Total revenue for the third quarter of 2025 reached $363.7 million, a 2.9 % year‑over‑year increase that fell short of the consensus estimate of $366.4 million by $2.7 million (0.7 %). The miss was driven by a 4 % decline in Gaming & Entertainment revenue, offset only partially by a 13 % rise in Health & Wellness sales. The stronger performance in Health & Wellness was largely due to higher subscription uptake and a 15 % lift in advertising revenue from the segment’s flagship health‑tech platform.
Operating income swung to a $28.4 million profit, reversing a $29.3 million loss in the same period last year and translating into a 7.8 % operating margin, up from a negative 8.3 % margin a year earlier. The turnaround was largely attributable to cost discipline in the Technology & Shopping segment, where the company reduced marketing spend by 8 % while maintaining revenue growth, and to a 2 % decline in the Cybersecurity & Martech segment’s operating costs, which helped offset the Gaming & Entertainment downturn.
Adjusted EBITDA for the quarter was $124.1 million, representing a 34.1 % margin—slightly below the 35.3 % margin recorded in Q3 2024. The compression of 0.2 percentage points was driven by higher technology‑infrastructure expenses associated with the company’s AI‑driven product launches and a 3 % increase in content‑creation costs in the Gaming & Entertainment segment. Despite the margin dip, the absolute EBITDA figure remained well above the company’s historical averages, underscoring continued operational leverage.
Net loss narrowed to $3.6 million, a dramatic improvement from the $48.6 million loss reported a year earlier, while free cash flow surged to $108.2 million, up 35 % from $80.1 million a year ago. Share repurchases totaled $44.4 million in the quarter, up from $30.9 million reported in the prior year, reflecting the company’s ongoing commitment to returning capital to shareholders. Management also announced that it has engaged outside advisors to evaluate potential divestitures of non‑core divisions, citing a perceived discount between the company’s market capitalization and its intrinsic value.
The company reaffirmed its full‑year 2025 guidance, maintaining revenue expectations of $1,442 million to $1,502 million, adjusted EBITDA of $505 million to $542 million, and adjusted diluted EPS of $6.64 to $7.28. The unchanged guidance signals management’s confidence that the current growth trajectory and cost‑control initiatives will sustain profitability, even as the company navigates the slight EBITDA margin compression. CEO Vivek Shah highlighted the company’s “fifth consecutive quarter of revenue growth” and emphasized the strategic review of its portfolio as a key driver of future value creation.
Investors responded positively to the earnings release, with market sentiment reflecting confidence in the company’s strategic direction and capital‑return program. The announcement of a potential divestiture review and the reaffirmation of guidance were cited as primary factors behind the favorable reaction, underscoring the market’s focus on long‑term value unlocking rather than short‑term earnings fluctuations.
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