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j2 Global (JCOM) Q2 Earnings Beat, Cloud Revenues Up Y/Y

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j2 Global, Inc.’s (JCOM - Free Report) second-quarter 2018 adjusted earnings of $1.50 per share beat the Zacks Consensus Estimate by eight cents and increased 12.8% on a year-over-year basis.

Revenues came in at $287.9 million, up 5.8% year over year but lagged the Zacks Consensus Estimate of $290 million.

Quarter Details

Revenues from Cloud Services increased 3.9% from the year-ago quarter to $150.3 million. Digital Media revenues were $137.6 million, up 7.1% year over year. The company’s total subscription revenues increased 4.7% year over year to $150.1 million.

At the end of the quarter, the company had 3,197 cloud services customers. Average Monthly Revenue per Customer increased 2.6% from the year-ago quarter to $15.68.

j2 Global, Inc. Price, Consensus and EPS Surprise

j2 Global, Inc. Price, Consensus and EPS Surprise | j2 Global, Inc. Quote


Adjusted gross margin contracted 80 basis points (bps) on a year-over-year basis to 83.7%. Cloud Services and Digital Media adjusted gross margin contracted 50 bps and 30 bps, respectively.

Adjusted EBITDA margin contracted 90 bps to 39.4%. Cloud Services adjusted EBITDA margin contracted 190 bps from the year-ago quarter. However, Digital Media adjusted EBITDA margin expanded 30 bps.

Adjusted operating margin contracted 160 bps to 36.1%. Cloud Services and Digital Media adjusted operating margin contracted 190 bps and 40 bps, respectively.

Balance Sheet and Cash Flow

As of Jun 30, 2018, cash and cash equivalents were $357.4 million compared with $331.4 million at the end of the previous quarter. Long-term debt during the period was $1 billion.

Cash flow from operations was $102.4 million in the second quarter compared with $103.9 million at the end of the previous quarter.

Free cash flow was $87 million compared with $90.7 million at the end of the previous quarter.


j2 Global reaffirmed its earlier guidance. Revenues are expected to be between $1.20 billion and $1.25 billion for 2018. Additionally, the company projects adjusted EBITDA in a band of $480-$505 million.

Adjusted earnings are now anticipated between $6.16 and $6.46 per share, up from previous guidance of $5.95-$6.25.

Zacks Rank & Stocks to Consider

j2 Global currently carries a Zacks Rank #3 (Hold).

Attunity (ATTU - Free Report) , Five9 (FIVN - Free Report) and Paycom (PAYC - Free Report) are stocks worth considering in the same industry. All the three stocks sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Attunity, Five9 and Paycom is pegged at 20%, 20% and 24.82%, respectively.

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