Slide 1: Investor Presentation (Based upon Second Quarter 2007 results)
Investor Presentation (Based upon Second Quarter 2007 results) August 6, 2007
Slide 2: Safe Harbor for Forward-Looking Statements
Future operating results Subscriber growth and retention Results of eFax price change New products, services and features Corporate spending Liquidity Network capacity and coverage Regulatory developments Taxes Certain statements in this presentation constitute “forward-looking statements” within th
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; worse than expected results of eFax price change Higher than expected tax rates or exposure to additional tax liability Inability to obtain telepho
Slide 4: Messaging 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 as a Service
Slide 5: Core j2 Global Assets
Core j2 Global Assets 11.6 million Subscribed Telephone Numbers (DIDs) Global Advanced Messaging Network > 2,900 cities in 42 countries on 5 continents 17.0MM + unique DIDs worldwide in inventory Patented Technology A portfolio of 54 issued patents, and numerous pending U.S. and foreign patent appli
Slide 6: Subscriber Acquisition
Subscriber Acquisition Individuals Targeted marketing (search, online media and radio) Sold primarily through: www.eFax.com , www.j2.com, www.onebox.com and www.evoice.com Use of proprietary Life Cycle Management Advertising & Calling-Party-Pays revenue supports the Free base Small to Mid-Sized Busi
Slide 7: Paid Subscription Drivers
Paid Subscription Drivers Six 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 ~ 45% monthly paid DID signups Free-to-Paid subscriber upgrades L
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Slide 9: eFax Price Change Update
eFax® Price Change Update New Customers Signup on New Pricing All at $16.95 (monthly) or $169.50 (annual) in January Existing Customers Continue to Migrate to New Pricing ~ 40% at end of Q4 2006 ~ 60% at end of Q1 2007 ~ 80% at end of Q2 2007 Cancels within Expected Range 10%-15% incremental cancels
Slide 10: Voice Services Update
Voice Services Update Voice Services Paid DIDs Represent > 5% of the Paid DID Base Growth Rate from Q1 2007 to Q2 2007 > 30% Current Target Customer is SMB with 2 – 15 Persons Acquired YAC in Q3 with UK Base of Voice Services Customers Marketing to Internal Customer Base Beginning to Test External M
Slide 11: New Marketing Tests
New Marketing Tests Began National Radio Spots During January Utilized Primarily Talk Show Format Variety of personalities including Kim Komando, Colin Cowherd, Laura Ingraham, Hugh Hewitt, Dennis Miller, Leo Laporte Ad spots and show sponsorship Primarily eFax oriented eFax Radio Spot Testing Voice
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Slide 13: Q2 2007 Non-GAAP Financial Results
Q2 2007 Non-GAAP Financial Results GAAP Revenues $54.0 MM Gross Profit/Margin (1) $43.9 MM 81.3% Operating Profit/Margin (1) $23.9 MM 44.2% Non-GAAP EPS (2) $0.36 Per Share Free Cash Flow (3) $20.6 MM Cash and Investments $233.1 MM Margin (1) Excludes SFAS 123(R) non-cash compensation expense. See s
Slide 14: Margin Trends by Year
Margin Trends by Year Operating margins for 2004 to 2006 are based on Modified earnings. Q1 2007 and Q2 2007 excludes SFAS 123(R) non-cash compensation, net of tax benefit. See slides 19 and 20 for reconciliations to the nearest GAAP financial measures.
Slide 15: Financial Guidance
Financial Guidance (1) Excludes SFAS 123(R) non-cash compensation, net of tax benefit. Assumes an effective annual tax rate of approximately 30% and 51.2 million fully diluted shares outstanding. $0.36 - $0.37 $56.0 - $57.5 Q3 $1.35 - $1.45 Non-GAAP EPS (1) $217 - $229 Revenues (MM) Fiscal Year
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Slide 17: Metrics
Metrics Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Fixed Subscriber Revenues $22,773 $23,756 $25,229 $26,963 $98,721 $28,537 $29,855 $32,179 $36,013 $126,586 $37,765 $39,653 Variable Subscriber Revenues 8,502 10,323 11,258 10,901 40,985 12,025 12,816 12,312 11,433 48,585 12,528 12,961 Subscriber Reve
Slide 18: Computation of Free Cash Flow
(1) Net cash provided by operating activities, less purchases of property & equipment. Free Cash Flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. Computation of Free Cash Flow ($ in millions) Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '0
Slide 19: GAAP Reconciliation
GAAP Reconciliation (1) Stock-based compensation is as follows: for Q2, Cost of revenues is $140K, Sales and Marketing is $264K, R&D is $184K, and G&A is $1,114K and for Q1, Cost of revenues is $182K, Sales and Marketing is $278K, R&D is $173K, and G&A is $1,097K. (2) Income tax expense is adjusted
Slide 20: GAAP Reconciliation
GAAP Reconciliation (1) Stock-based compensation and charges for payroll tax and employee compensation liabilities associated with inadvertent measurement date errors in prior stock option grants are as follows: 2006 Adjustments - Cost of revenues is $571K, Sales and Marketing is $1,236K, R&D is $75
Slide 21: Global
Global