F O U R T H Q U A R T E R R E S U L T S February 6, 2018

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Transcription:

F O U R T H Q U A R T E R 2 0 1 7 R E S U L T S February 6, 2018

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 2018 Financial Guidance. Such forward-looking statements are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in those statements. Readers should carefully review the Risk Factors slide of this presentation. These forward-looking statements are based on management s expectations or beliefs as of February 6, 2018 and as well as those set forth in our Annual Report on Form 10-K filed by us on March 1, 2017 with the Securities and Exchange Commission ( SEC ) and the other reports we file from time-to-time with the SEC. We undertake no obligation to revise or publicly release any updates to such statements based on future information or actual results. Such forwardlooking statements address the following subjects, among others: Future operating results Ability to acquire businesses on acceptable terms and integrate and recognize synergies from acquired businesses Deployment of cash and investment balances to grow the company Subscriber growth, retention, usage levels and average revenue per account Cloud service and digital media growth and continued demand for fax services International growth New products, services, features and technologies Corporate spending including stock repurchases Intellectual property and related licensing revenues Liquidity and ability to repay or refinance indebtedness Network capacity, coverage, reliability and security Regulatory developments and taxes 2 All information in this presentation speaks as of February 6, 2018 and any redistribution or rebroadcast of this presentation after that date is not intended and will not be construed as updating or confirming such information.

Risk Factors The following factors, among others, could cause our business, prospects, financial condition, operating results and cash flows to be materially adversely affected: 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 declines Reduced use of fax services due to increased use of email, scanning or widespread adoption of digital signatures or otherwise Inability to acquire businesses on acceptable terms or successfully integrate and realize anticipated synergies Failure to offer compelling digital media content causing reduced traffic and advertising levels; loss of advertisers or reduction in advertising spend; increased prevalence or effectiveness of advertising blocking technologies; inability to monetize handheld devices and handheld traffic supplanting monetized traffic; and changes by our vendors or partners that impact our traffic or publisher audience acquisition and/or monetization New or unanticipated costs or tax liabilities, including those relating to federal and state income tax and indirect taxes, such as sales, value-added and telecommunications taxes Inability to manage certain risks inherent to our business, such as fraudulent activity, system failure or a security breach Competition from others with regard to price, service, content and functionality Inadequate intellectual property (IP) protection, expiration or invalidity of key patents, violations of 3rd party IP rights or inability or significant delay in monetizing IP Inability to continue to expand our business and operations internationally Inability to maintain required services on acceptable terms with financially stable telecom, co-location and other critical vendors; and inability to obtain telephone numbers in sufficient quantities on acceptable terms and in desired locations Level of debt limiting availability of cash flow to reinvest in the business; inability to repay or refinance debt when due; and restrictive covenants relating to debt imposing operating and financial restrictions on business activities or plans Inability to maintain and increase our cloud services customer base or average revenue per user Enactment of burdensome telecommunications, Internet, advertising, health care or other regulations, or being subject to existing regulations Inability to adapt to technological change and diversify services & related revenues at acceptable levels of financial return Loss of services of executive officers and other key employees Other factors set forth in our Annual Report on Form 10-K filed by us on March 1, 2017 with the Securities and Exchange Commission ( SEC ) and the other reports we file from time-to-time with the SEC 3

STRATEGIC OVERVIEW

Monetizing Shift from Analog to Digital 5

Diversified Internet Portfolio 6

Robust Financials and Balanced Business Model Total Revenue (1) >$1.1B Gross Margin (1) ~85% EBITDA (1)(2)(3) >40% Revenue by Segments Revenue by Type Revenue Growth 7 (1) Figures are based on 2017 figures. (2) Figures are Adjusted Non-GAAP. (3) See slides 24-32 for a GAAP reconciliation of revenue, earnings per diluted share, free cash flow, and EBITDA.

M&A: Where We Focus Customers Acquire and migrate competitor s customers Minimal infrastructural Traffic costs of migrated services Strong traffic profiles, but under-monetized Generate commerce, leadgen, data and subscription revenues Platform New service or content verticals Future acquisitions will be customer or traffic deals 4.8x 8

Growth Opportunities Capitalize on growth of cloud fax in compliance-driven verticals such as healthcare, financials services and legal Expand our CSMB security offerings beyond email to include endpoint, web and VPN Build on the growing importance of email to reach customers not just in their inboxes but across all platforms Broaden our purchase-oriented content (reviews, buying guides, deals) to participate in more e-commerce categories Leverage our strong video content brands to secure ad dollars shifting from TV to digital video Convert consumer traffic and data into subscription businesses for individuals and businesses 10

