Achieves Record Second Quarter Revenues

Announces Share Repurchase Program of up to 10 Million Shares

LOS ANGELES, CA – August 11, 2020 — /BackupReview.info/ — J2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the second quarter ended June 30, 2020.

“J2’s outstanding results in an exceptionally challenging environment demonstrate the strength and quality of our business and the dedication of our employees,” said Vivek Shah, CEO of J2 Global. “Our adaptability and focus led to record-breaking revenues, Adjusted EBITDA, and free cash flow for the quarter.”

SECOND QUARTER 2020 RESULTS

Q2 2020 quarterly revenues increased 2.7% to a second quarter record of $331.0 million compared to $322.4 million for Q2 2019.

Net cash provided by operating activities increased to $139.6 million compared to $95.4 million for Q2 2019. Q2 2020 free cash flow(2) increased 35.1% to $115.9 million compared to $85.8 million for Q2 2019.

GAAP earnings per diluted share(3) increased 21.1% to $0.80 in Q2 2020 compared to $0.66 for Q2 2019.

Adjusted non-GAAP earnings per diluted share(3)(4) for the quarter increased 7.0% to $1.71 as compared to $1.60 for Q2 2019.

GAAP net income increased by 16.9% to $38.1 million as compared to $32.6 million for Q2 2019.

Quarterly Adjusted EBITDA(5) increased 6.1% to $132.9 million compared to $125.2 million for Q2 2019.

J2 ended the quarter with approximately $711 million in cash, cash equivalents, and investments after deploying approximately $1 million during the quarter in connection with contingent consideration payments for acquisitions from previous years. In addition, J2 deployed approximately $24 million in respect of its share repurchase program during the quarter.

Key financial results for Q2 2020 versus Q2 2019 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

Q2 2020 Q2 2019 % Change
Revenues
Cloud Services $167.1 million $169.1 million (1.2)%
Digital Media $163.9 million $153.3 million 6.9%
Total Revenue: (1) $331.0 million $322.4 million 2.7%
Operating Income $73.0 million $56.6 million 29.0%
Net Cash Provided by Operating Activities $139.6 million $95.4 million 46.4%
Free Cash Flow (2) $115.9 million $85.8 million 35.1%
GAAP Earnings per Diluted Share (3) $0.80 $0.66 21.1%
Adjusted Non-GAAP Earnings per Diluted Share (3) (4) $1.71 $1.60 7.0%
GAAP Net Income $38.1 million $32.6 million 16.9%
Adjusted Non-GAAP Net Income $80.6 million $77.7 million 3.7%
Adjusted EBITDA (5) $132.9 million $125.2 million 6.1%
Adjusted EBITDA Margin (5) 40.1% 38.8% 3.4%

BUSINESS OUTLOOK

The Company has reinstated full-year guidance and now estimates that for fiscal year 2020 it will achieve revenues between $1.380 billion and $1.400 billion; Adjusted EBITDA between $556 million and $570 million; and Adjusted non-GAAP earnings per diluted share of between $7.17 and $7.41.

Adjusted non-GAAP earnings per diluted share for 2020 excludes share-based compensation of between $23 million and $27 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax.

It is anticipated that the non-GAAP effective tax rate for 2020 (exclusive of the release of reserves for uncertain tax positions) will be between 20.5% and 22.5%.

The Company has not reconciled the Adjusted non-GAAP earnings per diluted share and any related tax rate information included in this release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability with respect to costs related to acquisitions and taxation, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable and significant impact on our future GAAP financial results.

SHARE REPURCHASE PROGRAM

J2 Global’s Board of Directors has approved a share repurchase program. Under the new program, the Company may purchase in the public market or in off-market transactions up to 10 million shares through August 6, 2025. The timing and amounts of any purchases will be determined by the Company from time to time, depending on market conditions and other factors it deems relevant.

Notes :

(1) The revenues associated with each of the businesses may not foot precisely since each is presented independently.
(2) Free cash flow is defined as net cash provided by operating activities, less purchases of property and equipment, plus contingent consideration. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
(3) The estimated GAAP effective tax rates were approximately 26.7% for Q2 2020 and 28.1% for Q2 2019. The estimated Adjusted non-GAAP effective tax rates were approximately 21.8% for Q2 2020 and 21.0% for Q2 2019.
(4) Adjusted non-GAAP earnings per diluted share excludes certain non-GAAP items, as defined in the Reconciliation of GAAP to Adjusted non-GAAP Financial Measures, for the three months ended June 30, 2020 and 2019 totaled $0.91 and $0.94 per diluted share, respectively.
(5) Adjusted EBITDA is defined as earnings before interest; loss on investments, net; other (income) expense, net; income tax expense; net loss (income) in earnings of equity method investments; depreciation and amortization; and the items used to reconcile EPS to Adjusted non-GAAP EPS, as defined in the Reconciliation of GAAP to Adjusted non-GAAP Financial Measures. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

About J2 Global

J2 Global, Inc. (NASDAQ: JCOM) is a leading internet information and services company consisting of a portfolio of brands including IGN, Mashable, Humble Bundle, Speedtest, PCMag, Offers.com, Spiceworks, Everyday Health, BabyCenter and What To Expect in its Digital Media business and eFax, eVoice, iContact, Campaigner, Vipre, IPVanish and KeepItSafe in its Cloud Services business. J2 reaches in excess of 180 million people per month across its brands. As of December 31, 2019, J2 had achieved 24 consecutive fiscal years of revenue growth. For more information about J2, please visit www.J2global.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this Press Release are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995, including those contained in Vivek Shah’s quote and the “Business Outlook” portion regarding the Company’s expected fiscal 2020 financial performance. These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: the Company’s ability to grow non-fax revenues, profitability and cash flows; the Company’s ability to identify, close and successfully transition acquisitions; subscriber growth and retention; variability of the Company’s revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology or infringement by the Company of intellectual property of others; the risk of adverse changes in the U.S. or international regulatory environments, including but not limited to the imposition or increase of taxes or regulatory-related fees; and the numerous other factors set forth in J2 Global’s filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting J2 Global, refer to the 2019 Annual Report on Form 10-K filed by J2 Global on March 2, 2020, and the other reports filed by J2 Global from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release, including those contained in Vivek Shah’s quote and in the “Business Outlook” portion regarding the Company’s expected fiscal 2020 financial performance are based on limited information available to the Company at this time, which is subject to change. Although management’s expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following Adjusted non-GAAP financial measures: Adjusted non-GAAP net income, Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these Adjusted non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these Adjusted non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these Adjusted non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These Adjusted non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these Adjusted non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

For more information on these Adjusted non-GAAP financial measures, please see the appropriate GAAP to Adjusted non-GAAP reconciliation tables included within the attached Exhibit to this release.

For detailed financial reports, visit: https://investor.j2global.com/news-events/news/news-details/2020/J2-Global-Reports-Second-Quarter-2020-Results/default.aspx

Contact:
Rebecca Wright
J2 Global, Inc.
800-577-1790
press@J2.com

Source: J2 Global, Inc.

 

 

 

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