falsedesktopJCOM2020-09-30000108404820000050{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "\t\t\tPAGE\nPART I.\tFINANCIAL INFORMATION\t\t\n\tItem 1.\tFinancial Statements\t\n\t\tCondensed Consolidated Balance Sheets (unaudited)\t3\n\t\tCondensed Consolidated Statements of Operations (unaudited)\t4\n\t\tCondensed Consolidated Statements of Comprehensive Income (unaudited)\t5\n\t\tCondensed Consolidated Statements of Cash Flows (unaudited)\t6\n\t\tCondensed Consolidated Statements of Stockholders' Equity (unaudited)\t8\n\t\tNotes to Condensed Consolidated Financial Statements (unaudited)\t10\n\tItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t46\n\tItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t59\n\tItem 4.\tControls and Procedures\t60\nPART II.\tOTHER INFORMATION\t\t\n\tItem 1.\tLegal Proceedings\t61\n\tItem 1A.\tRisk Factors\t61\n\tItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t61\n\tItem 3.\tDefaults Upon Senior Securities\t63\n\tItem 4.\tMine Safety Disclosures\t63\n\tItem 5.\tOther Information\t63\n\tItem 6.\tExhibits\t63\n\t\tSignature\t64\n", "q10k_tbl_1": "\tSeptember 30 2020\tDecember 31 2019\nASSETS\t\t\nCash and cash equivalents\t567930\t575615\nAccounts receivable net of allowances of $13202 and $12701 respectively\t192800\t261928\nPrepaid expenses and other current assets\t46594\t49347\nTotal current assets\t807324\t886890\nLong-term investments\t96575\t100079\nProperty and equipment net\t147268\t127817\nOperating lease right-of-use assets\t97439\t125822\nTrade names net\t126859\t138029\nCustomer relationships net\t190689\t238502\nGoodwill\t1661546\t1633033\nOther purchased intangibles net\t142018\t180022\nDeferred income taxes noncurrent\t57490\t59976\nOther assets\t15785\t15676\nTOTAL ASSETS\t3342993\t3505846\nLIABILITIES AND STOCKHOLDERS' EQUITY\t\t\nAccounts payable and accrued expenses\t177820\t238059\nIncome taxes payable current\t12733\t17758\nDeferred revenue current\t155806\t162855\nOperating lease liabilities current\t27673\t26927\nCurrent portion of long-term debt\t393980\t385532\nOther current liabilities\t901\t1973\nTotal current liabilities\t768913\t833104\nLong-term debt\t1075071\t1062929\nDeferred revenue noncurrent\t11232\t12744\nOperating lease liabilities noncurrent\t87563\t104070\nIncome taxes payable noncurrent\t11675\t11675\nLiability for uncertain tax positions\t60197\t52451\nDeferred income taxes noncurrent\t115356\t107453\nOther long-term liabilities\t36649\t10228\nTOTAL LIABILITIES\t2166656\t2194654\nCommitments and contingencies\t0\t0\nPreferred stock $0.01 par value. Authorized 1000000 and none issued\t0\t0\nPreferred stock - Series A $0.01 par value. Authorized 6000; total issued and outstanding zero\t0\t0\nPreferred stock - Series B $0.01 par value. Authorized 20000; total issued and outstanding zero\t0\t0\nCommon stock $0.01 par value. Authorized 95000000; total issued and outstanding 44767341 and 47654929 shares at September 30 2020 and December 31 2019 respectively.\t448\t476\nAdditional paid-in capital\t451741\t465652\nRetained earnings\t782142\t891526\nAccumulated other comprehensive loss\t(57994)\t(46462)\nTOTAL STOCKHOLDERS' EQUITY\t1176337\t1311192\nTOTAL LIABILITIES AND STOCKHOLDERS' EQUITY\t3342993\t3505846\n", "q10k_tbl_2": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nTotal revenues\t356976\t344141\t1020353\t966466\nCost of revenues (1)\t55822\t61716\t171755\t172995\nGross profit\t301154\t282425\t848598\t793471\nOperating expenses:\t\t\t\t\nSales and marketing (1)\t95074\t98486\t287317\t273812\nResearch development and engineering (1)\t14261\t13770\t43273\t38692\nGeneral and administrative (1)\t114381\t110810\t312283\t314132\nTotal operating expenses\t223716\t223066\t642873\t626636\nIncome from operations\t77438\t59359\t205725\t166835\nInterest expense net\t22712\t17271\t65879\t50625\nGain on sale of businesses\t(17122)\t0\t(17122)\t0\nLoss on investments net\t156\t7\t20991\t45\nOther (income) expense net\t(14230)\t857\t(16413)\t2657\nIncome before income taxes and net loss (income) in earnings of equity method investment\t85922\t41224\t152390\t113508\nIncome tax expense\t24330\t6998\t49011\t17851\nNet loss (income) in earnings of equity method investment\t709\t3481\t10799\t(126)\nNet income\t60883\t30745\t92580\t95783\nNet income per common share:\t\t\t\t\nBasic\t1.31\t0.63\t1.96\t1.98\nDiluted\t1.31\t0.62\t1.93\t1.93\nWeighted average shares outstanding:\t\t\t\t\nBasic\t46279515\t47673211\t46914750\t47654327\nDiluted\t46309072\t49064272\t47620308\t48892523\n(1) Includes share-based compensation expense as follows:\t\t\t\t\nCost of revenues\t136\t127\t413\t390\nSales and marketing\t321\t419\t1135\t1212\nResearch development and engineering\t425\t373\t1340\t1092\nGeneral and administrative\t4918\t5527\t15755\t15700\nTotal\t5800\t6446\t18643\t18394\n", "q10k_tbl_3": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet income\t60883\t30745\t92580\t95783\nOther comprehensive loss net of tax:\t\t\t\t\nForeign currency translation adjustment\t(3202)\t(8166)\t(12085)\t(8852)\nChange in fair value on available-for-sale investments net of tax expense of $141 and $314 for the three and nine months ended September 30 2020 respectively and zero and $184 for the three and nine months ended September 30 2019 respectively.