GET DAILY SIGNALSZiff Davis (ZD) Posts Q3 2026 EPS Beat Alongside Revenue Shortfall
Key Takeaways
- Ziff Davis reported third quarter 2026 revenue of $289.3 million, below the consensus estimate of roughly $294.5 million.
- Adjusted (non-GAAP) earnings per share (EPS) came in at $1.39, beating the consensus estimate of $1.25.
- Adjusted EBITDA was $82.2 million, essentially in line with the roughly $82.9 million consensus.
- The year-over-year revenue comparison was affected by the previously completed divestiture of the Connectivity segment.
- Management repurchased approximately $265 million of shares through the first three quarters of 2026, reducing share count by nearly 14%.
- CEO Vivek Shah characterized results as in line with prior guidance, citing sequential revenue growth in a challenging operating environment.
Earnings Context and Its Significance
Ziff Davis runs a diversified set of digital media, subscription, and technology businesses that span consumer media, cybersecurity, martech, healthcare, and entertainment. This quarter’s report matters because the company continues to navigate a structural shift in digital advertising, with declining search referral traffic and changes in AI-driven content distribution, all while reshaping its portfolio. The earlier sale of the Connectivity segment has altered the revenue base and made year-over-year comparisons less straightforward. For investors, the period serves as an important checkpoint on whether cost discipline, the share repurchase program, and ongoing portfolio simplification can offset top-line pressure and support per-share value.
Reported Results
For the third quarter ended September 30, 2026, Ziff Davis posted revenue of $289.3 million, below the consensus estimate of approximately $294.5 million. On a reported basis, revenue declined 20.5% year over year, though the comparison is distorted by the Connectivity divestiture. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted (non-GAAP) EPS reached $1.39, topping the consensus estimate of $1.25 for an 11.1% beat. Adjusted EBITDA totaled $82.2 million, narrowly below the roughly $82.9 million consensus. The GAAP operating margin turned negative, reflecting elevated expenses relative to revenue. Free cash flow came in negative at roughly -$23.0 million, a sharp swing from positive free cash flow of approximately $108.2 million in the prior-year quarter. Management noted that results aligned with expectations set in the previous quarter, highlighting sequential revenue growth and continued capital returns to shareholders.
Market Reaction and Investor Sentiment
Ziff Davis delivered a mixed quarter that highlighted the tension between disciplined cost management and a shrinking revenue base. The adjusted EPS beat stood out as a clear positive, reflecting effective expense control and the benefit of a reduced share count from aggressive buybacks. At the same time, the revenue miss and negative free cash flow are likely to weigh on sentiment, especially given the structural headwinds in search-driven advertising and the ongoing impact of the Connectivity divestiture.
Investor views will probably depend on whether the market sees the per-share improvement as sustainable operational progress or as a buyback-driven effect that masks underlying top-line weakness. The company’s commentary on sequential revenue growth provides some reassurance, but the broader story remains one of portfolio transition rather than strong organic expansion.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors should watch several factors that could shape Ziff Davis’s path after this report. First is the direction of organic revenue, particularly whether sequential growth leads to stabilization of year-over-year declines as the company moves past the Connectivity divestiture. Second, margin trends warrant attention. The shift to a negative operating margin this quarter raises questions about the balance between investment and cost discipline. Third, the share repurchase program remains a central driver of per-share value. With nearly $265 million deployed through the first three quarters of 2026, continued buybacks could further support EPS even if net income stays flat or declines. Finally, watch for updates on demand signals across advertising, cybersecurity, and healthcare, along with any additional portfolio actions.
Using Tickeron’s AI Tools for Deeper Analysis
In my own review of the quarter, I turned to Tickeron’s AI Screener to compare Ziff Davis with peers on fundamentals and recent patterns. The tool helped surface similar setups across digital media and tech names, offering a structured way to assess whether the EPS beat and buyback activity stand out relative to the broader group. I find it useful for quickly filtering thousands of stocks by industry, technical indicators, and performance metrics when earnings season brings a wave of reports like this one.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Momentum Indicator for ZD turns negative, indicating new downward trend
ZD saw its Momentum Indicator move below the 0 level on October 27, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 83 similar instances where the indicator turned negative. In 67 of the 83 cases, the stock moved further down in the following days. The odds of a decline are at 81%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for ZD turned negative on October 28, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In 35 of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at 76%.
The 10-day moving average for ZD crossed bearishly below the 50-day moving average on November 02, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 9 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 60%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ZD declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 75%.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ZD's RSI Indicator exited the oversold zone, 31 of 43 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 72%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 40 of 62 cases where ZD's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 65%.
ZD moved above its 50-day moving average on November 04, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +6.77% 3-day Advance, the price is estimated to grow further. Considering data from situations where ZD advanced for three days, in 176 of 271 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
ZD may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 31 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 41 (best 1 - 100 worst), indicating steady price growth. ZD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 47 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.870) is normal, around the industry mean (-0.306). P/E Ratio (3.252) is within average values for comparable stocks, (19.327). Projected Growth (PEG Ratio) (1.320) is also within normal values, averaging (1.501). Dividend Yield (0.032) settles around the average of (0.077) among similar stocks. P/S Ratio (1.571) is also within normal values, averaging (1.860).
The Tickeron PE Growth Rating for this company is 96 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 97, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a provider of internet, cloud & digital media services
Industry AdvertisingMarketingServices
Advertisement