Slide 1: Investor Presentation (Q4 & Year-End 2003 results)
Global Communications www.j2global.com ® Investor Presentation (Based upon Fourth Quarter & Year —End 2003 results) February 2, 2004
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 “2c04 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 deploys the power of the Internet
j2),Global j2 Global deploys the power of the Internet to deliver business critical communication and messaging services to individuals and corporations throughout the world. 4 42), clos communications ne
Slide 5: Brands: eFax, jConnect, Consensus, PaperMasterPro
j2),Global @ijfax.com eFax a Ora Consensus j2) jConnect | PaperMasterPro- (aay 5 i eee
Slide 6: Unique Operational Assets
j2),Global Unique Operational Assets 5.6 million subscribed telephone numbers (DIDs) Global advanced messaging network + 1,100+ cities in 20 countries on 5 continents + 7.1MM unique DIDs worldwide in inventory Patented technology + 7 issued U.S. Patents, with 9 Patents pending Expertise + Telecom, m
Slide 7: Financial Strength
j2),Global Financial Strength Q4 2003 2003 Revenues $20.5MM — $71.6 MM Modified Earnings — $8.1 MM $26.3 MM GAAP Earnings $17.6MM — $35,8MM Modified EPs“ $0.32 $1.04 GAAP EPS $0.69 $1.42 + 27 consecutive quarters of revenue growth + 8 consecutive quarters of positive Earnings + 490% year-over-year R
Slide 8: 2003 Strategy & Accomplishments
j2),Global 2003 Strategy & Accomplishments Further penetrate existing markets + Added 41 new cities in the US and Canada + Expanded our marketing presence (Yahoo!, AOL.com, Monster.com) + Expanded our Corporate sales team Geographic market expansion + Entered Hong Kong via acquisition * Entered Isra
Slide 9: Subscriber Acquisition
j2),Global Subscriber Acquisition Created by a variety of on-line and off-line sales and marketing activities historically categorized as: Web Corporate 3 §2). cote communications a.
Slide 10: Subscriber Profile
j2),Global Subscriber Profile Vertical Markets Real estate Financial institutions Law firms & corporate legal departments Hospitality Medical Government Remote workers & “road warriors” ° . . . . . . Value Proposition Digitization (paper reduction) Security Privacy Efficiency Cost Infrastructure rep
Slide 11: Channel Interaction
j2),Global Channel Interaction Significant interdependency between the Web and Corporate channels All channels rely on Web marketing and customer acquisition Refinement of customer definition between channels * Criteria used in 2001 > Billing method » Sales method » Customer type » Pricing methodolo
Slide 12: Paid Telephone Numbers (DIDs)
j2),Global 2 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 Paid Telephone Numbers (DIDs) aie = = , 7 Active Telephone Numbers (DIDs) Ll 8 4 12/31/2002 | Qi 31/2003 | gz 6/30/2003 | G3 9/30/2003 | Q+ 12/31/2003 atorperate BR am 35008 em eases atleb Pad Es] waa aa 08 a6 9 Ene
Slide 13: Web Channel
j2),Global 13 Web Channel Profile Target indi Targeted marketing over the Web Use of Web-based marketing tools Includes Advertising-Support "Free” Users Enhanced by Life-Cycle Management (i.e. Free > Paid conversions) ual users Revenue Sources . www.eFax.com www.j2.com www.Consensus.com Advertising
Slide 14: Web Channel Financial Performance
j2),Global Web Channel Financial Performance 2002 2003 Web Year-to-Year Growth Metrics am”? oe oa 33 4038 Web Revenues $ 9,844 $ 10,761 $ 11,973 $ 13,074 $ 14,902 Number of Deployed FREE DIDs = 4.0MM— 43MM 48M 5.15.2 MM Number of Deployed PAID DIDs 226,863 256,242 298,104 316,949 331,321 Net DID Add
Slide 15: Corporate Channel
j2),Global : Corporate Channel Profile + Direct sales to SMEs and large companies * TeleSales to smaller businesses * Resellers + Permission-based marketing Revenue Sources + www.j2Corporate.com + www.eFaxCorporate.com + www.jBlast.net + www.M4Internet.com Revenue Drivers + Greater than 66% of subsc
Slide 16: Corporate Channel Financial Performance
j2),Global Corporate Channel Financial Performance 2002 __ 2008 Corporate Year-to-Year Growth Metrics 402, i038 = 3B 03403 Corporate Reverties $3,627 $4,306 $4,943 $5,413 «$5,420 Number of Deployed DIDs 43,331 «48,727 «(55,884 63,281 68,924 Net DID Additions 8,851 5,396 7107 7,397 5,643 Number of Ac
Slide 17: Page Index Detail
= == :_— 7a age Index Detail j2),Global Page Index 8 o§8 6 88 m Non-Mortgage_@ Mortgage 0 jplast ‘The index ie defined as the total pages per quarter of inbound and autbound trafic For Corporate, exprested as a percentage of the total inbound ard eutbourd pages fer the channel during Qt 2002 (Index
Slide 18: Subscriber Outlook
j2),Global 18 Subscriber Outlook Challenges Increase gross monthly subscriber additions Control subscriber cancellations Expand methods of customer acquis! Increase sales efficiency and product Further diversify industry verticals Opportunities Leverage Life-Cycle Management Enhance and expand on-li
Slide 19: eFax Corporate
j2),Global eFax Corporate @eFaxCorporate” ‘Coma by pone To G66-791-EFAX or eso feed 19
Slide 20: 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 20 §2). cote communications a.