\t8\t0\t553\t558\nOther comprehensive loss net of tax\t(3194)\t(8166)\t(11532)\t(8294)\nComprehensive income\t57689\t22579\t81048\t87489\n", "q10k_tbl_4": "\tNine Months Ended September 30\t\nCash flows from operating activities:\t2020\t2019\nNet income\t92580\t95783\nAdjustments to reconcile net income to net cash provided by operating activities:\t\t\nDepreciation and amortization\t163680\t170409\nAmortization of financing costs and discounts\t21393\t9072\nNon-cash operating lease costs\t15686\t14474\nShare-based compensation\t18643\t18394\nProvision for doubtful accounts\t9508\t9217\nDeferred income taxes net\t7815\t2850\nGain on sale of businesses\t(17122)\t0\nLease asset impairments and other charges\t9786\t0\nChanges in fair value of contingent consideration\t(243)\t8044\nForeign currency remeasurement gain\t(15919)\t0\nLoss (income) on equity method investments\t10799\t(166)\nLoss on equity and debt investments\t20826\t0\nDecrease (increase) in:\t\t\nAccounts receivable\t57560\t29953\nPrepaid expenses and other current assets\t(3279)\t(10094)\nOther assets\t543\t(1528)\nIncrease (decrease) in:\t\t\nAccounts payable and accrued expenses\t(26430)\t623\nIncome taxes payable\t(496)\t(15179)\nDeferred revenue\t(10494)\t777\nOperating lease liabilities\t(12857)\t(13612)\nLiability for uncertain tax positions\t7746\t(9144)\nOther long-term liabilities\t6284\t(566)\nNet cash provided by operating activities\t356009\t309307\nCash flows from investing activities:\t\t\nDistribution from equity method investment\t0\t10288\nPurchases of equity method investment\t(29979)\t(22338)\nPurchases of equity investments\t(843)\t0\nPurchases of property and equipment\t(71266)\t(49483)\nAcquisition of businesses net of cash received\t(27156)\t(411349)\nProceeds from sale of businesses\t24353\t0\nProceeds from sale of assets\t507\t0\nPurchases of intangible assets\t(2902)\t(46)\nNet cash used in investing activities\t(107286)\t(472928)\nCash flows from financing activities:\t\t\nPayment of note payable\t(400)\t(5100)\nProceeds from line of credit\t0\t185000\nRepayment of line of credit\t0\t(57000)\nRepurchase of common stock\t(238905)\t(20562)\nIssuance of common stock under employee stock purchase plan\t3303\t1995\nExercise of stock options\t952\t5274\nDividends paid\t0\t(43966)\nDeferred payments for acquisitions\t(20427)\t(17734)\nOther\t(1377)\t(1055)\nNet cash (used in) provided by financing activities\t(256854)\t46852\nEffect of exchange rate changes on cash and cash equivalents\t446\t(520)\nNet change in cash and cash equivalents\t(7685)\t(117289)\nCash and cash equivalents at beginning of period\t575615\t209474\nCash and cash equivalents at end of period\t567930\t92185\n", "q10k_tbl_5": "\t\t\t\t\t\t\t\t\tAccumulated\t\t\n\tCommon stock\t\tAdditional paid-in\tTreasury stock\t\tRetained\tother comprehensive\t\t\tTotal Stockholders'\n\tShares\tAmount\t\t\tcapital\tShares\tAmount\tearnings\tloss\t\tEquity\nBalance July 1 2019\t47765869\t478\t\t\t365687\t0\t0\t752040\t(46107)\t\t1072098\nNet income\t0\t0\t\t\t0\t0\t0\t30745\t0\t\t30745\nOther comprehensive income net of tax expense of zero\t0\t0\t\t\t0\t0\t0\t0\t(8166)\t\t(8166)\nVested restricted stock\t26989\t0\t\t\t0\t0\t0\t0\t0\t\t0\nRepurchase and retirement of common stock\t(206923)\t(2)\t\t\t(2160)\t0\t0\t(14593)\t0\t\t(16755)\nShare based compensation\t0\t0\t\t\t6446\t0\t0\t0\t0\t\t6446\nBalance September 30 2019\t47585935\t476\t\t\t369973\t0\t0\t768192\t(54273)\t\t1084368\n", "q10k_tbl_6": "\t\t\t\t\t\t\t\t\tAccumulated\t\t\n\tCommon stock\t\tAdditional paid-in\tTreasury stock\t\tRetained\tother comprehensive\t\t\tTotal Stockholders'\n\tShares\tAmount\t\t\tcapital\tShares\tAmount\tearnings\tloss\t\tEquity\nBalance July 1 2020\t46892691\t469\t\t\t467267\t0\t0\t850232\t(54800)\t\t1263168\nNet income\t0\t0\t\t\t0\t0\t0\t60883\t0\t\t60883\nOther comprehensive income net of tax expense of $141\t0\t0\t\t\t0\t0\t0\t0\t(3194)\t\t(3194)\nVested restricted stock\t19893\t0\t\t\t0\t0\t0\t0\t0\t\t0\nRepurchase and retirement of common stock\t(2145243)\t(21)\t\t\t(21442)\t0\t0\t(128973)\t0\t\t(150436)\nShare based compensation\t0\t0\t\t\t5800\t0\t0\t0\t0\t\t5800\nOther net\t0\t0\t\t\t116\t0\t0\t0\t0\t\t116\nBalance September 30 2020\t44767341\t448\t\t\t451741\t0\t0\t782142\t(57994)\t\t1176337\n", "q10k_tbl_7": "\t\t\t\t\t\t\t\t\tAccumulated\t\t\n\tCommon stock\t\tAdditional paid-in\tTreasury stock\t\tRetained\tother comprehensive\t\t\tTotal Stockholders'\n\tShares\tAmount\t\t\tcapital\tShares\tAmount\tearnings\tloss\t\tEquity\nBalance January 1 2019\t48082800\t481\t\t\t354210\t(600000)\t(42543)\t769575\t(45979)\t\t1035744\nNet income\t0\t0\t\t\t0\t0\t0\t95783\t0\t\t95783\nOther comprehensive income net of tax expense of $184\t0\t0\t\t\t0\t0\t0\t0\t(8294)\t\t(8294)\nDividends ($0.9000 per share)\t0\t0\t\t\t0\t0\t0\t(43966)\t0\t\t(43966)\nExercise of stock options\t156038\t2\t\t\t5272\t0\t0\t0\t0\t\t5274\nIssuance of shares under employee stock purchase plan\t32154\t0\t\t\t1995\t0\t0\t0\t0\t\t1995\nVested restricted stock\t167746\t1\t\t\t(1)\t0\t0\t0\t0\t\t0\nRepurchase and retirement of common stock\t(852803)\t(8)\t\t\t(9832)\t600000\t42543\t(53265)\t0\t\t(20562)\nShare based compensation\t0\t0\t\t\t18329\t0\t0\t65\t0\t\t18394\nBalance September 30 2019\t47585935\t476\t\t\t369973\t0\t0\t768192\t(54273)\t\t1084368\n", "q10k_tbl_8": "\t\t\t\t\t\t\t\t\tAccumulated\t\t\n\tCommon stock\t\tAdditional paid-in\tTreasury stock\t\tRetained\tother comprehensive\t\t\tTotal Stockholders'\n\tShares\tAmount\t\t\tcapital\tShares\tAmount\tearnings\tloss\t\tEquity\nBalance January 1 2020\t47654929\t476\t\t\t465652\t0\t0\t891526\t(46462)\t\t1311192\nNet income\t0\t0\t\t\t0\t0\t0\t92580\t0\t\t92580\nOther comprehensive income net of tax expense of $314\t0\t0\t\t\t0\t0\t0\t0\t(11532)\t\t(11532)\nExercise of stock options\t41530\t0\t\t\t1583\t0\t0\t(631)\t0\t\t952\nIssuance of shares under employee stock purchase plan\t53694\t0\t\t\t3303\t0\t0\t0\t0\t\t3303\nExercise of 3.25% Convertible Note\t0\t0\t\t\t(12)\t0\t0\t0\t0\t\t(12)\nVested restricted stock\t267894\t3\t\t\t(3)\t0\t0\t0\t0\t\t0\nRepurchase and retirement of common stock\t(3250706)\t(31)\t\t\t(37541)\t0\t0\t(201333)\t0\t\t(238905)\nShare based compensation\t0\t0\t\t\t18643\t0\t0\t0\t0\t\t18643\nOther