Ziff Davis, Inc. · NASDAQ:ZD
Ziff Davis — J2 Global Communications — Q2 2006 Earnings Presentation
24 slides from Ziff Davis's earnings presentation, Aug 2, 2006
Slide 1: Investor Presentation (Based upon Second Quarter 2006 results)
Investor Presentation (Based upon Second Quarter 2006 results) August 1, 2006
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 Higher than expected tax rates or exposure to additional income or other tax liability Inability to obtain telephone numbers in sufficient quantitie
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 11.4 million subscribed telephone numbers (DIDs) Global advanced messaging network 2000+ cities in 31 countries on 5 continents 15.4 MM+ unique DIDs worldwide in inventory Patented technology A portfolio of 29 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, Earthlink) 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
Slide 7: Paid Subscription Drivers
Paid Subscription Drivers Seven Drivers for Paid DID Additions Subscribers coming directly to the Company’s Websites/Telesales Brand awareness Search engine discovery Accounts for approximately 50% of monthly paid DID signups Free-to-Paid subscriber upgrades Life Cycle Management Less than 10% of mo
Slide 8: Service Roadmap
All brand names and logos are trademarks of j2 Global Communications, Inc. or its affiliates in the U.S. and/or internationally. Service Roadmap
Slide 9: <a) Slobal
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Slide 10: Recent Corporate Channel Achievements
Recent Corporate Channel Achievements Largest Corporate Contract Signed Minimum commitment of 10,000 DIDs Largest Existing Customer Extending Deployment 7,000 DIDs 10,000+ DIDs ~ 20,000 DIDs Deployed DIDs 54% Greater than Contracted Minimum Pipeline includes 59 1,000+ DID Engagements (17 in Europe)
Slide 11: 3 Years of Growth and Efficiency
All brand names and logos are trademarks of j2 Global Communications, Inc. or its affiliates in the U.S. and/or internationally. 3 Years of Growth and Efficiency ( Mid-Year 2003-2006) Corporate Staff Grew Only 33% Deployed DIDs Grew More than 300% 2 Customers with More than 10,000 DIDs 24 Customers
Slide 12: Four Corporate Sales Channels
Four Corporate Sales Channels Small & Medium Sized Businesses (SMB) Drivers : Web, In-Bound Leads, Advertising, Customer Referrals Target : Company size of 10 to 250 people Sales Size : 10 - 100 DIDs Focus/ Interaction : Non-geographic/phone/chat/email Mid-Market Sales (SME) Newest Channel Launched
Slide 13: Corporate Channel Drivers
Corporate Channel Drivers Continued Consolidation of Multi Data Center Infrastructure Lower cost consolidated sites push out fax-servers Prefer scalable and geographically diverse solutions Desire for global solutions Comfort with Outsourcing Infrastructure (SME & Enterprise) Access to Solutions as
Slide 14: Corporate Channel
Corporate Channel Drivers – Web New Corporate Website Launched January 2006 New Content, Layout, Search, Tools Year-over-Year Visits Increased over 80% 36% More Leads Generated Direct Revenue Impact of 27% on SMB Channel (Inbound only Channel) Telesales
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Slide 16: Historical Revenue & Operating Earnings Growth
37 consecutive quarters of Revenue growth 18 consecutive quarters of Operating Earnings growth Historical Revenue & Operating Earnings Growth Operating earnings for Q1 and Q2 2006 is based on Non-GAAP earnings. See Slide 23 for a reconciliation to GAAP. In addition in Q4 2002, operating income is re
Slide 17: Q2 Financial Results
Q2 Financial Results Revenue $44.4 Million Non-GAAP Gross Margin 79.3% Non-GAAP Operating Margin 43.4% Non-GAAP EPS $0.28 GAAP EPS $0.26
Slide 18: Quarter Rolling Average Cost Trends
4 Quarter Rolling Average Cost Trends All margin data for Q1 and Q2 2006 are based on Non-GAAP earnings. See Slide 23 for a reconciliation to GAAP. Sales & Marketing Engineering
Slide 19: Financial Guidance
Financial Guidance (1) Excludes non-cash compensation expense for SFAS 123(R). Assumes an effective annual tax rate of approximately 30% and 51.6 million fully diluted shares outstanding. $0.29 - $0.30 $46.2 - $47.2 Q3 $1.12 - $1.18 Non-GAAP EPS (1) $181 - $191 Revenues (millions) Fiscal Year
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Slide 21: Metrics
Metrics Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Fixed Subscriber Revenues $16,021 $17,750 $19,122 $20,823 $73,716 $22,773 $23,756 $25,229 $26,963 $98,721 $28,537 $29,687 Variable Subscriber Revenues 6,041 7,314 7,863 8,226 29,444 8,502 10,323 11,258 10,901 40,984 12,025 12,817 Subscriber Revenues
Slide 22: Computation of Free Cash Flow
(1) Net cash provided by operating activities, less purchases of property & equipment. Free Cash Flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. Computation of Free Cash Flow ($ in millions) Q1 '04 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '0
Slide 23: GAAP Reconciliation
GAAP Reconciliation Reported Non-GAAP Reported Non-GAAP Revenues Subscriber 40,562 $ - $ 40,562 $ 42,504 $ - $ 42,504 $ Other 1,456 - 1,456 1,870 - 1,870 Total revenue 42,018 - 42,018 44,374 - 44,374 Cost of revenues (1) 9,010 (109) (1) 8,901 9,272 (96) (1) 9,176 Gross profit 33,008 33,117 35,102 35
Slide 24: Global
Global
J2 Global Communications — Q2 2006 Earnings Presentation on 6ix