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j2 Global (JCOM) Q2 Earnings Beat Estimates, Revenues Up
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j2 Global reported second-quarter 2019 adjusted earnings of $1.60 per share, beating the Zacks Consensus Estimate by 8 cents. The figure also grew 6.7% year over year.
Revenues were up 12% year over year to $322.4 million, comfortably surpassing the consensus mark of $318 million.
Average monthly revenue per customer decreased 10.7% to $14.01. Cancel rate was 2.5%, up from 2% reported in the year-ago quarter.
Shares fell 2.7% to close at $79.72 on Aug 7, following the results. j2 Global shares have returned 14.9% compared with the industry’s rally of 29.1% on a year-to-date basis.
Year-to-date Performance
Top-Line Details
Revenues from Cloud Services (52.5% of revenues) increased 12.5% from the year-ago quarter to $169.1 million.
Subscriber revenues (99.9% of Cloud Services revenues) climbed 12.5% to $168.9 million, driven by 13.5% growth in fixed subscriber revenues (83.1% of Subscriber revenues). Variable subscriber revenues (16.9% of Subscriber revenues) increased 7.8% year over year. Other licenses revenues (0.1% of Cloud Services revenues) skyrocketed 31.2% to $0.2 million in the reported quarter.
Moreover, DID-based revenues edged down 1.1% to $97.4 million. Non-DID revenues surged 38.5% year over year.
Digital Media revenues (47.5% of revenues) were $153.3 million, up 11.4% year over year.
At the end of the reported quarter, j2 Global had 4,015 Cloud Services customers compared with 3,197 at the end of the year-ago quarter.
Operating Details
Adjusted gross margin contracted 220 basis points (bps) on a year-over-year basis to 81.5%. Cloud Services’ adjusted gross margin shrunk 50 bps to 41.3%. Digital Media contracted 170 bps to 40.2%.
Adjusted sales & marketing, research & development, and general & administrative expenses flared up 7.3%, 8% and 13.4%, respectively, on a year-over-year basis.
Adjusted EBITDA margin shrunk 60 bps to 38.8%. Cloud Services adjusted EBITDA margin expanded 10 bps on a year-over-year basis. However, Digital Media adjusted EBITDA margin advanced 60 bps.
Adjusted operating margin descended 100 bps to 35.1%. Cloud Services adjusted operating margin expanded 10 bps, while that of Digital Media contracted 100 bps.
Balance Sheet and Cash Flow
As of Jun 30, 2019, j2 Global had approximately $155.5 million in cash and cash equivalents compared with $226.6 million as of Mar 31, 2019.
As of Jun 30, 2019, long-term debt was $1.12 billion higher than $1.02 billion as of Mar 31, 2019.
Cash flow from operations was $95.4 million compared with $116.9 million in the previous quarter.
Free cash flow was $85.8 million compared with $104.3 million in the prior quarter.
2019 Guidance Reiterated
j2 Global still expects revenues between $1.33 billion and $1.37 billion for 2019.
Additionally, the company still expects adjusted EBITDA in the $540-$556 million range.
Adjusted earnings are anticipated between $6.95 per share and $7.15 per share.
Zacks Rank & Stocks to Consider
j2 Global currently carries a Zacks Rank #3 (Hold).
Long-term earnings growth rate for CDW, Chegg and Cirrus Logic is 15.5%, 30% and 15%, respectively.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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j2 Global (JCOM) Q2 Earnings Beat Estimates, Revenues Up
j2 Global reported second-quarter 2019 adjusted earnings of $1.60 per share, beating the Zacks Consensus Estimate by 8 cents. The figure also grew 6.7% year over year.
Revenues were up 12% year over year to $322.4 million, comfortably surpassing the consensus mark of $318 million.
Average monthly revenue per customer decreased 10.7% to $14.01. Cancel rate was 2.5%, up from 2% reported in the year-ago quarter.
Shares fell 2.7% to close at $79.72 on Aug 7, following the results. j2 Global shares have returned 14.9% compared with the industry’s rally of 29.1% on a year-to-date basis.
Year-to-date Performance
Top-Line Details
Revenues from Cloud Services (52.5% of revenues) increased 12.5% from the year-ago quarter to $169.1 million.
Subscriber revenues (99.9% of Cloud Services revenues) climbed 12.5% to $168.9 million, driven by 13.5% growth in fixed subscriber revenues (83.1% of Subscriber revenues). Variable subscriber revenues (16.9% of Subscriber revenues) increased 7.8% year over year. Other licenses revenues (0.1% of Cloud Services revenues) skyrocketed 31.2% to $0.2 million in the reported quarter.
Moreover, DID-based revenues edged down 1.1% to $97.4 million. Non-DID revenues surged 38.5% year over year.
Digital Media revenues (47.5% of revenues) were $153.3 million, up 11.4% year over year.
At the end of the reported quarter, j2 Global had 4,015 Cloud Services customers compared with 3,197 at the end of the year-ago quarter.
Operating Details
Adjusted gross margin contracted 220 basis points (bps) on a year-over-year basis to 81.5%. Cloud Services’ adjusted gross margin shrunk 50 bps to 41.3%. Digital Media contracted 170 bps to 40.2%.
Adjusted sales & marketing, research & development, and general & administrative expenses flared up 7.3%, 8% and 13.4%, respectively, on a year-over-year basis.
Adjusted EBITDA margin shrunk 60 bps to 38.8%. Cloud Services adjusted EBITDA margin expanded 10 bps on a year-over-year basis. However, Digital Media adjusted EBITDA margin advanced 60 bps.
Adjusted operating margin descended 100 bps to 35.1%. Cloud Services adjusted operating margin expanded 10 bps, while that of Digital Media contracted 100 bps.
Balance Sheet and Cash Flow
As of Jun 30, 2019, j2 Global had approximately $155.5 million in cash and cash equivalents compared with $226.6 million as of Mar 31, 2019.
As of Jun 30, 2019, long-term debt was $1.12 billion higher than $1.02 billion as of Mar 31, 2019.
Cash flow from operations was $95.4 million compared with $116.9 million in the previous quarter.
Free cash flow was $85.8 million compared with $104.3 million in the prior quarter.
2019 Guidance Reiterated
j2 Global still expects revenues between $1.33 billion and $1.37 billion for 2019.
Additionally, the company still expects adjusted EBITDA in the $540-$556 million range.
Adjusted earnings are anticipated between $6.95 per share and $7.15 per share.
Zacks Rank & Stocks to Consider
j2 Global currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer & technology sector include Fortinet (FTNT - Free Report) , Chegg (CHGG - Free Report) and Cirrus Logic (CRUS - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for CDW, Chegg and Cirrus Logic is 15.5%, 30% and 15%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>