net\t0\t0\t\t\t116\t0\t0\t0\t0\t\t116\nBalance September 30 2020\t44767341\t448\t\t\t451741\t0\t0\t782142\t(57994)\t\t1176337\n", "q10k_tbl_9": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\nDigital Media\t2020\t2019\t2020\t2019\nAdvertising\t135219\t123463\t371403\t339024\nSubscription\t49386\t47048\t136534\t128402\nOther\t2179\t2481\t5525\t6608\nTotal Digital Media revenues\t186784\t172992\t513462\t474034\nCloud Services\t\t\t\t\nSubscription\t170233\t170971\t507021\t491669\nOther\t15\t192\t69\t871\nTotal Cloud Services revenues\t170248\t171163\t507090\t492540\nCorporate\t0\t3\t1\t6\nElimination of inter-segment revenues\t(56)\t(17)\t(200)\t(114)\nTotal Revenues\t356976\t344141\t1020353\t966466\nTiming of revenue recognition\t\t\t\t\nPoint in time\t8396\t10371\t19366\t24315\nOver time\t348580\t333770\t1000987\t942151\nTotal\t356976\t344141\t1020353\t966466\n", "q10k_tbl_10": "Assets and Liabilities\t\tValuation\nAccounts receivable\t$\t875\nPrepaid expenses and other current assets\t\t91\nProperty and equipment\t\t53\nOperating lease right of use asset\t\t113\nTrade names\t\t1527\nCustomer relationships\t\t10681\nGoodwill\t\t23817\nOther intangibles\t\t5272\nAccounts payable and accrued expenses\t\t(373)\nDeferred revenue\t\t(2390)\nOperating lease liabilities current\t\t(95)\nOperating lease liabilities non-current\t\t(19)\nDeferred tax liability\t\t(405)\nTotal\t$\t39147\n", "q10k_tbl_11": "\tCost\tImpairment\tAdjustments\tReported Amount\nSeptember 30 2020\t\t\t\t\nEquity securities\t54145\t(23769)\t(480)\t29896\nTotal\t54145\t(23769)\t(480)\t29896\nDecember 31 2019\t\t\t\t\nEquity securities\t34977\t(4164)\t(3678)\t27135\nTotal\t34977\t(4164)\t(3678)\t27135\n", "q10k_tbl_12": "\tAmortized Cost\tGross Unrealized Gains\tGross Unrealized Losses\tFair Value\nSeptember 30 2020\t\t\t\t\nCorporate debt securities\t511\t142\t0\t653\nTotal\t511\t142\t0\t653\nDecember 31 2019\t\t\t\t\nCorporate debt securities\t23256\t112\t(698)\t22670\nTotal\t23256\t112\t(698)\t22670\n", "q10k_tbl_13": "\tSeptember 30 2020\tDecember 31 2019\nDue within 1 year\t0\t0\nDue within more than 1 year but less than 5 years\t653\t22670\nDue within more than 5 years but less than 10 years\t0\t0\nDue 10 years or after\t0\t0\nTotal\t653\t22670\n", "q10k_tbl_14": "\tAs of December 31 2019\t\t\t\t\t\n\tLess than 12 Months\t\t12 Months or Greater\t\tTotal\t\n\tFair Value\tUnrealized Loss\tFair Value\tUnrealized Loss\tFair Value\tUnrealized Loss\nCorporate debt securities\t0\t0\t22047\t(698)\t22047\t(698)\nTotal\t0\t0\t22047\t(698)\t22047\t(698)\n", "q10k_tbl_15": "\tSeptember 30 2020\tDecember 31 2019\nEquity method investment\t66026\t50274\nMaximum exposure to loss\t66026\t50274\n", "q10k_tbl_16": "\tValuation Technique\tUnobservable Input\tRange\tWeighted Average\nContingent Consideration\tOption-Based Model\tRisk free rate\t1.9% - 2.9%\t1.9%\n\t\tDebt spread\t0.0% - 33.5%\t12.6%\n\t\tProbabilities\t5.0% - 100.0%\t77.8%\n\t\tPresent value factor\t3.6% - 4.8%\t3.8%\n\t\tDiscount rate\t28.6%\t28.6%\n", "q10k_tbl_17": "September 30 2020\tLevel 1\tLevel 2\tLevel 3\tFair Value\nAssets:\t\t\t\t\nCash equivalents:\t\t\t\t\nMoney market and other funds\t317107\t0\t0\t317107\nCorporate debt securities\t0\t653\t0\t653\nTotal assets measured at fair value\t317107\t653\t0\t317760\nLiabilities:\t\t\t\t\nContingent consideration\t0\t0\t8352\t8352\nTotal liabilities measured at fair value\t0\t0\t8352\t8352\nDecember 31 2019\tLevel 1\tLevel 2\tLevel 3\tFair Value\nAssets:\t\t\t\t\nCash equivalents:\t\t\t\t\nMoney market and other funds\t395664\t0\t0\t395664\nCorporate debt securities\t0\t623\t22047\t22670\nTotal assets measured at fair value\t395664\t623\t22047\t418334\nLiabilities:\t\t\t\t\nContingent consideration\t0\t0\t37887\t37887\nTotal liabilities measured at fair value\t0\t0\t37887\t37887\n", "q10k_tbl_18": "\tLevel 3\tAffected line item in the Statement of Operations\nBalance as of January 1 2020\t37887\t\nContingent consideration\t8106\t\nTotal fair value adjustments reported in earnings\t(243)\tGeneral and administrative\nContingent consideration payments\t(37398)\tNot applicable\nBalance as of September 30 2020\t8352\t\n", "q10k_tbl_19": "\tFax and Martech\tVoice Backup Security and CPP\tTotal Cloud Services\tDigital Media\tConsolidated\nBalance as of January 1 2020\t397788\t480084\t877872\t755161\t1633033\nGoodwill acquired (Note 4)\t21950\t0\t21950\t1867\t23817\nGoodwill written off related to sale of a business (1)\t0\t(4751)\t(4751)\t0\t(4751)\nPurchase accounting adjustments (2)\t0\t(2130)\t(2130)\t9721\t7591\nForeign exchange translation\t2226\t(358)\t1868\t(12)\t1856\nBalance as of September 30 2020\t421964\t472845\t894809\t766737\t1661546\n", "q10k_tbl_20": "\tSeptember 30 2020\tDecember 31 2019\nTrade names\t27417\t27379\nOther\t4317\t4306\nTotal\t31734\t31685\n", "q10k_tbl_21": "\tWeighted-Average Amortization Period\tHistorical Cost\tAccumulated Amortization\tNet\nTrade names\t10.1 years\t193701\t94259\t99442\nPatent and patent licenses\t5.5 years\t67949\t66805\t1144\nCustomer relationships (1)\t8.5 years\t630768\t440079\t190689\nOther purchased intangibles\t4.4 years\t383555\t246998\t136557\nTotal\t\t1275973\t848141\t427832\n", "q10k_tbl_22": "\tWeighted-Average Amortization Period\tHistorical Cost\tAccumulated Amortization\tNet\nTrade names\t10.2 years\t193202\t82552\t110650\nPatent and patent licenses\t6.5 years\t67921\t63143\t4778\nCustomer relationships (1)\t8.5 years\t630730\t392228\t238502\nOther purchased intangibles\t4.3 years\t383195\t212257\t170938\nTotal\t\t1275048\t750180\t524868\n", "q10k_tbl_23": "\tSeptember 30 2020\tDecember 31 2019\n6.0% Senior Notes\t650000\t650000\nConvertible Notes:\t\t\n3.25% Convertible Notes\t402414\t402500\n1.75% Convertible