Ziff Davis, Inc. · NASDAQ:ZD
Ziff Davis — j2 Global — Q4 2016 Earnings Presentation
37 slides from Ziff Davis's earnings presentation, Feb 10, 2017
Slide 1: Investors Presentation: Fourth Quarter 2016 Results
Investors Presentation ® Fourth Quarter 2016 Results February 9, 2017
Slide 2: Safe Harbor for Forward-Looking Statements
Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly those regarding our 2017 Financial Guidance. Such forward-looking statements are subject to numerous assumptions, risks and uncertainties
Slide 3: Risk Factors
Inability to sustain growth or profitability, particularly in light of an uncertain U.S. and worldwide economy and the related impact on customer acquisition, retention and usage levels, advertising spend and credit and debit card payment declinesReduced use of fax services due to increased use of e
Slide 4: Q4 & FY 2016 Results
Q4 & FY 2016 Results
Slide 5: Record Results - full year and Q4 results
5 Record Results - full year and Q4 resultsAll Q4 Records: Revenue(1)(2) $252M, EBITDA(1)(2) $117M, FCF(1)(2) $83M, and Adjusted EPS(1)(2) $1.49All FY Records: Revenue(1)(2) $874M, EBITDA(1)(2) $396M, FCF $260M(1)(2), and Adjusted EPS(1)(2) $4.992016 FY Revenue up $153M or 21% vs. prior yearM&A stra
Slide 6: j2 Global Consolidated
j2 Global Consolidated
Slide 7: Q4 2016 Results vs. Prior Year
7 Q4 2016 Results vs. Prior Year See slides 22-26 for a GAAP reconciliation of revenue, earnings per diluted share and adjusted EBITDA for the Company as a whole and by segment.Includes Allocation from Cloud Connect to Cloud Services of $1.7M in Q4 ‘16 and $1.8M in Q4 ’15The Consolidated j2 Global d
Slide 8: Business Cloud Services
Business Cloud Services
Slide 9: Cloud Connect Q4 2016 Highlights
9 Q4 2016 HighlightsQ4 ‘16 Revenue up ~5% vs. Q4 ’15 ($1.2M in foreign currencies headwinds)2016 Full Year HighlightsFax/Voice Revenue grew ~$15M in 2016 vs. 2015 (+$18.4M or 5% in constant currencies)Fax represented 42% of total j2 consolidated revenue in 2015, and dropped to 35% in 20163 acquisiti
Slide 10: Cloud Backup Q4 2016 Highlights
10 Cloud Backup Q4 2016 HighlightsQ4 ‘16 Revenue up ~9% vs Q4 ’15 ($1.4M in currency headwinds)2016 Full Year HighlightsRevenue $115M, up 56% vs. prior year (+$3.9M or 62% in constant currencies)EBITDA(1)(2) up 92% vs. prior year, EBITDA margin improved to 53%Completed 11 acquisitions including Vaul
Slide 11: Email Security Highlights
Q4 2016 HighlightsQ4 ‘16 Revenue flat vs. Q3 ‘16 and down 1% vs. Q4 ’15 in constant currencies2016 Full Year Highlights2016 Revenue of $46M up 2% vs. prior year (+$1.0M or 4% in constant currencies)FuseMail product grew from 200K legacy users early 2016 to over 1.8M users in Q1 2017Completed the mig
Slide 12: Email Marketing Highlights
4Q 2016 HighlightsQ4 ‘16 Revenue up 34% vs. Q4 ‘152016 Full Year Highlights2016 Revenue of ~$27M up 27% vs. prior yearCompleted 4 acquisitions including MailOut, WhatCounts, SMTP and Unified EmailProven ability to efficiently integrate new acquisitionsARPU is up to $261 vs. $219 in prior yearWon sev
Slide 13: Digital Media
Digital Media
Slide 14: Q4 2016 Digital Media Highlights
14 Figures are Adjusted Non-GAAPSee slides 26-36 for a GAAP reconciliation of revenue, earnings per diluted share and EBITDA. Digital media business demonstrating strong fundamentalsQ4 ‘16 Revenue of $109M, +56% vs. Q4 ’15Q4 ‘16 EBITDA(1)(2) of $44M, up, +37% vs. Q4 ’15Total multi-platform visits we
Slide 15: Q4 2016 Digital Media Highlights: Social and Everyday Health
15 Q4 2016 Digital Media Highlights Social platform distribution significantly increasesTotal social followers are up 47% YOY to 28.4MAskMen Facebook followers up 117% YOY to 1.2MPCMag/Geek.com/ExtremeTech combined Facebook and Twitter followers are up 25% YOY to 1.9MIGN total social followers are u
Slide 16: Digital Media 2016 Results & 2017 Outlook
16 Digital Media 2016 Results & 2017 Outlook 2016 Results2016 FY Revenue of $307M, up $91M or 42% vs. prior yearAcquired Everyday Health in December 2016EBITDA(1)(2) margin greater than 37%2017 OutlookRevenue(1) growth expected to be >80%EBITDA(1) margin ~32%Everyday Health EBITDA margin will improv
Slide 17: 2017 Financial Guidance
2017 Financial Guidance
Slide 18: 2017 Outlook (Non-GAAP)
2017 Outlook (Non-GAAP) 18 Cloud ServicesRevenue growth expected to be ~2-3% EBITDA(1) margin ~52%Sustaining EBITDA margin even with investment in Backup IP LicensingRevenue expected between $3.0M - $4.0MMediaRevenue(1) growth expected to be >80%EBITDA(1) margin expected to be ~32%Distribution of Re
Slide 19: 2017 Guidance
Revenues $1,130M - $1,170M Adjusted Non-GAAP EPS(1)(2) $5.60 - $6.00 19 2017 Guidance Figures are adjusted Non-GAAP.Adjusted earnings per diluted share excludes share-based compensation, amortization of acquired intangibles and the impact of any currently anticipated items, in each case net of tax.
