Ziff Davis, Inc. · NASDAQ:ZD
Ziff Davis — j2 Global Communications — Q3 2003 Earnings Presentation
24 slides from Ziff Davis's earnings presentation, Oct 21, 2003
Slide 1: Investor Presentation (Based upon Third Quarter 2003 results)
Global Communications www.j2global.com ® Investor Presentation (Based upon Third Quarter 2003 results) October 20, 2003
Slide 2: Safe Harbor for Forward-Looking Statements
j2),Global Safe Harbor for Forward-Looking Statements Certain statements in this presentation constitute “forwarcHlooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly those contained in the side entitled “2003 Financial Guidance”. These forwarc
Slide 3: Risk Factors
j2),Global Risk Factors ‘The following factors, among others, could cause our business, prospects, financial condition, cperating results and cash flaws to be materially adversely affected! ‘+ Inability to sustain growth in our customer base, reverie or profitability + Competition in price, quality,
Slide 4: j2 Global delivers
j2),Global j2 Global delivers business critical communication and messaging services to individuals and corporations throughout the world. 4 42), clos communications ne
Slide 5: j2 Global brands: eFax, jConnect and others
j2),Global @ijfax.com eFax a Ora Consensus j2) jConnect | PaperMasterPro- (aay 5 i eee
Slide 6: What we do...
j2),Global What we do... Proprietary IP Control Structure 1,100+ Cities Worldwide Voicemail Outbound (Send) Create a document Proprietary IP Subscriber Control Structure 6 §2). cote commuicatons ie
Slide 7: Unique Assets
j2),Global Unique Assets 5.5 million subscribed telephone numbers (DIDs) Global advanced messaging network + 1,100+ cities in 20 countries on 5 continents + 6.7MM+ unique DIDs worldwide in inventory Patented technology + 7 issued U.S. Patents, with 8 Patents pending Expertise + Telecom, messaging, I
Slide 8: Sales Channels
j2),Global Sales Channels Web + Target individual users * Targeted marketing over the Web yaad + Use of Web-based marketing tools wwrw.Consensus.com Corporate + Direct sales force to SMEs and large companies + TeleSales to smaller businesses + Resellers wow j20orporatecom e i. 4 ‘a ‘www jBlast.com P
Slide 9: Corporate Channel Vertical Markets
j2),Global Corporate Channel Vertical Markets ¢ Financial institutions + Law firms & corporate legal departments + Real estate + Hospitality + Medical * Government + Remote workers & “road warriors” al Features ‘ation (paper reduction) + Security + Privacy + Efficiency + Cost 3 §2). cote commuicaton
Slide 10: Active Telephone Numbers (DIDs)
j2),Global Active Telephone Numbers (DIDs) 400,000 2 as0,000 & © 300,000 5 8 250,000 2 5 200,000 150,000 @B_9/20/ 2000 [QA 42/21/2000 | GA ajan/ 00a | GE 6/20/2008 | G9 30/2005 Corporate BI [ 9800 23031 aan 5008 e201 web paid [212001 725,865 522 Z308 ECE) fora pap ps _|__ 216902 O94 308,969 ag08 300
Slide 11: Metrics
j2),Global Metrics 93 ‘02 9402 gi 03 9203 98 ‘03 Web - Paid Number of Deployed DIDs 212,001 226,863 256,242 293,104 316,949 Net DID Add tions 14005 14,852 28,379 HH2_— 23,845 ARPU / Month $1346 91394 $1404 $1379 $144 Cancdlation Rate) 4.9% 3.7% 3.5% 2.9% 2.8% Corporate Number of Deployed DIDs 34400
Slide 12: Global Network Presence
j2),Global Global Network Presence j2 Global Network * 1,100+ cities in 20 countries on 5 continents * Continuing to expand into new international locations R §2). cote communications a.
