Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | J2 GLOBAL, INC. | |
Entity Central Index Key | 1,084,048 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 49,288,344 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 303,524 | $ 350,945 |
Accounts receivable, net of allowances of $9,803 and $8,701, respectively | 176,758 | 234,195 |
Prepaid expenses and other current assets | 33,864 | 35,287 |
Total current assets | 514,146 | 620,427 |
Long-term investments | 82,517 | 57,722 |
Property and equipment, net | 98,016 | 79,773 |
Trade names, net | 136,748 | 123,947 |
Patent and patent licenses, net | 8,062 | 10,871 |
Customer relationships, net | 206,955 | 193,606 |
Goodwill | 1,314,301 | 1,196,611 |
Other purchased intangibles, net | 145,217 | 157,327 |
Other assets | 11,201 | 12,809 |
Total assets | 2,517,163 | 2,453,093 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable and accrued expenses | 158,919 | 169,837 |
Income taxes payable, current | 8,186 | 0 |
Deferred revenue, current | (126,931) | (95,255) |
Other current liabilities | 415 | 10 |
Total current liabilities | 294,451 | 265,102 |
Long-term debt | 1,010,566 | 1,001,944 |
Deferred revenue, noncurrent | 5,546 | 47 |
Accrued Income Taxes, Noncurrent | 39,974 | 43,781 |
Liability for uncertain tax positions | 55,694 | 52,216 |
Deferred income taxes, non-current | 34,724 | 38,264 |
Other long-term liabilities | 31,386 | 31,434 |
Total liabilities | 1,472,341 | 1,432,788 |
Commitments and contingencies | 0 | 0 |
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 48,018,663 and 47,854,510 shares, respectively | 480 | 479 |
Additional paid-in capital | 345,670 | 325,854 |
Retained earnings | 740,433 | 723,062 |
Accumulated other comprehensive loss | (41,761) | (29,090) |
Stockholders' Equity Attributable to Parent | 1,044,822 | 1,020,305 |
Total liabilities and stockholders’ equity | 2,517,163 | 2,453,093 |
Series A Preferred Stock [Member] | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | 0 | 0 |
Series B Preferred Stock [Member] | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 9,803 | $ 8,701 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 48,018,663 | 47,854,510 |
Common stock, shares outstanding | 48,018,663 | 47,854,510 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 6,000 | 6,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares authorized | 20,000 | 20,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 292,724 | $ 273,616 | $ 861,236 | $ 801,458 |
Cost of Revenue | 49,217 | 42,371 | 145,112 | 126,339 |
Gross profit | 243,507 | 231,245 | 716,124 | 675,119 |
Operating expenses: | ||||
Sales and marketing (1) | 80,708 | 79,432 | 250,190 | 237,772 |
Research, development and engineering (1) | 11,950 | 12,431 | 35,412 | 35,737 |
General and administrative (1) | 93,792 | 76,425 | 272,926 | 232,118 |
Total operating expenses | 186,450 | 168,288 | 558,528 | 505,627 |
Income from operations | 57,057 | 62,957 | 157,596 | 169,492 |
Interest expense, net | 15,175 | 25,326 | 46,428 | 51,406 |
Other expense (income), net | 1,239 | (3,890) | 6,150 | 660 |
Income before income taxes and net loss in earnings of equity method investment | 40,643 | 41,521 | 105,018 | 117,426 |
Income tax expense | 9,310 | 9,163 | 23,365 | 27,872 |
Net loss in earnings of equity method investment | 610 | 0 | 3,581 | 0 |
Net income | $ 30,723 | $ 32,358 | $ 78,072 | $ 89,554 |
Net income per common share: | ||||
Basic | $ 0.63 | $ 0.67 | $ 1.61 | $ 1.86 |
Diluted EPS impact | $ 0.61 | $ 0.66 | $ 1.57 | $ 1.81 |
Weighted average shares outstanding: | ||||
Basic | 48,009,953 | 47,609,819 | 47,945,264 | 47,540,593 |
Diluted | 49,279,217 | 48,521,082 | 49,068,653 | 48,745,680 |
Cash dividends paid per common share | $ 0.4250 | $ 0.3850 | $ 1.2450 | $ 1.1250 |
Allocated Share-based Compensation Expense | $ 7,906 | $ 4,563 | $ 21,393 | $ 13,740 |
Cost of Sales [Member] | ||||
Allocated Share-based Compensation Expense | 128 | 120 | 378 | 357 |
Selling and Marketing Expense [Member] | ||||
Allocated Share-based Compensation Expense | 548 | 365 | 1,380 | 1,265 |
Research and Development Expense [Member] | ||||
Allocated Share-based Compensation Expense | 399 | 296 | 1,187 | 815 |
General and Administrative Expense [Member] | ||||
Allocated Share-based Compensation Expense | $ 6,831 | $ 3,782 | $ 18,448 | $ 11,303 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 30,723 | $ 32,358 | $ 78,072 | $ 89,554 |
Foreign currency translation adjustment | (2,934) | 7,703 | (11,272) | 23,616 |
Change in fair value on available-for-sale investments, net of tax expense (benefit) of $58 and ($454) for the three and nine months ended September 30, 2018, respectively and zero and zero for the three and nine months ended September 30, 2017, respectively | 178 | 0 | (1,399) | 0 |
Other comprehensive (loss) income, net of tax | (2,756) | 7,703 | (12,671) | 23,616 |
Comprehensive income | $ 27,967 | $ 40,061 | $ 65,401 | $ 113,170 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Foreign currency translation adjustment | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized gain on available-for-sale investments | $ 58 | $ 0 | $ (454) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 78,072 | $ 89,554 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 132,850 | 118,597 |
Amortization of financing costs and discounts | 8,692 | 9,094 |
Share-based compensation | 21,393 | 13,740 |
Provision for doubtful accounts | 13,992 | 9,099 |
Deferred income taxes, net | 559 | 3,859 |
Loss on extinguishment of debt and related interest expense | 0 | (7,962) |
Gain on sale of businesses | 0 | 4,715 |
Changes in fair value of contingent consideration | 14,400 | (600) |
Loss on equity investments | 8,421 | 0 |
Decrease (increase) in: | ||
Accounts receivable | 49,937 | 4,711 |
Prepaid expenses and other current assets | (3,771) | (264) |
Other assets | 1,714 | 134 |
(Decrease) increase in: | ||
Accounts payable and accrued expenses | (38,508) | (48,724) |
Income taxes payable | (4,304) | (26,359) |
Deferred revenue | 7,042 | (75) |
Liability for uncertain tax positions | 3,678 | 1,554 |
Other long-term liabilities | (51) | 1,429 |
Net cash provided by operating activities | 294,116 | 178,996 |
Cash flows from investing activities: | ||
Payments to Acquire Equity Method Investments | (34,558) | 0 |
Purchases of available-for-sale investments | (500) | (5) |
Purchases of property and equipment | (44,928) | (29,483) |
Acquisition of businesses, net of cash received | (191,567) | (47,268) |
Proceeds from sale of businesses, net of cash divested | 0 | 33,508 |
Purchases of intangible assets | (183) | (1,320) |
Net cash used in investing activities | (271,736) | (44,568) |
Cash flows from financing activities: | ||
Issuance of long-term debt, net | 0 | 636,598 |
Payment of debt | 0 | 255,000 |
Proceeds from line of credit, net | 0 | 44,981 |
Repayment of line of credit | 0 | (225,000) |
Repurchase and retirement of common stock | (4,167) | (7,862) |
Issuance of common stock under employee stock purchase plan | 135 | 194 |
Exercise of stock options | 1,419 | 1,108 |
Dividends paid | (60,654) | (54,346) |
Deferred payments for acquisitions | (3,558) | (5,062) |
Other | (330) | (45) |
Net cash (used in) provided by financing activities | (67,155) | 135,566 |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (2,646) | 8,600 |
Net change in cash and cash equivalents | (47,421) | 278,594 |
Cash and cash equivalents at beginning of period | 350,945 | 123,950 |
Cash and cash equivalents at end of period | $ 303,524 | $ 402,544 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Basis of Presentation j2 Global, Inc., together with its subsidiaries (“j2 Global”, the “Company”, “our”, “us”, or “we”), is a leading provider of internet services. Through our Cloud Services segment, we provide cloud services to consumers and businesses and license our intellectual property (“IP”) to third parties. In addition, the Cloud Services segment includes fax, voice, backup, security and email marketing products. Our Digital Media segment specializes in the technology, gaming, lifestyle and healthcare markets, offering content, tools and services to consumers and businesses. The accompanying interim condensed consolidated financial statements include the accounts of j2 Global and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements although the Company believes that the disclosures made are adequate to make that information not misleading. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these interim financial statements. It is suggested that these financial statements be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2017 included in our Annual Report (Form 10-K) filed with the SEC on March 1, 2018. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein. The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. We believe that our most significant estimates are those related to the valuation of investments and assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowances for doubtful accounts. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. Allowances for Doubtful Accounts j2 Global reserves for receivables it may not be able to collect. The reserves for the Company’s Cloud Services segment are typically driven by the volume of credit card declines and past due invoices and are based on historical experience as well as an evaluation of current market conditions. The reserves for the Company’s Digital Media segment are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves. Revenue Recognition Accounting Standard Codification (“ASC”) Topic 605, Revenue Recognition (“Topic 605”) j2 Global recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price is fixed and determinable and collection is probable. Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Topic 605 for principal-agent considerations and places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk. ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”, “ASC 606” or the “new revenue standard”) j2 Global recognizes revenue when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services (see Note 3 - Revenues). Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Topic 606 for principal-agent considerations and assesses: (i) if another party is involved in providing goods or services to the customer and (ii) whether the Company controls the specified goods or services prior to transferring control to the customer. Sales Taxes The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer. Investments The Company accounts for its investments in debt securities in accordance with ASC Topic No. 320, Investments - Debt Securities (“ASC 320”). Debt investments are typically comprised of corporate debt securities. j2 Global determines the appropriate classification of its investments at the time of acquisition and evaluates such determination at each balance sheet date. Trading securities are those investments that the Company intends to sell within a few hours or days and are carried at fair value, with unrealized gains and losses included in investment income. Available-for-sale securities are those investments j2 Global does not intend to hold to maturity and can be sold. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. Held-to-maturity securities are those investments which the Company has the ability and intent to hold until maturity and are recorded at amortized cost. All debt securities are accounted for on a specific identification basis. The Company accounts for its investments in equity securities in accordance with ASC Topic No. 321, Investments - Equity Securities (“ASC 321”) which requires the accounting for equity investments (other than those accounted for using the equity method of accounting) generally be measured at fair value for equity securities with readily determinable fair values. For equity securities without a readily determinable fair value that are not accounted for by the equity method, the Company measures the equity security using cost, less impairment, if any, and plus or minus observable price changes arising from orderly transactions in the same or similar investment from the same issuer. Any unrealized gains or losses will be reported in current earnings (see Note 5 - Investments). Variable Interest Entities (“VIE”) A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates its investments in entities in which it is involved to determine if the entity is a VIE and if so, whether it holds a variable interest and is the primary beneficiary. The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”). In determining whether the Company is deemed to be the primary beneficiary of the VIE, both of the following characteristics must be present: a) the Company has the power to direct the activities of the VIE that most significantly impacts the VIEs economic performance (the power criterion); and b) the Company has the obligation to absorb losses of the VIE, or the right to receive benefits of the VIE, that could potentially be significant to the VIE (the economic criterion). The Company has concluded that, as a limited partner, although the obligations to absorb losses or benefit from the gains is not insignificant, the Company does not have “power” over OCV because it does not have the ability to direct the significant decisions which impact the economics of OCV. j2 believes that the OCV general partner, as a single decision maker, holds the ability to make the decisions about the activities that most significantly impacts the OCV Fund’s economic performance. As a result, the Company has concluded that it will not consolidate OCV, as it is not the primary beneficiary of the OCV Fund, and will account for this investment under the equity-method of accounting. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value, the loss will be recorded in the period in which the Company identifies the decline. Fair Value Measurements j2 Global complies with the provisions of the Financial Accounting Standards Board (“FASB”) ASC Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. As of September 30, 2018 , the carrying value of cash and cash equivalents, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits and long-term debt are reflected in the financial statements at cost. With the exception of certain investments and long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of available debt instruments with similar terms and maturities. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to j2 Global. Property and Equipment Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from 1 to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases, are amortized on a straight-line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The Company has capitalized certain internal use software and website development costs which are included in property and equipment. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 5 years. Debt Issuance Costs and Debt Discount j2 Global capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing or term of the credit facility using the effective interest method. Contingent Consideration j2 Global measures the contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 6 - Fair Value Measurements). