Slide 1: Core Investor Presentation Q2 2021
Core Investor Presentation Q2 2021
Slide 2: Safe Harbor for Forward-Looking Statements
2 Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly those regarding our 2021 Financial Guidance. Such forward-looking statements are subject to numerous assumptions, risks and uncertaintie
Slide 3: Risk Factors
3 The following factors, among others, could cause our business, prospects, financial condition, operating results and cash flows to be materially adversely affected: • Inability to sustain growth or profitability, and any related impact of U.S. or worldwide economic issues on customer acquisition,
Slide 4: Overview
Overview
Slide 5: J2 Global's Success Story
5 J2 Global’s Success Story Highly Recurring Revenues across Advertising and Subscription Businesses Consistent and Sustained Revenue and Earnings Growth Diversified Portfolio of Internet Brands at the Forefront of the Shift from Analog to Digital Programmatic M&A System with Proven Track Record Vir
Slide 6: Snapshot
$1.7b in Revenue (1) 16% CAGR $694MM in Adjusted EBITDA (1)(2) 15% CAGR 42% Adjusted EBITDA (1)(2) Margin 62% FCF / Adjusted EBITDA (1)(2) 196 Acquisitions since Inception 5.3x Spend / Adjusted EBITDA (3) 40+ Internet Information & Services Brands (1) Snapshot 6 1. Results based on LTM (July 2020 th
Slide 7: Our Two Segments: Digital Media and Cloud Services
Digital Media Our Two Segments 7 Cloud Services
Slide 8: Highly Recurring Revenues Across Cloud Services and Digital Media
8 93% of Advertising Revenue from Recurring Customers SIGNIFICANT SUBSCRIPTION MIX… …WITH HIGHLY RECURRING ADVERTISING REVENUE Total Revenue Breakdown (LTM June 2021) (1) (in millions) Recurring Advertising Dollar Spend (FY 2020) (2) $1,490 Total Revenue Highly Recurring Revenues Across Cloud Servic
Slide 9: Acquisition Strategy
Acquisition Strategy
Slide 10: Acquisitions Are Core to Our Strategy
10 Completed 171 acquisitions since 2008 through June 2021, representing over $3.0b of deployed acquisition capital We believe that the shift to digital is not complete: We believe in the power of our diversified portfolio: We behave like investors with operators’ advantages: Our approach to acquisi
Slide 11: Multiple Demands on Acquisition Capital
11 Corporate Acquire a new division (e.g., Ziff Davis, Everyday Health) • 16% of M&A since 2000 • Sponsored by J2 corporate leadership Divisional Acquire a new business unit within an existing division (e.g., IGN, Ookla, IPVanish) • 15% of M&A since 2000 • Sponsored by one of our three divisional pr
Slide 12: Business Update
Business Update
Slide 13: Our Two Segments
Our Two Segments (1) 13 58% of Total Revenue 54% of Total EBITDA Contribution Digital Media FINANCIAL OVERVIEW 42% of Total Revenue 46% of Total EBITDA Contribution Cloud Services FINANCIAL OVERVIEW 1. Figures are adjusted non-GAAP and adjusted EBITDA margins are before corporate allocation. See sli
Slide 14: Digital Media Business Model
Display & Video Ads ~21% of J2 Revenue 31B+ page views/year 6B+ video views/year • Ads running on O&O and affiliate sites • Priced based on ads served • Ad creative generally supplied by client Performance Marketing ~20% of J2 Revenue 240MM+ clicks delivered/year 1.9MM+ leads generated/year • Delive
Slide 15: Cloud Services Business Model
SoHo Subscription SMBE Subscription ~22% of J2 Revenue Customers ~2.8MM ARPU/Mo ~$9.95 • Subscription services for emerging businesses • Digital services: cloud fax, soft phone, file sync, email marketing and anti-virus • Customer acquisition mostly through online channels • Strong recurring revenue
Slide 16: Consolidated Financial Snapshot
161. See slide 28 for a GAAP reconciliation of adjusted EBITDA for the Company Consolidated Financial Snapshot (1)
Slide 17: Adjusted EBITDA and Free Cash Flow
17 Adjusted EBITDA and Free Cash Flow (1)(3) 1. See slides 27 and 28 for a GAAP reconciliation of Free Cash Flow and Adjusted EBITDA 2. Figures are adjusted non-GAAP 3. Free cash flow decreased primarily due to additional tax payments during Q2 2021 in comparison to the prior comparable period in th
Slide 18: 2021 Guidance
2021 Guidance (Forward-Looking Statement) 18 J2 has raised its full-year guidance of Revenues, Adjusted EBITDA and Adjusted non-GAAP EPS (1)(2)(3) (1) Figures are adjusted non-GAAP, and exclude our B2B Backup and UK Voice businesses (2) Adjusted earnings per diluted share excludes share-based compen
Slide 19: Supplemental Information
Supplemental Information
Slide 20: Q2 2021 Consolidated Financial Snapshot
20 Q2 2021 Consolidated Financial Snapshot (1) 1 Figures are adjusted non-GAAP; See slide 31 for a reconciliation of the pro-forma adjustments for excluded assets consist of certain Voice assets in Australia and New Zealand that were sold in the third quarter of 2020, certain Voice assets in the Uni
