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j2 Global (JCOM) Beats on Q2 Earnings, Revenues Rise Y/Y
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j2 Global reported second-quarter 2020 adjusted earnings of $1.71 per share, which beat the Zacks Consensus Estimate by 17.1% and increased 6.9% year over year.
Revenues were up 2.7% year over year to $331 million, beating the consensus mark by 5.2%.
Average monthly revenue per customer decreased 2.5% year over year to $13.66. Cancel rate was 2.2%, down 30 basis points (bps) year over year.
Top-Line Details
Revenues from Cloud Services (50.5% of revenues) decreased 1.2% from the year-ago quarter to $167.1 million.
Subscriber revenues (100% of Cloud Services revenues) fell 1.1% year over year to $167 million, primarily attributed to 8% decline in variable-subscriber revenues (15.7% of Subscriber revenues), which totaled $26.3 million. Fixed-subscriber revenues (84.3% of Subscriber revenues) climbed 0.3% year over year to $140.8 million.
Moreover, DID-based revenues slid 2.5% year over year to $95 million. Non-DID revenues inched up0.4% year over year to $72.1 million.
Digital Media revenues (49.5% of revenues) were $163.9 million, up 6.9% year over year.
At the end of the reported quarter, j2 Global had 4,076 Cloud Services customers compared with 4,015 at the end of the year-ago quarter.
Operating Details
Adjusted gross margin expanded 150 bps on a year-over-year basis to 83%. Cloud Services’ adjusted gross margin shrank 250 bps to 38.8%. Digital Media adjusted gross margin expanded 410 bps to 44.3%.
Adjusted sales & marketing, general & administrative, and research, development & engineering expenses flared up 4.5%, 13.6% and 1.8%, respectively, on a year-over-year basis.
Adjusted EBITDA margin expanded 130 bps on a year-over-year basis to 40.1%. Cloud Services adjusted EBITDA margin increased 40 bps on a year-over-year basis. However, Digital Media adjusted EBITDA margin declined 60 bps.
Adjusted operating margin expanded 80 bps year over year to 35.9%. While Cloud Services adjusted operating margin contracted 230 bps, Digital Media adjusted operating margin expanded 290 bps on a year-over-year basis.
Balance Sheet and Cash Flow
As of Jun 30, 2020, j2 Global had $616.8 million in cash and cash equivalents compared with $526.6 million as of Mar 31, 2020.
Long-term debt as of Jun 30, 2020 was $1.07 billion, lower than $1.46 billion as of Mar 31, 2020.
Free cash flow was $115.9 million, up 35.1% year over year.
Moreover, the company approved a new share-repurchase program under which j2 Global can purchase up to 10 million shares in the public market or in off-market transactions through Aug 6, 2025.
Guidance
For 2020, j2 Global now expects revenues between $1.380 billion and $1.400 billion. Adjusted EBITDA is expected between $556 million and $570 million. Moreover, adjusted non-GAAP earnings are expected between $7.17 and $7.41 per share.
Agilent, Analog Devices and Baozun are set to report their quarterly results on Aug 18, 19 and 21, respectively.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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j2 Global (JCOM) Beats on Q2 Earnings, Revenues Rise Y/Y
j2 Global reported second-quarter 2020 adjusted earnings of $1.71 per share, which beat the Zacks Consensus Estimate by 17.1% and increased 6.9% year over year.
Revenues were up 2.7% year over year to $331 million, beating the consensus mark by 5.2%.
Average monthly revenue per customer decreased 2.5% year over year to $13.66. Cancel rate was 2.2%, down 30 basis points (bps) year over year.
Top-Line Details
Revenues from Cloud Services (50.5% of revenues) decreased 1.2% from the year-ago quarter to $167.1 million.
j2 Global, Inc. Price, Consensus and EPS Surprise
j2 Global, Inc. price-consensus-eps-surprise-chart | j2 Global, Inc. Quote
Subscriber revenues (100% of Cloud Services revenues) fell 1.1% year over year to $167 million, primarily attributed to 8% decline in variable-subscriber revenues (15.7% of Subscriber revenues), which totaled $26.3 million. Fixed-subscriber revenues (84.3% of Subscriber revenues) climbed 0.3% year over year to $140.8 million.
Moreover, DID-based revenues slid 2.5% year over year to $95 million. Non-DID revenues inched up0.4% year over year to $72.1 million.
Digital Media revenues (49.5% of revenues) were $163.9 million, up 6.9% year over year.
At the end of the reported quarter, j2 Global had 4,076 Cloud Services customers compared with 4,015 at the end of the year-ago quarter.
Operating Details
Adjusted gross margin expanded 150 bps on a year-over-year basis to 83%. Cloud Services’ adjusted gross margin shrank 250 bps to 38.8%. Digital Media adjusted gross margin expanded 410 bps to 44.3%.
Adjusted sales & marketing, general & administrative, and research, development & engineering expenses flared up 4.5%, 13.6% and 1.8%, respectively, on a year-over-year basis.
Adjusted EBITDA margin expanded 130 bps on a year-over-year basis to 40.1%. Cloud Services adjusted EBITDA margin increased 40 bps on a year-over-year basis. However, Digital Media adjusted EBITDA margin declined 60 bps.
Adjusted operating margin expanded 80 bps year over year to 35.9%. While Cloud Services adjusted operating margin contracted 230 bps, Digital Media adjusted operating margin expanded 290 bps on a year-over-year basis.
Balance Sheet and Cash Flow
As of Jun 30, 2020, j2 Global had $616.8 million in cash and cash equivalents compared with $526.6 million as of Mar 31, 2020.
Long-term debt as of Jun 30, 2020 was $1.07 billion, lower than $1.46 billion as of Mar 31, 2020.
Free cash flow was $115.9 million, up 35.1% year over year.
Moreover, the company approved a new share-repurchase program under which j2 Global can purchase up to 10 million shares in the public market or in off-market transactions through Aug 6, 2025.
Guidance
For 2020, j2 Global now expects revenues between $1.380 billion and $1.400 billion. Adjusted EBITDA is expected between $556 million and $570 million. Moreover, adjusted non-GAAP earnings are expected between $7.17 and $7.41 per share.
Zacks Rank & Stocks to Consider
Currently, j2 Global has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Agilent (A - Free Report) , Analog Devices (ADI - Free Report) and Baozun (BZUN - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Agilent, Analog Devices and Baozun are set to report their quarterly results on Aug 18, 19 and 21, respectively.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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