j2 Global, Inc. (NASDAQ:JCOM) Q3 2017 Earnings Conference Call Transcript

Nov 02, 2017 • 05:00 pm ET


j2 Global, Inc. (NASDAQ:JCOM) Q3 2017 Earnings Conference Call Transcript


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Welcome to the j2 Global Q3 Earnings Conference Call. Leading today's call will be Mr. Hemi Zucker, CEO; and Mr. Scott Turicchi, President and CFO. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

(Operator Instruction) As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Mr. Scott Turicchi. Thank you, you may begin.

Scott Turicchi

Thank you. Good afternoon and welcome to j2 Global's investor conference call for the third fiscal quarter of 2017. As the operator just mentioned, I'm Scott Turicchi, the President and CFO of j2 Global, and with me today is Hemi Zucker, our CEO for his final earnings call, his 50th.

Q3 was another strong quarter producing record revenues, an all-time record, and a third fiscal quarter record of EBITDA and non-GAAP earnings. In addition, during the quarter, we sold our Web24 web hosting asset in Australia, and just after the quarter ended disposed of Tea Leaves. Our Board has increased the quarterly dividend by $0.01 to $0.395 per share.

We will use a presentation for today's call, a copy of which is available at our website. There's a new enhanced webcast facility. So when you launch the webcast, you will see that there is an icon, which is in the middle of the page and when you press on it, it will enlarge, so the slides take up the full page and you'll be able to read not only the contents of the slide, but also the footnotes.

If you've not yet received a copy of the press release, you can access it through our corporate website at j2global.com/press. You can also access the website or webcast from this site. After we complete our presentation, we will conduct the Q&A session. At that time, the operator will instruct you as to the procedures regarding the asking of a question. However, at any time you may e-mail questions to us at investor@j2global.com.

(Forward-Looking Cautionary Statement)

I would now ask you to turn the presentation to Slide 5, and I will briefly go through the highlights for the third fiscal quarter. As I just mentioned, we reported an all-time record revenue of $274 million, resulting (inaudible) of $111 million, free cash flow of $57 million, and adjusted EPS of $1.34 per share. Our revenue increased by $63 million versus Q3 2016 or approximately 30%.

EBITDA was up by $16 million or 17%. Of course, a large portion of this came from a quarter inclusion of Everyday Health. We ended the quarter with slightly in excess of $400 million in cash and cash equivalents, aided in part by the financing we did at the end of Q2, which gave us $150 million of excess proceeds. Specifically, for the Cloud segment, its revenues were $146 million were up $2 million or 1.7% versus Q3 of 2016. In constant currencies, the revenue growth was 2.3%. The EBITDA (inaudible) for the segment remained strong