Notes\t550000\t550000\nTotal Notes\t1602414\t1602500\nLess: Unamortized discount\t120910\t139981\nDeferred issuance costs\t12453\t14058\nTotal long-term debt\t1469051\t1448461\nLess: current portion\t393980\t385532\nTotal long-term debt less current portion\t1075071\t1062929\n", "q10k_tbl_24": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nOperating lease cost\t16888\t6509\t33106\t17684\nShort-term lease cost\t264\t407\t1357\t1291\nTotal lease cost\t17152\t6916\t34463\t18975\n", "q10k_tbl_25": "\tSeptember 30 2020\tDecember 31 2019\nOperating leases\t\t\nOperating lease right-of-use assets\t97439\t125822\nTotal operating lease right-of-use assets\t97439\t125822\nOperating lease liabilities current\t27673\t26927\nOperating lease liabilities noncurrent\t87563\t104070\nTotal operating lease liabilities\t115236\t130997\n", "q10k_tbl_26": "\tNine Months Ended September 30\t\n\t2020\t2019\nCash paid for amounts included in the measurement of lease liabilities:\t\t\nOperating cash flows from operating leases\t21764\t15925\nRight-of-use assets obtained in exchange for lease obligations:\t\t\nOperating leases\t7968\t32442\n", "q10k_tbl_27": "\tSeptember 30 2020\tDecember 31 2019\nOperating leases:\t\t\nWeighted average remaining lease term\t5.5 years\t5.9 years\nWeighted average discount rate\t4.21%\t3.95%\n", "q10k_tbl_28": "\tOperating Leases\nFiscal Year:\t\n2020 (remainder)\t7393\n2021\t29086\n2022\t26120\n2023\t20383\n2024\t13726\nThereafter\t38471\nTotal lease payments\t135179\nLess: Imputed interest\t19943\nPresent value of operating lease liabilities\t115236\n", "q10k_tbl_29": "Declaration Date\tDividend per Common Share\tRecord Date\tPayment Date\nFebruary 6 2019\t0.4450\tFebruary 25 2019\tMarch 12 2019\nMay 2 2019\t0.4550\tMay 20 2019\tJune 4 2019\n", "q10k_tbl_30": "\tNumber of Shares\tWeighted- Average Exercise Price\tWeighted-Average Remaining Contractual Term (in years)\tAggregate Intrinsic Value\nOutstanding at January 1 2020\t518341\t65.77\t\t\nGranted\t0\t0\t\t\nExercised\t(41530)\t22.92\t\t\nCanceled\t0\t0\t\t\nOutstanding at September 30 2020\t476811\t69.51\t6.4\t2187385\nExercisable at September 30 2020\t176811\t60.13\t4.9\t2187385\nVested and expected to vest at September 30 2020\t394131\t68.35\t6.2\t2187385\n", "q10k_tbl_31": "\tSeptember 30 2020\tSeptember 30 2019\nUnderlying stock price at valuation date\t91.17\t84.58\nExpected volatility\t27.0%\t28.3%\nRisk-free interest rate\t0.7%\t2.53%\n", "q10k_tbl_32": "\tShares\tWeighted-Average Grant-Date Fair Value\nNonvested at January 1 2020\t1105059\t64.76\nGranted\t1268\t98.63\nVested\t(261396)\t70.20\nCanceled\t(11460)\t78.88\nNonvested at September 30 2020\t833471\t62.91\n", "q10k_tbl_33": "\tNumber of Shares\tWeighted-Average Remaining Contractual Term (in years)\tAggregate Intrinsic Value\nOutstanding at January 1 2020\t20874\t\t\nGranted\t206886\t\t\nVested\t(6498)\t\t\nCanceled\t(5297)\t\t\nOutstanding at September 30 2020\t215965\t3.8\t14949097\nVested and expected to vest at September 30 2020\t140841\t3.1\t9748995\n", "q10k_tbl_34": "\tSeptember 30 2020\tSeptember 30 2019\nRisk-free interest rate\t0.13%\t2.43%\nExpected term (in years)\t0.5\t0.5\nDividend yield\t0.00%\t1.05%\nExpected volatility\t23.95%\t26.80%\nWeighted average volatility\t23.95%\t26.80%\n", "q10k_tbl_35": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNumerator for basic and diluted net income per common share:\t\t\t\t\nNet income attributable to J2 Global Inc. common shareholders\t60883\t30745\t92580\t95783\nNet income available to participating securities (a)\t(89)\t(511)\t(477)\t(1361)\nNet income available to J2 Global Inc. common shareholders\t60794\t30234\t92103\t94422\nDenominator:\t\t\t\t\nWeighted-average outstanding shares of common stock\t46279515\t47673211\t46914750\t47654327\nDilutive effect of:\t\t\t\t\nEquity incentive plans\t29557\t68413\t23211\t73906\nConvertible debt (b)\t0\t1322648\t682347\t1164290\nCommon stock and common stock equivalents\t46309072\t49064272\t47620308\t48892523\nNet income per share:\t\t\t\t\nBasic\t1.31\t0.63\t1.96\t1.98\nDiluted\t1.31\t0.62\t1.93\t1.93\n", "q10k_tbl_36": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenue by reportable segment:\t\t\t\t\nFax and Martech\t98044\t95300\t286687\t284151\nVoice Backup Security and CPP\t72204\t75863\t220403\t208389\nCloud Services Total\t170248\t171163\t507090\t492540\nDigital Media\t186784\t172992\t513462\t474034\nElimination of inter-segment revenues\t(56)\t(17)\t(200)\t(114)\nTotal segment revenues\t356976\t344138\t1020352\t966460\nCorporate (1)\t0\t3\t1\t6\nTotal revenues\t356976\t344141\t1020353\t966466\nGross profit by reportable segment:\t\t\t\t\nFax and Martech\t81435\t79590\t238149\t239915\nVoice Backup Security and CPP\t50392\t53333\t152733\t145304\nCloud Services Total\t131827\t132923\t390882\t385219\nDigital Media\t169394\t149516\t457963\t408360\nElimination of inter-segment gross profit\t(56)\t(17)\t(200)\t(114)\nTotal segment gross profit\t301165\t282422\t848645\t793465\nCorporate (1)\t(11)\t3\t(47)\t6\nTotal gross profit\t301154\t282425\t848598\t793471\nDirect costs by reportable segment (2):\t\t\t\t\nFax and Martech (3)\t28614\t27670\t89121\t93384\nVoice Backup Security and CPP (3)\t37456\t44308\t118291\t110009\nCloud Services Total\t66070\t71978\t207412\t203393\nDigital Media (3)\t143312\t144023\t410109\t402349\nElimination of inter-segment direct costs\t(56)\t(17)\t(200)\t(114)\nTotal segment direct costs\t209326\t215984\t617321\t605628\nCorporate (1)\t14390\t7082\t25552\t21008\nTotal direct costs (2)\t223716\t223066\t642873\t626636\nOperating income by reportable segment:\t\t\t\t\nFax and Martech\t52821\t51920\t149028\t146531\nVoice Backup Security and CPP\t12936\t9025\t34442\t35295\nCloud Services Total\t65757\t60945\t183470\t181826\nDigital Media\t26082\t5493\t47854\t6011\nTotal segment operating income\t91839\t66438\t231324\t187837\nCorporate (1)\t(14401)\t(7079)\t(25599)\t(21002)\nTotal income from operations\t77438\t59359\t205725\t166835\n(1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment.\t\t\t\t\n(2) Direct costs for each segment include other operating expenses that are directly attributable to the segment such as employee compensation expense local sales and marketing expenses engineering and network operations expense depreciation and amortization and other administrative expenses.\t\t\t\t\n(3) Beginning in the third quarter of 2020 certain expenses associated with the Corporate entity that were previously allocated to the Cloud Services business and the Digital Media business for shared costs incurred by the Corporate entity were no longer allocated.\t\t\t\t\n", "q10k_tbl_37": "\tSeptember 30 2020\tDecember 31 2019\nAssets:\t\t\nCloud Services\t1481866\t1466969\nDigital Media\t1450894\t1561024\nTotal assets from Cloud Services and Digital Media\t2932760\t3027993\nCorporate\t410233\t477853\nTotal assets\t3342993\t3505846\n\tNine Months Ended September 30\t\n\t2020\t2019\nCapital expenditures:\t\t\nCloud Services\t27673\t17216\nDigital Media\t43593\t32267\nTotal capital expenditures from Cloud Services and Digital Media\t71266\t49483\nCorporate\t0\t0\nTotal capital expenditures\t71266\t49483\n", "q10k_tbl_38": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nDepreciation and amortization:\t\t\t\t\nCloud Services\t20524\t24605\t58355\t58445\nDigital Media\t36651\t38990\t101771\t110067\nTotal depreciation and amortization from Cloud Services and Digital Media\t57175\t63595\t160126\t168512\nCorporate\t2437\t602\t3554\t1897\nTotal depreciation and amortization\t59612\t64197\t163680\t170409\n", "q10k_tbl_39": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenues:\t\t\t\t\nUnited States\t296054\t278917\t827520\t763494\nCanada\t17728\t16825\t51298\t51178\nIreland\t14947\t14228\t40520\t44604\nAll other countries\t28247\t34171\t101015\t107190\n\t356976\t344141\t1020353\t966466\n", "q10k_tbl_40": "\tSeptember 30 2020\tDecember 31 2019\nLong-lived assets:\t\t\nUnited States\t623190\t701580\nAll other countries\t49349\t76927\nTotal\t672539\t778507\n", "q10k_tbl_41": "\tUnrealized Gains (Losses) on Investments\tForeign Currency Translation\tTotal\nBeginning balance\t270\t(55070)\t(54800)\nOther comprehensive income (loss)\t8\t(3202)\t(3194)\nNet current period other comprehensive income (loss)\t8\t(3202)\t(3194)\nEnding balance\t278\t(58272)\t(57994)\n", "q10k_tbl_42": "\tUnrealized Gains (Losses) on Investments\tForeign Currency Translation\tTotal\nBeginning balance\t(275)\t(46187)\t(46462)\nOther comprehensive income (loss)\t553\t(12085)\t(11532)\nNet current period other comprehensive income (loss)\t553\t(12085)\t(11532)\nEnding balance\t278\t(58272)\t(57994)\n", "q10k_tbl_43": "Details about Accumulated Other Comprehensive Loss Components\tAmount Reclassified from Accumulated Other Comprehensive Loss\t\tAffected Line Item in the Statement of Operations\n\tThree Months Ended September 30 2020\tNine Months Ended September 30 2020\t\t\t\t\t\t\t\nUnrealized loss on available-for-sale investments\t0\t698\t\t\t\t\tLoss on investments net\t\t\n\t0\t698\t\t\t\t\tIncome before income taxes\t\t\n\t0\t0\t\t\t\t\tIncome tax expense\t\t\nTotal reclassifications for the period\t0\t698\t\t\t\t\tNet Income\t\t\n", "q10k_tbl_44": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nSubscriber revenues:\t\t\t\t\nFixed (1)\t144525\t141832\t426766\t406493\nVariable (1)\t25708\t29139\t80255\t85176\nTotal subscriber revenues\t170233\t170971\t507021\t491669\nOther license revenues\t15\t192\t69\t871\nTotal revenues\t170248\t171163\t507090\t492540\nPercentage of total subscriber revenues:\t\t\t\t\nFixed\t84.9%\t83.0%\t84.2%\t82.7%\nVariable\t15.1%\t17.0%\t15.8%\t17.3%\nTotal revenues:\t\t\t\t\nNumber-based\t98000\t97219\t289502\t291666\nNon-number-based\t72248\t73944\t217588\t200874\nTotal revenues\t170248\t171163\t507090\t492540\nAverage monthly revenue per Cloud Business Customer (ARPU) (2)(3)\t13.98\t14.15\t\t\nCancel Rate (4)\t2.1%\t2.4%\t\t\n", "q10k_tbl_45": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nVisits (1)\t2197\t1857\t6701\t5282\nPage views\t7244\t7008\t22777\t20587\n", "q10k_tbl_46": "\tThree Months Ended September 30\t\tPercentage Change\tNine Months Ended September 30\t\tPercentage Change\n\t2020\t2019\t\t2020\t2019\t\nRevenues\t356976\t344141\t4%\t1020353\t966466\t6%\n", "q10k_tbl_47": "\tThree Months Ended September 30\t\tPercentage Change\tNine Months Ended September 30\t\tPercentage Change\n\t2020\t2019\t\t2020\t2019\t\nCost of revenue\t55822\t61716\t(10)%\t171755\t172995\t(1)%\nAs a percent of revenue\t16%\t18%\t\t17%\t18%\t\n", "q10k_tbl_48": "\tThree Months Ended September 30\t\tPercentage Change\tNine Months Ended September 30\t\tPercentage Change\n\t2020\t2019\t\t2020\t2019\t\nSales and Marketing\t95074\t98486\t(3)%\t287317\t273812\t5%\nAs a percent of revenue\t27%\t29%\t\t28%\t28%\t\n", "q10k_tbl_49": "\tThree Months Ended September 30\t\tPercentage Change\tNine Months Ended September 30\t\tPercentage Change\n\t2020\t2019\t\t2020\t2019\t\nResearch Development and Engineering\t14261\t13770\t4%\t43273\t38692\t12%\nAs a percent of revenue\t4%\t4%\t\t4%\t4%\t\n", "q10k_tbl_50": "\tThree Months Ended September 30\t\tPercentage Change\tNine Months Ended September 30\t\tPercentage Change\n\t2020\t2019\t\t2020\t2019\t\nGeneral and Administrative\t114381\t110810\t3%\t312283\t314132\t(1)%\nAs a percent of revenue\t32%\t32%\t\t31%\t33%\t\n", "q10k_tbl_51": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nCost of revenues\t136\t127\t413\t390\nOperating expenses:\t\t\t\t\nSales