Slide 13: Product Roadmap
j2),Global IP , Document Fax Management Inbound Fax to Emal + ProtoFax® + Outtound Fax via Email * Messenger 3.0 + Fax broadcasting + HotSend® + Seaute fax + PaperMaster Pro™ © OCR + Fax storagefarchive + New notification methods I Currently offered I Future cpportunities 13 Product Roadmap Unified
Slide 14: Financial Highlights
j2),Global Financial Highlights 4 52), cata conmuicton ne
Slide 15: Revenue Growth
3 2 © oO ok | Revenue Growth ‘orica Hist 26 consecutive quarters of revenue growth $20.0 $18.0 $16.0 $14.0 (suot) 2) wan canminsanncine
Slide 16: Quarterly Revenue
j2),Global Quarterly Revenue 2002 2003 Q3. Q4 Qu Qe Q3. Subscriber Fl1551 $12,956 $14,454 $16,307 $17,806 ‘Quar ter-to-Quarter Growth 108% 22% 11.6% 12.8% 32% Advertising 783 715 612 609 681 Quar ter-to-Quarter Growth 11.1% “8.7% -14.4% 0.6% 11.9% Licensed Services 169 354 142 124 416 Total Revenue
Slide 17: Quarterly Revenue by Channel
j2),Global Quarterly Revenue by Channel 2002 2003 Qs" 4 Qr Q2 Q3. Web $9031 «99844 «f10,761 «$1973 «413,074 Quar ter-to-Quarter Growth B.% 90% 93% 11.3% 32% Corporate 3308 3827 4,306 4948 5413 ‘Quar ter-to-Quarter Growth 16.3% 15.9% 125% 14.8% 3.5% Licensed Services 169 354 t4i 124 416 Total Revenue
Slide 18: Cost Trends
90% 8000 70% 60% 50% 40% 30% (Percentage of Total Revenue) 20% 10% 0% 18 Cost Trends Gross Margin Operating Margin tn ————SS ee Sales & Marketing” Engingering Q3'02 402 Ql 03 203 Qs 03 In Q4 2002, excludes a cne-time recovery of a marketing payment of $694,000 2) wan canminsanncine
Slide 19: Free Cash Flow
j2),Global 19 (ritons) g (1 eludes a one-time recovery ofa marketing payment of $834,000, ‘GINat cath provided by operating activites, less purchases of FFEE., Free Cash Flow amounts are net meant 352 substitute for GAAP, but are solely for informational purposes ‘Gnmilions) Co 62m Gn am os ans ar I
Slide 20: Tax Considerations
j2),Global Tax Considerations Net Operating Loss Carry-Forwards (NOLs) at 9/30/03 + Company had approximately $41MM and $43MM of Federal and State available NOLs, respectively, for tax purposes Company had approximately $1MM of Federal tax credits available Reduction of the Valuation Allowance on De
Slide 21: 2003 Financial Guidance
j2),Global 2003 Financial Guidance (Revised 10/20/03) Q4 Year-End 2003 2003 Revenue $20.3MM $71.4MM Net Earnings Per Fully Diluted Share $0.31 $1.03 © assumes fully diluted shares of 25,814,961 as of October 15, 2003 ® Assumes a 5% California tax rate and no reduction ofthe Company's tax valuation a
Slide 22: 2004 View
j2),Global 22 2004 View 2004 Budgeting currently in-process Historical Results (since Qi 2001) + Subscriber growth: 5.3% to 12.8% () + Advertising & Licensed Services: Varied 2) + 40%+ EBIT Flow-Through of Incremental Revenue @) Current View j2 Global currently believes that, subject to the risk fac
Slide 23: Recent Events
j2 23 Global Recent Events ¢ Implementing a phased price change for existing subscribers of eFax Plus ($9.95 > $12.95) and jConnect Premier™ ($12.50 > $15.00) + 2-for-1 common stock split effective August 29, 2003 ~ Introduced additional “secure fax” solutions j2 Global's network expands into Mexico
Slide 24: j2 Global
j2). Global
j2 Global Communications — Q3 2003 Earnings Presentation on 6ix