J2 Reports Third Quarter 2016 Results

j2 Global, Inc. (NASDAQGS: JCOM) today reported financial results for the third quarter ended September 30, 2016 and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.3550 per share.


Q3 2016 quarterly revenues increased 17.6% to a Q3 record of $210.1 million compared to $178.7 million for Q3 2015.

Net cash provided by operating activities increased by 18.6% to $60.5 million compared to $51.0 million for Q3 2015. Q3 2016 free cash flow (1) increased by 7.3% to $53.2 million compared to $49.6 million for Q3 2015 which included an adjustment to free cash flow of $1.2 million associated with taxes for prior periods under audit. Exclusive of the impact of the adjustment in Q3 2015, free cash flow increased by 9.9% compared to $48.4 million for Q3 2015.

GAAP earnings per diluted share (2) increased 22.1% to $0.94 in Q3 2016 compared to $0.77 for Q3 2015. Adjusted non-GAAP earnings per diluted share (2)(3) for the quarter increased 20.2% to $1.25 compared to $1.04 for Q3 2015.

GAAP net income increased by 21.9% to $45.6 million compared to $37.4 million for Q3 2015.

Quarterly Adjusted EBITDA (4) increased 13.2% to $95.4 million compared to $84.3 million for Q3 2015.

j2 ended the quarter with approximately $378.9 million in cash and investments after deploying approximately $85.0 million during the quarter with respect to the repurchase of approximately 935,000 shares of j2 common stock, four acquisitions and j2's regular quarterly dividend.

Key financial results for Q3 2016 versus Q3 2015 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.
    Q3 2016   Q3 2015   % Change
Cloud Services   $142.2 million   $125.3 million   13.5%
Digital Media   $66.8 million   $52.3 million   27.7%
IP Licensing   $1.1 million   $1.1 million   —%
Total Revenue:   $210.1 million   $178.7 million   17.6%
Operating Income   $62.1 million   $55.7 million   11.5%
Net Cash Provided by Operating Activities   $60.5 million   $51.0 million   18.6%
Free Cash Flow (1)   $53.2 million   $49.6 million   7.3%
GAAP Earnings per Diluted Share (2)   $0.94   $0.77   22.1%
Adjusted Non-GAAP Earnings per Diluted Share (2) (3)   $1.25   $1.04   20.2%
GAAP Net Income   $45.6 million   $37.4 million   21.9%
Non-GAAP Net Income   $60.7 million   $50.7 million   19.7%
Adjusted EBITDA (4)   $95.4 million   $84.3 million   13.2%
Adjusted EBITDA Margin (4)   45.4%   47.2%   (1.8)%

"Our third quarter results highlight the positive combination of healthy revenue growth and efficient expense management" said Hemi Zucker, CEO of j2 Global. "Our efforts yielded an impressive 20% year-over-year Adjusted non-GAAP Diluted EPS increase and 18% year-over-year revenue growth. With the excellent results for the first nine months of the year, I am pleased to announce that our results are trending toward the higher end of our Adjusted non-GAAP earnings per diluted share guidance for the year.

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