Q4 & FY 2017 RESULTS

2017 Q4 & FY Accomplishments Record Q4 & FY 2017 Consolidated Results Q4 17 Results: All quarterly records: Revenue $316MM, EBITDA (1)(2) $142MM, and Adjusted EPS (1)(2) $1.79 Q4 17 Revenue up $65MM or 26% vs. prior year, EBITDA (1)(2) up $25MM or 22% vs. prior year FY 2017 Results: All annual records: Revenue $1,118MM, EBITDA (1)(2) $463MM, and Adjusted EPS (1)(2) $5.64 FY 2017 Revenue up $244MM or 28% vs. prior year, EBITDA (1)(2) up $67MM or 17% vs. prior year 15 Acquisitions completed 2017 ~$410MM+ in cash and investments Cloud Services Segment Q4 17 Revenue of $147MM, up $4MM vs. prior year 2017 FY Revenue of $579MM, up $12MM vs. prior year, EBITDA margin (1)(2)(3) of 53% Cancel Rate 2.0%, improved vs. prior year Digital Media Segment Q4 17 Revenue of $169.5MM up $61MM or +56% vs. prior year Q4 17 EBITDA (1)(2) of $67.3MM and EBITDA Margin (1)(2)(3) of 40% 2017 FY Revenue of $539MM, up $232MM vs. prior year, EBITDA margin (1)(2)(3) of 32% 11 (1) Figures are Adjusted Non-GAAP. (2) See slides 24-32 for a GAAP reconciliation of revenue, earnings per diluted share, free cash flow, and EBITDA. (3) EBITDA margin defined as EBITDA divided by Revenue

Q4 & FY 2017 Results vs. Prior Year 4 th Quarter By Segment (in Thousands) Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Revenues $ 142,997 $ 146,916 $ 108,840 $ 169,464 $ 0 $ 0 $ 251,837 $ 316,380 26% Adj. Non-GAAP Gross Profit (1) 114,453 118,025 98,768 153,092 0 0 213,221 271,117 27% Adj. Non-GAAP Operating Profit (1) $ 72,932 $ 74,642 $ 40,471 $ 61,282 ($ 3,070) ($ 2,214) $ 110,333 $ 133,710 21% Adjusted EBITDA (1) $ 75,476 $ 76,770 $ 44,053 $ 67,324 ($ 3,070) ($ 2,214) $ 116,459 $ 141,880 22% Adjusted EBITDA % 53% 52% 40% 40% na na 46% 45% Full Year By Segment Cloud Services Digital Media j2 Global Inc. j2 Global (2) QoQ Adjusted Non-GAAP Net Income $ 72,204 $ 87,345 21% EPS (1) Adj. Non-GAAP $ 1.49 $ 1.79 20% EPS (1) GAAP $ 0.89 $ 1.02 15% Cloud Services Digital Media j2 Global Inc. j2 Global (2) (in Thousands) FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 Revenues $ 566,938 $ 578,956 $ 307,317 $ 538,882 $ 0 $ 0 $ 874,255 $ 1,117,838 28% Adj. Non-GAAP Gross Profit (1) 452,208 463,821 280,763 485,315 0 0 732,971 949,136 29% Adj. Non-GAAP Operating Profit (1) $ 285,631 $ 294,763 $ 102,706 $ 150,835 ($ 13,398) ($ 12,971) $ 374,939 $ 432,627 15% Adjusted EBITDA (1) $ 295,269 $ 304,073 $ 114,218 $ 171,850 ($ 13,398) ($ 12,971) $ 396,089 $ 462,952 17% Adjusted EBITDA % 52% 53% 37% 32% na na 45% 41% QoQ Adjusted Non-GAAP Net Income $ 243,895 $ 275,113 13% EPS (1) Adj. Non-GAAP $ 4.99 $ 5.64 13% EPS (1) GAAP $ 3.13 $ 2.83-10% 12 (1) See slides 24-32 for a GAAP reconciliation of revenue, adjusted non-gaap gross profit, adjusted non-gaap operating profit, adjusted EBITDA and adjusted earnings per diluted share for the Company as a whole and by segment. (2) The Consolidated j2 Global data may not foot as each segment is calculated independently