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes, and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and the amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. j2 Global reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating income, except for the time component of the present value calculation which is reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. Self-Insurance Program j2 Global is self-insured for certain subsidiaries providing health and dental insurance plans to its employees through a self-insurance structure. The Company has reinsurance which is a two tiered stop-loss coverage that limits the exposure arising from any claims made. Self-insurance claims filed and claims incurred but not reported are accrued based on management’s estimate of the discounted ultimate costs for self-insured claims incurred using actuarial assumptions followed in the insurance industry and historical experience. Although management believes it has the ability to reasonably estimate losses related to claims, it is possible that actual results could materially differ from recorded self-insurance liabilities. Segment Reporting Accounting guidance establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. Accounting guidance also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company operates as two segments: (1) Cloud Services and (2) Digital Media. Reclassifications Certain prior year reported amounts have been reclassified to conform to the 2018 presentation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this ASU modify how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the practical expedient exception. An entity may elect to measure an equity security without a readily determinable fair value that does not qualify for the practical expedient to estimate fair value under ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has adopted this ASU on a prospective basis in the first quarter of 2018 and has determined that investments within the scope of the standard will be recorded at fair value with changes in fair value recognized in earnings which may lead to increased volatility in other expense. In February 2016, the FASB issued ASU No. 2016-02, Leases. This ASU establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. This ASU is meant to clarify the guidance in ASU No. 2016-02, Leases. This ASU does not change the core principle of the guidance in Topic 842. Instead, the amendments provide clarifying guidance in a few narrow areas. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU provides another transition method for entities who have not yet adopted the new leasing standard by allowing entities to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In addition, this ASU provides a practical expedient to lessors to not separate nonlease components from the associated lease components similar to the expedient that is afforded to lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (2) the lease component, if accounted for separately, would be classified as an operating lease. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects to adopt these ASUs January 1, 2019 and expects the adoption to have a material effect on its condensed consolidated balance sheet and disclosures. The Company continues to assess the effects of adoption and believes the most significant changes relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for capital and operating leases in addition to expanded disclosures as a result of the adoption of this ASU. The Company has both capital and operating leases, both domestically and internationally, with varying expiration dates through 2025 in the aggregate amount of $78.1 million for the period ended September 30, 2018 . Significant changes in leasing activity between now and adoption are not expected. The Company has determined to elect, as an accounting policy, not to recognize ROU assets or lease liabilities for leases that, at the acquisition date, have a remaining lease term of 12 months or less. In addition, the Company has determined that it will elect and apply the available transition practical expedients upon adoption. By electing these practical expedients, the Company will: • not reassess whether expired or existing contracts contain leases under the new definition of a lease; • not reassess lease classification for expired or existing leases; • not reassess whether previously capitalized initial direct costs would qualify for capitalization under Topic 842 • use hindsight in determining the lease term, assessing the likelihood that lessee renewal, termination or purchase option will be exercised; and • use hindsight for lessees, in assessing the impairment of ROU assets. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The adoption of this ASU is not expected to have a material impact on our financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this ASU simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test and eliminating the requirement for a reporting unit with a zero or negative carrying amount to perform a qualitative assessment. Instead, under this pronouncement, an entity would perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment change for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects will be considered, if applicable. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted and should be adopted on a prospective basis. The Company has adopted this ASU on a prospective basis in the third quarter of 2018 and has determined there to be no impact on our financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU allow reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. federal tax legislation, the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Consequently, the amendments eliminate the stranded tax effects resulting from the 2017 Tax Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the 2017 Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates to be included in income from continuing operations is not affected. This ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Tax Act is recognized. The adoption of this ASU is not expected to have a material impact on our financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on our financial statements and related disclosures. In July 2018, the FASB issued ASU No. 2018-09, Codification Improvements. The amendments in this ASU clarify certain aspects of the guidance related to: reporting comprehensive income, debt modification and extinguishment, income taxes related to stock compensation, income taxes related to business combinations, derivatives and hedging, fair value measurements, brokers and dealers liabilities, and plan accounting. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this ASU is not expected to have a material impact on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU remove, add, and modify certain disclosures. The ASU removes the following disclosure requirements from Topic 820: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of transfers between levels; (3) the valuation process for Level 3 fair value measurements; and (4) certain other requirements for nonpublic entities. The ASU adds the following disclosure requirements: (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, disclosure of other quantitative information may be more appropriate if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The ASU modifies disclosure requirements in Topic 820 relating to timing of liquidation of an investee’s assets, the disclosure of the date when restrictions from redemption might lapse, the intention of the measurement uncertainty disclosure, and certain other requirements for nonpublic entities. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the effect of this ASU on our financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software). The amendments in this ASU require an entity (customer) in a hosting arrangement that is a service to (1) determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense; (2) expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement; (3) apply the existing impairment guidance to the capitalized implementation costs as if the costs were long-lived assets; (4) present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting arrangements; and (5) present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the effect of this ASU on our financial statements and related disclosures. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues Digital Media Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information. Payment is received in arrears by check or wire and includes terms aligned with the industry standard of 90 days or less. Revenue is earned from the delivery of advertising services on the Company’s owned and operated websites and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services are recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product. Revenue from subscriptions is earned through the granting of access to, or delivery of, certain data products or services to customers. Subscriptions cover video games and related content, health information, data and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are recognized over time. j2 Global also generates Digital Media revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise. Such assets may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. Technology assets are also licensed to clients. These assets are recognized over the term of the access period. The Digital Media business also generates other types of revenues, marketing and production services, and from other sources. Such other revenues are generally recognized over the period in which the products or services are delivered. Revenues are no longer generated in 2018 from certain marketing and production services as a result of the sale of certain Digital Media assets during 2017. The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites or on unaffiliated advertising networks, (ii) through the Company’s lead-generation business and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites. Cloud Services The Company’s Cloud Services revenues substantially consist of monthly recurring subscription and usage-based fees, which are primarily paid in advance by credit card. The Company defers the portions of monthly, quarterly, semi-annually and annually recurring subscription and usage-based fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned. Along with our numerous proprietary Cloud Services solutions, the Company also generates revenues by reselling various third-party solutions, primarily through our email security and online backup lines of business. These third-party solutions, along with our proprietary products, allow the Company to offer customers a variety of solutions to better meet their needs. The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer. j2 Global’s Cloud Services also include patent license revenues generated under license agreements that provide for the payment of contractually determined fully paid-up or royalty-bearing license fees to j2 Global in exchange for the grant of non-exclusive, retroactive and future licenses to our intellectual property, including patented technology. Patent revenues may also consist of revenues generated from the sale of patents. Patent license arrangements are evaluated to determine if they grant the customer a right to access the Company’s intellectual property which is generally recognized over the life of the arrangement or a right to use the Company’s intellectual property which is generally recognized at the point in time the license is granted. With regard to royalty-bearing license arrangements, the Company recognizes revenues of license fees earned during the applicable period. With regard to patent sales, the Company recognizes revenue in the period of the sale the amount of the purchase price over the carrying value of the patent(s) sold. The Cloud Services business also generates revenues by licensing certain technology to third parties. Generally, revenue is recognized over time as the third party uses the licensed technology over the period. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606 is as follows (in thousands): January 1, 2018 Adjustments due to ASU No. 2014-09 December 31, 2017 Balance Sheet Assets Accounts receivable, net $ 234,195 $ — $ 234,195 Liabilities Deferred revenue, current 93,656 (1,599 ) 95,255 Deferred revenue, noncurrent 47 — 47 Equity Retained earnings $ 724,661 $ 1,599 $ 723,062 The following tables summarize the impact of adopting Topic 606 on the Company’s consolidated financial statements (in thousands): September 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Balance Sheet Assets Accounts receivable, net $ 176,758 $ — $ 176,758 Liabilities Deferred revenue, current 126,931 (6,103 ) 120,828 Deferred revenue, noncurrent 5,546 — 5,546 Equity Retained earnings $ 740,433 $ 6,103 $ 746,536 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Amounts Without Adoption of ASC 606 As Reported Adjustments Amounts Without Adoption of ASC 606 Statement of Income Revenues Total revenues $ 292,724 $ 2,882 $ 295,606 $ 861,236 $ 7,702 $ 868,938 Expenses Total expenses 262,001 — 262,001 783,164 — 783,164 Net income 30,723 2,882 33,605 78,072 7,702 85,774 Diluted EPS impact $ 0.61 $ 0.06 $ 0.67 $ 1.57 $ 0.16 $ 1.73 Revenues from external customers classified by revenue source are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Digital Media 2018 2017 2018 2017 Advertising $ 107,864 $ 109,291 $ 315,689 $ 308,985 Subscription 34,791 17,912 95,718 47,987 Other (1) — 662 — 12,498 Total Digital Media revenues $ 142,655 $ 127,865 $ 411,407 $ 369,470 Cloud Services Subscription $ 149,892 $ 144,564 $ 449,341 $ 428,314 Other 202 1,223 535 3,725 Total Cloud Services revenues $ 150,094 $ 145,787 $ 449,876 $ 432,039 Corporate $ 2 $ — $ 4 $ — Elimination of inter-segment revenues (27 ) (36 ) (51 ) (51 ) Total Revenues $ 292,724 $ 273,616 $ 861,236 $ 801,458 Timing of revenue recognition Point in time $ 1,019 $ 6,690 $ 2,960 $ 15,574 Over time 291,705 266,926 858,276 785,884 Total $ 292,724 $ 273,616 $ 861,236 $ 801,458 (1) In the second quarter of 2018, the Company reclassified the Other revenues associated with its Digital Media segment to Advertising revenue. The Company has recorded $67.9 million of revenue for the nine months ended September 30, 2018 which was previously included in the contract liability balance as of the adoption date. The prior quarter disclosure of $74.5 million for the six months ended June 30, 2018 included $17.5 million of revenue recognized related to contract liabilities generated after the adoption date. As a result, such revenue is excluded from the disclosure for the nine months ended September 30, 2018. As of September 30, 2018, the , the Company acquired $33.2 million of deferred revenue in connection with the Company’s business acquisitions (see Note 4 - Business Acquisitions) which are subject to any purchase accounting adjustments. Performance Obligations The Company’s contracts with customers may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on its relative standalone selling price. The Company satisfies its performance obligations within the Digital Media segment upon delivery of services to its customers. Payments for these services are typically due shortly after they have been provided. In addition, the Company provides content to its advertising partners which the Company sells to its partners’ customer base and receives a revenue share based on the terms of the agreement. The Company satisfies its performance obligations within the Cloud Services segment upon delivery of services to its customers. Payment terms vary by type and location of our customers and the services offered. The term between invoicing and when payment is due is not significant. For certain services and customer types, we require payment before services are delivered to the customer. Due to the nature of the services