Ziff Davis recorded a $54.8 million goodwill impairment against its Health & Wellness segment in the second quarter of 2026, pushing the digital publisher into a $44.7 million operating loss and marking the first time the company has written down the value of the division that carries its largest advertising business.

The charge was disclosed on August 6, 2026, in results covering the three months ended June 30, 2026, filed with the Securities and Exchange Commission on Form 8-K and signed by Jeremy Rossen, executive vice president, general counsel and secretary. Ziff Davis scheduled its earnings call for 8:30 a.m. Eastern on August 7.

Total revenues from continuing operations reached $286.7 million, down 2.7% from $294.8 million a year earlier. Net loss from continuing operations came to $52.2 million, or $1.43 per diluted share, against net income of $14.3 million and earnings of $0.34 per diluted share in the second quarter of 2025.

Strip out the impairment and the picture changes shape but not direction. Adjusted EBITDA fell 3.7% to $76.8 million. Adjusted net income was essentially flat at $37.8 million against $38.1 million. Adjusted diluted earnings per share rose 13.2% to $1.03, an increase produced almost entirely by a smaller share count rather than by higher profit: weighted average diluted shares fell to 36.4 million from 41.8 million.

"With the successful sale of our Connectivity business, our significant share repurchases, and our robust free cash flow, Ziff Davis is in a very strong financial position," said Vivek Shah, chief executive of Ziff Davis, in the results statement. "We are focused on deploying capital strategically to maximize long-term shareholder returns."

Where the write-down landed

Goodwill impairment is a non-cash accounting entry recorded when the carrying value of a reporting unit exceeds its fair value. It is, in effect, a company revising downward what it believes one of its own divisions is worth.

The entire $54.8 million charge sat in Health & Wellness. That segment posted an operating loss of $42.3 million for the quarter, against operating income of $16.0 million a year earlier. Revenues fell 4.8% to $94.7 million. Adjusted EBITDA, which excludes the impairment, declined 9.7% to $30.2 million, with margin narrowing to 31.9% from 33.6%.

Health & Wellness is the segment where Ziff Davis derives the largest share of its advertising revenue: $79.8 million in the quarter, down from $82.5 million. It is also the vertical that independent measurement has repeatedly identified as the most exposed to AI-generated search answers. Index Exchange analysis of 1,200 publishers found health and nutrition ad opportunities declining 40% to 50% during 2025, against a 7% decline for news, with categories most susceptible to AI overview interception absorbing the steepest losses.

Ziff Davis does not attribute the impairment to any specific cause in the results statement. The company's risk disclosures identify the general terrain: content piracy and developments related to artificial intelligence, and separately, the unauthorized use of its content and infringement of its intellectual property by developers and users of generative AI.

Company goodwill on the balance sheet stood at $1.291 billion at June 30, 2026, down from $1.347 billion at December 31, 2025.

Advertising falls, subscriptions hold

Ziff Davis splits revenue into advertising and performance marketing on one side and subscription and licensing on the other. The two moved differently.

Advertising and performance marketing revenue fell 6.0% to $182 million from $194 million. Subscription and licensing revenue was close to flat at $98 million against $99 million, a decline of 0.2%. The advertising line accounted for the whole of the consolidated revenue decline and then some.

A note on the comparison base is warranted. PPC Land reported in August 2025 that Ziff Davis advertising and performance marketing revenues had risen 15.5% to $197 million in the second quarter of 2025. The $194 million figure now presented for that quarter reflects two adjustments: the reclassification of the Connectivity business as a discontinued operation, and the exclusion of revenues the company classifies as "other". The direction of travel is unaffected. A business that grew advertising revenue by double digits a year ago is now shrinking it.

On the same earnings call in August 2025, Shah described the composition of that revenue: roughly 35% of company revenues were advertisements on owned and operated web traffic, and about 40% of that came from search. Programmaticrepresented less than $50 million of annual revenue, a positioning the company presented at the time as insulation from open-web volatility. The exposure that framing implies is to search referrals rather than to programmatic pricing.

That exposure now has a measured cost attached to it. A randomized field experiment run through a custom browser extension found AI Overviews reduce outbound organic clicks by 39.8% and raise zero-click searches by 34.5% when the feature appears, the first causal rather than correlational evidence on the question.