HIGHLIGHTS

Q4 2017 Digital Media Highlights Digital media business continues demonstrating strong fundamentals Total multi-platform visits were up 22% YoY at 1.6B (1) Commerce revenue grew 46% vs. Q4 2016 Shopping clicks to our merchant partners reached a record high 69M, a YOY increase of 72% (1) Significant YOY merchant partner click growth at PCMag (up 51%) (1), IGN (up 86%) (1) and Offers.com (up 57% YOY) (1) Social, video and user engagement platforms continue to scale IGN platform followers and subscribers grew 38% YOY and the total IGN social following is now 30.7MM (1) Ziff Davis Tech and Commerce, driven by the acquisition of Mashable, grew followers/subscribers over 1,300% YOY to 49M (1) Everyday Health social traffic totaled 3.9MM unique visits, up 35% from the prior quarter (1) Q4 WTE app installs of 441K was up 11% from the prior quarter and WTE now registers more than 50% of all births in the US (1) Media platforms continue to expand video programming, content partnerships and monetization opportunities IGN debuted the weekly program HERO Makeover with 1.2M views, one of six long-form shows produced for Facebook s Watch initiative (1) IGN partnered with WWE during New York Comic Con to create a custom events generating 7MM+ video views (1) IGN continued to expand live event coverage through a partnership with BAFTA (British Academy of Film and Television Arts) to live stream movie awards programming and fireside chats with actors and directors WTE Announced the first WTE Awards across 20 consumer product categories resulting in new award licensing agreements 14 (1) Google Analytics and Affiliate Partner platforms

Q4 2017 Cloud Services Highlights Corporate Fax leads the growth in compliance verticals, particularly in Healthcare Fax revenue had largest Q4 sequential growth since 2010 The number of compliance customers increased 60% YoY through organic and M&A Healthcare represented 44% of all new U.S. Corporate Fax customers, up from 22% YoY Revenue from compliance verticals increased from 50% of total revenue to over 60% of total revenue YoY Mobile apps continue to supplement overall sign-up growth Cloud Services reached a milestone of over 8MM lifetime app downloads Fax mobile apps were redesigned for streamlined signup and usage experience, resulting in: 48% YoY increase in fax app downloads, 84% YoY growth in fax app signups, 17% increase in fax interactions YoY Strong platform growth across Cloud businesses FuseMail achieved over 1.8MM users on its platform and 900M emails a month, an increase of 7% YoY Campaigner customers sent 5.5 Billion emails in the Q4 17, an increase of 21% YoY The number of email marketing campaigns reached 1.5M in 17, an increase of 31% YoY Cloud backup rolled out DRaaS solutions in 7 countries in 17 Acquired Vipre Q1 2018 Vipre complements the security suite of services of FuseMail Endpoint security business with threat intelligence focus 15 Focus on expanding Vipre across Security base and expansion in to the EU

2018 FINANCIAL GUIDANCE

2018 Outlook (Forward-Looking Statements) Cloud Services Revenue growth expected to be ~5% EBITDA (1)(2) margin inline with prior year (ASC 606 impact of ~ 1%) Includes recent acquisition of Vipre only Digital Media Revenue growth expected to be 15%+ EBITDA (1)(2) margin expected to be 33% - 34% (ASC 606 impact of 1.5%) Distribution of Revenues in 2018 Q1 expected to represent ~20% of full year Revenue, similar to prior year Q4 expected to represent ~ 30% of full year Revenue, similar to prior year Corporate ASC 606 unfavorable impact to Revenue and EBITDA (1)(2) ~$13MM (licensing & patents) Loss of Revenue and EBITDA (1)(2) due to divestitures, $31MM & $1MM respectively Full year impact of senior notes issued in June 2017, non-gaap interest expense ~$56M OCV Management Fee of $4.5M in other expense Tax rate expected to be between 23%-25% Excludes Share-Based Compensation of between $31-$34M Effective Share Count for EPS estimated at 49.7M, assumes no dilution from the convertible note 17 (1) Figures are adjusted Non-GAAP. (2) See slides 24-32 for a GAAP reconciliation of revenue, earnings per diluted share, free cash flow, and EBITDA.

2018 Guidance Revenues $1,200MM - $1,250MM Adjusted EBITDA (1) $480MM - $505MM Adjusted Non-GAAP EPS (1)(2) $5.95 - $6.25 18 (1) Figures are adjusted Non-GAAP. (2) 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.