provided, there are no obligations for returns. Significant Judgments In determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is also required to determine the standalone selling price for each distinct performance obligation. Performance Obligations Satisfied Over Time The Company’s Digital Media segment consists primarily of performance obligations that are satisfied over time. This was determined based on a review of the contracts and the nature of the services offered, where the customer simultaneously receives and consumes the benefit of the services provided. Satisfaction of these performance obligations is evidenced in the following ways: Advertising • Website reporting by the Company, the customer, or a third-party contains the delivery evidence needed to satisfy the performance obligations within the advertising contract • Successfully delivered leads are evidenced by either delivery reports from the Company’s internal lead management systems or through e-mail communication and/or other evidence of delivery showing acceptance of leads by the customer • Commission is evidenced by direct site reporting from the affiliate or via direct confirmation from the customer Subscription • Evidence of delivery is contained in the Company’s systems or from correspondence with the customer which tracks when a customer accepts delivery of any assets, digital keys or download links The Company has concluded revenue is recognized based on delivery of services over the contract period for advertising and on a straight-line basis over the contract period for subscriptions. The Company believes that the methods described are a faithful depiction of the transfer of goods and services. The Company’s Cloud Services segment consists primarily of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are subscription based and include fax, voice, backup, security and email marketing products where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. Depending on the individual contracts with the customer, revenue for these services are recognized over the contract period when any of the following materially distinct performance obligations are satisfied: • Faxing capabilities are provided • Voice services are delivered • Email marketing services are delivered • Security solutions, including email and endpoint are provided • Online data backup capabilities are provided The Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes revenue on a straight-line basis throughout the subscription period and believes that the method used is a faithful depiction of the transfer of goods and services. Performance Obligations Satisfied at a Point in Time The Company’s Digital Media segment has technology subscriptions that have standalone functionality. As a result, they are considered to be functional intellectual property where the performance obligations are satisfied at a point in time. This is evidenced once a digital key is delivered to the customer. Once the key is delivered to the customer, the customer has full control of the technology and the Company has no further performance obligations. The Company has concluded that revenue is recognized once the digital key is delivered. The Company believes that this method is a faithful depiction of the transfer of goods and services. Practical Expedients Existence of a Significant Financing Component in a Contract As a practical expedient, the Company has not assessed whether a contract has a significant financing component because the Company expects at contract inception that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less. In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company. The Company typically charges a single upfront amount for the services because other payment terms would affect the nature of the risk assumed by the Company to provide service given the costs of the customer acquisition and the highly competitive and commoditized nature of the business we operate which allows customers to easily move from one provider to another. This additional risk may make it uneconomical to provide the service. Costs to Fulfill a Contract The Company’s revenues are primarily generated from customer contracts that are for one year or less. Costs primarily consist of incentive compensation paid based on the achievements of sales targets in a given period for related revenue streams and are recognized in the month when the revenue is earned. Incentive compensation is paid on renewal of the customer contract. As a practical expedient, for amortization periods which are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred. For those customer contracts greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit. |
Business Acquisition
Business Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition | Business Acquisitions The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, acquire skilled personnel and enter into other jurisdictions. The Company completed the following acquisitions during the first nine months of fiscal 2018, paying the purchase price in cash in each transaction: (a) a share purchase of the entire issued capital of ThreatTrack Security Holdings, Inc., acquired on January 26, 2018, a Florida-based provider of cybersecurity solutions; (b) an asset purchase of Line2, Inc., acquired on June 18, 2018, a California-based provider of voice solutions; (c) a share purchase of all the membership interests of Mosaik Solutions, LLC, acquired on June 18, 2018, a Tennessee-based provider of mobile coverage data and network intelligence for mobile operators and network-dependent enterprises; (d) a share purchase of DW PRIME Holdings, Inc., acquired on August 20, 2018, a Florida-based accredited provider of continuing medical education for medical professionals; (e) a share purchase of The Communicator Corporation Limited, acquired on September 25, 2018, an English-based provider of email marketing services; and (f) other immaterial acquisitions of digital health and data analysis businesses. The condensed consolidated statement of income since the date of each acquisition and balance sheet as of September 30, 2018 , reflect the results of operations of all 2018 acquisitions. For the nine months ended September 30, 2018 , these acquisitions contributed $26.1 million to the Company’s revenues. Net income contributed by these acquisitions was not separately identifiable due to j2 Global’s integration activities and is impracticable to provide. Total consideration for these transactions was $197.8 million , net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid. The following table summarizes the allocation of the purchase consideration for these acquisitions (in thousands): Assets and Liabilities Valuation Cash (1) $ 9,257 Accounts receivable 7,803 Prepaid expenses and other current assets 2,149 Property and equipment 4,110 Trade names 23,381 Customer relationships 63,090 Goodwill 126,774 Other long-term assets 205 Other intangibles 29,212 Deferred tax asset 100 Accounts payable and accrued expenses (7,948 ) Deferred revenue (33,153 ) Capital leases (956 ) Income taxes payable (1,414 ) Deferred tax liability (12,312 ) Other long-term liabilities (3,265 ) Total $ 207,033 (1) Cash contains an immaterial amount of restricted cash associated with a pre-acquisition relationship with a vendor. The entire balance has been released during the third quarter of 2018. During the nine months ended September 30, 2018 , the purchase price accounting has been finalized for the following acquisitions: (i) WeCloud AB; (ii) ThreatTrack Security Holdings, Inc.; (iii) Humble Bundle Inc.; (iv) blackfriday.com; (v) OnTargetJobs, Inc.; (vi) Line2, Inc.; and (vii) other immaterial email security, digital marketing, data analysis, and digital health businesses. The initial accounting for all other 2018 acquisitions is incomplete and subject to change, which may be significant. j2 Global has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital and related tax items. During the nine months ended September 30, 2018 , the Company recorded adjustments to prior period acquisitions due to the finalization of purchase accounting in the Cloud Services segment which resulted in a net decrease in goodwill of $1.0 million . In addition, the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media segment, which resulted in a net decrease in goodwill of $0.3 million . Such adjustments had an immaterial impact on the amortization expense within the condensed consolidated statement of income for the nine months ended September 30, 2018 . Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with these acquisitions during the nine months ended September 30, 2018 is $126.8 million , of which $38.3 million is expected to be deductible for income tax purposes. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investments | Investments Investments consist of certificates of deposits, equity and debt securities. The Company has adopted ASU 2016-01 during the first quarter 2018 (see Note 2 - Recent Accounting Pronouncements) and determined that the equity securities that were received as part of the consideration for the sale of Tea Leaves Health, LLC (“Tea Leaves”) in fiscal year 2017 are without a readily determinable fair value because these securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. As a result, management has elected to alternatively measure this investment at cost, less impairment, adjusted for subsequent observable price changes to estimate fair value. The Company will make a “reasonable effort” to identify any observable price changes for identical or similar investments with the issuer that are known are can be reasonably known. The adoption of ASU 2016-01 was done on a prospective basis and any changes in the carrying value of the equity securities will be reported in our current earnings as Other expense (income), net. In addition, the Company determined that the shares of redeemable preferred stock that were also received as part of the consideration for the sale of Tea Leaves are corporate debt securities and are classified as available-for-sale securities. The following table summarizes the gross unrealized gains and losses and estimated fair values for the Company’s securities without a readily determinable fair value (in thousands): Cost Impairment Adjustments Fair Value September 30, 2018 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 December 31, 2017 Equity securities $ 34,977 $ — $ — $ 34,977 Total $ 34,977 $ — $ — $ 34,977 During the first nine months of 2018, the Company recorded an unrealized loss to earnings because an observable price for a similar instrument was observed in the market at an amount that was below the original carrying price of the investment (see Note 6 - Fair Value Measurements). The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale investments (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2018 Corporate debt securities $ 23,256 $ 45 $ (1,898 ) $ 21,403 Total $ 23,256 $ 45 $ (1,898 ) $ 21,403 December 31, 2017 Corporate debt securities $ 22,745 $ — $ — $ 22,745 Total $ 22,745 $ — $ — $ 22,745 At September 30, 2018 , the Company’s available-for-sale securities are carried at fair value, with the unrealized gains and losses reported as a component of stockholders’ equity. The following table summarizes j2 Global’s corporate debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands): September 30, 2018 December 31, 2017 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 21,403 22,745 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 21,403 $ 22,745 Recognition and Measurement of Other-Than-Temporary Impairment Regardless of the classification of the securities as available-for-sale or held-to-maturity, the Company has assessed each position for impairment. j2 Global regularly reviews and evaluates each investment that has an unrealized loss. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive income for available-for-sale securities. Factors considered in determining whether a loss is temporary include: • the length of time and the extent to which fair value has been below cost; • the severity of the impairment; • the cause of the impairment and the financial condition and near-term prospects of the issuer; • activity in the market of the issuer which may indicate adverse credit conditions; and • the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery. j2 Global’s review for impairment generally entails: • identification and evaluation of investments that have indications of possible impairment; • analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period; • discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having an other-than-temporary impairment and those that would not support an other-than-temporary impairment; • documentation of the results of these analyses, as required under business policies; and • information provided by third-party valuation experts. For these securities, a critical component of the evaluation for other-than-temporary impairments is the identification of credit impairment, where management does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. Credit impairment is assessed using a combination of a discounted cash flow model that estimates the cash flows on the underlying securities and a market comparable method, where the security is valued based upon indications from the secondary market of what discounts buyers demand when purchasing similar securities. The cash flow model incorporates actual cash flows from the securities through the current period and then projects the remaining cash flows using relevant interest rate curves over the remaining term. These cash flows are discounted using a number of assumptions, some of which include prevailing implied credit risk premiums, incremental credit spreads and illiquidity risk premiums, among others. Securities that have been identified as other-than-temporarily impaired are written down to their current fair value. For debt securities that are intended to be sold or that management believes it more-likely-than-not that it will be required to sell prior to recovery, the full impairment is recognized immediately in earnings. For available-for-sale and held-to-maturity securities that management has no intent to sell and believes that it more-likely-than-not that it will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the rest of the fair value impairment is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2018 and December 31, 2017 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands): As of September 30, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ 20,846 $ (1,898 ) $ — $ — $ 20,846 $ (1,898 ) Total $ 20,846 $ (1,898 ) $ — $ — $ 20,846 $ (1,898 ) As of December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ 22,745 $ — $ — $ — $ 22,745 $ — Total $ 22,745 $ — $ — $ — $ 22,745 $ — As of September 30, 2018 and December 31, 2017 , we did not recognize any other-than-temporary impairment losses. On September 25, 2017 , the Company entered into a commitment to invest $200 million (approximately 66.7% of equity) in the OCV Fund. The total expected commitment to the OCV Fund is expected to be approximately $300 million . The primary purpose of the Fund is to provide a limited number of select investors with the opportunity to realize long-term appreciation from public and private companies, with a particular focus on the technology and life science industries. The general activities of the OCV Fund is to buy, sell, hold and otherwise invest in securities of every kind and nature and rights and options with respect