Advertiser retention deteriorates

The operating metrics disclosed alongside the financial statements are more revealing than the revenue lines, because they separate how many advertisers a segment holds from how much each one spends.

Net advertising and performance marketing revenue retention measures trailing twelve-month revenues from prior-year customers against what those same customers spent in the prior-year period, excluding customers below $10,000. In Gaming & Entertainment, that figure fell to 81.6% from 93.7%. In Technology & Shopping, it fell to 90.0% from 95.0%. Health & Wellness moved the other way, rising to 99.8% from 97.4%.

Customer counts tell a different story from retention. Gaming & Entertainment added advertisers, reaching 486 from 431. Technology & Shopping edged up to 626 from 619. Health & Wellness lost advertisers, falling to 797 from 866.

Put the two series together and the pattern in the gaming business becomes clear. More advertisers, each spending less. Quarterly revenue per advertiser in Gaming & Entertainment fell 19.8% to $60,015 from $74,830. In Technology & Shopping, it fell 11.0% to $113,267 from $127,299. Only Health & Wellness raised revenue per advertiser, to $99,046 from $94,718, which is what happens when a segment sheds smaller accounts while keeping larger ones.

Gaming & Entertainment was the only segment to grow revenue, up 0.9% to $46.6 million, but the composition shifted. Advertising fell to $29.2 million from $32.3 million while subscription and licensing rose to $16.3 million from $14.0 million. Segment adjusted EBITDA declined 4.3% to $14.5 million, with margin down to 31.2% from 32.9%.

Technology & Shopping revenues fell 5.0% to $76.7 million, with advertising down to $73.1 million from $78.8 million. The segment nonetheless improved adjusted EBITDA by 8.6% to $19.8 million and lifted margin to 25.8% from 22.6%, a cost outcome rather than a demand outcome.

Cybersecurity & Martech, the only segment with no advertising revenue line, grew 0.5% to $68.7 million and held margin at 34.4%.

Subscription customer counts

Subscription metrics show erosion in unit terms offset by pricing. Health & Wellness subscription customers fell to 1.618 million from 1.892 million, a loss of 274,000 accounts, while average quarterly revenue per customer rose to $7.92 from $7.17. Cybersecurity & Martech customers slipped to 1.219 million from 1.232 million, with revenue per customer down to $53.93 from $55.48. Gaming & Entertainment subscription customers were roughly stable at 526,000, with revenue per customer up to $30.94 from $26.47.

The balance sheet after Accenture

The quarter's dominant cash event was not operational. Ziff Davis completed the sale of its Connectivity division, whose brands include Ookla, Speedtest, Ekahau, Downdetector and RootMetrics, to Accenture. Total proceeds came to approximately $1,216.1 million, comprising roughly $1,179.1 million in cash at closing, or $1,134.1 million net of cash divested, with $37.0 million held in escrow. The definitive agreement had been signed on March 2, 2026.

Net income from discontinued operations was $676.6 million for the quarter, producing total net income of $624.5 million and basic earnings of $17.16 per share. The transaction also generated a large near-term tax liability: income taxes payable, current, rose to $185.6 million at June 30, 2026 from $7.3 million at December 31, 2025.

Cash and cash equivalents reached $1.606 billion, against $573.8 million at the end of 2025. Gross debt stood at $872 million, comprising $460 million of 4.625% senior notes, $263 million of 3.625% convertible notes and $149 million of 1.75% convertible notes. Against trailing twelve-month adjusted EBITDA, that is 2.4 times gross debt and 2.0 times net cash.

Capital deployment ran heavily toward buybacks. Ziff Davis spent $121.5 million on share repurchases in the quarter and $173.1 million in the first half, against $9.2 million on acquisitions during the quarter. Ending shares outstanding stood at 34.3 million as of August 4, 2026, down from 38.4 million at the end of 2025 and 47.3 million at the end of 2022. Roughly 27% of the share base has been retired in less than four years.

Operating cash flow, presented on a combined continuing and discontinued basis, rose 55.9% to $89.0 million. Free cash flow doubled to $54.0 million from $26.9 million.

Why this matters for the marketing community

Ziff Davis operates more than 45 properties including CNET, PCMag, IGN, Mashable and Lifehacker, and the segment metrics it publishes are unusually granular for a publisher of its scale. That granularity makes the quarter useful as a read on premium editorial supply generally.

