j2 Global(US:ZD)2025-08-07 13:30Financial Data and Key Metrics Changes - Q2 2025 revenues were $352.2 million, reflecting growth of nearly 10% compared to $320.8 million in the prior year period [23] - Adjusted EBITDA for Q2 2025 was $107.7 million, up nearly 12% from $96.3 million in the prior year [23] - Adjusted diluted EPS increased to $1.24 from $1.18 in 2024, reflecting growth of more than 5% [23] - Adjusted EBITDA margin for the quarter was 30.6% [23] - Free cash flow for Q2 2025 was $26.9 million, 7.5% higher than the prior year period [32] Business Line Data and Key Metrics Changes - Four of the five reportable segments grew in revenues in Q2 2025, with the Digital Media segment growing nearly 13% [8] - Tech and Shopping's revenues grew over 11%, with adjusted EBITDA growth of over 5% [9] - Gaming and Entertainment revenues grew nearly 8%, with adjusted EBITDA growth of almost 24% [10] - Health and Wellness revenues increased nearly 16%, with adjusted EBITDA up 11% [11] - Connectivity revenues were up over 14%, with adjusted EBITDA growth of over 12% [13] - Cybersecurity and Martech segment's revenue declined less than 1% but posted over 5% adjusted EBITDA growth [15] Market Data and Key Metrics Changes - Advertising and performance marketing revenues grew 15.5% year over year, while subscription and licensing revenues grew by 5% [25] - Other revenues declined by $2.2 million year over year, primarily due to a decline in the contribution from the Hungable Games publishing business [26] Company Strategy and Development Direction - The company is committed to repurchasing shares and has completed five tuck-in acquisitions in the first half of the year [7] - The focus remains on identifying and integrating durable high-quality assets while maintaining a disciplined approach to capital allocation [20] - The company aims for double-digit total revenue growth, with expectations of mid-30s adjusted EBITDA margins in the long term [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Cybersecurity and Martech segment returning to growth in Q3 [8] - The company anticipates at least mid-single-digit revenue growth for both Q3 and Q4 2025, with Q4 potentially being stronger than Q3 [31] - Health and Wellness and Connectivity businesses are expected to be the largest contributors to second-half growth [31] Other Important Information - The company has a healthy balance sheet with $457 million in cash and cash equivalents and $140 million in long-term investments [27] - The company has repurchased nearly 1.4 million shares since the beginning of Q2 2025, totaling over $170 million since June 30, 2024 [29] Q&A Session Summary Question: What are you hoping to communicate to the market regarding intrinsic value versus current public market valuation? - Management hopes investors will assess each of the five segments, noting that four segments collectively grew 13% and that there are differing levels of growth and margin profiles [36][38] Question: Can you update us on trends in the ad market? - The ad business grew a little over 15%, with health and wellness being very strong and gaming up mid-teens [44][50] Question: Can you unpack the incremental EBITDA margin and any factors affecting it? - Management indicated that there are no specific changes in cost structure affecting margins, and advised looking at performance over multiple quarters for a clearer picture [55][60] Question: What are the trends in health and wellness advertising participation? - The increase in advertiser participation is attributed to expanding beyond pharma to include more health and wellness brands [80][82]