and marketing\t321\t419\t1135\t1212\nResearch development and engineering\t425\t373\t1340\t1092\nGeneral and administrative\t4918\t5527\t15755\t15700\nTotal\t5800\t6446\t18643\t18394\n", "q10k_tbl_52": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\nExternal net sales\t170248\t171163\t507090\t492540\t\t\t\t\t\t\t\t\t\t\t\t\nInter-business net sales\t0\t0\t0\t0\t\t\t\t\t\t\t\t\t\t\t\t\nNet sales\t170248\t171163\t507090\t492540\t\t\t\t\t\t\t\t\t\t\t\t\nCost of revenues\t38421\t38240\t116208\t107321\t\t\t\t\t\t\t\t\t\t\t\t\nGross profit\t131827\t132923\t390882\t385219\t\t\t\t\t\t\t\t\t\t\t\t\nOperating expenses\t66070\t71978\t207412\t203393\t\t\t\t\t\t\t\t\t\t\t\t\nOperating income\t65757\t60945\t183470\t181826\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_53": "\tThree Months Ended September 30\t\tNine Months Ended September 30\n\t2020\t2019\t\t\t\t\t2020\t\t\t\t\t\t2019\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nExternal net sales\t186728\t172975\t\t\t\t\t513262\t\t\t\t\t\t473920\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nInter-business net sales\t56\t17\t\t\t\t\t200\t\t\t\t\t\t114\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nNet sales\t186784\t172992\t\t\t\t\t513462\t\t\t\t\t\t474034\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nCost of revenues\t17390\t23476\t\t\t\t\t55499\t\t\t\t\t\t65674\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nGross profit\t169394\t149516\t\t\t\t\t457963\t\t\t\t\t\t408360\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nOperating expenses\t143312\t144023\t\t\t\t\t410109\t\t\t\t\t\t402349\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nOperating income\t26082\t5493\t\t\t\t\t47854\t\t\t\t\t\t6011\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_54": "\tPayments Due in (in thousands)\t\t\t\t\t\t\nContractual Obligations\t2020\t2021\t2022\t2023\t2024\tThereafter\tTotal\nLong-term debt - principal (a)\t0\t402414\t0\t0\t0\t1200000\t1602414\nLong-term debt - interest (b)\t11352\t55164\t48625\t48625\t48625\t58250\t270641\nOperating leases (c)\t7393\t29086\t26120\t20383\t13726\t38471\t135179\nFinance leases (d)\t474\t602\t313\t29\t0\t0\t1418\nTelecom services and co-location facilities (e)\t890\t2261\t1114\t103\t0\t0\t4368\nHoldback payments (f)\t4608\t1511\t1511\t0\t0\t0\t7630\nTransition Tax (g)\t0\t0\t0\t0\t3189\t8486\t11675\nSelf-Insurance (h)\t5815\t6165\t0\t0\t0\t0\t11980\nOther (i)\t388\t614\t598\t0\t0\t0\t1600\nTotal\t30920\t497817\t78281\t69140\t65540\t1305207\t2046905\n", "q10k_tbl_55": "Period\tTotal Number of Shares Purchased (1)\tAverage Price Paid Per Share\tTotal Number of Shares Purchased as Part of Publicly Announced Plans or Program\tMaximum Number of Shares That May Yet Be Purchased Under the Plans or Program\nJuly 1 2020 - July 31 2020\t142033\t59.62\t140819\t0\nAugust 1 2020 - August 31 2020\t278219\t69.80\t276089\t9723911\nSeptember 1 2020 - September 30 2020\t1724991\t71.23\t1723911\t8000000\nTotal\t2145243\t\t2140819\t8000000\n", "q10k_tbl_56": "3.1\tAmended and Restated Certificate of Incorporation of J2 Global Inc. dated as of June 10 2014 (1)\n3.2\tAmendment to Amended and Restated Certificate of Incorporation of J2 Global Inc. dated as of September 5 2019 (2)\n3.3\tThird Amended and Restated By-Laws (2)\n31.1\tRule 13a-14(a) Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n31.2\tRule 13a-14(a) Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n32.1\tSection 1350 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2\tSection 1350 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101\tThe following financial information from J2 Global Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30 2020 and December 31 2019 (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30 2020 and 2019 (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30 2020 and 2019 (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30 2020 and 2019 (v) Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30 2020 and 2019 and (vi) the Notes to Condensed Consolidated Financial Statements.\n104\tCover Page Interactive Data File - the cover page from J2 Global Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30 2020 is formatted in Inline XBRL\n", "q10k_tbl_57": "Exhibit Number\tDescription\n3.1\tAmended and Restated Certificate of Incorporation of J2 Global Inc. dated as of June 10 2014 (1)\n3.2\tAmendment to Amended and Restated Certificate of Incorporation of J2 Global Inc. dated as of September 5 2019 (2)\n3.3\tThird Amended and Restated By-Laws (2)\n31.1\tRule 13a-14(a) Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n31.2\tRule 13a-14(a) Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n32.1\tSection 1350 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n32.2\tSection 1350 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101\tThe following financial information from J2 Global Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30 2020 and December 31 2019 (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30 2020 and 2019 (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30 2020 and 2019 (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30 2020 and 2019 (v) Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30 2020 and 2019 and (vi) the Notes to Condensed Consolidated Financial Statements.\n104\tCover Page Interactive Data File - the cover page from J2 Global Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30 2020 is formatted in Inline XBRL\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_2", "cf": "q10k_tbl_4"}None
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 0-25965
J2 GLOBAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
47-1053457
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization)
Identification No.)
