It has been about a month since the last earnings report for j2 Global . Shares have added about 5.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.
J2 Global Q1 Earnings and Revenues Tops Estimates
J2 Global reported first-quarter 2021 adjusted earnings of $2.18 per share, beating the Zacks Consensus Estimate of $1.65. Moreover, the figure jumped 55.7% year over year.
Revenues of $398.2 million outpaced the consensus mark of $365.3 million and increased 19.8% year over year as well.
Average monthly revenue per customer increased 3.2% year over year to $14.40. Cancel rate was 2.2%, marginally down from the year-ago quarter’s 2.3%.
Top Line Details
Cloud Services (43% of revenues) revenues inched up 0.9% year over year to $171.4 million. At the end of the reported quarter, J2 Global had 3,910 Cloud Services customers, down 4.1% year on year.
Subscriber revenues (99.9% of Cloud Services revenues) inched up 0.9% year over year, primarily on the 2.1% increase in fixed-subscriber revenues (84.3% of Subscriber revenues). However, variable-subscriber revenues (15.7% of Subscriber revenues) decreased 5% year over year to $26.8 million.
Moreover, DID-based revenues inched up 0.6% year over year to $97.1 million. In addition, non-DID revenues increased 1.3% year over year to $74.2 million.
Digital Media revenues (57% of revenues) climbed 39.5% year over year to $226.8 million.
Operating Details
Adjusted gross margin expanded 330 basis points (bps) on a year-over-year basis to 85.7%. Cloud Services’ adjusted gross margin advanced 110 bps to 78.9%. Further, Digital Media adjusted gross margin expanded 360 bps to 90.8%.
In terms of expenses, adjusted research, development & engineering and adjusted sales & marketing expenses as percentage of revenues expanded 60 bps and 50 bps, respectively, year over year. Nevertheless, adjusted general& administrative expenses shrunk 230 bps on a year-over-year basis.
Adjusted EBITDA margin expanded 410 bps on a year-over-year basis to 33.8%. Cloud Services’ adjusted EBITDA margin improved 70 bps to 48.7%, year on year. Additionally, Digital Media’s adjusted EBITDA margin increased to 37.2% from the prior-year period’s 26.7%.
Adjusted operating margin expanded 440 bps year over year to 35.1%. While Cloud Services’ adjusted operating margin contracted 350 bps, Digital Media’s adjusted operating margin expanded 840 bps on a year-over-year basis.
Balance Sheet and Cash Flow
As of Mar 31, 2021, J2 Global had $338.6 million in cash and cash equivalents compared with $340.8 million as of Dec 31, 2020.
Long-term debt, as of Dec 31, 2020,was $1.59 billion, slightly higher than $1.58 billion as of Dec 31, 2020.
Free cash flow was $152.5 million, up 60.1% year over year.
Guidance
Buoyed by the outstanding first-quarter performance, J2 Global raised the full-year 2021 outlook. For 2021, J2 Global now expects revenues between $1.676 billion and $1.700 billion, up from the earlier guided range of $1.630-$1.676 billion.
Adjusted EBITDA is now estimated between $666 million and $680 million, up from the previous range of $646-$666 million.
Apart from this, adjusted non-GAAP earnings are now projected between $9.27 and $9.51 per share, up from the earlier estimate of $8.93-$9.27 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, j2 Global has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, j2 Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
j2 Global (JCOM) Up 5.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for j2 Global . Shares have added about 5.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.
J2 Global Q1 Earnings and Revenues Tops Estimates
J2 Global reported first-quarter 2021 adjusted earnings of $2.18 per share, beating the Zacks Consensus Estimate of $1.65. Moreover, the figure jumped 55.7% year over year.
Revenues of $398.2 million outpaced the consensus mark of $365.3 million and increased 19.8% year over year as well.
Average monthly revenue per customer increased 3.2% year over year to $14.40. Cancel rate was 2.2%, marginally down from the year-ago quarter’s 2.3%.
Top Line Details
Cloud Services (43% of revenues) revenues inched up 0.9% year over year to $171.4 million. At the end of the reported quarter, J2 Global had 3,910 Cloud Services customers, down 4.1% year on year.
Subscriber revenues (99.9% of Cloud Services revenues) inched up 0.9% year over year, primarily on the 2.1% increase in fixed-subscriber revenues (84.3% of Subscriber revenues). However, variable-subscriber revenues (15.7% of Subscriber revenues) decreased 5% year over year to $26.8 million.
Moreover, DID-based revenues inched up 0.6% year over year to $97.1 million. In addition, non-DID revenues increased 1.3% year over year to $74.2 million.
Digital Media revenues (57% of revenues) climbed 39.5% year over year to $226.8 million.
Operating Details
Adjusted gross margin expanded 330 basis points (bps) on a year-over-year basis to 85.7%. Cloud Services’ adjusted gross margin advanced 110 bps to 78.9%. Further, Digital Media adjusted gross margin expanded 360 bps to 90.8%.
In terms of expenses, adjusted research, development & engineering and adjusted sales & marketing expenses as percentage of revenues expanded 60 bps and 50 bps, respectively, year over year. Nevertheless, adjusted general& administrative expenses shrunk 230 bps on a year-over-year basis.
Adjusted EBITDA margin expanded 410 bps on a year-over-year basis to 33.8%. Cloud Services’ adjusted EBITDA margin improved 70 bps to 48.7%, year on year. Additionally, Digital Media’s adjusted EBITDA margin increased to 37.2% from the prior-year period’s 26.7%.
Adjusted operating margin expanded 440 bps year over year to 35.1%. While Cloud Services’ adjusted operating margin contracted 350 bps, Digital Media’s adjusted operating margin expanded 840 bps on a year-over-year basis.
Balance Sheet and Cash Flow
As of Mar 31, 2021, J2 Global had $338.6 million in cash and cash equivalents compared with $340.8 million as of Dec 31, 2020.
Long-term debt, as of Dec 31, 2020,was $1.59 billion, slightly higher than $1.58 billion as of Dec 31, 2020.
Free cash flow was $152.5 million, up 60.1% year over year.
Guidance
Buoyed by the outstanding first-quarter performance, J2 Global raised the full-year 2021 outlook. For 2021, J2 Global now expects revenues between $1.676 billion and $1.700 billion, up from the earlier guided range of $1.630-$1.676 billion.
Adjusted EBITDA is now estimated between $666 million and $680 million, up from the previous range of $646-$666 million.
Apart from this, adjusted non-GAAP earnings are now projected between $9.27 and $9.51 per share, up from the earlier estimate of $8.93-$9.27 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, j2 Global has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, j2 Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.