Slide 1: Investor Presentation: Fourth Quarter and Year-End 2004 Results
Investor Presentation (Based upon Fourth Quarter and Year-End 2004 results) February 3, 2005 www.j2global.com
Slide 2: Safe Harbor for Forward-Looking Statements
Future operating results Subscriber growth and retention Earnings growth and expectations New products, services and features Corporate spending Liquidity Network capacity and coverage Regulatory developments Taxes Certain statements in this presentation constitute “forward-looking statements” withi
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 Inability to obtain telephone numbers in sufficient quantities on acceptable terms in desirable locations Enactment of burdensome telecommunications
Slide 4: j2 Global deploys the power of the Internet
j2 Global deploys the power of the Internet to deliver business critical communication and messaging services to individuals and corporations throughout the world.
Slide 5: Trademark notice
All brands names and logos are trademarks of j2 Global Communications, Inc. in the U.S. and/or internationally.
Slide 6: Unique Assets
Unique Assets 8.7 million subscribed telephone numbers (DIDs) Global advanced messaging network 1,500+ cities in 22 countries on 5 continents 11.9MM+ unique DIDs worldwide in inventory Patented technology A portfolio of 23 issued U.S. patents, and numerous pending U.S. patent applications, issued fo
Slide 7: Subscriber Profile
Subscriber Profile Vertical Markets Financial institutions Real estate Law firms & corporate legal departments Medical Government Hospitality Remote workers & “road warriors” Value Proposition Digitization (paper reduction) Security Privacy Efficiency Cost Infrastructure replacement
Slide 8: Subscriber Acquisition
Subscriber Acquisition Individuals Targeted Web marketing (e.g. AOL, Hotmail, Yahoo!, Google, AT&T, United Online, etc.) Sold through: www.eFax.com and www.j2.com Use of proprietary Life Cycle Management (i.e. Free Paid conversions) Advertising & Calling-Party-Pays revenue supports the Free base Sma
Slide 9: Paid Subscription Drivers
Paid Subscription Drivers Five drivers for Paid subscription additions: Subscribers coming directly to the Company’s Websites Brand awareness Search engine discovery Free-to-Paid subscriber upgrades Life Cycle Management eFax Corporate SME sales Hybrid Website and human interaction (i.e. Telesales)
Slide 10: Active Telephone Numbers (DIDs) & ARPU
$15.73 $16.68 $0.05 $0.05 $17.22 $0.04 $16.95 $0.04 $16.87 $0.04 Active Telephone Numbers (DIDs) & ARPU * Defined as individual customer DIDs with greater than 4 months of continuous service (continuous service includes customer DIDs which are administratively cancelled and reactivated within a cale
Slide 11: Total Revenues
Total Revenues Core Total Revenues focus DID based revenues
Slide 12: j2 Global Network
j2),Global j2 Global Network © Carvent population of {2 Globat-served countries! 717 million » ‘¢ Representing 226+ million Internel users 32 Global has 554,000 international subscribers ‘Source: US Census Burebu{ 2003), ninety (2004 cate) Bnd? Globe Everyone has a fax number ‘on their business card
Slide 13: International Traction
International Traction Website content, sales and support in English, Spanish, German, French and Dutch Non-U.S. Website visits grew by 29% between Q4 2003 and Q4 2004 Expansion of the “Free” model throughout Europe 460,000 telephone numbers assigned in the UK, France, Germany and the Netherlands Lo
Slide 14: Product Roadmap
j2),Global Document Inbound Fax to Email + ProtoFax® + Outtound Fax via Email » Messenger 3.0 Fax broadcasting» HotSend® + Seaute fax + PaperMaster Pro™ + OCR + POF delivery + Fax storagefarchive + Smart Caller 1D + New notification methods I Currently offered I Future cpportunities 14 tans a ste Ta
Slide 15: j2),Global
j2),Global 2) wan tanminsanncin
Slide 16: Historical Revenue & Operating Income Growth
31 consecutive quarters of Revenue growth 12 consecutive quarter of Operating Earnings growth Historical Revenue & Operating Income Growth
Slide 17: Quarterly Revenues
Quarterly Revenues FY Q1 Q2 Q3 Q4 FY Subscriber $68,084 $22,062 $25,063 $26,985 $29,050 $103,160 13.0% 13.6% 7.7% 7.7% Year-to-Year Growth 53.7% 51.5% Advertising 2,708 2,745 -5.6% -15.0% 3.2% 0.1% Year-to-Year Growth -10.7% 1.4% Licensing and Other Total Revenues $71,621 $22,942 $25,831 $27,771 $29
Slide 18: Subscriber Revenues
Subscriber Revenues (in Thousands) Core Subscriber Revenues focus Fixed revenues FY Q1 Q2 Q3 Q4 FY Fixed ($M) 47,190 16,021 17,750 19,122 20,823 73,716 % of Subs. Revenues 71.6% 72.6% 70.8% 70.9% 71.7% 71.5% % Growth 54.4% 14.6% 10.8% 7.7% 8.9% 56.2% TTM Growth 55.4% 56.0% 56.5% 56.2% Variable ($M)
Slide 19: Gross Margin and Operating Margin
j2),Global 80% Gross Margin 70% 60% 50% ° 41.4% 43.5% 42.6% 43.0% AA,0%e— 40% — : Operating Margin (Percentage of Total Revenue) 30% G&A 20% ol a ii, ales & Marketing or Engingring 4038 Qu‘o4 Q2'04 Qe'04 2) wan canminsanncine
Slide 20: Earnings & Free Cash Flow
(2) (1) Earnings & Free Cash Flow (1) Excludes benefit of $9.5 million to record the reversal of certain valuation allowances of our deferred tax assets. (2) Prior to Q4 2003, the Company accrued tax expense at the rate of 5% of less. (3) Net cash provided by operating activities, less purchases of
Slide 21: 2005 Financial Guidance
2005 Financial Guidance (1) Assumes an annual tax rate of between 25-28% and diluted shares of 25.8 million as of January 31, 2005 $0.39 $32.2 Q1 $1.70 - 1.75 Net Earnings per Share (1) $145 - 148 Revenues (millions) Year-End
Slide 22: Recent Events
Recent Events Introduced free on-line message access and storage to eFax Plus ® and jConnect ® Premier customers eFax Secure ™ , an encrypted link notification and delivery method, was introduced for eFax Corporate customers For power users, eFax Pro ™ , a new service bundle, was introduced j2 Globa
Slide 23: j2 Global
j2) Global