[November 05, 2014]

j2 Global Reports Q3 2014 Results

j2 Global, Inc. (NASDAQGS: JCOM) today reported financial results for the third quarter ended September 30, 2014 and announced that its Board of Directors has declared a quarterly cash dividend of $0.285 per share, j2's 13th consecutive quarterly dividend increase.

THIRD QUARTER 2014 RESULTS

Revenues for the quarter increased 19.7% to a record $153.0 million compared to $127.8 million in Q3 2013. All three of the Company's business divisions contributed to the increase.

Business Cloud Services revenues⁽¹⁾ increased 16.4% to a record $108.7 million compared to $93.4 million for Q3 2013. Digital Media revenues increased 29.3% to a record $43.2 million compared to $33.4 million for Q3 2013. Intellectual Property (IP) Licensing revenues increased to $1.2 million from $1.0 million for Q3 2013.

Earnings per diluted share⁽²⁾ for the quarter increased 1.7% to $0.60 compared to $0.59 for Q3 2013. Adjusted Non-GAAP earnings per diluted share⁽²⁾⁽³⁾ for the quarter increased 12.2% to $0.83 compared to $0.74 for Q3 2013.

EBITDA⁽⁴⁾ for the quarter increased 22.5% to $64.7 million compared to $52.8 million for Q3 2013.

Free cash flow⁽⁵⁾ for the quarter increased 75.3% to $39.1 million compared to $22.3 million for Q3 2013.

j2 ended the quarter with $684 million in cash and investments after deploying $52.9 million for acquisitions during the quarter and j2's regular quarterly dividend payment.

Key GAAP financial results for Q3 2014 versus Q3 2013 are set forth in the following table (in millions, except per share). Amounts may not foot due to rounding.

Key Adjusted Non-GAAP financial results for Q3 2014 versus Q3 2013 are set forth in the following table (in millions, except per share). Reconciliations of earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

"This was another strong quarter with record performance in both our cloud and media divisions," said Hemi Zucker, j2's CEO. "Q3 revenues were strong and for the year are trending to the higher end of our guidance. We continued to broaden our array of cloud-based businesses by adding hosted web services through our acquisition of Web24 and significantly expanded our email security business with our acquisition of Excel Micro."

BUSINESS OUTLOOK

j2 is reaffirming its previously announced fiscal 2014 revenues estimate of between $580 and $600 million.

In Q2 2014, j2 issued $402.5 million in convertible senior notes, which will adversely affect 2014 earnings per diluted share by approximately $0.10. Notwithstanding this impact, j2 is reaffirming its estimated fiscal 2014 Adjusted Non-GAAP earnings per diluted share of between $3.23 and $3.47.

Adjusted Non-GAAP earnings per diluted share for 2014 excludes share-based compensation of between $8 and $10 million, amortization of acquired intangibles and the impact of any currently unanticipated items, and adds back $1.5 million to reflect the impact of the fair value adjustment to deferred revenues purchased in the Livedrive acquisition, in each case net of tax.

The Adjusted Non-GAAP earnings per diluted share estimate assumes a 2014 tax rate of between 27% and 29%.

DIVIDEND

j2's Board of Directors has approved a cash dividend of $0.285 per common share, an 11.8% increase versus the dividend declared in November 2013. This is j2's 13th consecutive quarterly dividend increase since its first quarterly dividend in September 2011. The dividend will be paid on December 4, 2014 to all shareholders of record as of the close of business on November 17, 2014. Future dividends will be subject to Board approval.