thereto, including, without limitation, stock, notes, bonds, debentures and evidence of indebtedness; to exercise all rights, powers, privileges and other incidents of ownership or possession with respect to securities held or owned by the OCV Fund; to enter into, make and perform all contracts and other undertakings; and to engage in all activities and transactions as may be necessary, advisable or desirable to carry out the foregoing. The manager and general partner of the Fund are entities with respect to which Richard S. Ressler, Chairman of the Board of Directors (the “Board”) of the Company, is indirectly the majority equity holder and a related party. As a limited partner in the Fund, the Company will pay an annual management fee to the manager equal to 2.0% (reduced by 10% each year beginning with the sixth year) of capital commitments. In addition, subject to the terms and conditions of the Fund’s limited partnership agreement, once the Company has received distributions equal to its invested capital, the Fund’s general partner would be entitled to a carried interest equal to 20% . The Fund has a six year investment period, subject to certain exceptions. The commitment was approved by the Audit Committee of the Board in accordance with the Company’s related-party transaction approval policy. During 2018, the Company received capital call notices from the management of OCV Management, LLC. for $35.8 million , inclusive of certain management fees, of which $34.8 million has been paid for the nine months ended September 30, 2018 . The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value, the loss will be recorded in the period in which the Company identifies the decline. During the three and nine months ended September 30, 2018 , the Company recognized an investment loss of $0.6 million and $3.6 million , net of tax benefit, respectively. The loss is presented in the Company’s condensed consolidated statement of income as loss from equity investments, net. The following table discloses the carrying amount for the Company’s equity method investment (in thousands): September 30, 2018 December 31, 2017 Equity securities $ 29,815 $ — As a limited partner, the Company’s maximum exposure to loss is $29.8 million and is limited to its proportional ownership in the partnership. In addition, the Company’s is not required to contribute capital in an aggregate amount in excess of its capital commitment and any expected losses will not be in excess of the Capital Account. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the Fund. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Measurements j2 Global complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: l Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. l Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. l Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The Company’s debt securities are classified within Level 2. The Company values these Level 2 investments based on model-driven valuations using significant inputs derived from or corroborated by observable market data. The fair value of our senior notes is determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 2 inputs. The fair value of long-term debt at September 30, 2018 and December 31, 2017 was $1.2 billion and $1.2 billion , respectively (see Note 8 - Long-Term Debt). In addition, the Convertible Notes contain terms that may require the Company to pay contingent interest on the Convertible Notes which is accounted for as a derivative with fair value adjustments being recorded to interest expense (see Note 8 - Long Term Debt). This derivative is fair valued using a binomial lattice convertible bond pricing model using historical and implied market information, which are Level 2 inputs. The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The fair value of the contingent consideration liability was determined using option based approaches. This methodology was utilized because the distribution of payments is not symmetric and amounts are only payable upon certain earnings before interest, tax, depreciation and amortization (“EBITDA”) thresholds being reached. Such valuation approach included a Monte-Carlo simulation for the contingency since the financial metric driving the payments is path dependent. Significant increases or decreases in either of the inputs noted above in isolation would result in a significantly lower or higher fair value measurement. The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 41,827 $ — $ — $ 41,827 Corporate debt securities — 21,403 — 21,403 Total assets measured at fair value $ 41,827 $ 21,403 $ — $ 63,230 Liabilities: Contingent consideration $ — $ — $ 41,142 $ 41,142 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 41,142 $ 41,910 December 31, 2017 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 453 $ — $ — $ 453 Corporate debt securities — 22,745 — 22,745 Total assets measured at fair value $ 453 $ 22,745 $ — $ 23,198 Liabilities: Contingent consideration $ — $ — $ 20,477 $ 20,477 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 20,477 $ 21,245 At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the nine months ended September 30, 2018 , there were no transfers that have occurred between levels. The following table presents a reconciliation of the Company’s derivative instruments (in thousands): Amount Affected line item in the Statement of Income Derivative Liabilities: Level 2: Balance as of January 1, 2018 $ 768 Balance as of September 30, 2018 $ 768 The following table presents a reconciliation of the Company’s Level 3 financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Income Balance as of January 1, 2018 $ 20,477 Total fair value adjustments reported in earnings 14,400 General and administrative Contingent consideration 7,042 Contingent consideration payments (777 ) Balance as of September 30, 2018 $ 41,142 In connection with the acquisition of Humble Bundle, on October 13, 2017, contingent consideration of up to an aggregate of $40.0 million may be payable upon achieving certain future EBITDA thresholds and had a fair value of $34.1 million and $19.7 million at September 30, 2018 and December 31, 2017 , respectively. In connection with the acquisition of blackfriday.com, on November 7, 2017, the Company achieved certain earnings targets and, as a result, contingent consideration of $0.8 million was paid to the seller during the first quarter 2018 in connection with this acquisition. In connection with the acquisition of Mosaik Solutions, on June 18, 2018, contingent consideration of up to an aggregate of $1.0 million may be payable upon achieving certain income thresholds and had a fair value of $0.8 million at September 30, 2018 . In connection with the acquisition of bestblackfriday.com, on July 13, 2018, contingent consideration of up to an aggregate of $2.0 million may be payable upon achieving a certain number of visitors and had a fair value of $2.0 million at September 30, 2018 . In connection with the acquisition of DemandShore, on July 19, 2018, contingent consideration of up to an aggregate of $1.9 million may be payable upon achieving certain future EBITDA and revenue thresholds and had a fair value of $1.3 million at September 30, 2018 . In connection with the acquisition of DownDetector, on August 9, 2018, contingent consideration of up to an aggregate of $3.7 million may be payable upon achieving certain number of average monthly unique visitors thresholds and had a fair value of $2.9 million at September 30, 2018 . During the nine months ended September 30, 2018 , the Company recorded an increase in the fair value of the contingent consideration of $14.4 million and reported such increase in general and administrative expenses. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one to 20 years. The changes in carrying amounts of goodwill for the nine months ended September 30, 2018 are as follows (in thousands): Cloud Services Digital Media Consolidated Balance as of January 1, 2018 $ 603,753 $ 592,858 $ 1,196,611 Goodwill acquired (Note 4) 72,737 54,037 126,774 Purchase accounting adjustments (1) (1,014 ) (277 ) (1,291 ) Foreign exchange translation (6,811 ) (982 ) (7,793 ) Balance as of September 30, 2018 $ 668,665 $ 645,636 $ 1,314,301 (1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 - Business Acquisitions). Intangible Assets with Indefinite Lives: Intangible assets are summarized as of September 30, 2018 and December 31, 2017 as follows (in thousands): September 30, December 31, Trade names $ 27,379 $ 27,379 Other 4,306 5,432 Total $ 31,685 $ 32,811 Intangible Assets Subject to Amortization: As of September 30, 2018 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 11.0 years $ 171,055 $ 61,686 $ 109,369 Patent and patent licenses 6.5 years 67,862 59,800 8,062 Customer relationships (1) 9.1 years 505,843 298,888 206,955 Other purchased intangibles 4.8 years 248,573 107,662 140,911 Total $ 993,333 $ 528,036 $ 465,297 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. As of December 31, 2017 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 11.2 years $ 147,997 $ 51,429 $ 96,568 Patent and patent licenses 6.6 years 67,724 56,853 10,871 Customer relationships (1) 8.9 years 447,070 253,464 193,606 Other purchased intangibles 4.8 years 218,628 66,733 151,895 Total $ 881,419 $ 428,479 $ 452,940 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. Amortization expense, included in general and administrative expense, approximated $35.8 million and $31.7 million for the three months ended September 30, 2018 and 2017 , respectively, and $102.7 million and $94.3 million for the nine month periods ended September 30, 2018 and 2017 , respectively. Amortization expense is estimated to approximate $204.4 million , $93.5 million , $59.2 million , $45.1 million and $36.2 million for fiscal years 2018 through 2022 , respectively, and $129.7 million thereafter through the duration of the amortization period. |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
Debt Disclosure [Text Block] | Long-Term Debt 6.0% Senior Notes On June 27, 2017 , j2 Cloud Services, LLC (“j2 Cloud”) and j2 Cloud Co-Obligor (the “Co-Issuer” and together with j2 Cloud, the “Issuers”), wholly-owned subsidiaries of the Company, completed the issuance and sale of $650 million aggregate principal amount of their 6.0% senior notes due in 2025 (the “6.0% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. The 6.0% Senior Notes are presented as long-term debt, net of deferred issuance costs, on the condensed consolidated balance sheets as of September 30, 2018 . The 6.0% Senior Notes bear interest at a rate of 6.0% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2018. The 6.0% Senior Notes mature on July 15, 2025 , and are senior unsecured obligations of the Issuers and are guaranteed on an unsecured basis by certain subsidiaries of j2 Cloud (as defined in the Indenture agreement dated June 27, 2017, the “Indenture”). If j2 Cloud or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an insignificant subsidiary (as defined in the Indenture), after the issue date, or any insignificant subsidiary ceases to fit within the definition of insignificant subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Issuers’ obligations under the 6.0% Senior Notes. The Issuers may redeem some or all of the 6.0% Senior Notes at any time on or after July 15, 2020 at specified redemption prices plus accrued and unpaid interest, if any, to, but excluding the redemption date. Before July 15, 2020, in connection with certain equity offerings, the Issuers also may redeem up to 35% of the 6.0% Senior Notes at a price equal to 106.0% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding the redemption date. In addition, at any time prior to July 15, 2020, the Issuers may redeem some or all of the 6.0% Senior Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus an applicable “make-whole” premium. The Indenture contains certain restrictive and other covenants applicable to j2 Cloud and subsidiaries designated as restricted subsidiaries including, but not limited to, restrictions on (i) paying dividends or making distributions on j2 Cloud’s membership interests or repurchasing j2 Cloud’s membership interests; (ii) making certain restricted payments; (iii) creating liens or entering into sale and leaseback transactions; (iv) entering into transactions with affiliates; (v) merging or consolidating with another company; and (vi) transferring and selling assets. These covenants include certain exceptions. Violation of these covenants could result in a default which could result in the acceleration of outstanding amounts if such default is not cured or waived within the time periods outlined in the Indenture. Restricted payments, specifically dividend payments, are applicable only if j2 Cloud and subsidiaries designated as restricted subsidiaries has a leverage ratio of greater than 3.0 to 1.0. In addition, if such leverage ratio is in excess of 3.0 to 1.0, the restriction on restricted payments is subject to various exceptions, including an exception for the payment of restricted payments up to $75 million. These contractual provisions did not, as of September 30, 2018 , restrict j2 Cloud’s ability to pay dividends to j2 Global, Inc. The company is in compliance with its debt covenants as of September 30, 2018 . As of September 30, 2018 and December 31, 2017 , the estimated fair value of the 6.0% Senior Notes was approximately $669.5 million and $684.1 million , respectively, and was based on the quoted market prices of debt instruments with similar terms, credit rating and maturities of the 6.0% Senior Notes which are Level 2 inputs (see Note 6 - Fair Value Measurements). 