Discontinued Operations

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Consensus Spin-Off

As further described in Note 1 - Basis of Presentation and Overview, on October 7, 2021, the Separation of the cloud fax business was completed. The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed as the Separation constituted a strategic shift that would have a major effect on the Company’s operations and financial results. Accordingly, the Condensed Consolidated Financial Statements reflect the results of the cloud fax business as a discontinued operation for the three months ended March 31, 2021. The Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Operations report discontinued operations separate from continuing operations. The Condensed Consolidated Statements of Comprehensive Income, Condensed Consolidated Statements of Cash Flows, and Condensed Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations.

The key components of cash flows from discontinued operations were as follows (in thousands):

	Three Months Ended March 31, 2021
Capital expenditures		$	4,766
Depreciation and amortization		$	2,822
Deferred taxes		$	2,722

In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, which are further discussed in Note 16 - Related Party Transactions. Further, certain of the Company’s management and members of its board of directors resigned from the Company as of the date of distribution and joined Consensus. In addition, one of the Company’s members of senior management as of March 31, 2022 has served on the board of directors of Consensus since the date of distribution.

The key components of income from discontinued operations were as follows (in thousands):

	Three Months Ended March 31, 2021
Revenues	$	86,528
Cost of revenues	(13,970)
Sales and marketing	(13,235)
Research, development and engineering	(1,676)
General and administrative	(6,048)
Interest expense and other	151
Income before income taxes	51,750
Income tax expense	12,608
Income from discontinued operations, net of income taxes	$	39,142