j2 Global(US:ZD)2024-08-08 20:46Revenue Performance - Total revenues for the three months ended June 30, 2024, were $320.8 million, a decrease of 0.7% compared to $326.0 million for the same period in 2023[104]. - Digital Media revenues for the three months ended June 30, 2024, were $251.8 million, slightly down from $252.9 million in the prior year[104]. - Cybersecurity and Martech revenues for the three months ended June 30, 2024, were $69.0 million, down from $73.2 million in the same period last year[104]. - Digital Media revenues for the three months ended June 30, 2024, decreased by $4.7 million, while Cybersecurity and Martech revenues decreased by $4.1 million[115]. - Total revenues for the six months ended June 30, 2024, increased by 0.3% to $635.3 million compared to $633.2 million in the prior period[116]. - Digital Media revenues for the three months ended June 30, 2024, totaled $251,817,000, slightly down from $252,870,000 in the prior year[104]. - Cybersecurity and Martech revenues for the three months ended June 30, 2024, were $68,984,000, down from $73,196,000 in the same period last year[104]. - For the first half of 2024, Digital Media's revenues increased to $490.8 million, up $3.9 million or 0.8% year-over-year, driven by an $8.9 million increase in subscription and licensing revenue[127]. - Cybersecurity and Martech's revenues for Q2 2024 were $69.0 million, a decrease of $4.2 million or 5.8% compared to Q2 2023, mainly due to lower revenue from consumer privacy services[129]. - Cybersecurity and Martech's revenues for the first half of 2024 decreased to $144.4 million, down $1.8 million or 1.2% year-over-year[129]. Customer Metrics - The number of Digital Media customers increased to 2,148 thousand in Q2 2024, up from 1,808 thousand in Q2 2023[108]. - Average quarterly revenue per Digital Media customer decreased to $33.86 in Q2 2024 from $37.74 in Q2 2023[108]. - The churn rate for Digital Media was 3.19% in Q2 2024, an improvement from 3.69% in Q2 2023[108]. - The company reported a net advertising and performance marketing revenue retention rate of 90.5% for the three months ended June 30, 2024, up from 89.8% in the prior year[105]. Expenses and Costs - Direct costs for the three months ended June 30, 2024, increased by 10.9% to $52.6 million, representing 16.4% of revenues[117]. - Sales and marketing expenses for the three months ended June 30, 2024, increased by 4.0% to $124.8 million, accounting for 38.9% of revenues[118]. - Research, development, and engineering costs for the three months ended June 30, 2024, decreased by 5.7% to $16.8 million, representing 5.2% of revenues[119]. - General, administrative, and other related costs for the three months ended June 30, 2024, decreased by 3.8% to $98.1 million, accounting for 30.6% of revenues[120]. - Share-based compensation expense for the three months ended June 30, 2024, totaled $11.6 million, an increase from $9.2 million in the prior period[121]. - Interest expense, net for the three months ended June 30, 2024, was $1.8 million, a decrease of 82.8% compared to $10.5 million in the prior period[122]. - The company’s sales and marketing expenses as a percentage of revenues increased to 38.9% for the three months ended June 30, 2024, compared to 36.8% in the prior year[118]. Income and Taxation - Digital Media operating income was $35.0 million for the three months ended June 30, 2024, a decrease of $1.7 million or 4.6% compared to the prior period[128]. - Cybersecurity and Martech operating income was $11.5 million for the three months ended June 30, 2024, a decrease of $2.0 million or 14.6% compared to the prior period[129]. - Provision for income taxes amounted to $7.0 million for the three months ended June 30, 2024, compared to $6.5 million for the same period in 2023[124]. - The effective tax rate for the three months ended June 30, 2024, was 19.9%, down from 27.2% in the prior year[124]. - The company reported a total non-operating income of $6.5 million for the three months ended June 30, 2024, compared to a loss of $15.2 million in the same period last year[122]. - Income from equity method investment was $8.8 million for the three months ended June 30, 2024, compared to a loss of $0.6 million in the same period last year[125]. Cash and Debt Management - Cash and cash equivalents as of June 30, 2024, were $687.2 million, down from $737.6 million as of December 31, 2023[132]. - Total cash, cash equivalents, and investments were $839.7 million as of June 30, 2024, compared to $905.6 million as of December 31, 2023[132]. - As of June 30, 2024, the Company had outstanding indebtedness of $1.0 billion and total future minimum lease payments of $25.8 million, with approximately $12.0 million due in the next twelve months[136]. - Net cash provided by operating activities for the six months ended June 30, 2024, was $126.1 million, a decrease of $28.9 million compared to $155.0 million in the prior period[138]. - The Company used $83.1 million in investing activities during the six months ended June 30, 2024, an increase of $17.8 million compared to the prior period, primarily due to higher cash used on business acquisitions[140]. - The net cash used in financing activities increased by $27.1 million during the six months ended June 30, 2024, primarily due to increased share repurchases[141]. - The Company’s liability for uncertain tax positions was $37.1 million as of June 30, 2024[136]. Share Repurchase Program - The Company repurchased 1,500,000 shares at an aggregate cost of $84.9 million during the six months ended June 30, 2024, with 3,241,308 shares remaining under the repurchase authorization[143]. - Cumulatively, as of June 30, 2024, the Company repurchased 6,758,692 shares under the 2020 Program at an aggregate cost of $486.7 million[144]. - On August 2, 2024, the Board authorized an increase in the 2020 Program for an additional 5 million shares, raising the total authorization to 15 million shares[144]. - The expiration date of the 2020 Program has been extended from August 6, 2025, to August 2, 2029[144]. - As of August 2, 2024, there are 8,241,308 shares remaining under the 2020 Program[144]. Strategic Outlook - The company continues to pursue acquisitions to grow customer bases and diversify service offerings[102]. - The company faces risks related to economic downturns, supply chain disruptions, and competition in the digital media space[101]. - The company expects continued growth in Digital Media as advertising transactions shift from offline to online, with a focus on improving ad relevance and effectiveness[113]. - The company anticipates continued improvement in its Digital Media business as it integrates recent acquisitions and expands advertising platforms[112]. - The company expects acquisitions to remain a key component of its strategy, although the number and significance may vary due to macroeconomic conditions[113].