j2 Global(US:ZD)2025-11-07 21:05Revenue Performance - Total revenues for the three months ended September 30, 2025, were $363.7 million, an increase from $353.6 million in the same period of 2024, representing a growth of 2.9%[180] - Total revenues for Q3 2025 were $363.7 million, a 2.9% increase from $353.6 million in Q3 2024; revenues for the nine months ended September 30, 2025, were $1,044.6 million, up 5.6% from $988.9 million in the same period of 2024[200] - Revenues for the three months ended September 30, 2025, increased by 2.9% to $363,711,000 compared to $353,580,000 in 2024, while revenues for the nine months increased by 5.6% to $1,044,556,000 from $988,865,000[200] Segment Performance - The Technology & Shopping segment generated $85.2 million in revenues for Q3 2025, a decrease of 1.1% compared to $87.1 million in Q3 2024[180] - The Health & Wellness segment saw revenues rise to $102.3 million in Q3 2025, up 12.5% from $90.8 million in Q3 2024[180] - Subscription and licensing revenues for the Cybersecurity & Martech segment totaled $69.1 million in Q3 2025, slightly down from $70.0 million in Q3 2024[180] - The Connectivity segment's total revenues were $57.2 million in Q3 2025, an increase from $55.9 million in Q3 2024, reflecting a growth of 2.2%[180] - Gaming & Entertainment segment had 514,000 customers in Q3 2025, up from 484,000 in Q3 2024, while average revenue per customer decreased slightly to $30.49 from $30.60[188] - Health & Wellness segment reported 1,902,000 customers in Q3 2025, an increase from 1,731,000 in Q3 2024, with average revenue per customer declining to $7.17 from $7.38[188] - Connectivity segment saw customer growth to 25,000 in Q3 2025 from 24,000 in Q3 2024, with average revenue per customer increasing to $1,988 from $1,972[188] - Cybersecurity & Martech segment had 1,232,000 customers in Q3 2025, down from 1,251,000 in Q3 2024, while average revenue per customer increased to $56.13 from $55.99[188] Cost and Expenses - Direct costs for Q3 2025 were $53.2 million, a 3.9% increase from $51.2 million in Q3 2024, representing 14.6% of revenues compared to 14.5% in the prior year[203] - Sales and marketing expenses increased by 8.2% to $137.8 million in Q3 2025 from $127.4 million in Q3 2024, accounting for 37.9% of revenues[204] - Research, development, and engineering costs for Q3 2025 were $15.4 million, a slight increase of 1.0% from $15.3 million in Q3 2024, representing 4.2% of revenues[206] - General, administrative, and other related costs for Q3 2025 were $53.996 million, a 3.0% increase from $52.417 million in Q3 2024, maintaining 14.8% of revenues[207] - Depreciation and amortization for Q3 2025 was $57.319 million, an 11.6% increase from $51.351 million in Q3 2024, representing 15.8% of revenues[208] Goodwill and Impairments - The company recorded a goodwill impairment of approximately $17.6 million in Q3 2025 due to a decline in fair value of a reporting unit within the Cybersecurity & Martech segment[192] - Goodwill impairment for Q3 2025 was $17.6 million, significantly lower than $85.3 million in Q3 2024, related to the Cybersecurity & Martech segment[210] Tax and Interest Expenses - Income tax expense for Q3 2025 was $12.8 million, compared to $(12.5) million in Q3 2024, resulting in an effective tax rate of 139.8%[216] - Interest expense, net for Q3 2025 was $(6.496) million, a 61.4% increase from $(4.024) million in Q3 2024, with total non-operating expenses rising by 189.7% to $(19.286) million[211] Cash Flow and Financing - Cash, cash equivalents, and investments totaled $622.9 million as of September 30, 2025, down from $664.1 million as of December 31, 2024[252] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $215.986 million, a decrease of $16.096 million compared to the prior period[260] - Net cash used in investing activities decreased by $148.2 million to $116.371 million for the nine months ended September 30, 2025, primarily due to lower cash used on business acquisitions[262] - Net cash used in financing activities decreased by $211.6 million to $111.466 million for the nine months ended September 30, 2025, due to the absence of cash outflows related to the settlement of the 1.75% Convertible Notes[263] - The Company repurchased a total of 3,011,405 shares at an aggregate cost of $109.854 million during the nine months ended September 30, 2025, with 3,229,903 shares remaining under repurchase authorization[265] - Cumulatively, as of September 30, 2025, the Company repurchased 11,770,097 shares at an aggregate cost of $693.5 million[266] Strategic Outlook - The company anticipates continued growth despite potential economic challenges, including inflation and supply chain disruptions[172] - 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[198] - The Company expects the One Big Beautiful Bill Act to reduce current income tax liabilities and increase deferred tax liabilities, though it does not anticipate a material impact on its effective tax rate[218] - The company plans to continue enhancing existing offerings and exploring acquisitions as part of its growth strategy, while monitoring macroeconomic conditions[198]