About j2 Global

j2 Global, Inc. provides Internet services through two divisions: Business Cloud Services and Digital Media. The Business Cloud Services Division offers Internet fax, virtual phone, hosted email, email marketing, online backup, unified communications and CRM solutions. It markets its services principally under the brand names eFax^®, eVoice^®, FuseMail^®, Campaigner^®, KeepItSafe^®, Livedrive^® and Onebox^®, and operates a messaging network spanning 49 countries on six continents. The Digital Media Division offers technology, gaming and lifestyle content through its digital properties, which include PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. The Digital Media Division also operates NetShelter^® Powered by BuyerBase^®, an advanced digital ad targeting platform, and Ziff Davis B2B, a leading provider of research to enterprise buyers and leads to IT vendors. As of December 31, 2013, j2 had achieved 18 consecutive fiscal years of revenue growth. For more information about j2, please visit www.j2global.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this Press Release are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995, particularly those contained in the "Business Outlook" portion regarding the Company's expected fiscal 2014 financial performance. These forward-looking statements are based on management's current expectations or beliefs and are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: ability to successfully diversify and grow our business, including both the Business Cloud Services and Digital Media Divisions; ability to identify, close and successfully integrate acquisitions; risks of geographic expansion; risks that markets we choose to enter fail to achieve desired levels of growth and profitability prospects; subscriber growth and retention; variability of revenue based on changing conditions in particular industries and the economy generally; protection of the Company's proprietary technology or infringement by the Company of intellectual property of others; the risk of adverse changes in the U.S. or international regulatory environments surrounding messaging and communications, including but not limited to the imposition or increase of taxes or regulatory-related fees; and the numerous other factors set forth in j2's filings with the Securities and Exchange Commission ("SEC"). For a more detailed description of the risk factors and uncertainties affecting j2, refer to the 2013 Annual Report on Form 10-K filed by j2 on March 3, 2014, and the other reports filed by j2 from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release and particularly those contained in the "Business Outlook" portion regarding the Company's expected fiscal 2014 financial performance are based on limited information available to the Company at this time, which is subject to change. Although management's expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.

j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES
THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Adjusted non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) IRS consulting fee; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of additional income tax benefit from prior years; and (6) elimination of income tax provision associated with share-based compensation and the associated payroll tax expense, certain acquisition-related integration costs and fair value adjustments to deferred revenue, IRS consulting fee, amortization of patents and intangible assets that we acquired and additional income tax benefit from prior years.

* The reconciliation of net income per share from GAAP to adjusted non-GAAP may not foot since each is calculated independently.

The Company discloses adjusted non-GAAP Earnings Per Share ("EPS") as supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that this adjusted non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company believes that the presentation of this adjusted non-GAAP financial measure provides useful information to investors.

Adjusted non-GAAP EPS is not in accordance with, or an alternative to, net income per share and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, this adjusted non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This adjusted non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES
NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Adjusted non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) IRS consulting fee; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of additional income tax benefit and indirect tax expense from prior years; (6) elimination of revenue associated with past damages under a single $27 million license agreement; and (7) elimination of income tax provision associated with share-based compensation and the associated payroll tax expense, certain acquisition-related integration costs and fair value adjustments to deferred revenue, IRS consulting fee, amortization of patents and intangible assets that we acquired, additional income tax benefit and indirect tax expense from prior years and elimination of revenue associated with past damages under a single $27 million license agreement.

* The reconciliation of net income per share from GAAP to adjusted non-GAAP may not foot since each is calculated independently.

The Company discloses adjusted non-GAAP Earnings Per Share ("EPS") as supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that this adjusted non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company believes that the presentation of this adjusted non-GAAP financial measure provides useful information to investors.

Adjusted non-GAAP EPS is not in accordance with, or an alternative to, net income per share and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, this adjusted non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This adjusted non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

EBITDA as calculated above represents earnings before interest and other expense, net, income tax expense, depreciation and amortization and the items used to reconcile GAAP to adjusted non-GAAP financial measures, including (1) share-based compensation, (2) certain acquisition-related integration costs and (3) additional indirect tax expense from prior years. We disclose EBITDA as a supplemental non-GAAP financial performance measure as we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to EBITDA are broadly used by analysts, rating agencies and investors in assessing our performance. Accordingly, we believe that the presentation of EBITDA provides useful information to investors.

EBITDA is not in accordance with, or an alternative to, net income, and may be different from non-GAAP measures used by other companies. In addition, EBITDA is not based on any comprehensive set of accounting rules or principles. This adjusted non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

The Company discloses Free Cash Flows as supplemental non-GAAP financial performance measure, as it believes it is a useful metrics by which to compare the performance of its business from period to period. The Company also understands that this non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company's performance. Accordingly, the Company believes that the presentation of this non-GAAP financial measure provides useful information to investors.

Free Cash Flows is not in accordance with, or an alternative to, Cash Flows from Operating Activities, and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, the non-GAAP measure is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

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