3.25% Convertible Notes On June 10, 2014 , j2 Global issued $402.5 million aggregate principal amount of 3.25% convertible senior notes due June 15, 2029 (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 3.25% per annum, payable semiannually in arrears on June 15 and December 15 of each year. Beginning with the six-month interest period commencing on June 15, 2021, the Company must pay contingent interest on the Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the Convertible Notes for each of the five trading days immediately preceding the first day of such interest period equals or exceeds $1,300. Any contingent interest payable on the Convertible Notes will be in addition to the regular interest payable on the Convertible Notes. Holders may surrender their Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding the maturity date only if one or more of the following conditions is satisfied: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the closing sale price of j2 Global common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs is more than 130% of the applicable conversion price of the Convertible Notes on each such trading day; (ii) during the five consecutive business day period following any ten consecutive trading day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the product of (a) the closing sale price of j2 Global common stock on each such trading day and (b) the applicable conversion rate on each such trading day; (iii) if j2 Global calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the business day prior to the redemption date; (iv) upon the occurrence of specified corporate events; or (v) during either the period beginning on, and including, March 15, 2021 and ending on, but excluding, June 20, 2021 or the period beginning on, and including, March 15, 2029 and ending on, but excluding, the maturity date. j2 Global will settle conversions of Convertible Notes by paying or delivering, as the case may be, cash, shares of j2 Global common stock or a combination thereof at j2 Global’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock, where cash will be used to settle each $1,000 of principal and the remainder, if any, will be settled via shares of the Company’s common stock. As of September 30, 2018 , the conversion rate is 14.6680 shares of j2 Global common stock for each $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $68.18 per share of j2 Global common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the Convertible Notes, but will not be adjusted for accrued interest. In addition, following certain corporate events that occur on or prior to June 20, 2021, j2 Global will increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such a corporate event. j2 Global may not redeem the Convertible Notes prior to June 20, 2021. On or after June 20, 2021, j2 Global may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes. Holders have the right to require j2 Global to repurchase for cash all or part of their Convertible Notes on each of June 15, 2021 and June 15, 2024 at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the relevant repurchase date. In addition, if a fundamental change, as defined in the indenture governing the Convertible Notes, occurs prior to the maturity date, holders may require j2 Global to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Convertible Notes; (ii) equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries. Accounting for the Convertible Notes In accordance with ASC 470-20, Debt with Conversion and Other Options, convertible debt that can be settled for cash is required to be separated into the liability and equity component at issuance, with each component assigned a value. The value assigned to the liability component is the estimated fair value, as of the issuance date, of similar debt without the conversion feature. The difference between the cash proceeds and estimated fair value of the liability component, representing the value of the conversion premium assigned to the equity component, is recorded as a debt discount on the issuance date. This debt discount is amortized to interest expense using the effective interest method over the period from the issuance date through the first stated repurchase date on June 15, 2021. j2 Global estimated the borrowing rates of similar debt without the conversion feature at origination to be 5.79% for the Convertible Notes and determined the debt discount to be $59.0 million . As a result, a conversion premium after tax of $37.7 million was recorded in additional paid-in capital. The aggregate debt discount is amortized as interest expense over the period from the issuance date through the first stated repurchase date on June 15, 2021, which management believes is the expected life of the Convertible Notes using an interest rate of 5.81% . As of September 30, 2018 , the remaining period over which the unamortized debt discount will be amortized is 2.7 years . The Convertible Notes are carried at face value less any unamortized debt discount and debt issuance costs. The fair value of the Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the Convertible Notes, which are Level 1 inputs (see Note 6 - Fair Value Measurements). If such information is not available, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. As of September 30, 2018 and December 31, 2017 , the estimated fair value of the Convertible Notes was approximately $525.3 million and $504.5 million , respectively. Long-term debt as of September 30, 2018 and December 31, 2017 consists of the following (in thousands): September 30, 2018 December 31, 2017 6.0% Senior Notes $ 650,000 $ 650,000 3.25% Convertible Notes 402,500 402,500 Less: Unamortized discount (35,446 ) (42,902 ) Deferred issuance costs (6,488 ) (7,654 ) Total long-term debt 1,010,566 1,001,944 Less: Current portion — — Total long-term debt, less current portion $ 1,010,566 $ 1,001,944 |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies Litigation From time to time, j2 Global and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against j2 Global and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief. On February 17, 2011, Emmanuel Pantelakis (“Pantelakis”) filed suit against a j2 Global affiliate in the Ontario Superior Court of Justice (No. 11-50673), alleging that the j2 Global affiliate breached a contract relating to Pantelakis’s use of the Campaigner service. The j2 Global affiliate filed a responsive pleading on March 23, 2011 and responses to undertakings on July 16, 2012. On November 6, 2012, Pantelakis filed a second amended statement of claim, reframing his lawsuit as a negligence action. The j2 Global affiliate filed an amended statement of defense on April 8, 2013. Discovery has closed. A judicial pre-trial conference took place on September 27, 2018. There is an anticipated trial date of January 2020. On January 17, 2013, the Commissioner of the Massachusetts Department of Revenue (“Commissioner”) issued a notice of assessment to a j2 Global affiliate for sales and use tax for the period of July 1, 2003 through December 31, 2011. On July 22, 2014, the Commissioner denied the j2 Global affiliate’s application for abatement. On September 18, 2014, the j2 Global affiliate petitioned the Massachusetts Appellate Tax Board for abatement of the tax asserted in the notice of assessment (No. C325426). A trial was held on December 16, 2015. On May 18, 2017, the Appellate Board decided in favor of the Commonwealth of Massachusetts. The j2 Global affiliate has requested the findings of fact and conclusions of law from the Appellate Board. On January 21, 2016, Davis Neurology, P.A. filed a putative class action against two j2 Global affiliates in the Circuit Court for the County of Pope, State of Arkansas (58-cv-2016-40), alleging violations of the TCPA. The case was ultimately removed to the U.S. District Court for the Eastern District of Arkansas (the “Eastern District of Arkansas”) (No. 4:16-cv-00682). On June 6, 2016, the j2 Global affiliates filed a motion for judgment on the pleadings. On March 20, 2017, the Eastern District of Arkansas dismissed all claims against the j2 Global affiliates. On July 23, 2018, the Eighth Circuit Court of Appeals vacated the judgment and remanded to district court with instructions to return the case to state court. The j2 Global affiliates have filed a petition for rehearing or rehearing en banc . j2 Global does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing reserves, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on j2 Global’s consolidated financial position, results of operations, or cash flows in a particular period. The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management. It is the Company’s policy to expense as incurred legal fees related to various litigations. Non-Income Related Taxes The Company does not collect and remit sales and use, telecommunication, or similar taxes and fees in jurisdictions where the Company believes such taxes are not applicable or legally required. Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company is required to collect and remit such taxes there. The aggregate assessments at September 30, 2018 were not material. The June 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc., No. 17-494, along with the application of existing, new or future rulings and laws could have adverse effects on our business, prospects and operating results. There have been, and will continue to be, substantial ongoing costs associated with complying with the various indirect tax requirements in the numerous markets in which we conduct or will conduct business. The Company is currently under audit or is subject to audit for indirect taxes in several states and municipalities. The Company has a $4.6 million reserve established for these matters. It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could have a material impact our financial results. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate adjusted for discrete interim period tax impacts. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. The Company’s effective tax rate was 22.9% and 22.1% for the three months ended September 30, 2018 and 2017 , respectively, and 22.2% and 23.7% for the nine months ended September 30, 2018 and 2017 , respectively. Income before income taxes included income from domestic operations of $4.3 million and $13.7 million for the nine months ended September 30, 2018 and 2017 , respectively, and income from foreign operations of $100.7 million and $103.7 million for the nine months ended September 30, 2018 and 2017 , respectively. The 2017 Tax Act was enacted on December 22, 2017. The 2017 Tax Act includes a number of changes to the Internal Revenue Code including a one-time transition tax on the mandatory deemed repatriation of cumulative undistributed foreign earnings and a permanent reduction in the U.S. federal statutory income tax rate from 35% to 21% , effective on January 1, 2018. The 2017 Tax Act also created a new requirement that certain income (i.e. Global Intangible Low Taxed Income (“GILTI”)) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Consistent with guidance issued by SAB 118, the Company recorded provisional estimates for the income tax effects of the 2017 Tax Act in December 31, 2017. In addition, SAB 118 provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act. The Company continues to analyze the impacts of the 2017 Tax Act and refine calculations. The Company is required to record deferred tax assets and liabilities based on the enacted tax rates at which they are expected to reverse in the future. Therefore, any U.S. related deferred taxes were re-measured from 35% down to 21% based on the recorded balances as of December 31, 2017. The analysis included a preliminary assessment on the deductibility of certain amounts for which deferred tax assets may have been recorded. As of December 31, 2017 , the Company recorded an estimated tax benefit of approximately $33.3 million . As of September 30, 2018 , the Company has not adjusted its provisional estimate related to re-measurement of its deferred tax balances. The Company was required to calculate a one-time transition tax based on its total post-1986 foreign earnings and profits (“E&P”) that it previously deferred from U.S. income taxes. During the year ended December 31, 2017 , the Company recorded a provisional estimate of the transition tax of $49.2 million payable over an eight year period. As of September 30, 2018 , the Company has not adjusted its provisional estimate of the transition tax. The Company was unable to determine a reasonable estimate of the remaining tax liability, if any, under the 2017 Tax Act for its remaining outside basis differences or evaluate how the 2017 Tax Act will affect the Company’s existing accounting position to indefinitely reinvest unremitted foreign earnings. Therefore, the Company did not include a provisional amount for this item in its financial statements for fiscal 2017. As of September 30, 2018 , the Company continues to review the amount of tax due, if any, on differences in tax basis and the accounting position related to indefinite reinvestment of foreign earnings. The Company is subject to a territorial tax system under the 2017 Tax Act, in which it is required to provide for tax on GILTI earned by certain foreign subsidiaries. Additionally, the Company is required to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. As of September 30, 2018 , the Company is still evaluating the effects of the GILTI provisions as guidance and interpretations continue to emerge. Therefore, the Company has not determined its accounting policy on the GILTI provisions. However, the standard requires that the Company reflect the impact of the GILTI provisions as a period expense until the accounting policy is finalized. Therefore, the Company has included the provisional estimate of GILTI related to current-year operations in its estimated annual effective tax rate only and will be updating the impact and accounting policy as the analysis related to the GILTI provisions is completed. As of September 30, 2018 and December 31, 2017 , the Company had $55.7 million and $52.2 million , respectively, in liabilities for uncertain income tax positions. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s consolidated statement of income. Cash paid for income taxes net of refunds received was $21.9 million and $46.6 million for the nine months ended September 30, 2018 and 2017 , respectively. Certain taxes are prepaid during the year and, where appropriate, included within prepaid expenses and other current assets on the consolidated balance sheet. The Company’s prepaid taxes were zero and $6.0 million at September 30, 2018 and December 31, 2017 , respectively. Income Tax Audits : The Company is in various stages of audit by the U.S. Internal Revenue Service (“IRS”) for its 2012 through 2016 tax years. j 2 Global is under income tax audit by the California Franchise Tax Board (the “FTB”) for its tax years 2012 and 2013. The FTB, however, has agreed to suspend its audit for 2012 and 2013 pending the outcome of the IRS audit for such tax years. In August 2018, the FTB notified the Company that it will commence an audit of tax years 2015 and 2016. The Company is under income tax audit by the New York State Department of Taxation and Finance (“NYS”) for tax years 2011 through 2014. The Company was under income tax audit by the Massachusetts Department of Revenue (“MA”) for tax years 2014 and 2015. In September 2018, MA concluded its audit of tax years 2014 and 2015. The Company was assessed an insignificant amount of income tax and interest, which was paid. The Company was under audit by the Georgia Department of Revenue (“Georgia DOR”) for tax years 2014 through 2016. In June 2018, the Georgia DOR concluded its audit of tax years 2014 through 2016. The Company was assessed an insignificant amount of income tax and interest, which was paid. The Company is currently under audit by the French tax authorities for tax years 2011 to 2016. It is reasonably possible that these audits may conclude in the next 12 months and that the uncertain tax positions the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. If the recorded uncertain tax positions are inadequate to cover the associated tax liabilities, the Company would be required to record additional tax expense in the relevant period, which could be material. If the recorded uncertain tax positions are adequate to cover the associated tax liabilities, the Company would be required to record any excess as a reduction in tax expense in the relevant period, which could be material. However, it is not currently possible to estimate the amount, if any, of such change. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock Repurchase Program In February 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 19, 2019. In July 2016, the Company acquired and subsequently retired 935,231 shares of j2 Global common stock in connection with the acquisition of Integrated Global Concepts, Inc. As a result of the purchase of j2 Global common stock, the Company’s Board of Directors approved a reduction in the number of shares available for purchase under the 2012 Program by the same amount leaving 1,938,689 shares of j2 Global common stock available for purchase under this program. During the nine month period ended September 30, 2018 , we repurchased zero shares under this program. Cumulatively at September 30, 2018 , 2.1 million shares were repurchased at an aggregate cost of $58.6 million (including an immaterial amount of commission fees). Periodically, participants in j2 Global’s stock plans surrender to the Company shares of j2 Global stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock. During the three month period ended September 30, 2018 , the Company purchased 9,509 shares from plan participants for this purpose. Dividends The following is a summary of each dividend declared during fiscal year 2018 and 2017 : Declaration Date Dividend per Common Share Record Date Payment Date February 9, 2017 $ 0.3650 February 22, 2017 March 9, 2017 May 4, 2017 $ 0.3750 May 19, 2017 June 2, 2017 August 2, 2017 $ 0.3850 August 14, 2017 September 1, 2017 October 31, 2017 $ 0.3950 November 17, 2017 December 5, 2017 February 2, 2018 $ 0.4050 February 22, 2018 March 9, 2018 May 3, 2018 $ 0.4150 May 18, 2018 June 1, 2018 August 8, 2018 $ 0.4250 August 20, 2018 September 4, 2018 Future dividends are subject to Board approval. |