700 S. Flower Street, 15th Floor
Los Angeles, California90017
(Address of principal executive offices)
(323) 860-9200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
JCOM
Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
Accelerated filer
o
Non-Accelerated filer
o
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý
As of November 4, 2020, the registrant had 45,592,054 shares of common stock outstanding.
(Unaudited, in thousands except share and per share data)
September 30, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
567,930
$
575,615
Accounts receivable, net of allowances of $13,202 and $12,701, respectively
192,800
261,928
Prepaid expenses and other current assets
46,594
49,347
Total current assets
807,324
886,890
Long-term investments
96,575
100,079
Property and equipment, net
147,268
127,817
Operating lease right-of-use assets
97,439
125,822
Trade names, net
126,859
138,029
Customer relationships, net
190,689
238,502
Goodwill
1,661,546
1,633,033
Other purchased intangibles, net
142,018
180,022
Deferred income taxes, noncurrent
57,490
59,976
Other assets
15,785
15,676
TOTAL ASSETS
$
3,342,993
$
3,505,846
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses
$
177,820
$
238,059
Income taxes payable, current
12,733
17,758
Deferred revenue, current
155,806
162,855
Operating lease liabilities, current
27,673
26,927
Current portion of long-term debt
393,980
385,532
Other current liabilities
901
1,973
Total current liabilities
768,913
833,104
Long-term debt
1,075,071
1,062,929
Deferred revenue, noncurrent
11,232
12,744
Operating lease liabilities, noncurrent
87,563
104,070
Income taxes payable, noncurrent
11,675
11,675
Liability for uncertain tax positions
60,197
52,451
Deferred income taxes, noncurrent
115,356
107,453
Other long-term liabilities
36,649
10,228
TOTAL LIABILITIES
2,166,656
2,194,654
Commitments and contingencies
—
—
Preferred stock, $0.01 par value. Authorized 1,000,000 and none issued
—
—
Preferred stock - Series A, $0.01 par value. Authorized 6,000; total issued and outstanding zero
—
—
Preferred stock - Series B, $0.01 par value. Authorized 20,000; total issued and outstanding zero
—
—
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 44,767,341 and 47,654,929 shares at September 30, 2020 and December 31, 2019, respectively.
448
476
Additional paid-in capital
451,741
465,652
Retained earnings
782,142
891,526
Accumulated other comprehensive loss
(57,994)
(46,462)
TOTAL STOCKHOLDERS’ EQUITY
1,176,337
1,311,192
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
3,342,993
$
3,505,846
See Notes to Condensed Consolidated Financial Statements
-3-
J2 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except share and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Total revenues
$
356,976
$
344,141
$
1,020,353
$
966,466
Cost of revenues (1)
55,822
61,716
171,755
172,995
Gross profit
301,154
282,425
848,598
793,471
Operating expenses:
Sales and marketing (1)
95,074
98,486
287,317
273,812
Research, development and engineering (1)
14,261
13,770
43,273
38,692
General and administrative (1)
114,381
110,810
312,283
314,132
Total operating expenses
223,716
223,066
642,873
626,636
Income from operations
77,438
59,359
205,725
166,835
Interest expense, net
22,712
17,271
65,879
50,625
Gain on sale of businesses
(17,122)
—
(17,122)
—
Loss on investments, net
156
7
20,991
45
Other (income) expense, net
(14,230)
857
(16,413)
2,657
Income before income taxes and net loss (income) in earnings of equity method investment
85,922
41,224
152,390
113,508
Income tax expense
24,330
6,998
49,011
17,851
Net loss (income) in earnings of equity method investment
709
3,481
10,799
(126)
Net income
$
60,883
$
30,745
$
92,580
$
95,783
Net income per common share:
Basic
$
1.31
$
0.63
$
1.96
$
1.98
Diluted
$
1.31
$
0.62
$
1.93
$
1.93
Weighted average shares outstanding:
Basic
46,279,515
47,673,211
46,914,750
47,654,327
Diluted
46,309,072
49,064,272
47,620,308
48,892,523
(1) Includes share-based compensation expense as follows:
Cost of revenues
$
136
$
127
$
413
$
390
Sales and marketing
321
419
1,135
1,212
Research, development and engineering
425
373
1,340
1,092
General and administrative
4,918
5,527
15,755
15,700
Total
$
5,800
$
6,446
$
18,643
$
18,394
See Notes to Condensed Consolidated Financial Statements
-4-
J2 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Net income
$
60,883
$
30,745
$
92,580
$
95,783
Other comprehensive loss, net of tax:
Foreign currency translation adjustment
(3,202)
(8,166)
(12,085)
(8,852)
Change in fair value on available-for-sale investments, net of tax expense of $141 and $314 for the three and nine months ended September 30, 2020, respectively, and zero and $184 for the three and nine months ended September 30, 2019, respectively.
