j2 Global Inc. JCOM reported a strong second quarter of 2015 with both the top and the bottom line outpacing the Zacks Consensus Estimate.
Additionally, the company’s board of directors declared a 10.8% annual increase in its quarterly dividend, raising the figure to 30.75 cents per share from 29.25 cents. This is in sync with j2 Global’s streak of dividend increases made over the last 15 quarters.
Quarterly GAAP net income came in at $38.9 million or 81 cents per share compared with $35 million or 73 cents in the year-ago quarter. Second-quarter adjusted earnings per share stood at 80 cents, surpassing the Zacks Consensus Estimate of 75 cents. Quarterly total revenue stood at approximately $176 million, up 21.6% year over year and also above the Zacks Consensus Estimate of $170 million.
Segment-wise, Cloud Service revenues totaled $123.9 million, highlighting an increase of 17.7% year over year while Digital Media revenues stood at $50.8 million, up 33%. Further, IP Licensing revenues in the reported quarter grossed $1.3 million, up 8.3% from the figure recorded a year ago.
j2 Global posted quarterly gross margin of 83.2% compared with 82.4% in the year-ago quarter. Operating expenses in the quarter under review stood at $96.5 million, up 29.9% from a year ago. Quarterly operating margin stood at 28.5% against 31% in the comparable quarter last year. Meanwhile, quarterly EBITDA stood at $79.6 million, up 25% year over year.
At the end of the first six months of 2015, j2 Global generated $97.6 million of cash from operations compared with $91.8 million in the same period last year. Free cash flow, in the second quarter of 2015, was $90.7 million compared with $87.2 million in the year-ago quarter. At the end of the second quarter, j2 Global had around $513.1 million in cash & marketable securities on its balance sheet compared with $529.9 million at the end of 2014. Also, the company had $597.2 million of debt compared with $593.4 million at 2014-end. The debt-to-capitalization ratio stood at 0.41 flat year over year.
Financial Outlook
For fiscal 2015, management expects total revenue in the band of $690–$710 million. Non-GAAP earnings per share are projected in the $3.73–$3.97 range. Meanwhile, non-GAAP effective tax rate is estimated between 27% and 29%.
j2 Global presently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the Internet/Application software industry include Attunity, Ltd. ATTU, Support.com, Inc. SPRT and TeleCommunication Systems Inc. TSYS. Currently, all three stocks sport a Zacks Rank #1 (Strong Buy).
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