Stock Options And Employee Stoc
Stock Options And Employee Stock Purchase Plan | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options And Employee Stock Purchase Plan | Stock Options and Employee Stock Purchase Plan j2 Global’s share-based compensation plans include the 2007 Stock Plan (the “2007 Plan”), 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Each plan is described below. The 2007 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units and other share-based awards. 4,500,000 shares of j2 Global common stock are authorized to be used for 2007 Plan purposes. Options under the 2007 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the fair market value of j2 Global’s common stock on the date of grant for incentive stock options and not less than 85% of the fair market value of j2 Global’s common stock on the date of grant for non-statutory stock options. As of September 30, 2018 , 250,577 shares underlying options and 6,460 shares of restricted units were outstanding under the 2007 Plan. The 2007 Plan terminated on February 14, 2017. The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units and other share-based awards and is intended as a successor plan to the 2007 Stock Plan since no further grants will be made under the 2007 Stock Plan. 4,200,000 shares of j2 Global common stock are authorized to be used for 2015 Plan purposes. Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100% of the fair market value of j2 Global’s common stock subject to the option on the date the option is granted. As of September 30, 2018 , 462,000 shares underlying options and 36,751 shares of restricted stock units were outstanding under the 2015 Plan. All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m). Stock Options The following table represents stock option activity for the nine months ended September 30, 2018 : Number of Shares Weighted- Weighted-Average Aggregate Outstanding at January 1, 2018 375,675 $ 31.30 Granted 400,000 75.03 Exercised (63,098 ) 22.50 Canceled — — Outstanding at September 30, 2018 712,577 $ 56.63 6.1 $ 18,687,302 Exercisable at September 30, 2018 303,377 $ 32.03 1.8 $ 15,416,702 Vested and expected to vest at September 30, 2018 572,480 $ 52.14 5.3 $ 17,582,813 The total intrinsic values of options exercised during the nine months ended September 30, 2018 and 2017 were $3.6 million and $2.1 million , respectively. The Company recognized $0.2 million and $40,000 of compensation expense related to stock options for the three months ended September 30, 2018 and 2017 , respectively, and $0.7 million and $0.1 million for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 and December 31, 2017 , unrecognized stock compensation related to non-vested stock options granted under each of the share-based compensation plans approximated $7.1 million and $0.2 million , respectively. Unrecognized stock compensation expense related to non-vested stock options granted under these plans is expected to be recognized ratably over a weighted-average period of 7.1 years (i.e., the remaining requisite service period). Fair Value Disclosure j2 Global uses the Black-Scholes option pricing model to calculate the fair value of each option grant. The expected volatility is based on historical volatility of the Company’s common stock. The Company estimates the expected term based upon the historical exercise behavior of our employees. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. Estimated forfeiture rates were 11.71% and 14.07% as of September 30, 2018 and 2017 , respectively. Restricted Stock and Restricted Stock Units j2 Global has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans. Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Vesting periods are approximately one year for awards to members of the Company’s Board of Directors, five years for senior staff (excluding market-based awards discussed below) and eight years for the Chief Executive Officer (“CEO”). Restricted Stock - Awards with Market Conditions j2 Global has awarded certain key employees market-based restricted stock awards pursuant to the 2015 Plan. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20-day and 30-day lookback (trading days). Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. During the nine months ended September 30, 2018 and 2017 , the Company awarded 473,501 and 85,825 market-based restricted stock awards, respectively. The per share weighted average grant-date fair values of the market-based restricted stock awards granted during the nine months ended September 30, 2018 and 2017 were $52.95 and $72.20 , respectively. The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions: September 30, 2018 Underlying stock price at valuation date $ 82.11 Expected volatility 28.4 % Risk-free interest rate 2.89 % Restricted stock award activity for the nine months ended September 30, 2018 is set forth below: Shares Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2018 605,566 $ 51.57 Granted 816,894 63.41 Vested (138,524 ) 65.42 Canceled (68,021 ) 74.71 Nonvested at September 30, 2018 1,215,915 $ 64.24 Restricted stock unit award activity for the nine months ended September 30, 2018 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2018 38,400 Granted 20,044 Vested (10,040 ) Canceled (5,193 ) Outstanding at September 30, 2018 43,211 2.2 $ 3,580,031 Vested and expected to vest at September 30, 2018 33,716 1.9 $ 2,793,404 The Company recognized $7.5 million and $4.4 million of compensation expense related to restricted stock and restricted stock units for the three months ended September 30, 2018 and 2017 , respectively, and $20.2 million and $13.5 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018 and December 31, 2017 , the Company had unrecognized share-based compensation cost of approximately $67.6 million and $36.6 million , respectively, associated with these awards. This cost is expected to be recognized over a weighted-average period of 5.7 years for awards and 3.4 years for units. Employee Stock Purchase Plan The Purchase Plan provides for the issuance of a maximum of two million shares of the Company’s common stock. Under the Purchase Plan, eligible employees can have up to 15% of their earnings withheld, up to certain maximums, to be used to purchase shares of j2 Global common stock at certain plan-defined dates. The price of the j2 Global common stock purchased under the Purchase Plan for the offering periods is equal to 95% of the fair market value of the j2 Global common stock at the end of the offering period. On February 2, 2018, the Company approved an amendment to the Company’s Amended and Restated 2001 Employee Stock Purchase Plan, to be effective May 1, 2018, such that (i) the purchase price for each offering period shall be 85% of the lesser of the fair market value of a share of common stock of the Company (a “Share”) on the beginning or the end of the offering period, rather than 95% of the fair market value of a Share at the end of the offering period, and (ii) each offering period will be six months, rather than three months. j2 Global performed an analysis of the Amendment terms and determined that a plan provision exists which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature. The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and the Company to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period. The Company used the Black-Scholes option pricing model to calculate the estimated fair value of the purchase right issued under the ESPP. The expected volatility is based on historical volatility of the Company’s common stock. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. Estimated forfeiture rates were 0.10% as of September 30, 2018 . For the nine months ended September 30, 2018 and 2017 , 1,781 and 2,373 shares were purchased under the Purchase Plan, respectively. Cash received upon the issuance of j2 Global common stock under the Purchase Plan was $135,000 and $194,000 for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , 1,621,462 shares were available under the Purchase Plan for future issuance. The Company recognized $0.3 million and zero of compensation expense related to the Purchase Plan for the three months ended September 30, 2018 and 2017 , respectively, and $0.4 million and zero of compensation expense related to the Purchase Plan for the nine months ended September 30, 2018 and 2017 , respectively. The compensation expense related to the Purchase Plan has been estimated utilizing the following assumptions: September 30, 2018 Risk-free interest rate 2.02% Expected term (in years) 0.5 Dividend yield 1.03% Expected volatility 22.21% Weighted average volatility 22.21% |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share Reconciliation [Abstract] | |
Earnings Per Share | Earnings Per Share The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator for basic and diluted net income per common share: Net income attributable to j2 Global, Inc. common shareholders $ 30,723 $ 32,358 $ 78,072 $ 89,554 Net income available to participating securities (a) (426 ) (420 ) (1,065 ) (1,128 ) Net income available to j2 Global, Inc. common shareholders $ 30,297 $ 31,938 $ 77,007 $ 88,426 Denominator: Weighted-average outstanding shares of common stock 48,009,953 47,609,819 47,945,264 47,540,593 Dilutive effect of: Equity incentive plans 147,916 218,782 140,396 232,506 Convertible debt (b) 1,121,348 692,481 982,993 972,581 Common stock and common stock equivalents 49,279,217 48,521,082 49,068,653 48,745,680 Net income per share: Basic $ 0.63 $ 0.67 $ 1.61 $ 1.86 Diluted $ 0.61 $ 0.66 $ 1.57 $ 1.81 (a) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (b) Represents the incremental shares issuable upon conversion of the Convertible Notes due June 15, 2029 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 8 - Long Term Debt). For the three months ended September 30, 2018 and 2017 , there were zero options outstanding, respectively, which were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price of the common stock. For the nine months ended September 30, 2018 and 2017 , there were zero options outstanding, respectively, which were excluded from the computation of diluted earnings per share because the exercise prices were greater than the average market price of the common stock. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2018 | |
Segments, Geographical Areas [Abstract] | |
Segment and Geographic Information | Segment Information The Company’s business segments are based on the organization structure used by management for making operating and investment decisions and for assessing performance. j2 Global’s operating segments have been aggregated into two reportable business segments: (i) Cloud Services and (ii) Digital Media. The Company’s Cloud Services segment is driven primarily by subscription revenues that are relatively higher margin, stable and predictable from quarter to quarter with some seasonal weakness in the fourth quarter. The Cloud Services segment also includes the results of our IP licensing business, which can vary dramatically in both revenues and profitability from period to period. The Company’s Digital Media segment is driven primarily by advertising revenues, has relatively higher sales and marketing expense and has seasonal strength in the fourth quarter. The accounting policies of the segments are the same as those described in Note 1 - Basis of Presentation. The Company evaluates performance based on gross margin and profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses. Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues by segment: Cloud Services $ 150,094 $ 145,787 $ 449,876 $ 432,039 Digital Media 142,655 127,865 411,407 369,470 Elimination of inter-segment revenues (27 ) (36 ) (51 ) (51 ) Total segments revenues 292,722 273,616 861,232 801,458 Corporate (2) 2 — 4 — Total revenues 292,724 273,616 861,236 801,458 Gross profit by segment: Cloud Services 118,326 115,675 356,427 342,895 Digital Media 125,206 115,600 359,745 332,269 Elimination of inter-segment gross profit (27 ) (30 ) (52 ) (45 ) Total segments gross profit 243,505 231,245 716,120 675,119 Corporate 2 — 4 — Total gross profit 243,507 231,245 716,124 675,119 Direct costs by segment (1) : Cloud Services 61,237 59,550 184,266 172,371 Digital Media 118,185 103,234 352,931 313,266 Elimination of inter-segment direct costs (27 ) (30 ) (52 ) (45 ) Total segments direct costs 179,395 162,754 537,145 485,592 Corporate (2) 7,056 5,534 21,382 20,035 Total direct costs 186,451 168,288 558,527 505,627 Cloud Services operating income (2) 57,089 56,125 172,161 170,524 Digital Media operating income 7,021 12,366 6,814 19,003 Segment operating income 64,110 68,491 178,975 189,527 Corporate (2) (7,053 ) (5,534 ) (21,379 ) (20,035 ) Income from operations $ 57,057 $ 62,957 $ 157,596 $ 169,492 (1) Direct costs for each segment include other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses. (2) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. In addition, the Company determined certain patent assets and related income and expenses associated with Advanced Messaging Technologies, Inc. should be reclassified from the Cloud Services segment to Corporate resulting in an increase in expenses over the prior periods. September 30, 2018 December 31, 2017 Assets: Cloud Services $ 1,020,839 $ 1,078,577 Digital Media 1,333,965 1,317,113 Total assets from reportable segments 2,354,804 2,395,690 Corporate 162,359 57,403 Total assets $ 2,517,163 $ 2,453,093 Nine Months Ended September 30, 2018 2017 Capital expenditures: Cloud Services $ 10,654 $ 5,399 Digital Media 34,274 24,084 Total from reportable segments 44,928 29,483 Corporate — — Total capital expenditures $ 44,928 $ 29,483 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Depreciation and amortization: Cloud Services $ 15,046 $ 17,145 $ 44,236 $ 51,097 Digital Media 30,580 22,227 85,751 67,500 Total from reportable segments 45,626 39,372 129,987 118,597 Corporate 749 — 2,863 — Total depreciation and amortization $ 46,375 $ 39,372 $ 132,850 $ 118,597 j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: United States $ 221,031 $ 201,543 $ 649,103 $ 589,797 Canada 18,353 19,312 56,503 58,064 Ireland 18,182 18,350 52,296 54,730 All other countries 35,158 34,411 103,334 98,867 $ 292,724 $ 273,616 $ 861,236 $ 801,458 September 30, December 31, Long-lived assets: United States $ 486,691 $ 452,143 All other countries 76,622 80,571 Total $ 563,313 $ 532,714 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | Accumulated Other Comprehensive Income The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the three months ended September 30, 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ (1,577 ) $ (37,428 ) $ (39,005 ) Other comprehensive income (loss) 178 (2,934 ) (2,756 ) Net current period other comprehensive income (loss) 178 (2,934 ) (2,756 ) Ending balance $ (1,399 ) $ (40,362 ) $ (41,761 ) The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the nine months ended September 30, 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ — $ (29,090 ) $ (29,090 ) Other comprehensive (loss) income (1,399 ) (11,272 ) (12,671 ) Net current period other comprehensive (loss) income (1,399 ) (11,272 ) (12,671 ) Ending balance $ (1,399 ) $ (40,362 ) $ (41,761 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 10, 2018, in a cash transaction, the Company acquired through a share purchase all the issued capital of Ekahau Inc., a Virginia-based provider in solutions for enterprise Wi-Fi network design, troubleshooting and optimization. On October 29, 2018 , the Company’s Board of Directors approved a quarterly cash dividend of $0.4350 per share of j2 Global common stock payable on December 5, 2018 to all stockholders of record as of the close of business on November 19, 2018 . |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use Of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. We believe that our most significant estimates are those related to the valuation of investments and assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowances for doubtful accounts. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. |