SUPPLEMENTAL INFORMATION

Consolidated Metrics 2016 2017 j2 Consolidated Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue by Segment --(in '000s)--I Cloud Services Revenues $138,139 $142,460 $143,342 $142,998 $141,544 $144,709 $145,787 $146,916 Digital Media Revenues $62,363 $69,340 $66,774 $108,840 $113,125 $128,465 $127,829 $169,464 Total Revenues $200,502 $211,800 $210,116 $251,837 $254,669 $273,174 $273,616 $316,380 Diluted EPS GAAP $0.61 $0.69 $0.94 $0.89 $0.52 $0.63 $0.66 $1.02 Adjusted Non-GAAP (1) $1.05 $1.21 $1.25 $1.49 $1.19 $1.33 $1.34 $1.79 I--(millions)--I Cash & Investment $394.5 $407.2 $378.9 $124.0 $187.5 $330.8 $402.5 $408.7 Free Cash Flow (2) $68.5 $63.5 $53.2 $82.7 $61.5 $71.1 $56.8 $75.3 Adjusted EBITDA (3) $86.7 $97.5 $95.4 $116.5 $99.5 $110.2 $111.3 $141.9 20 (1) See slide 24-32 for a reconciliation of Non-GAAP earnings and EPS to GAAP net income and diluted GAAP EPS (2) See slide 24 for a definition of Free Cash Flow and reconciliation to net cash provided by operating activities (3) See slide 24 for a definition of adjusted EBITDA and reconciliation to Net Income

Cloud Services & Digital Media Metrics Cloud Services Metrics Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue by Type Fixed Subscriber Revenues $115,496 $117,199 $117,816 $117,885 $115,726 $117,556 $118,755 $119,232 Variable Subscriber Revenues $21,453 $24,156 $24,396 $23,944 $24,606 $25,863 $25,808 $26,651 Subscriber Revenues $136,949 $141,355 $142,212 $141,830 $140,332 $143,419 $144,563 $145,882 Other Licenses Revenues (1) $1,191 $1,105 $1,130 $1,168 $1,212 $1,291 $1,223 $1,034 Total Cloud Services Revenues $138,139 $142,460 $143,342 $142,998 $141,544 $144,709 $145,787 $146,916 Revenue - DID vs. Non-DID DID Based Revenues $89,967 $92,592 $92,396 $92,787 $93,438 $95,490 $96,702 $99,299 Non-DID Based Revenues $48,173 $49,868 $50,946 $50,211 $48,106 $49,220 $49,084 $47,617 Total Adjusted Non-GAAP Cloud Services Revenues $138,139 $142,460 $143,342 $142,998 $141,544 $144,709 $145,787 $146,916 Cloud Services Customers (2) 3,074 3,081 3,108 3,109 3,116 3,141 3,175 3,176 Average Monthly Revenue/Customers (3) $15.00 $15.31 $15.32 $15.21 $15.03 $15.28 $15.26 $15.31 Cancel Rate (4) 2.2% 2.2% 2.3% 2.1% 2.3% 2.1% 2.2% 2.0% Digital Media Metrics (5) I------------ (in '000s) ------------I (in '000s) 2016 2017 Visits 1,096,332 1,159,925 1,448,339 1,287,501 1,401,666 1,352,200 1,394,177 1,572,398 Views 3,637,100 4,215,216 5,405,305 4,805,816 5,386,097 6,054,062 5,872,437 6,418,612 21 (1) Cloud Services revenue includes IP Licensing revenue (2) Cloud Services Customers are defined as paying DIDs for Fax & Voice services and direct and resellers accounts for other services (3) Quarterly ARPU is calculated using our standard convention of applying the average of the quarter s beginning and ending customer base to the total revenue of the quarter (4) User cancel rate, also called user churn, is defined as cancellation of service by Cloud Business customers with greater than 4 months of continuous service (continuous service includes Cloud Business customers that are administratively cancelled and reactivated within the same calendar month). User cancel rate is calculated monthly and expressed here as an average over the three months of the quarter. (5) Digital Media Traffic figures based on Google Analytics & Partner Platforms

