Ziff Davis (NASDAQ:ZD) reported a significant contraction in fourth-quarter net income, weighed down by divestitures and investment losses, even as the company intensified its share buyback program.
Net income for the final three months of 2025 plummeted to $0.4 million, or $0.01 per diluted share, compared to $64.1 million in the prior-year period.
The decline was primarily driven by a pre-tax $58 million loss on the sale of a business and a $19.7 million loss related to equity method investments.
Despite the bottom-line pressure, CEO Vivek Shah emphasized the company's underlying cash engine.
Ziff Davis generated $157.8 million in free cash flow during the quarter, a 20.4% increase year-over-year.
For the full year, the company produced nearly $290 million in free cash flow, providing the capital necessary to fuel a $174 million share repurchase initiative.
While the fourth quarter saw a slight 1.5% dip in revenue to $406.7 million, the full-year picture remained positive.
Total 2025 revenues climbed 3.5% to $1.45 billion, up from $1.40 billion in 2024.
Meanwhile, operational efficiency showed resilience as income from operations rose 9.6% to $86 million in the fourth quarter.
However, adjusted EBITDA for the period slipped to $163.2 million from $171.8 million a year earlier, reflecting a tightening environment for digital advertising and subscription services.