Allowances For Doubtful Accounts | Allowances for Doubtful Accounts j2 Global reserves for receivables it may not be able to collect. The reserves for the Company’s Cloud Services segment are typically driven by the volume of credit card declines and past due invoices and are based on historical experience as well as an evaluation of current market conditions. The reserves for the Company’s Digital Media segment are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Accounting Standard Codification (“ASC”) Topic 605, Revenue Recognition (“Topic 605”) j2 Global recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price is fixed and determinable and collection is probable. Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Topic 605 for principal-agent considerations and places the most weight on three factors: whether or not the Company (i) is the primary obligor in the arrangement, (ii) has latitude in determining pricing and (iii) bears credit risk. ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”, “ASC 606” or the “new revenue standard”) j2 Global recognizes revenue when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services (see Note 3 - Revenues). Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Topic 606 for principal-agent considerations and assesses: (i) if another party is involved in providing goods or services to the customer and (ii) whether the Company controls the specified goods or services prior to transferring control to the customer. Sales Taxes The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer. |
Investment, Policy [Policy Text Block] | Investments The Company accounts for its investments in debt securities in accordance with ASC Topic No. 320, Investments - Debt Securities (“ASC 320”). Debt investments are typically comprised of corporate debt securities. j2 Global determines the appropriate classification of its investments at the time of acquisition and evaluates such determination at each balance sheet date. Trading securities are those investments that the Company intends to sell within a few hours or days and are carried at fair value, with unrealized gains and losses included in investment income. Available-for-sale securities are those investments j2 Global does not intend to hold to maturity and can be sold. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. Held-to-maturity securities are those investments which the Company has the ability and intent to hold until maturity and are recorded at amortized cost. All debt securities are accounted for on a specific identification basis. The Company accounts for its investments in equity securities in accordance with ASC Topic No. 321, Investments - Equity Securities (“ASC 321”) which requires the accounting for equity investments (other than those accounted for using the equity method of accounting) generally be measured at fair value for equity securities with readily determinable fair values. For equity securities without a readily determinable fair value that are not accounted for by the equity method, the Company measures the equity security using cost, less impairment, if any, and plus or minus observable price changes arising from orderly transactions in the same or similar investment from the same issuer. Any unrealized gains or losses will be reported in current earnings (see Note 5 - Investments). Variable Interest Entities (“VIE”) A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates its investments in entities in which it is involved to determine if the entity is a VIE and if so, whether it holds a variable interest and is the primary beneficiary. The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”). In determining whether the Company is deemed to be the primary beneficiary of the VIE, both of the following characteristics must be present: a) the Company has the power to direct the activities of the VIE that most significantly impacts the VIEs economic performance (the power criterion); and b) the Company has the obligation to absorb losses of the VIE, or the right to receive benefits of the VIE, that could potentially be significant to the VIE (the economic criterion). The Company has concluded that, as a limited partner, although the obligations to absorb losses or benefit from the gains is not insignificant, the Company does not have “power” over OCV because it does not have the ability to direct the significant decisions which impact the economics of OCV. j2 believes that the OCV general partner, as a single decision maker, holds the ability to make the decisions about the activities that most significantly impacts the OCV Fund’s economic performance. As a result, the Company has concluded that it will not consolidate OCV, as it is not the primary beneficiary of the OCV Fund, and will account for this investment under the equity-method of accounting. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value, the loss will be recorded in the period in which the Company identifies the decline. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value Measurements j2 Global complies with the provisions of the Financial Accounting Standards Board (“FASB”) ASC Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. As of September 30, 2018 , the carrying value of cash and cash equivalents, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits and long-term debt are reflected in the financial statements at cost. With the exception of certain investments and long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of available debt instruments with similar terms and maturities. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to j2 Global. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost. Equipment under capital leases is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range from 1 to 10 years. Fixtures, which are comprised primarily of leasehold improvements and equipment under capital leases, are amortized on a straight-line basis over their estimated useful lives or for leasehold improvements, the related lease term, if less. The Company has capitalized certain internal use software and website development costs which are included in property and equipment. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 5 years. |
Debt | Debt Issuance Costs and Debt Discount j2 Global capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing or term of the credit facility using the effective interest method. |
Business Combinations Policy [Policy Text Block] | Contingent Consideration j2 Global measures the contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 6 - Fair Value Measurements). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes, and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and the amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. j2 Global reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts. Changes in the estimated fair value of our contingent earn-out liabilities are reported in operating income, except for the time component of the present value calculation which is reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. |
Self Insurance Reserve [Policy Text Block] | Self-Insurance Program j2 Global is self-insured for certain subsidiaries providing health and dental insurance plans to its employees through a self-insurance structure. The Company has reinsurance which is a two tiered stop-loss coverage that limits the exposure arising from any claims made. Self-insurance claims filed and claims incurred but not reported are accrued based on management’s estimate of the discounted ultimate costs for self-insured claims incurred using actuarial assumptions followed in the insurance industry and historical experience. Although management believes it has the ability to reasonably estimate losses related to claims, it is possible that actual results could materially differ from recorded self-insurance liabilities. |
Segment Reporting | Segment Reporting Accounting guidance establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. Accounting guidance also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company operates as two segments: (1) Cloud Services and (2) Digital Media. |
Comparability of Prior Year Financial Data | Reclassifications Certain prior year reported amounts have been reclassified to conform to the 2018 presentation. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Recent Accounting Pronouncements | The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606 is as follows (in thousands): January 1, 2018 Adjustments due to ASU No. 2014-09 December 31, 2017 Balance Sheet Assets Accounts receivable, net $ 234,195 $ — $ 234,195 Liabilities Deferred revenue, current 93,656 (1,599 ) 95,255 Deferred revenue, noncurrent 47 — 47 Equity Retained earnings $ 724,661 $ 1,599 $ 723,062 The following tables summarize the impact of adopting Topic 606 on the Company’s consolidated financial statements (in thousands): September 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Balance Sheet Assets Accounts receivable, net $ 176,758 $ — $ 176,758 Liabilities Deferred revenue, current 126,931 (6,103 ) 120,828 Deferred revenue, noncurrent 5,546 — 5,546 Equity Retained earnings $ 740,433 $ 6,103 $ 746,536 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Amounts Without Adoption of ASC 606 As Reported Adjustments Amounts Without Adoption of ASC 606 Statement of Income Revenues Total revenues $ 292,724 $ 2,882 $ 295,606 $ 861,236 $ 7,702 $ 868,938 Expenses Total expenses 262,001 — 262,001 783,164 — 783,164 Net income 30,723 2,882 33,605 78,072 7,702 85,774 Diluted EPS impact $ 0.61 $ 0.06 $ 0.67 $ 1.57 $ 0.16 $ 1.73 |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | Revenues from external customers classified by revenue source are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Digital Media 2018 2017 2018 2017 Advertising $ 107,864 $ 109,291 $ 315,689 $ 308,985 Subscription 34,791 17,912 95,718 47,987 Other (1) — 662 — 12,498 Total Digital Media revenues $ 142,655 $ 127,865 $ 411,407 $ 369,470 Cloud Services Subscription $ 149,892 $ 144,564 $ 449,341 $ 428,314 Other 202 1,223 535 3,725 Total Cloud Services revenues $ 150,094 $ 145,787 $ 449,876 $ 432,039 Corporate $ 2 $ — $ 4 $ — Elimination of inter-segment revenues (27 ) (36 ) (51 ) (51 ) Total Revenues $ 292,724 $ 273,616 $ 861,236 $ 801,458 Timing of revenue recognition Point in time $ 1,019 $ 6,690 $ 2,960 $ 15,574 Over time 291,705 266,926 858,276 785,884 Total $ 292,724 $ 273,616 $ 861,236 $ 801,458 (1) In the second quarter of 2018, the Company reclassified the Other revenues associated with its Digital Media segment to Advertising revenue. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase consideration for these acquisitions (in thousands): Assets and Liabilities Valuation Cash (1) $ 9,257 Accounts receivable 7,803 Prepaid expenses and other current assets 2,149 Property and equipment 4,110 Trade names 23,381 Customer relationships 63,090 Goodwill 126,774 Other long-term assets 205 Other intangibles 29,212 Deferred tax asset 100 Accounts payable and accrued expenses (7,948 ) Deferred revenue (33,153 ) Capital leases (956 ) Income taxes payable (1,414 ) Deferred tax liability (12,312 ) Other long-term liabilities (3,265 ) Total $ 207,033 (1) Cash contains an immaterial amount of restricted cash associated with a pre-acquisition relationship with a vendor. The entire balance has been released during the third quarter of 2018. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Schedule of Cost Method Investments | The following table summarizes the gross unrealized gains and losses and estimated fair values for the Company’s securities without a readily determinable fair value (in thousands): Cost Impairment Adjustments Fair Value September 30, 2018 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 December 31, 2017 Equity securities $ 34,977 $ — $ — $ 34,977 Total $ 34,977 $ — $ — $ 34,977 |
Schedule of Available-for-sale Securities Reconciliation | The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale investments (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2018 Corporate debt securities $ 23,256 $ 45 $ (1,898 ) $ 21,403 Total $ 23,256 $ 45 $ (1,898 ) $ 21,403 December 31, 2017 Corporate debt securities $ 22,745 $ — $ — $ 22,745 Total $ 22,745 $ — $ — $ 22,745 |
Investments Classified by Contractual Maturity Date | The following table summarizes j2 Global’s corporate debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands): September 30, 2018 December 31, 2017 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 21,403 22,745 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 21,403 $ 22,745 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2018 and December 31, 2017 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands): As of September 30, 2018 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ 20,846 $ (1,898 ) $ — $ — $ 20,846 $ (1,898 ) Total $ 20,846 $ (1,898 ) $ — $ — $ 20,846 $ (1,898 ) As of December 31, 2017 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ 22,745 $ — $ — $ — $ 22,745 $ — Total $ 22,745 $ — $ — $ — $ 22,745 $ — |