EBITDA to Cumulative Investment Cloud Services 2000-2012 2013 2014 2015 2016 2017 Adj. Non-GAAP Revenues (1) $ 377,537 $ 433,549 $ 504,638 $ 566,939 $ 578,956 Adj. Non-GAAP Gross Profit (1) 309,158 349,452 407,505 452,208 463,821 Adj. Non-GAAP Operating Profit (1)(2) $ 196,237 $ 214,164 $ 252,748 $ 285,631 $ 294,763 EBITDA (1)(2) $ 201,907 $ 222,366 $ 261,541 $ 295,269 $ 304,073 % of Revenue 53% 51% 52% 52% 53% Capital Investment (CapEx, Acquisitions, Intangible Assets) $ 54,187 $ 135,302 $ 197,558 $ 123,321 $ 62,466 Cumulative Investment $ 509,455 $ 563,642 $ 698,944 $ 896,502 $ 1,019,823 $ 1,082,289 EBITDA / Cumulative Investment 35% 35% 33% 31% 29% Digital Media 2000-2012 2013 2014 2015 2016 2017 Adj. Non-GAAP Revenues (1) $ 128,931 $ 167,814 $ 216,177 $ 307,317 $ 538,882 Adj. Non-GAAP Gross Profit (1) 112,990 148,787 194,428 280,764 485,315 Adj. Non-GAAP Operating Profit (1)(2) $ 27,605 $ 48,264 $ 77,883 $ 102,707 $ 150,835 EBITDA (1)(2) $ 29,913 $ 53,306 $ 85,027 $ 114,218 $ 171,850 % of Revenue 23% 32% 39% 37% 32% Capital Investment (CapEx, Acquisitions, Intangible Assets) $ 103,968 $ 126,871 $ 123,641 $ 486,437 $ 154,320 Cumulative Investment $ 172,032 $ 276,000 $ 402,871 $ 526,512 $ 1,012,950 $ 1,167,270 EBITDA / Cumulative Investment 8% 16% 18% 15% 16% 22 (1) Figures are Adjusted Non-GAAP. (2) See slide 31 for a GAAP reconciliation of Operating Profit

EBITDA to Cumulative Investment Continued j2 Global Corporate 2000-2012 2013 2014 2015 2016 2017 Adj. Non-GAAP Operating Profit (1)(2) ($ 11,786) ($ 13,023) ($ 13,283) ($ 13,398) ($ 12,971) EBITDA (1)(2) ($ 11,786) ($ 13,023) ($ 13,283) ($ 13,398) ($ 13,398) j2 Global Consolidated 2000-2012 2013 2014 2015 2016 2017 Adj. Non-GAAP Revenues (1) $ 506,020 $ 601,105 $ 720,815 $ 874,255 $ 1,117,838 Adj. Non-GAAP Gross Profit (1) 421,699 497,980 601,933 732,972 949,136 Adj. Non-GAAP Operating Profit (1)(2) $ 212,467 $ 249,405 $ 317,348 $ 374,940 $ 432,627 EBITDA (1)(2) $ 220,444 $ 262,649 $ 333,284 $ 396,090 $ 462,952 % of Revenue 44% 44% 46% 45% 41% Fax Revenue Percent of Consolidated 57% 49% 42% 35% 29% Capital Investment (CapEx, Acquisitions, Intangible Assets) $ 158,155 $ 262,174 $ 321,199 $ 609,759 $ 216,786 Cumulative Investment $ 681,487 $ 839,642 $ 1,101,815 $ 1,423,014 $ 2,032,773 $ 2,249,559 EBITDA / Cumulative Investment (3) 24% 27% 26% 23% 22% 23 (1) Figures are Adjusted Non-GAAP. (2) See slide 32 for a GAAP reconciliation of Operating Profit

GAAP Reconciliation Free Cash Flow & Adjusted EBITDA ($ in millions) Free Cash Flow (1) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Net cash provided by operating activities $64.524 $67.528 $60.488 $89.847 $51.191 $60.464 $67.341 $85.424 Less: Purchases of property and equipment ($4.321) ($4.865) ($8.261) ($7.299) ($9.660) ($9.285) ($10.538) ($10.112) Add: Excess tax benefit (deficit) from share-based compensation $0.264 $0.833 $0.974 $0.200 $0.000 $0.000 $0.000 $0.000 Add: Contingent Consideration $8.000 $0.000 $0.000 $0.000 $20.000 $19.950 $0.000 $0.000 Free cash flow $68.467 $63.496 $53.201 $82.748 $61.531 $71.129 $56.803 $75.312 Adjusted EBITDA (2) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Net income $29.943 $33.770 $45.569 $43.158 $25.820 $31.376 $32.358 $49.871 Plus: Other expense (income), net $0.126 ($0.213) ($9.718) ($0.438) $0.323 $1.592 $0.521 ($22.696) Interest expense (income), net $10.233 $10.301 $10.436 $10.400 $12.410 $13.670 $25.326 $16.372 Income tax expense $13.036 $15.087 $15.835 $15.041 $9.422 $9.287 $9.163 $32.669 Depreciation and amortization $27.174 $31.058 $30.336 $33.522 $39.323 $39.902 $39.372 $43.444 Share-based compensation and associated payroll tax expense $2.809 $3.439 $3.699 $3.703 $3.614 $5.562 $4.563 $8.997 Acquisition-related integration costs $2.595 $3.952 ($0.736) $12.973 $8.613 $5.800 $4.761 $11.253 Additional indirect tax expense (benefit) from prior years $0.750 $0.150 $0.000 ($1.900) $0.000 $3.007 $0.000 $1.970 Sales of business $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 ($4.715) $0.000 Adjusted EBITDA $86.666 $97.544 $95.421 $116.459 $99.525 $110.196 $111.349 $141.880 24 (1) Free Cash Flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus excess tax benefits (deficits) from share based compensation. Free Cash Flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes (2) Adjusted EBITDA is defined as net income plus interest and other expense, net; income tax expense; depreciation and amortization and the items used to reconcile GAAP to Adjusted Non-GAAP EPS. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes

