j2 Global(US:ZD)2024-11-08 21:18Revenue Performance - Total revenues for the three months ended September 30, 2024, were $353.58 million, an increase from $340.99 million in the same period of 2023, representing a growth of 3.5%[102] - Digital Media revenues for the three months ended September 30, 2024, were $283.57 million, up from $267.95 million in the prior year, reflecting a year-over-year increase of 5.8%[102] - Cybersecurity and Martech revenues decreased to $70.04 million for the three months ended September 30, 2024, compared to $73.05 million in the same period of 2023, a decline of 4.1%[102] - Revenues for the three months ended September 30, 2024, were $353.6 million, representing a 3.7% increase from $341.0 million in the prior year; for the nine months, revenues were $988.9 million, up 1.5% from $974.1 million[114] - Digital Media revenues increased by $10.6 million in advertising and performance marketing and $5.6 million in subscription and licensing for the three months ended September 30, 2024[114] - Digital Media revenues for the nine months ended September 30, 2024, were $774.4 million, a 2.6% increase from $755.0 million in the prior year[124] - Cybersecurity and Martech's revenues for the three months ended September 30, 2024, were $70.0 million, a decrease of $3.0 million or 4.1% compared to the prior period[126] - For the nine months ended September 30, 2024, revenues were $214.5 million, down $4.8 million or 2.2% from the previous year, primarily due to lower revenue in the cybersecurity business[126] Customer Metrics - The number of Digital Media customers increased to 2,239 thousand in the three months ended September 30, 2024, up from 1,905 thousand in the same period of 2023, indicating a growth of 17.6%[107] - Total consolidated customers increased to 3,490 thousand in the three months ended September 30, 2024, compared to 3,300 thousand in the prior year, representing a growth of 5.8%[107] - The churn rate for Digital Media was 2.59% for the three months ended September 30, 2024, an improvement from 3.14% in the same period of 2023[107] Financial Performance - Digital Media's operating loss for the three months ended September 30, 2024, was $24.7 million, an increase of 91.7% compared to the prior period's loss of $12.9 million[124] - Operating income for the three months ended September 30, 2024, increased to $14.9 million, up $2.4 million or 19.0% year-over-year[126] - Digital Media's operating costs and expenses for the three months ended September 30, 2024, were $308.3 million, a 9.8% increase from $280.9 million in the prior year[124] - Direct costs decreased by 4.1% to $53.2 million for the three months ended September 30, 2024, and increased by 2.8% to $152.9 million for the nine months[115] - Sales and marketing expenses rose to $127.4 million for the three months ended September 30, 2024, a 2.3% increase from $125.1 million in the prior year[116] - Research, development, and engineering costs decreased by 13.3% to $15.3 million for the three months ended September 30, 2024, and by 6.6% to $49.8 million for the nine months[117] - General, administrative, and other related costs increased by 2.4% to $101.7 million for the three months ended September 30, 2024, but decreased by 2.0% to $296.6 million for the nine months[118] Goodwill and Impairment - The Company recorded a goodwill impairment of approximately $85.3 million for the three and nine months ended September 30, 2024, compared to $56.9 million for the same periods in 2023[119] - As of September 30, 2024, goodwill for three reporting units within the Digital Media segment totaled $498.4 million, with one additional unit at risk of impairment[119] Cash Flow and Investments - Cash, cash equivalents, and investments totaled $538.9 million as of September 30, 2024, down from $905.6 million at the end of 2023[128] - The company had outstanding indebtedness of $863.7 million as of September 30, 2024[131] - Net cash provided by operating activities was $232.1 million for the nine months ended September 30, 2024, an increase of $4.2 million compared to the prior period[133] - Net cash used in investing activities increased by $159.8 million during the nine months ended September 30, 2024, primarily due to higher cash used for business acquisitions[136] - The company repurchased 3.5 million shares at an aggregate cost of $181.8 million during the nine months ended September 30, 2024[139] - The company anticipates that existing cash and cash equivalents, along with cash generated from operations, will be sufficient for its needs for at least the next 12 months[132] Strategic Outlook - The company continues to pursue acquisitions to grow customer bases and expand service offerings, which may impact consolidated results[100] - The Company expects its Digital Media business to improve as it integrates recent acquisitions and continues to expand its platforms[112] - The Company anticipates that acquisitions will remain a key component of its strategy, although the number and significance of future acquisitions may vary due to macroeconomic conditions[112][113] Share-Based Compensation - Total share-based compensation expense for the three months ended September 30, 2024, was $10.2 million, an increase of 49.5% compared to $6.8 million for the same period in 2023[120] - Total share-based compensation expense for the nine months ended September 30, 2024, was $30.6 million, an increase of 25.7% from $24.4 million in the prior period[120]