A month has gone by since the last earnings report for j2 Global . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is j2 Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
J2 Global Q4 Earnings Top Estimates, Revenues Rise
J2 Global reported fourth-quarter 2020 adjusted earnings of $3.11 per share that beat the Zacks Consensus Estimate by 10.7%. Moreover, the figure increased 30.7% year over year.
Revenues of $469.2 million beat the consensus mark by 8% and increased 15.7% year over year.
Average monthly revenue per customer increased 1.3% year over year to $14.14. Cancel rate was 2.4%, unchanged year over year.
Quarter Details
Cloud Services (36.5% of revenues) revenues increased 1.2% year over year to $171.4 million. At the end of the reported quarter, j2 Global had 4,018 Cloud Services customers, down 0.4% year over year.
Subscriber revenues (99.8% of Cloud Services revenues) increased 1.1% year over year, primarily attributed to 2.2% decline in variable-subscriber revenues (15.3% of Subscriber revenues). However, fixed-subscriber revenues (84.7% of Subscriber revenues) increased 1.7% year over year to $144.9 million.
Moreover, DID-based revenues inched up 0.8% year over year to $97.4 million. However, non-DID revenues increased 1.9% year over year to $74 million.
Digital Media revenues (63.5% of revenues) increased 26.1% year over year to $297.9 million.
Adjusted gross margin expanded 300 bps on a year-over-year basis to 87.3%. Cloud Services’ adjusted gross margin shrank 200 bps to 45.4%. However, Digital Media adjusted gross margin expanded530 bps to 43.9%.
In terms of expenses, adjusted research, development & engineering as percentage of revenues increased 50 bps year over year. Moreover, both adjusted sales & marketing, and general & administrative expenses increased 60 bps on a year-over-year basis.
Adjusted EBITDA margin expanded 170 bps on a year-over-year basis to 45.1%. Cloud Services’ adjusted EBITDA margin decreased 280 bps on a year-over-year basis. Moreover, Digital Media’s adjusted EBITDA margin increased 520 bps.
Adjusted operating margin expanded 140 bps year over year to 41.7%. While Cloud Services’ adjusted operating margin contracted 200 bps, Digital Media’s adjusted operating margin expanded 530 bps on a year-over-year basis.
As of Dec 31, 2020, J2 Global had $340.8 million in cash and cash equivalents compared with $567.9 million as of Sep 30, 2020.
Long-term debt, as of Dec 31, 2020, was $1.58 billion, higher than $1.07 billion as of Sep 30, 2020.
Free cash flow was $102.9 million, up 25.3% year over year.
Guidance
For 2021, J2 Global now expects revenues between $1.630 billion and $1.676 billion.
Adjusted EBITDA is expected between $646 million and $666 million.
Moreover, adjusted non-GAAP earnings are expected between $8.93 and $9.27 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, j2 Global has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
j2 Global has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is j2 Global (JCOM) Up 11.5% Since Last Earnings Report?
A month has gone by since the last earnings report for j2 Global . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is j2 Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
J2 Global Q4 Earnings Top Estimates, Revenues Rise
J2 Global reported fourth-quarter 2020 adjusted earnings of $3.11 per share that beat the Zacks Consensus Estimate by 10.7%. Moreover, the figure increased 30.7% year over year.
Revenues of $469.2 million beat the consensus mark by 8% and increased 15.7% year over year.
Average monthly revenue per customer increased 1.3% year over year to $14.14. Cancel rate was 2.4%, unchanged year over year.
Quarter Details
Cloud Services (36.5% of revenues) revenues increased 1.2% year over year to $171.4 million. At the end of the reported quarter, j2 Global had 4,018 Cloud Services customers, down 0.4% year over year.
Subscriber revenues (99.8% of Cloud Services revenues) increased 1.1% year over year, primarily attributed to 2.2% decline in variable-subscriber revenues (15.3% of Subscriber revenues). However, fixed-subscriber revenues (84.7% of Subscriber revenues) increased 1.7% year over year to $144.9 million.
Moreover, DID-based revenues inched up 0.8% year over year to $97.4 million. However, non-DID revenues increased 1.9% year over year to $74 million.
Digital Media revenues (63.5% of revenues) increased 26.1% year over year to $297.9 million.
Adjusted gross margin expanded 300 bps on a year-over-year basis to 87.3%. Cloud Services’ adjusted gross margin shrank 200 bps to 45.4%. However, Digital Media adjusted gross margin expanded530 bps to 43.9%.
In terms of expenses, adjusted research, development & engineering as percentage of revenues increased 50 bps year over year. Moreover, both adjusted sales & marketing, and general & administrative expenses increased 60 bps on a year-over-year basis.
Adjusted EBITDA margin expanded 170 bps on a year-over-year basis to 45.1%. Cloud Services’ adjusted EBITDA margin decreased 280 bps on a year-over-year basis. Moreover, Digital Media’s adjusted EBITDA margin increased 520 bps.
Adjusted operating margin expanded 140 bps year over year to 41.7%. While Cloud Services’ adjusted operating margin contracted 200 bps, Digital Media’s adjusted operating margin expanded 530 bps on a year-over-year basis.
As of Dec 31, 2020, J2 Global had $340.8 million in cash and cash equivalents compared with $567.9 million as of Sep 30, 2020.
Long-term debt, as of Dec 31, 2020, was $1.58 billion, higher than $1.07 billion as of Sep 30, 2020.
Free cash flow was $102.9 million, up 25.3% year over year.
Guidance
For 2021, J2 Global now expects revenues between $1.630 billion and $1.676 billion.
Adjusted EBITDA is expected between $646 million and $666 million.
Moreover, adjusted non-GAAP earnings are expected between $8.93 and $9.27 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, j2 Global has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
j2 Global has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.