Slide 1: Investor Presentation (Based upon Fourth Quarter 2005 results)
Investor Presentation (Based upon Fourth Quarter 2005 results) February 6, 2006 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 desired locations Enactment of burdensome telecommunications o
Slide 4: Trademark notice
All brand names and logos are trademarks of j2 Global Communications, Inc. or its affiliates in the U.S. and/or internationally.
Slide 5: Core j2 Global Assets
Core j2 Global Assets 11.2 million subscribed telephone numbers (DIDs) Global advanced messaging network 2,000+ cities in 26 countries on 5 continents 14.6 MM+ unique DIDs worldwide in inventory Patented technology A portfolio of 25 issued U.S. patents, and numerous pending U.S. patent applications,
Slide 6: Subscriber Acquisition
Subscriber Acquisition Individuals Targeted Web marketing (e.g. AOL, MSN, Yahoo!, Google, CareerBuilder, New York Times, etc.) Sold primarily through: www.eFax.com , www.j2.com, www.onebox.com and www.evoice.com Use of proprietary Life Cycle Management (e.g. Free Paid conversions) Advertising & Call
Slide 7: Paid Subscription Drivers
Paid Subscription Drivers Six Drivers for Paid Subscription Additions Subscribers coming directly to the Company’s Websites/Telesales Brand awareness Search engine discovery Accounts for up to 50% of monthly paid DID signups Free-to-Paid subscriber upgrades Life Cycle Management eFax Corporate SMB s
Slide 8: j2 Global
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Slide 9: International Efforts Over Past 2 Years
Headcount In-Country Offices Languages Currencies Countries Covered Area Codes 2 26 1 7 19 26 60 340 International Efforts Over Past 2 Years
Slide 10: Aggressive International Expansion
Aggressive International Expansion 29K Paid DIDs 161K Free DIDs English Only US $ Only 60 Area Codes 2 Non-US Headcount 39K Paid DIDs 549K Free DIDs Launched local- language web sites in UK, NL, FR, DE, SP, CA 6 Additional Currencies ( £, €, ¥, CA $, AU $, HK $) 120 Area Codes 7 Non-US & 2 US- based
Slide 11: United Kingdom
United Kingdom Largest Revenue Market in Europe Substantial Growth Potential Acquired Three Companies in Past 18 Months
Slide 12: Netherlands
Netherlands Largest Free Base with Strong CPP Revenue Strong Partner Base - Expanding into other EU Countries
Slide 13: France/Spain
France/Spain Added Area Codes Launched Initial Marketing Campaigns Seeing Growth Accelerate
Slide 14: 2005 Results & 2006 Goals
2005 Results & 2006 Goals Rapid Growth in 2005 71K paid DIDs (+82% vs. 2004) 966K free DIDs (+76% vs. 2004) Represents slightly less than 10% of company revenue International has substantial upside potential Accelerate Expansion in EU Continue to penetrate in Western Europe Network and marketing New
Slide 15: j2 Global
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Slide 16: Enterprise Sales
Corporate Update Enterprise Sales 18 Enterprise accounts with 1,000+ DIDs – all under annual or multi-year contracts Largest account has more than 10,000 DIDs provisioned 8 “Fortune 100” accounts Pipeline: 68 qualified 1,000+ DID opportunities, of which 14 are international Lower cancellation rate m
Slide 17: j2 Global
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Slide 18: Historical Revenue & Operating Earnings Growth
35 consecutive quarters of Revenue growth 16 consecutive quarter of Operating Earnings growth Historical Revenue & Operating Earnings Growth
Slide 19: Cost Trends
Cost Trends * * * Reflects a reclassification of certain network operations and depreciation expenses into Cost of Revenues, which was implemented in Q1 2005, versus their historical inclusion in General & Administrative expenses. See Slide #24 for a reconciliation to previously reported numbers.
Slide 20: Financial Guidance
Financial Guidance (1) Assumes an effective annual tax rate of 27% and 25.8 million fully diluted shares outstanding $0.53 – $0.55 $41.3 – $42.1 Q1 $2.34 - $2.46 Net Earnings per Share (1) $181 - $191 Revenues (millions) Fiscal Year
Slide 21: Goals for 2006
Goals for 2006 Further Penetrate North America with DID Based Offerings Grow International Revenues at a Greater Rate than the Company Lay Foundation for Additional Revenue in Asia Launch “Bring Your Own Number Service” in US Evolve eVoice Product Suite Enhance OneBox Service Offering Refine Product
Slide 22: j2 Global
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Slide 23: Metrics
Metrics Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Fixed Subscriber Revenues $16,021 $17,750 $19,122 $20,823 $73,716 $22,773 $23,756 $25,229 $26,963 $98,721 Variable Subscriber Revenues 6,041 7,314 7,863 8,226 29,444 8,502 10,323 11,258 10,901 40,984 Subscriber Revenues $22,062 $25,063 $26,985 $29,050 $103
Slide 24: Reconciliation of previously reported Cost of Revenues and G&A
Reconciliation of previously reported Cost of Revenues and General & Administrative Expenses for 2004 ($ in thousands) Q1-2004 % of Rev Q2-2004 % of Rev Q3-2004 % of Rev Q4-2004 % of Rev Total 2004 % of Rev Cost of Revenues Previously reported 3,640 $ 15.9% 4,063 $ 15.7% 4,363 $ 15.7% 4,448 $ 14.9%
Slide 25: 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) Net cash provided by operating activities $10.252 $13.044 $13
Slide 26: j2 Global
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