GAAP Reconciliation Q4 & FY 2017 Adjusted Non-GAAP Earnings & EPS Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Cost of revenues $ 45,974 $ 40,229 $ 172,313 $ 147,100 Plus: Share based compensation (1) (143) (123) (500) (436) Acquisition related integration costs (2) - - (195) - Amortization (3) (568) (1,490) (2,916) (5,380) Adjusted non-gaap cost of revenues $ 45,263 $ 38,616 $ 168,702 $ 141,284 Sales and marketing $ 92,525 $ 63,717 $ 330,296 $ 206,871 Plus: Share based compensation (1) (458) (393) (1,723) (1,782) Acquisition related integration costs (2) (4,471) (4,327) (8,155) (5,859) Adjusted non-gaap sales and marketing $ 87,596 $ 58,997 $ 320,418 $ 199,230 Research, development and engineering $ 10,267 $ 10,881 $ 46,004 $ 38,046 Plus: Share based compensation (1) (367) (240) (1,182) (904) Acquisition related integration costs (2) (35) (947) (1,885) (997) Adjusted non-gaap research, development and engineering $ 9,865 $ 9,694 $ 42,937 $ 36,145 General and administrative $ 91,398 $ 68,849 $ 323,517 $ 239,672 Plus: Share based compensation (1) (8,029) (2,947) (19,332) (10,528) Acquisition related integration costs (2) (6,747) (7,699) (17,254) (11,926) Amortization (3) (34,706) (25,906) (128,800) (95,561) Tax (expense) benefit from prior years (4) (1,970) 1,900 (4,977) 1,000 Adjusted non-gaap general and administrative $ 39,946 $ 34,197 $ 153,154 $ 122,657 25 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 certain acquisition-related integration costs 3) Elimination of amortization of patents and intangible assets that we acquired 4) Elimination of additional tax or indirect tax related expense/benefit from prior years

GAAP Reconciliation Q4 & FY 2017 Adjusted Non-GAAP Earnings & EPS Three Months Ended December 31, Twelve Months Ended December 31, 26 2017 2016 2017 2016 Interest expense, net $ 16,372 $ 10,400 $ 67,777 $ 41,370 Plus: Acquisition related integration costs (2 ) (90) (8) (90) (8) Interest costs (3 ) (1,897) (1,448) (18,541) (7,186) Tax (expense) benefit from prior years (5 ) (830) 171 (830) 171 Adjusted non-gaap interest expense, net $ 13,555 $ 9,115 $ 48,316 $ 34,347 Other income, net $ (22,696) $ (438) $ (22,035) $ (10,243) Plus: Acquisition related integration costs (2 ) - - (2,938) - Tax benefit from prior years (5 ) - - - 811 Sale of investment (6 ) - - - 7,540 Sale of businesses (7 ) 22,981-27,696 - Adjusted non-gaap other expense (income), net $ 285 $ (438) $ 2,723 $ (1,892) Income Tax Provision $ 32,669 $ 15,041 $ 60,541 $ 59,000 Plus: Share based compensation (1 ) 941 2,337 5,440 5,052 Acquisition related integration costs (2 ) 3,138 4,193 9,848 6,226 Interest costs (3 ) 90 2,298 4,837 3,719 Amortization (4 ) 14,197 6,080 44,747 27,919 Tax expense (benefit) from prior years (5 ) 325 (497) 1,458 (462) Sale of investment (6 ) - (2,865) Sale of businesses (7 ) (7,296) - (8,857) - Tax Cuts and Jobs Act (8 ) (11,539) - (11,539) - Adjusted non-gaap income tax provision $ 32,525 $ 29,452 $ 106,475 $ 98,589 Total adjustments $ (37,474) $ (29,046) $ (135,688) $ (91,456) GAAP earnings per diluted share $1.02 $0.89 $2.83 $3.13 Adjustments (9 ) $0.77 $0.61 $2.81 $1.92 Adjusted non-gaap earnings per diluted share $1.79 $1.49 $5.64 $4.99 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 certain acquisition-related integration costs 3) Elimination of interest costs in excess of the coupon rate associated with the convertible notes 4) Elimination of amortization of patents and intangible assets that we acquired 5) Elimination of additional tax or indirect tax related expense/benefit from prior years 6) Elimination of gain on sale of investments 7) Elimination of gain on sale of businesses 8) Elimination of additional tax expense due to the Tax Cuts and Jobs Act 9) Elimination of dilutive effect of the convertible debt

