Slide 1: Investor Presentation (Based upon Second Quarter 2008 results)
Investor Presentation (Based upon Second Quarter 2008 results) August 5, 2008
Slide 2: Safe Harbor for Forward-Looking Statements
Future operating results Subscriber growth, retention and usage levels Fax and voice service growth New products, services and features Corporate spending Liquidity Network capacity, coverage and security Regulatory developments Taxes Certain statements in this presentation constitute “forward-looki
Slide 3: Risk Factors
Risk Factors Inability to sustain growth in our customer base, revenue or profitability Competition in price, quality, features and geographic coverage Higher than expected tax rates or exposure to additional tax liability Inability to obtain telephone numbers in sufficient quantities on acceptable
Slide 4: Messaging/Communications as a Service
All brand names and logos are trademarks of j2 Global Communications, Inc. or its affiliates in the U.S. and/or internationally. Messaging/Communications as a Service
Slide 5: Core j2 Global Assets
Core j2 Global Assets 11.4 million Subscribed Telephone Numbers (DIDs) 1,163K Paid DIDs Global Advanced Messaging Network Over 3 ,100 cities in 45 countries on 5 continents 17.5M + unique DIDs worldwide in inventory Intellectual Property 57 issued patents and l icensing programs designed to monetize
Slide 6: Subscriber Acquisition
Individuals Targeted marketing (search, online media and radio) Sold through: eFax.com, eVoice.com, Onebox.com, www.phonepeople.com, Fax.com, j2.com and other brand websites Use of proprietary Life Cycle Management Advertising, Up-selling, and Calling-Party-Pays revenue supports the Free base Small
Slide 7: Eight Drivers for Paid DID Additions
Eight Drivers for Paid DID Additions Subscribers coming directly to the Company’s Websites/Telesales Brand awareness driven by demand-generation programs and “word of mouth” Search engine discovery Accounts for over 40% of monthly paid DID signups Free-to-Paid subscriber upgrades Life Cycle Manageme
Slide 8: Global
Global j2 ), Communications {2 Global Communications 2008
Slide 9: GAAP Results Q2 2008
(1) Includes SFAS 123(R) non-cash compensation expense. (2) Includes SFAS 123(R) non-cash compensation expense, net of tax benefit. (3) See slide 20 for computation of free cash flow. GAAP Results GAAP Revenues $60.7M Gross Profit/Margin (1) $49.0M 80.7% Operating Profit/Margin (1) $24.1M 39.7% GAAP
Slide 10: Global
Global j2 ), Communications {2 Global Communications 2008
Slide 11: Phone People Highlights
A Leading Virtual PBX Company focused on Toll Free Numbers Full featured Virtual PBX Individual FM/FM Vanity number search engine Well Managed Company Generating Strong Free Cash Flow Emphasizes Search for Own Number Opportunity to Create Best of Breed Services/Marketing Additional Efficiencies by I
Slide 12: Voice Services Update
eVoice Receptionist/Onebox Receptionist/Phone People More than 150,000 paid DIDs currently Catering to different customer needs Voice to text deployed to Onebox New website in testing for Onebox Evaluating new features eReceptionist/YAC Western Europe in earlier phase than US Started cross-selling t
Slide 13: Corporate Fax Highlights
Continued Increase in Demand for Fax to Email Services More than 5 Big Contract Wins on Average/Quarter Large Enterprise Recognize eFax Corporate Service Model as Attractive Broad based deployment – heavy and light users Desire to eliminate less scalable fax servers and costly fax machines Company w
Slide 14: Marketing Highlights
Marketing Highlights 2008 Silver Communicator Award for eFax Direct Marketing – “You Are Here”
Slide 15: Global
Global j2 ), Communications {2 Global Communications 2008
Slide 16: Goals for 2008
Assumed Difficult Economy for 2008 - Objectives Grow voice services into a leadership position Focus on corporate and international markets Improve gross margin Improve operating margin Focus on free cash flow generation Look to deploy capital at attractive ROI Add to the asset base through M&A Goal
Slide 17: Achievements: Scorecard
Achievements Voice services at 150,000 DIDs Corporate fax continuing to sign up big deals with 4 in Q2 International grew ~ 30% from Q2 2007 Gross Margins up 108 bp since Q4 2007 Operating Margins up 241 bp since Q4 2007 Flow through 95%+ of incremental revenue to GM since Q4 2007 Flow through 75%+
Slide 18: 2008 Guidance
2008 Guidance $1.45 - $1.65 GAAP EPS $240 - $270 Revenues (M) 2008 EPS is based on GAAP which includes SFAS 123(R) non-cash compensation expense, net of tax benefit.
Slide 19: Global
Global j2 ), Communications {2 Global Communications 2008
Slide 20: Metrics
Metrics Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Fixed Subscriber Revenues $32,179 $36,013 $37,757 $39,643 $41,362 $43,336 $44,260 $46,593 Variable Subscriber Revenues 12,312 11,433 12,536 12,970 12,667 12,057 12,956 12,943 Subscriber Revenues $44,491 $47,447 $50,293 $52,613 $54,029 $55,393 $57,216 $59,536 Other Rev
Slide 21: Computation of Free Cash Flow
(1) Net cash provided by operating activities, less purchases of property & equipment. Free Cash Flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. Computation of Free Cash Flow ($ in millions) Q3 '06 Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Net c
Slide 22: Usage of Corporate and Web High Volume Users
Usage of Corporate and Web High Volume Users Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Credit Sensitive (inclu Web Heavy Users) Non Credit Sensitive
Slide 23: Global Communications
j2) Global Communications