Slide 21: Product Roadmap
Product Roadmap Unified Messaging & Comm, Services Document Management Voice Services Email Services + Inbound Fax to Emal_ + ProtoFax® + Inbound VM toEmal —« Permission-based + Integrated Emal, + Outbound Fax via Email» Messenger 30 + Voicemall management Email marketing voicemail & fax services +
Slide 22: Financial Highlights
j2),Global Financial Highlights 2 52), cata conmuicton ne
Slide 23: Revenue Growth
| Revenue Growth ‘orica Hist 27 consecutive quarters of revenue growth $22.0 egogqg segerag Be BeSs $12.0 $20.0 $18.0 $16.0 $14.0 $: (suot) 2) wan canminsanncine
Slide 24: Quarterly Revenues
j2),Global Quarterly Revenues 2002 2003 Qi Q2 Q3 Q4 Subscriber $14,454 $16,307 $17,806 $19,517 Quarter-to-Quarter Growth 11.6% 12.8% 9.2% 9.6% Year-to-Year Growth Advertising 612 09 681 06 Quarter-to-Quarter Growth: -14.4% 0.6% 11.9% 18.4% Year-to-Year Growth Licensed Services 142 121 416 151 Total
Slide 25: Margins (Percentage of Total Revenue)
25 (Percentage of Total Revenue) 90% 8000 70% 60% 50% 40% 30% 20% 10% 0% 82.1% ee 80.9% 81.5% 82.6% Gross Margin 30.2% 41.09%, Bie ra Operating Margin. ——<—<—<——— Sales & Marketing 14.2% Engineering = Q4'02 Ql ‘03 Q2 03 Q3 03 Q4 03 In Q4 2002, excludes a cne-time recovery of a marketing payment of $
Slide 26: Earnings & Free Cash Flow
j2),Global Earnings & Free Cash Flow we qe ere are ae we G0 (1 reludes a one-tne recovery ofa marketing payment of $834,000. (Gl Excludes benefit of $9.5 millon to recerd the reversal of certain valuation allowances of aur deferred tax assets, | Net cath provided by cperating activites, lass purchas
Slide 27: Tax Considerations
j2),Global Tax Considerations Reduction of the Valuation Allowance on Deferred Tax Assets + Occurred in Q4 2003 + One-time tax benefit of $9.5MM ($0.37 per share) Income Tax Accrual in 2004 + Current expected rate of approximately 35% to 40%, assuming current Federal and State tax rates > Dependent
Slide 28: 2004 Financial Guidance
j2),Global 2004 Financial Guidance Q4 Qi Year-End 2003 2004 2004 Revenue (millions) $20.5 $22.2- $22.7 $100 - $105 Earnings Before Taxes = gn 3.4 $0.37- $0.39 $1.65-$1.75 per Share (1) Assumes 40% GAAP tax accrual rate and fully-ciluted shares of 25,589,439 as of December 31, 2003 (2) Assumed a tax
Slide 29: Recent Events
29 Recent Events Announced an agreement to purchase assets of The Electric Mail Company — a provider of outsourced email and messaging services Received GSA authorization and contract approval Introduced eFax Corporate® (www.eFaxCorporate.com) —a more efficient way to sell into small- to mid-sized d
Slide 30: j2 Global
j2). Global