Three observations follow from the numbers.

First, the deterioration is on the buy side of the relationship, not the sell side. Gaming & Entertainment grew its advertiser count by 55 accounts while losing nearly 20% of revenue per advertiser. Advertisers are not leaving these properties. They are spending less on them, which is the signature of falling inventory volume rather than falling advertiser interest.

Second, the impairment attaches a balance-sheet number to a traffic problem that has until now been measured mostly in click-through rates. Publishers have been describing referral declines for two years. A $54.8 million write-down on the segment with the heaviest search exposure converts that description into an audited estimate of lost future cash flow.

Third, the divergence across publisher business models is widening within a single reporting week. The New York Times reported digital advertising revenue up 20.7% to $114 million on August 5. USA TODAY Co. reported digital advertising down 9.2% to $79.8 million alongside a loss of 22 million monthly unique visitors in a single quarter. Criteo cut full-year guidance for the second time in three months. The dividing line runs between businesses with direct audience relationships and businesses dependent on search-referred scale.

Ziff Davis sits partly on both sides. Its subscription lines held. Its advertising lines did not.

The company retains an active claim against the practices it identifies as a risk. Ziff Davis filed a copyright suit against OpenAI in Delaware federal court on April 24, 2025, alleging that OpenAI reproduced exact copies of its works despite robots.txt directives. It also appears among the publishers listed in the News/Media Alliance opt-out demands filed with Common Crawl in April 2026. Neither action has produced revenue.

For media buyers, the practical consequence is arithmetic. If premium editorial inventory in technology, gaming and health continues to contract at the rates these metrics imply, the impressions do not migrate to comparable environments. They disappear from the addressable pool, and the remaining supply reprices. Google Network revenue, the segment that pays open-web publishers, fell 1% to $7.3 billion in the same quarter while Google Search advertising grew 17% to $63.3 billion. The money is not leaving digital advertising. It is leaving the open web.

Ziff Davis issued no forward guidance in the results statement. Its risk disclosures reference an announced review of potential value-creating opportunities and the possible sale of one or more additional business lines.

Timeline

Summary

Who: Ziff Davis, Inc. (NASDAQ: ZD), the New York-based digital media company whose portfolio spans technology, shopping, gaming and entertainment, health and wellness, cybersecurity and martech. Chief executive Vivek Shah provided the sole executive comment in the results statement. Jeremy Rossen, executive vice president, general counsel and secretary, signed the Form 8-K. Accenture is the buyer of the divested Connectivity division.

What: Second quarter 2026 results showing total revenues of $286.7 million, down 2.7%, a $54.8 million goodwill impairment charged entirely to the Health & Wellness segment, an operating loss of $44.7 million against $13.8 million of operating income a year earlier, and a net loss from continuing operations of $52.2 million. Advertising and performance marketing revenue fell 6.0% to $182 million while subscription and licensing was flat at $98 million. Net advertising revenue retention fell to 81.6% in Gaming & Entertainment and 90.0% in Technology & Shopping. Adjusted EBITDA declined 3.7% to $76.8 million. The completed sale of Connectivity produced approximately $1,216.1 million in total proceeds and $676.6 million of net income from discontinued operations.

When: The quarter ended June 30, 2026. Results were released on August 6, 2026, with the Form 8-K filed the same day and the earnings conference call scheduled for August 7, 2026, at 8:30 a.m. Eastern.

Where: Ziff Davis is headquartered at 360 Park Avenue South, New York. Its properties operate globally across more than 45 brands including CNET, PCMag, IGN, Mashable and Lifehacker. The Connectivity brands sold to Accenture include Ookla, Speedtest, Ekahau, Downdetector and RootMetrics.

Why: The results attach an accounting value to the erosion of search-referred publisher traffic. Health & Wellness, the segment carrying the largest advertising revenue base and the vertical independent measurement identifies as most exposed to AI-generated search answers, was written down for the first time. The advertiser metrics show buyers remaining on the properties while spending materially less per account, which points to contracting inventory rather than departing demand. For media buyers, the quarter documents a shrinking pool of premium editorial impressions in technology, gaming and health at a time when overall search advertising spending continues to grow.