• Raises Full Year 2020 Estimates
  • Achieves Record Third Quarter Revenues
  • Completes Acquisition of RetailMeNot

LOS ANGELES, CA – November 3, 2020 — /BackupReview.info/ — J2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the third quarter ended September 30, 2020.

“J2 continues to demonstrate exceptional strength, delivering remarkable results across the board,” said Vivek Shah, CEO of J2 Global. “Our worldwide organization and portfolio of internet businesses are thriving in an uncertain environment.”

Q3 2020 quarterly revenues increased 3.7% to a third quarter record of $357.0 million compared to $344.1 million for Q3 2019.

Net cash provided by operating activities increased to $114.4 million compared to $97.1 million for Q3 2019. Q3 2020 free cash flow(2) increased 19.9% to $93.7 million compared to $78.2 million for Q3 2019.

GAAP earnings per diluted share(3) increased 111.7% to $1.31 in Q3 2020 compared to $0.62 for Q3 2019.

Adjusted non-GAAP earnings per diluted share(3)(4) for the quarter increased 19.1% to $2.02 as compared to $1.70 for Q3 2019.

GAAP net income increased by 98.0% to $60.9 million as compared to $30.7 million for Q3 2019.

Quarterly Adjusted EBITDA(5) increased 14.4% to $154.1 million compared to $134.8 million for Q3 2019.

J2 ended the quarter with approximately $665 million in cash, cash equivalents, and investments after deploying approximately $8 million during the quarter for acquisitions and $4 million in connection with payments for prior year acquisitions. In addition, J2 deployed approximately $150 million with respect to its share repurchase program during the quarter.

Key financial results for Q3 2020 versus Q3 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.

Q3 2020 Q3 2019 % Change
Cloud Services $170.2 million $171.2 million (0.5)%
Digital Media $186.7 million $173.0 million 8.0%
Total Revenue: (1) $357.0 million $344.1 million 3.7%
Operating Income $77.4 million $59.4 million 30.5%
Net Cash Provided by Operating Activities $114.4 million $97.1 million 17.8%
Free Cash Flow (2) $93.7 million $78.2 million 19.9%
GAAP Earnings per Diluted Share (3) $1.31 $0.62 111.7%
Adjusted Non-GAAP Earnings per Diluted Share (3) (4) $2.02 $1.70 19.1%
GAAP Net Income $60.9 million $30.7 million 98.0%
Adjusted Non-GAAP Net Income $93.9 million $82.8 million 13.5%
Adjusted EBITDA (5) $154.1 million $134.8 million 14.4%
Adjusted EBITDA Margin (5) 43.2% 39.2% 10.2%

The Company announced that it had completed its acquisition of leading savings destination RetailMeNot for approximately $420 million from Vericast, a premier marketing solutions company, on October 28, 2020.

For fiscal year 2020, the Company is increasing its estimates, expecting to achieve revenues between $1.447 billion and $1.462 billion from between $1.380 billion and $1.400 billion; Adjusted EBITDA between $595 million and $605 million from between $556 million and $570 million; and Adjusted non-GAAP earnings per diluted share of between $7.85 and $8.00 from 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 21% and 23%.

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.

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 28.3% for Q3 2020 and 17.0% for Q3 2019. The estimated Adjusted non-GAAP effective tax rates were approximately 21.8% for Q3 2020 and 21.7% for Q3 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 September 30, 2020 and 2019 totaled $0.71 and $1.08 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; 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, RetailMeNot, 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 230 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.




September 30,
December 31,
Cash and cash equivalents $ 567,930 $ 575,615
Accounts receivable, net of allowances of $13,202 and $12,701, respectively 192,800 261,928
Prepaid expenses and other current assets 46,594 49,347
Total current assets 807,324 886,890
Long-term investments 96,575 100,079
Property and equipment, net 147,268 127,817
Operating lease right-of-use assets 97,439 125,822
Goodwill 1,661,546 1,633,033
Other purchased intangibles, net 459,566 556,553
Deferred income taxes, noncurrent 57,490 59,976
Other assets 15,785 15,676
TOTAL ASSETS $ 3,342,993 $ 3,505,846
Accounts payable and accrued expenses $ 177,820 $ 238,059
Income taxes payable, current 12,733 17,758
Deferred revenue, current 155,806 162,855
Operating lease liabilities, current 27,673 26,927
Current portion of long-term debt 393,980 385,532
Other current liabilities 901 1,973
Total current liabilities 768,913 833,104
Long-term debt 1,075,071 1,062,929
Deferred revenue, noncurrent 11,232 12,744
Operating lease liabilities, noncurrent 87,563 104,070
Income taxes payable, noncurrent 11,675 11,675
Liability for uncertain tax positions 60,197 52,451
Deferred income taxes, noncurrent 115,356 107,453
Other long-term liabilities 36,649 10,228
TOTAL LIABILITIES 2,166,656 2,194,654
Commitments and contingencies
Preferred stock
Common stock 448 476
Additional paid-in capital 451,741 465,652
Retained earnings 782,142 891,526
Accumulated other comprehensive loss (57,994 ) (46,462 )
TOTAL STOCKHOLDERS’ EQUITY 1,176,337 1,311,192

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

Rebecca Wright
J2 Global, Inc.

Source: J2 Global, Inc.




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