j2 Global(US:ZD)2024-05-09 20:39Revenue Performance - Total revenues for the three months ended March 31, 2024, were $314.485 million, representing a 2.4% increase from $307.142 million in the same period of 2023[163]. - Digital Media revenues totaled $239.052 million for Q1 2024, up from $234.211 million in Q1 2023, driven by a $4.3 million increase in subscription and licensing revenue[147]. - Cybersecurity and Martech revenues increased to $75.452 million in Q1 2024 from $73.016 million in Q1 2023, reflecting a $2.5 million rise in subscription and licensing revenue[147]. - Digital Media revenue increased to $239.0 million in Q1 2024, up 2.1% from $234.1 million in Q1 2023, with operating income rising 11.0% to $31.6 million[181][182]. - Cybersecurity and Martech revenue reached $75.5 million in Q1 2024, a 3.3% increase from $73.0 million in Q1 2023, with operating income growing 15.7% to $19.4 million[183][184]. Customer Metrics - The number of customers in the Digital Media and Cybersecurity and Martech subscription and licensing businesses increased to 3,343 thousand in Q1 2024, compared to 3,175 thousand in Q1 2023[152]. - Average quarterly revenue per customer for subscription and licensing businesses was $44.55 in Q1 2024, slightly down from $44.78 in Q1 2023[152]. - The churn rate for subscription and licensing businesses improved to 3.09% in Q1 2024 from 3.30% in Q1 2023[152]. - The net advertising and performance marketing revenue retention improved to 91.6% in Q1 2024, up from 91.2% in Q1 2023[149]. Expenses and Costs - Direct costs for Q1 2024 were $47.1 million, an increase of 2.9% from $45.7 million in Q1 2023, representing 15.0% of revenue[165]. - Sales and marketing expenses rose to $117.0 million in Q1 2024, a 0.9% increase from $115.9 million in Q1 2023, accounting for 37.2% of revenue[166]. - Research, development, and engineering costs decreased to $17.8 million in Q1 2024, down 0.8% from $17.9 million in Q1 2023, representing 5.7% of revenue[167]. - General, administrative, and other related costs were $101.3 million in Q1 2024, a decrease of 4.4% from $96.8 million in Q1 2023, making up 30.8% of revenue[168]. - Operating costs and expenses decreased to $56.0 million, down $5.4 million, or 8.7%, primarily due to lower general and administrative costs[184]. Non-Operating and Tax Information - Total non-operating expenses decreased to $16.4 million in Q1 2024, down 35.5% from $25.4 million in Q1 2023[170]. - The effective tax rate for Q1 2024 was 42.2%, compared to (65.6)% in Q1 2023, with a provision for income taxes amounting to $8.2 million[176]. Cash Flow and Financial Position - Cash, cash equivalents, and investments totaled $891.1 million as of March 31, 2024, down from $905.6 million at the end of 2023[186]. - The company had outstanding indebtedness of $1.0 billion as of March 31, 2024, with future minimum lease payments of $27.9 million[189]. - Net cash provided by operating activities decreased by $39.7 million to $75.6 million for the three months ended March 31, 2024, compared to $115.3 million in the prior year[193][194]. - Net cash used in investing activities increased by $32.7 million to $71.5 million for the three months ended March 31, 2024, primarily due to higher cash used on business acquisitions[193][195]. - The company anticipates that existing cash and cash equivalents will be sufficient to meet its needs for at least the next 12 months[191]. Strategic Outlook - The company expects continued growth in its Digital Media business as advertising transactions shift from offline to online, enhancing advertising platforms[158]. - Acquisitions are anticipated to remain a key component of the company's strategy, potentially impacting overall operating profit margins[160][162]. - Incremental revenue of $7.8 million was contributed by businesses acquired in 2023 and 2024 during the three months ended March 31, 2024[164]. - The company expects acquisitions to remain a key component of its strategy, although the number and significance may vary due to macroeconomic conditions[160].