GAAP Reconciliation Q4 2017 Adjusted EBITDA ($ in thousands) Cloud Digital Services Media j2 Global, Inc. Total Revenues GAAP revenues $ 146,916 $ 169,464 $ $ 316,380 Gross profit GAAP gross profit $ 117,314 $ 153,092 $ $ 270,406 Non-GAAP adjustments: Share-based compensation (1) 143 143 Amortization (2) 568 568 Adjusted non-gaap gross profit $ 118,025 $ 153,092 $ $ 271,117 Operating profit GAAP operating profit $ 55,525 $ 29,060 $ (8,368) $ 76,217 Non-GAAP adjustments: Share-based compensation (1) 1,676 6,155 1,166 8,997 Acquisition related integration costs (3) 260 10,993 11,253 Amortization (2) 15,210 20,064 35,274 Additional tax expense from Prior Years (4) 1,970 1,970 Adjusted non-gaap operating profit $ 74,641 $ 66,272 $ (7,202) $ 133,711 Depreciation 2,127 6,042 8,169 Adjusted EBITDA $ 76,768 $ 72,314 $ (7,202 ) $ 141,880 NOTE: Table above excludes certain intercompany allocations 27 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 amortization of patents and intangible assets that we acquired 3) Elimination of certain acquisition-related integration costs 4) Elimination of additional tax or indirect tax related expense/benefit from prior years

GAAP Reconciliation Q4 2016 Adjusted EBITDA ($ in thousands) Cloud Digital Services Media j2 Global, Inc. Total Revenues GAAP revenues $ 142,997 $ 108,840 $ $ 251,837 Gross profit GAAP gross profit $ 112,840 $ 98,768 $ $ 211,608 Non-GAAP adjustments: Share-based compensation (1) 123 123 Amortization (2) 1,490 1,490 Adjusted non-gaap gross profit $ 114,453 $ 98,768 $ $ 213,221 Operating profit GAAP operating profit $ 55,298 $ 17,460 $ (4,597) $ 68,161 Non-GAAP adjustments: Share-based compensation (1) 1,465 711 1,527 3,703 Acquisition related integration costs (3) 50 12,923 12,973 Amortization (2) 18,019 9,377 27,396 Additional tax benefit from prior years (4 (1,900) (1,900) Adjusted Non-GAAP operating profit $ 72,932 $ 40,471 $ (3,070) $ 110,333 Depreciation 2,544 3,582 6,126 Adjusted EBITDA $ 75,476 $ 44,053 $ (3,070 ) $ 116,459 NOTE: Table above excludes certain intercompany allocations 28 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 amortization of patents and intangible assets that we acquired 3) Elimination of certain acquisition-related integration costs 4) Elimination of additional tax or indirect tax related expense/benefit from prior years

GAAP Reconciliation FY 2017 Adjusted EBITDA ($ in thousands) Cloud Digital Services Media j2 Global, Inc. Total Revenues GAAP Revenues $ 578,956 $ 538,882 $ $ 1,117,838 Gross Profit GAAP Gross Profit $ 460,210 $ 485,315 $ $ 945,525 Non-GAAP Adjustments: Share-based Compensation (1) 500 500 Acquisition Related Integration Costs (3) 195 195 Amortization (2) 2,916 2,916 Adjusted Non-GAAP Gross Profit $ 463,821 $ 485,315 $ $ 949,136 Operating Profit GAAP Operating Profit $ 226,048 $ 48,063 $ (28,404) $ 245,707 Non-GAAP Adjustments: Share-based Compensation (1) 6,204 4,107 12,426 22,737 Acquisition Related Integration Costs (3) 1,369 26,120 27,489 Amortization (2) 59,126 72,590 131,716 Additional Tax Expense from Prior Years (4) 1,970 3,007 4,977 Adjusted Non-GAAP Operating Profit $ 294,717 $ 150,880 $ (12,971) $ 432,626 Depreciation 9,310 21,015 30,325 Adjusted EBITDA $ 304,027 $ 171,895 $ (12,971 ) $ 462,951 NOTE: Table above excludes certain intercompany allocations 29 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 amortization of patents and intangible assets that we acquired 3) Elimination of certain acquisition-related integration costs 4) Elimination of additional tax or indirect tax related expense/benefit from prior years

