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j2 Global Tops Q3 Earnings & Revenues, Raises Dividend

j2 Global Inc.JCOM reported a strong third 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 10.5% annual increase in its quarterly dividend, raising the figure to 31.50 cents per share. This is in sync with j2 Global's streak of dividend increases made over the last 17 quarters.

Quarterly GAAP net income came in at $37.4 million or 77 cents per share compared with $28.8 million or 60 cents in the year-ago quarter. Third-quarter adjusted earnings per share stood at $1.02, surpassing the Zacks Consensus Estimate of 78 cents. Quarterly total revenue came in at approximately $178.7 million, up 16.8% year over year and also above the Zacks Consensus Estimate of $177 million.

Segment-wise, Cloud Service revenues totaled $125.3 million, highlighting an increase of 15.3% year over year while Digital Media revenues stood at $52.3 million, up 21.1%. Further, IP Licensing revenues in the reported quarter grossed $1.1 million, down 8.3% from the figure recorded a year ago.

j2 Global posted quarterly gross margin of 82.8% compared with 81.7% in the year-ago quarter. Operating expenses in the quarter under review totaled $92.3 million, up 17.6% from a year ago. Quarterly operating margin stood at 31.2% versus 30.4% in the comparable quarter last year. Meanwhile, quarterly EBITDA was $84.3 million, up 30.3% year over year.

At the end of the first nine months of 2015, j2 Global generated $150.8 million of cash from operations compared with $132.1 million in the same period last year. Free cash flow, in the third quarter of 2015, was $49.6 million compared with $39.1 million in the year-ago quarter. At the end of the third quarter, j2 Global had around $357.8 million in cash & marketable securities on its balance sheet compared with $529.9 million at the end of 2014. Also, the company had $599.2 million of debt compared with $593.4 million at 2014-end. The debt-to-capitalization ratio was 0.41 versus 0.42 at the end of 2014.

Financial Outlook

For fiscal 2015, management expects total revenue in the band of $690-$724 million. Non-GAAP earnings per share are projected in the $3.73-$4.13 range. Meanwhile, non-GAAP effective tax rate is estimated between 27% and 29%.

Zacks Rank

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 , Amaya, Inc. AYA and Cvent, Inc. CVT . Currently, all three stocks carry a Zacks Rank #2 (Buy).

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J2 GLOBAL INC (JCOM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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