LOS ANGELES, CA – May 10, 2021 — /BackupReview.info/ — J2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the first quarter ended March 31, 2021.

“J2 continues to produce outstanding results across the board,” said Vivek Shah, CEO of J2 Global. “Our strong momentum adds to the considerable excitement within our organization as we prepare to separate into two independent publicly traded companies.”

FIRST QUARTER 2021 RESULTS
Q1 2021 quarterly revenues increased 19.8% to a Q1 record of $398.2 million compared to $332.4 million for Q1 2020. On a pro-forma(6) basis, Q1 2021 quarterly revenues increased 23.2% to $385.6 million compared to $313.0 million for Q1 2020.

Net cash provided by operating activities increased to $178.7 million compared to $102.0 million for Q1 2020. Q1 2021 free cash flow(2) increased 60.1% to $152.5 million compared to $95.2 million for Q1 2020.

GAAP earnings per diluted share(3) increased to $1.67 in Q1 2021 compared to $(0.13) for Q1 2020.

Adjusted non-GAAP earnings per diluted share(3)(4) for the quarter increased 55.8% to $2.18 as compared to $1.40 for Q1 2020. On a pro-forma(6) basis, Adjusted non-GAAP earnings per diluted share(3)(4) for the quarter increased 60.0% to $2.11 as compared to $1.32 for Q1 2020.

GAAP net income increased to $77.9 million as compared to $(6.4) million for Q1 2020.

Adjusted non-GAAP net income increased by 43.9% to $97.2 million as compared to $67.5 million for Q1 2020. On a pro-forma(6) basis, Adjusted non-GAAP net income increased by 48.3% to $94.0 million as compared to $63.4 million for Q1 2020.

Adjusted EBITDA(5) for the quarter increased 33.8% to $156.3 million compared to $116.8 million for Q1 2020. On a pro-forma(6) basis, Adjusted EBITDA(5) for the quarter increased 37.5% to $151.5 million compared to $110.2 million for Q1 2020.

J2 ended the quarter with approximately $511 million in cash, cash equivalents, and investments after deploying approximately $8 million during the quarter for prior year acquisitions.

Key financial results for Q1 2021 versus Q1 2020 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. The Pro-Forma Results below exclude Voice assets in Australia, New Zealand, and the United Kingdom that have been sold as well as the Company’s B2B Backup business which it expects to sell.

Pro-Forma Results(6)

Q1 2021

Q1 2020

% Change

Q1 2021

Q1 2020

% Change

Revenues

Cloud Services

$171.4

$169.8

0.9%

$158.8

$150.4

5.6%

Digital Media

$226.8

$162.6

39.5%

$226.8

$162.6

39.5%

Total Revenue: (1)

$398.2

$332.4

19.8%

$385.6

$313.0

23.2%

Operating Income

$78.5

$55.2

42.1%

Net Cash Provided by Operating Activities

$178.7

$102.0

75.2%

Free Cash Flow (2)

$152.5

$95.2

60.1%

GAAP Earnings per Diluted Share (3)

$1.67

$(0.13)

NM

Adjusted Non-GAAP Earnings per Diluted Share (3) (4)

$2.18

$1.40

55.8%

$2.11

$1.32

60.0%

GAAP Net Income (Loss)

$77.9

$(6.4)

NM

Adjusted Non-GAAP Net Income

$97.2

$67.5

43.9%

$94.0

$63.4

48.3%

Adjusted EBITDA (5)

$156.3

$116.8

33.8%

$151.5

$110.2

37.5%

Adjusted EBITDA Margin (5)

39.3%

35.1%

11.7%

39.3%

35.2%

11.6%

BUSINESS OUTLOOK

Based on better-than-expected operating performance, the Company is raising its revenue, Adjusted EBITDA, and Adjusted non-GAAP EPS estimates:

Original 2021 Range of Estimates (A)

Revised 2021 Range of Estimates (A)

Low

High

Low

High

Revenue

$

1,630

$

1,676

$

1,676

$

1,700

Adjusted EBITDA

$

646

$

666

$

666

$

680

Adjusted non-GAAP EPS (B)

$

8.93

$

9.27

$

9.27

$

9.51

(A)

Balances are in millions, except per share amounts, and exclude the B2B Backup business and Voice assets in the United Kingdom

(B)

Assumed share cost does not factor in any share repurchases or issuances (e.g. convert settlement)

Adjusted non-GAAP earnings per diluted share for 2021 excludes share-based compensation of between $20 million and $24 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 2021 (exclusive of the release of reserves for uncertain tax positions) will be between 22% and 24%.

The Company has not reconciled the non-GAAP Business Outlook 2021 Adjusted EBITDA, Adjusted non-GAAP earnings per diluted share, and 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 forecasted revenues and costs primarily related to acquisitions and taxation, which are potential adjustments to future earnings, and the uncertainty as to when or if the B2B Backup Business will be sold. We expect the variability of forecasted revenues and costs to have a potentially unpredictable and significant impact on our future GAAP financial results.

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 9.6% for Q1 2021 and 132.5% for Q1 2020. The estimated Adjusted non-GAAP effective tax rates were approximately 22.5% for Q1 2021 and 22.0% for Q1 2020.

(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 March 31, 2021 and 2020 totaled $0.51 and $1.53 per diluted share, respectively.

(5)

Adjusted EBITDA is defined as earnings before interest; gain on sale of businesses; loss on investments, net; other (income) expense, net; income tax expense; (income) loss from equity method investment, net; 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.

(6)

Pro-forma figures are provided taking into consideration the sale of certain Voice assets in Australia, New Zealand, and the United Kingdom as well as the expected sale of the Company’s B2B Backup business as if they had occurred January 1, 2020.

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, RetailMeNot, Offers.com, Spiceworks, Ekahau, 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 240 million people per month across its brands. As of December 31, 2020, J2 had achieved 25 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 2021 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 2020 Annual Report on Form 10-K filed by J2 Global on March 1, 2021, 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 2021 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://bit.ly/3eFadzD

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

Source: J2 Global, Inc

 

 

 

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