GAAP Reconciliation FY 2016 Adjusted EBITDA ($ in thousands) Cloud Digital Services Media j2 Global, Inc. Total Revenues GAAP Revenues $ 566,938 $ 307,317 $ $ 874,255 Gross Profit GAAP Gross Profit $ 446,392 $ 280,763 $ $ 727,155 Non-GAAP Adjustments: Share-based Compensation (1) 436 436 Amortization (2) 5,380 5,380 Adjusted Non-GAAP Gross Profit $ 452,208 $ 280,763 $ $ 732,971 Operating Profit GAAP Operating Profit $ 211,041 $ 50,539 $ (19,014) $ 242,566 Non-GAAP Adjustments: Share-based Compensation (1) 5,642 2,392 5,616 13,650 Acquisition Related Integration Costs (3) 203 18,579 18,782 Amortization (2) 69,895 31,046 100,941 Additional Tax (Benefit) expense from Prior Years (4) (1,150) 150 (1,000) Adjusted Non-GAAP Operating Profit $ 285,631 $ 102,706 $ (13,398) $ 374,939 Depreciation 9,638 11,512 21,150 Adjusted EBITDA $ 295,269 $ 114,218 $ (13,398 ) $ 396,089 NOTE: Table above excludes certain intercompany allocations 30 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 amortization of patents and intangible assets that we acquired 3) Elimination of certain acquisition-related integration costs 4) Elimination of additional tax or indirect tax related expense/benefit from prior years

GAAP Reconciliation Operating Profit CLOUD SERVICES 2013 2014 2015 2016 2017 GAAP Operating Profit $187,446 $174,809 $189,306 $211,041 $226,094 Patent Settlement (12,572) - - - - Acquisition-related Revenue (4,428) - - - - Amortization 19,104 32,268 54,412 69,895 59,126 Share-based compensation and the Associated Payroll Tax Expense 2,601 2,766 3,680 5,642 6,204 Acquisition-related integration costs 4,488 2,174 1,903 203 1,369 IRS Consulting Fee - 1,423 - - - Additional Indirect Tax Expense (Benefit) from Prior Years - 713 3,651 (1,150) 1,970 Fees associated with prior year tax audits - - (204) - - Non-GAAP Entries $9,193 $39,344 $63,442 $74,590 $68,669 Adjusted Non-GAAP Operating Profit $196,639 $214,153 $252,748 $285,631 $294,763 ($ in thousands) MEDIA 2013 2014 2015 2016 2017 GAAP Operating Profit $6,732 $30,494 $30,240 $50,539 $48,018 Acquisition-related Revenue 2,214 - - - - Amortization 12,646 17,441 22,865 31,046 72,590 Share-based compensation and the Associated Payroll Tax Expense 67 516 1,803 2,392 4,107 Acquisition-related integration costs 5,947 (187) 22,975 18,579 26,120 Additional Indirect Tax Expense from Prior Years - - - 150 - Non-GAAP Entries $20,874 $17,770 $47,643 $52,167 $102,817 Adjusted Non-GAAP Operating Profit $27,606 $48,264 $77,883 $102,706 $150,835 31 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 certain acquisition-related integration costs 3) Elimination of interest costs in excess of the coupon rate associated with the convertible notes 4) Elimination of amortization of patents and intangible assets that we acquired

GAAP Reconciliation Operating Profit ($ in thousands) CONSOLIDATED 2013 2014 2015 2016 2017 GAAP Operating Profit $175,423 $186,206 $199,382 $242,566 $245,708 Patent Settlement (12,572) - - - - Acquisition-related Revenue (2,214) - - - - Amortization 31,750 49,709 72,277 100,941 131,716 Share-based compensation and the Associated Payroll Tax Expense 9,637 8,908 11,793 13,650 22,737 Acquisition-related integration costs 10,435 2,435 25,448 18,782 27,489 IRS Consulting Fee - 1,423 - - - Additional Indirect Tax Expense from Prior Years - 713 3,651 (1,000) 4,977 Fees associated with prior year tax audits - - (204) - - Non-GAAP Entries $37,036 $63,188 $112,965 $132,373 $186,919 Adjusted Non-GAAP Operating Profit $212,459 $249,394 $312,347 $374,939 $432,627 32 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 certain acquisition-related integration costs 3) Elimination of interest costs in excess of the coupon rate associated with the convertible notes 4) Elimination of amortization of patents and intangible assets that we acquired

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