8
—
553
558
Other comprehensive loss, net of tax
(3,194)
(8,166)
(11,532)
(8,294)
Comprehensive income
$
57,689
$
22,579
$
81,048
$
87,489
See Notes to Condensed Consolidated Financial Statements
-5-
J2 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30,
Cash flows from operating activities:
2020
2019
Net income
$
92,580
$
95,783
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
163,680
170,409
Amortization of financing costs and discounts
21,393
9,072
Non-cash operating lease costs
15,686
14,474
Share-based compensation
18,643
18,394
Provision for doubtful accounts
9,508
9,217
Deferred income taxes, net
7,815
2,850
Gain on sale of businesses
(17,122)
—
Lease asset impairments and other charges
9,786
—
Changes in fair value of contingent consideration
(243)
8,044
Foreign currency remeasurement gain
(15,919)
—
Loss (income) on equity method investments
10,799
(166)
Loss on equity and debt investments
20,826
—
Decrease (increase) in:
Accounts receivable
57,560
29,953
Prepaid expenses and other current assets
(3,279)
(10,094)
Other assets
543
(1,528)
Increase (decrease) in:
Accounts payable and accrued expenses
(26,430)
623
Income taxes payable
(496)
(15,179)
Deferred revenue
(10,494)
777
Operating lease liabilities
(12,857)
(13,612)
Liability for uncertain tax positions
7,746
(9,144)
Other long-term liabilities
6,284
(566)
Net cash provided by operating activities
356,009
309,307
Cash flows from investing activities:
Distribution from equity method investment
—
10,288
Purchases of equity method investment
(29,979)
(22,338)
Purchases of equity investments
(843)
—
Purchases of property and equipment
(71,266)
(49,483)
Acquisition of businesses, net of cash received
(27,156)
(411,349)
Proceeds from sale of businesses
24,353
—
Proceeds from sale of assets
507
—
Purchases of intangible assets
(2,902)
(46)
Net cash used in investing activities
(107,286)
(472,928)
Cash flows from financing activities:
Payment of note payable
(400)
(5,100)
Proceeds from line of credit
—
185,000
Repayment of line of credit
—
(57,000)
Repurchase of common stock
(238,905)
(20,562)
Issuance of common stock under employee stock purchase plan
3,303
1,995
Exercise of stock options
952
5,274
Dividends paid
—
(43,966)
Deferred payments for acquisitions
(20,427)
(17,734)
Other
(1,377)
(1,055)
Net cash (used in) provided by financing activities
(256,854)
46,852
Effect of exchange rate changes on cash and cash equivalents
446
(520)
Net change in cash and cash equivalents
(7,685)
(117,289)
Cash and cash equivalents at beginning of period
575,615
209,474
Cash and cash equivalents at end of period
$
567,930
$
92,185
See Notes to Condensed Consolidated Financial Statements
-6-
J2 GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three and Nine Months Ended September 30, 2019 and 2020
(unaudited, in thousands, except share amounts)
Accumulated
Common stock
Additional paid-in
Treasury stock
Retained
other comprehensive
Total Stockholders’
Shares
Amount
capital
Shares
Amount
earnings
loss
Equity
Balance, July 1, 2019
47,765,869
$
478
$
365,687
—
$
—
$
752,040
$
(46,107)
$
1,072,098
Net income
—
—
—
—
—
30,745
—
30,745
Other comprehensive income, net of tax expense of zero
—
—
—
—
—
—
(8,166)
(8,166)
Vested restricted stock
26,989
—
—
—
—
—
—
—
Repurchase and retirement of common stock
(206,923)
(2)
(2,160)
—
—
(14,593)
—
(16,755)
Share based compensation
—
—
6,446
—
—
—
—
6,446
Balance, September 30, 2019
47,585,935
$
476
$
369,973
—
$
—
$
768,192
$
(54,273)
$
1,084,368
Accumulated
Common stock
Additional paid-in
Treasury stock
Retained
other comprehensive
Total Stockholders’
Shares
Amount
capital
Shares
Amount
earnings
loss
Equity
Balance, July 1, 2020
46,892,691
$
469
$
467,267
—
$
—
$
850,232
$
(54,800)
$
1,263,168
Net income
—
—
—
—
—
60,883
—
60,883
Other comprehensive income, net of tax expense of $141
—
—
—
—
—
—
(3,194)
(3,194)
Vested restricted stock
19,893
—
—
—
—
—
—
—
Repurchase and retirement of common stock
(2,145,243)
(21)
(21,442)
—
—
(128,973)
—
(150,436)
Share based compensation
—
—
5,800
—
—
—
—
5,800
Other, net
—
—
116
—
—
—
—
116
Balance, September 30, 2020
44,767,341
$
448
$
451,741
—
$
—
$
782,142
$
(57,994)
$
1,176,337
-7-
Accumulated
Common stock
Additional paid-in
Treasury stock
Retained
other comprehensive
Total Stockholders’
Shares
Amount
capital
Shares
Amount
earnings
loss
Equity
Balance, January 1, 2019
48,082,800
$
481
$
354,210
(600,000)
$
(42,543)
$
769,575
$
(45,979)
$
1,035,744
Net income
—
—
—
—
—
95,783
—
95,783
Other comprehensive income, net of tax expense of $184
—
—
—
—
—
—
(8,294)
(8,294)
Dividends ($0.9000 per share)
—
—
—
—
—
(43,966)
—
(43,966)
Exercise of stock options
156,038
2
5,272
—
—
—
—
5,274
Issuance of shares under employee stock purchase plan
32,154
—
1,995
—
—
—
—
1,995
Vested restricted stock
167,746
1
(1)
—
—
—
—
—
Repurchase and retirement of common stock
(852,803)
(8)
(9,832)
600,000
42,543
(53,265)
—
(20,562)
Share based compensation
—
—
18,329
—
—
65
—
18,394
Balance, September 30, 2019
47,585,935
$
476
$
369,973
—
$
—
$
768,192
$
(54,273)
$
1,084,368
Accumulated
Common stock
Additional paid-in
Treasury stock
Retained
other comprehensive
Total Stockholders’
Shares
Amount
capital
Shares
Amount
earnings
loss
Equity
Balance, January 1, 2020
47,654,929
$
476
$
465,652
—
$
—
$
891,526
$
(46,462)
$
1,311,192
Net income
—
—
—
—
—
92,580
—
92,580
Other comprehensive income, net of tax expense of $314
—
—
—
—
—
—
(11,532)
(11,532)
Exercise of stock options
41,530
—
1,583
—
—
(631)
—
952
Issuance of shares under employee stock purchase plan