Slide 20: Supplemental Information
Supplemental Information
Slide 21: Financial Metrics: Consolidated
21 See slide 27 - 30 for a definition of adjusted Non-GAAP net income and a reconciliation of Non-GAAP earnings and EPS to GAAP net income and diluted GAAP EPSSee slide 26 for a definition of Free Cash Flow and reconciliation to net cash provided by operating activitiesSee slide 26 for a definition
Slide 22: Financial & Other Metrics: Cloud & Media
22 Cloud Services revenue includes IP Licensing revenueCloud Services Customers are defined as paying DIDs for Fax & Voice services and direct and resellers’ accounts for other servicesQuarterly ARPU is calculated using our standard convention of applying the average of the quarter’s beginning and e
Slide 23: FY 2016 Results vs. Prior Year
23 FY 2016 Results vs. Prior Year See slides 26-36 for a GAAP reconciliation of revenue, earnings per diluted share and adjusted EBITDA for the Company as a whole and by segment.Includes Allocation from Cloud Connect to Cloud Services of $6.8M in 2016 and $6.5M in 2015The Consolidated j2 Global data
Slide 24: Non-GAAP Financials: Cloud Segment by Service
24 Non-GAAP Financials Cloud Segment by Service Figures are Adjusted Non-GAAP. See slides 35-36 for a GAAP reconciliation of Revenue, Operating Profit and EBITDA.Includes Allocation from Cloud Connect to Cloud Services of $0.8M, $2.4M, $4.1M, $6.5M and $6.8M in 2012-2016, respectivelyCalculation inc
Slide 25: Non-GAAP Financials: Digital Media, Corporate and Consolidated
25 Non-GAAP Financials Digital Media, Corporate and Consolidated Figures are Adjusted Non-GAAP. See slides 35-36 for a GAAP reconciliation of Revenue, Operating Profit and EBITDACalculation includes $12.6M of Patent Revenue as reported on a GAAP basis
Slide 26: GAAP Reconciliation: Free Cash Flow & Adjusted EBITDA
26 Free Cash Flow (1) Free Cash Flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus excess tax benefits (deficiency) from share based compensation. In addition, the amount shown for Q2 and Q3 2015 excludes the effect of payments associa
Slide 27: GAAP Reconciliation Q4 Adjusted Non-GAAP Earnings & EPS
27 GAAP Reconciliation Q4 Adjusted Non-GAAP Earnings & EPS Adjusted Non-GAAP net income is not meant as a substitute for GAAP, and is defined as GAAP net income with the following modifications: 1) Elimination of shared-based compensation expense and associated payroll taxes 2) Elimination of certai
Slide 28: GAAP Reconciliation Q4 Adjusted Non-GAAP Earnings & EPS (continued)
28 GAAP Reconciliation Q4 Adjusted Non-GAAP Earnings & EPS (continued) Adjusted Non-GAAP net income is not meant as a substitute for GAAP, and is defined as GAAP net income with the following modifications: 1) Elimination of shared-based compensation expense and associated payroll taxes 2) Eliminati
Slide 29: GAAP Reconciliation FY 2016 Adjusted Non-GAAP Earnings & EPS
29 GAAP Reconciliation FY 2016 Adjusted Non-GAAP Earnings & EPS Adjusted Non-GAAP net income is not meant as a substitute for GAAP, and is defined as GAAP net income with the following modifications: 1) Elimination of shared-based compensation expense and associated payroll taxes 2) Elimination of c
Slide 30: GAAP Reconciliation FY 2016 Adjusted Non-GAAP Earnings & EPS (continued)
30 GAAP Reconciliation FY 2016 Adjusted Non-GAAP Earnings & EPS (continued) Adjusted Non-GAAP net income is not meant as a substitute for GAAP, and is defined as GAAP net income with the following modifications: 1) Elimination of shared-based compensation expense and associated payroll taxes 2) Elim
Slide 31: GAAP Reconciliation Q4 2016 Adjusted EBITDA
31 GAAP Reconciliation Q4 2016 Adjusted EBITDA ($ in thousands)
Slide 32: GAAP Reconciliation Q4 2015 Adjusted EBITDA
32 GAAP Reconciliation Q4 2015 Adjusted EBITDA ($ in thousands)
Slide 33: GAAP Reconciliation FY 2016 Adjusted EBITDA
33 GAAP Reconciliation FY 2016 Adjusted EBITDA ($ in thousands)
Slide 34: GAAP Reconciliation FY 2015 Adjusted EBITDA
34 GAAP Reconciliation FY 2015 Adjusted EBITDA ($ in thousands)
Slide 35: Consolidated GAAP Reconciliation Operating Profit
35 CONSOLIDATED ($ in thousands) GAAP Reconciliation Operating Profit
Slide 36: Cloud and Media GAAP Reconciliation Operating Profit
36 CLOUD ($ in thousands) GAAP Reconciliation Operating Profit MEDIA
Slide 37: Global
j2) Global