Slide 21: Q2 2021 Financial Snapshot By Business
21 Q2 2021 Financial Snapshot By Business (1) 1 Figures are adjusted non-GAAP; See slide 31 for a reconciliation of the pro-forma adjustments for excluded assets consist of certain Voice assets in Australia and New Zealand that were sold in the third quarter of 2020, certain Voice assets in the Unit
Slide 22: J2 Structure
Ziff Media Group Gaming Broadband B2B Pregnancy & Parenting Consumer Professional Digital Media Segment 22 J2 Structure Cloud Fax SMB Enablement Cybersecurity Cloud Segment
Slide 23: Consolidated Metrics
Consolidated Metrics 23 1. See slide 26 for a reconciliation of non-GAAP earnings and EPS to GAAP Net Income and diluted GAAP EPS 2. See slide 27 for a definition of Free Cash Flow and reconciliation to Net Cash Provided by Operating Activities 3. See slide 28 for a definition of adjusted EBITDA and
Slide 24: Cloud Services & Digital Media Metrics
Cloud Services & Digital Media Metrics 24 1. Cloud Services revenue includes IP Licensing revenue; Q3 2020 Cloud Services Revenue excludes $1.0MM in projected September revenues and $0.3MM in September EBITDA for the divested Voice ANZ asset; all periods include the B2B Backup and UK Voice businesse
Slide 25: Return on Invested Capital (ROIC) Calculation
25 Return on Invested Capital (ROIC) Calculation (in Millions) Cumulative Spend (1) Adjusted EBITDA (2)(3) Cumulative Spend / Adjusted EBITDA (3) Free Cash Flow (FCF) (3) Cumulative FCF (3) since 2008 Invested Equity Capital (IEC) (4) ROIC FCF (3) / IEC (4) IEC (4) & Net Debt (5) ROIC FCF (3) / (IEC
Slide 26: Q2 2021 Reconciliation of GAAP to Adjusted Non-GAAP Earnings & EPS
Q2 2021 Reconciliation of GAAP to Adjusted Non-GAAP Earnings & EPS (1) 26 Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation; (2) elimination of certain acquisition related integration costs; (3) elimination of interest costs in exces
Slide 27: GAAP Reconciliation - Free Cash Flow
GAAP Reconciliation - Free Cash Flow (1)(2)(3) 27 1. Free Cash Flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus excess tax benefits (deficits) from share based compensation, plus IRS settlement, plus contingent consideration. Free Ca
Slide 28: GAAP Reconciliation - Adjusted EBITDA
28 1. Adjusted EBITDA is defined as net income plus interest and other expense, net; income tax expense; depreciation and amortization and the items used to reconcile GAAP to Adjusted Non-GAAP EPS. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purpo
Slide 29: Q2 2021 Reconciliation of GAAP to Adjusted EBITDA
29 1. Figures are adjusted non-GAAP Q2 2021 Reconciliation of GAAP to Adjusted EBITDA (1) NOTE 1: Table above excludes certain intercompany allocations Figures in Thousands Cloud Services Digital Media Corporate Total Revenues GAAP revenues 175,283$ 253,761$ -$ 429,044$ Gross profit GAAP gross profi
Slide 30: Q2 2020 Reconciliation of GAAP to Adjusted EBITDA
30 1. Figures are adjusted non-GAAP Q2 2020 Reconciliation of GAAP to Adjusted EBITDA (1) NOTE 1: Table above excludes certain intercompany allocations NOTE 2: Table above has been recast to remove the impact of certain expenses associated with the Corporate entity that were previously allocated to
Slide 31: Reconciliation of Non-GAAP to Pro-Forma
Reconciliation of Non-GAAP to Pro-Forma (Figures in Thousands, except per share amounts) 1. Adjustments for excluded assets consist of certain Voice assets in Australia and New Zealand that were sold in the third quarter of 2020, certain Voice assets in the United Kingdom that were sold in February
Slide 32: Select History of Deals
32 Select History of Deals (1) 1. Companies are a sample of key acquisitions; timeline based on calendar year
Slide 33: Transaction Criteria
33 Fair businesses at great prices • Improve acquired company’s margins through “shrink to grow” • Build from the profitable core, developing new revenue streams Great businesses at fair prices • Accelerate sales and product development • Provide access to our capital • Leverage our marketing assets
Slide 34: Areas of Acquisition Focus
34 Areas of Acquisition Focus Subscribers Acquire and migrate competitor’s subscribers Minimal infrastructure costs of migrated services Traffic Strong traffic profiles, but under-monetized Generate commerce, lead-gen, data and subscription revenues Platform New service or content vertical
Slide 35: Programmatic Acquirers Significantly Outperform Indices
35 Programmatic Acquirers Significantly Outperform Indices 1. Indexed results since 2009 based on Market Cap of Serial Acquirers; through 12/31/2020 0% 200% 400% 600% 800% 1,000% 1,200% 1,400% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Serial Acquirers DJIA NASDAQ S&P 500
Slide 36: J2 Global
J2 GLOBAL