Equity Method Investments | The following table discloses the carrying amount for the Company’s equity method investment (in thousands): September 30, 2018 December 31, 2017 Equity securities $ 29,815 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Fair Values Of Financial Instruments Measured On Recurring Basis | The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 41,827 $ — $ — $ 41,827 Corporate debt securities — 21,403 — 21,403 Total assets measured at fair value $ 41,827 $ 21,403 $ — $ 63,230 Liabilities: Contingent consideration $ — $ — $ 41,142 $ 41,142 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 41,142 $ 41,910 December 31, 2017 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 453 $ — $ — $ 453 Corporate debt securities — 22,745 — 22,745 Total assets measured at fair value $ 453 $ 22,745 $ — $ 23,198 Liabilities: Contingent consideration $ — $ — $ 20,477 $ 20,477 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 20,477 $ 21,245 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table presents a reconciliation of the Company’s derivative instruments (in thousands): Amount Affected line item in the Statement of Income Derivative Liabilities: Level 2: Balance as of January 1, 2018 $ 768 Balance as of September 30, 2018 $ 768 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table presents a reconciliation of the Company’s Level 3 financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Income Balance as of January 1, 2018 $ 20,477 Total fair value adjustments reported in earnings 14,400 General and administrative Contingent consideration 7,042 Contingent consideration payments (777 ) Balance as of September 30, 2018 $ 41,142 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Carrying Amounts Of Goodwill | The changes in carrying amounts of goodwill for the nine months ended September 30, 2018 are as follows (in thousands): Cloud Services Digital Media Consolidated Balance as of January 1, 2018 $ 603,753 $ 592,858 $ 1,196,611 Goodwill acquired (Note 4) 72,737 54,037 126,774 Purchase accounting adjustments (1) (1,014 ) (277 ) (1,291 ) Foreign exchange translation (6,811 ) (982 ) (7,793 ) Balance as of September 30, 2018 $ 668,665 $ 645,636 $ 1,314,301 (1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 - Business Acquisitions). |
Schedule Of Intangible Assets With Indefinite Lives | Intangible Assets with Indefinite Lives: Intangible assets are summarized as of September 30, 2018 and December 31, 2017 as follows (in thousands): September 30, December 31, Trade names $ 27,379 $ 27,379 Other 4,306 5,432 Total $ 31,685 $ 32,811 |
Finite-Lived Intangible Assets By Major Class | Intangible Assets Subject to Amortization: As of September 30, 2018 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 11.0 years $ 171,055 $ 61,686 $ 109,369 Patent and patent licenses 6.5 years 67,862 59,800 8,062 Customer relationships (1) 9.1 years 505,843 298,888 206,955 Other purchased intangibles 4.8 years 248,573 107,662 140,911 Total $ 993,333 $ 528,036 $ 465,297 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. As of December 31, 2017 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 11.2 years $ 147,997 $ 51,429 $ 96,568 Patent and patent licenses 6.6 years 67,724 56,853 10,871 Customer relationships (1) 8.9 years 447,070 253,464 193,606 Other purchased intangibles 4.8 years 218,628 66,733 151,895 Total $ 881,419 $ 428,479 $ 452,940 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. |
Long Term Debt Long Term Debt (
Long Term Debt Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt as of September 30, 2018 and December 31, 2017 consists of the following (in thousands): September 30, 2018 December 31, 2017 6.0% Senior Notes $ 650,000 $ 650,000 3.25% Convertible Notes 402,500 402,500 Less: Unamortized discount (35,446 ) (42,902 ) Deferred issuance costs (6,488 ) (7,654 ) Total long-term debt 1,010,566 1,001,944 Less: Current portion — — Total long-term debt, less current portion $ 1,010,566 $ 1,001,944 |
Stockholders' Equity Dividends
Stockholders' Equity Dividends Declared (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Dividends Declared [Abstract] | |
Dividends Declared [Table Text Block] | The following is a summary of each dividend declared during fiscal year 2018 and 2017 : Declaration Date Dividend per Common Share Record Date Payment Date February 9, 2017 $ 0.3650 February 22, 2017 March 9, 2017 May 4, 2017 $ 0.3750 May 19, 2017 June 2, 2017 August 2, 2017 $ 0.3850 August 14, 2017 September 1, 2017 October 31, 2017 $ 0.3950 November 17, 2017 December 5, 2017 February 2, 2018 $ 0.4050 February 22, 2018 March 9, 2018 May 3, 2018 $ 0.4150 May 18, 2018 June 1, 2018 August 8, 2018 $ 0.4250 August 20, 2018 September 4, 2018 |
Stock Options And Employee St_2
Stock Options And Employee Stock Purchase Plan (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Options Activity | The following table represents stock option activity for the nine months ended September 30, 2018 : Number of Shares Weighted- Weighted-Average Aggregate Outstanding at January 1, 2018 375,675 $ 31.30 Granted 400,000 75.03 Exercised (63,098 ) 22.50 Canceled — — Outstanding at September 30, 2018 712,577 $ 56.63 6.1 $ 18,687,302 Exercisable at September 30, 2018 303,377 $ 32.03 1.8 $ 15,416,702 Vested and expected to vest at September 30, 2018 572,480 $ 52.14 5.3 $ 17,582,813 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | The compensation expense related to the Purchase Plan has been estimated utilizing the following assumptions: September 30, 2018 Risk-free interest rate 2.02% Expected term (in years) 0.5 Dividend yield 1.03% Expected volatility 22.21% Weighted average volatility 22.21% |
Restricted (Performance) Stock [Member] | |
Schedule of Share-based Payment Award, Performance Awards, Valuation Assumptions [Table Text Block] | The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions: September 30, 2018 Underlying stock price at valuation date $ 82.11 Expected volatility 28.4 % Risk-free interest rate 2.89 % |
Restricted Stock [Member] | |
Restricted Stock And Restricted Stock Unit Award Activity | Restricted stock award activity for the nine months ended September 30, 2018 is set forth below: Shares Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2018 605,566 $ 51.57 Granted 816,894 63.41 Vested (138,524 ) 65.42 Canceled (68,021 ) 74.71 Nonvested at September 30, 2018 1,215,915 $ 64.24 |
Restricted Stock Units (RSUs) [Member] | |
Restricted Stock And Restricted Stock Unit Award Activity | Restricted stock unit award activity for the nine months ended September 30, 2018 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2018 38,400 Granted 20,044 Vested (10,040 ) Canceled (5,193 ) Outstanding at September 30, 2018 43,211 2.2 $ 3,580,031 Vested and expected to vest at September 30, 2018 33,716 1.9 $ 2,793,404 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share Reconciliation [Abstract] | |
Components Of Basic And Diluted Earnings Per Share | The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator for basic and diluted net income per common share: Net income attributable to j2 Global, Inc. common shareholders $ 30,723 $ 32,358 $ 78,072 $ 89,554 Net income available to participating securities (a) (426 ) (420 ) (1,065 ) (1,128 ) Net income available to j2 Global, Inc. common shareholders $ 30,297 $ 31,938 $ 77,007 $ 88,426 Denominator: Weighted-average outstanding shares of common stock 48,009,953 47,609,819 47,945,264 47,540,593 Dilutive effect of: Equity incentive plans 147,916 218,782 140,396 232,506 Convertible debt (b) 1,121,348 692,481 982,993 972,581 Common stock and common stock equivalents 49,279,217 48,521,082 49,068,653 48,745,680 Net income per share: Basic $ 0.63 $ 0.67 $ 1.61 $ 1.86 Diluted $ 0.61 $ 0.66 $ 1.57 $ 1.81 (a) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (b) Represents the incremental shares issuable upon conversion of the Convertible Notes due June 15, 2029 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 8 - Long Term Debt). |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues by segment: Cloud Services $ 150,094 $ 145,787 $ 449,876 $ 432,039 Digital Media 142,655 127,865 411,407 369,470 Elimination of inter-segment revenues (27 ) (36 ) (51 ) (51 ) Total segments revenues 292,722 273,616 861,232 801,458 Corporate (2) 2 — 4 — Total revenues 292,724 273,616 861,236 801,458 Gross profit by segment: Cloud Services 118,326 115,675 356,427 342,895 Digital Media 125,206 115,600 359,745 332,269 Elimination of inter-segment gross profit (27 ) (30 ) (52 ) (45 ) Total segments gross profit 243,505 231,245 716,120 675,119 Corporate 2 — 4 — Total gross profit 243,507 231,245 716,124 675,119 Direct costs by segment (1) : Cloud Services 61,237 59,550 184,266 172,371 Digital Media 118,185 103,234 352,931 313,266 Elimination of inter-segment direct costs (27 ) (30 ) (52 ) (45 ) Total segments direct costs 179,395 162,754 537,145 485,592 Corporate (2) 7,056 5,534 21,382 20,035 Total direct costs 186,451 168,288 558,527 505,627 Cloud Services operating income (2) 57,089 56,125 172,161 170,524 Digital Media operating income 7,021 12,366 6,814 19,003 Segment operating income 64,110 68,491 178,975 189,527 Corporate (2) (7,053 ) (5,534 ) (21,379 ) (20,035 ) Income from operations $ 57,057 $ 62,957 $ 157,596 $ 169,492 (1) Direct costs for each segment include other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses. (2) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. In addition, the Company determined certain patent assets and related income and expenses associated with Advanced Messaging Technologies, Inc. should be reclassified from the Cloud Services segment to Corporate resulting in an increase in expenses over the prior periods. |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | September 30, 2018 December 31, 2017 Assets: Cloud Services $ 1,020,839 $ 1,078,577 Digital Media 1,333,965 1,317,113 Total assets from reportable segments 2,354,804 2,395,690 Corporate 162,359 57,403 Total assets $ 2,517,163 $ 2,453,093 Nine Months Ended September 30, 2018 2017 Capital expenditures: Cloud Services $ 10,654 $ 5,399 Digital Media 34,274 24,084 Total from reportable segments 44,928 29,483 Corporate — — Total capital expenditures $ 44,928 $ 29,483 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Depreciation and amortization: Cloud Services $ 15,046 $ 17,145 $ 44,236 $ 51,097 Digital Media 30,580 22,227 85,751 67,500 Total from reportable segments 45,626 39,372 129,987 118,597 Corporate 749 — 2,863 — Total depreciation and amortization $ 46,375 $ 39,372 $ 132,850 $ 118,597 |
Summary On Revenues And Long-Lived Assets By Geographic Areas | j2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: United States $ 221,031 $ 201,543 $ 649,103 $ 589,797 Canada 18,353 19,312 56,503 58,064 Ireland 18,182 18,350 52,296 54,730 All other countries 35,158 34,411 103,334 98,867 $ 292,724 $ 273,616 $ 861,236 $ 801,458 September 30, December 31, Long-lived assets: United States $ 486,691 $ 452,143 All other countries 76,622 80,571 Total $ 563,313 $ 532,714 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the three months ended September 30, 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ (1,577 ) $ (37,428 ) $ (39,005 ) Other comprehensive income (loss) 178 (2,934 ) (2,756 ) Net current period other comprehensive income (loss) 178 (2,934 ) (2,756 ) Ending balance $ (1,399 ) $ (40,362 ) $ (41,761 ) The following table summarizes the changes in accumulated balances of other comprehensive income, net of tax, for the nine months ended September 30, 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ — $ (29,090 ) $ (29,090 ) Other comprehensive (loss) income (1,399 ) (11,272 ) (12,671 ) Net current period other comprehensive (loss) income (1,399 ) (11,272 ) (12,671 ) Ending balance $ (1,399 ) $ (40,362 ) $ (41,761 ) |
Basis Of Presentation (Details)
Basis Of Presentation (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Property, Plant and Equipment, Other Types [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Property, Plant and Equipment, Other Types [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) $ in Millions | Sep. 30, 2018USD ($) |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Operating Leases, Future Minimum Payments Due | $ 78.1 |
Revenues (Details)
Revenues (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Accounts receivable, net | $ 176,758 | $ 176,758 | $ 234,195 | $ 234,195 | |||
Deferred revenue, current | (126,931) | (126,931) | (93,656) | (95,255) | |||
Deferred revenue, noncurrent | 5,546 | 5,546 | 47 | 47 | |||
Retained earnings | 740,433 | 740,433 | $ 724,661 | $ 723,062 | |||
Total revenues | 292,724 | $ 273,616 | 861,236 | $ 801,458 | |||
Costs and Expenses | 262,001 | 783,164 | |||||
Net income | $ 30,723 | $ 32,358 | $ 78,072 | $ 89,554 | |||
Diluted EPS impact | $ 0.61 | $ 0.66 | $ 1.57 | $ 1.81 | |||
Deferred Revenue, Revenue Recognized | $ 74,500 | $ 67,900 | |||||
Immaterial Error Correction | 17.5 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | $ 33,153 | 33,153 | |||||
Accounts Receivable, net [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 0 | 0 | |||||
Deferred Revenue, current [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (1,599) | (1,599) | |||||
Deferred Revenue, noncurrent [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 0 | 0 | |||||
Retained Earnings [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 1,599 | 1,599 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Accounts receivable, net | 0 | 0 | |||||
Deferred revenue, current | (6,103) | (6,103) | |||||
Deferred revenue, noncurrent | 0 | 0 | |||||
Retained earnings | 6,103 | 6,103 | |||||
Total revenues | 2,882 | 7,702 | |||||
Costs and Expenses | 0 | 0 | |||||
Net income | $ 2,882 | $ 7,702 | |||||
Diluted EPS impact | $ 0.06 | $ 0.16 | |||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||
Accounts receivable, net | $ 176,758 | $ 176,758 | |||||
Deferred revenue, current | (120,828) | (120,828) | |||||
Deferred revenue, noncurrent | 5,546 | 5,546 | |||||
Retained earnings | 746,536 | 746,536 | |||||
Total revenues | 295,606 | 868,938 | |||||
Costs and Expenses | 262,001 | 783,164 | |||||
Net income | $ 33,605 | $ 85,774 | |||||
Diluted EPS impact | $ 0.67 | $ 1.73 |
Revenues - Disaggregated Revenu
Revenues - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 292,724 | $ 273,616 | $ 861,236 | $ 801,458 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,019 | 6,690 | 2,960 | 15,574 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 291,705 | 266,926 | 858,276 | 785,884 |
Digital Media Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 142,655 | 127,865 | 411,407 | 369,470 |
Digital Media Segment [Member] | Advertising [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 107,864 | 109,291 | 315,689 | 308,985 |
Digital Media Segment [Member] | Subscription [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 34,791 | 17,912 | 95,718 | 47,987 |
Digital Media Segment [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 662 | 0 | 12,498 |
Cloud Services Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 150,094 | 145,787 | 449,876 | 432,039 |
Cloud Services Segment [Member] | Subscription [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 149,892 | 144,564 | 449,341 | 428,314 |
Cloud Services Segment [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 202 | 1,223 | 535 | 3,725 |
Corporate [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2 | 0 | 4 | 0 |
Intersegment Elimination [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ (27) | $ (36) | $ (51) | $ (51) |
Business Acquisition (Details)
Business Acquisition (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition Contributed Total Revenue | $ 26,100 |
Total consideration of transaction, net of cash acquired | 197,800 |
Purchase accounting adjustments (1) | (1,291) |
Goodwill, Acquired During Period | 126,774 |
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount | 38,300 |
Cloud Services Segment [Member] | |
Purchase accounting adjustments (1) | (1,014) |
Goodwill, Acquired During Period | 72,737 |
Digital Media Segment [Member] | |
Purchase accounting adjustments (1) | (277) |
Goodwill, Acquired During Period | $ 54,037 |
Business Acquisition (Allocatio
Business Acquisition (Allocation of Aggregate Purchase Price) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 9,257 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 7,803 |
Business Acquisition Purchase Price Allocation Current Noncurrent Assets Prepaid Expense and Other Assets | 2,149 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 4,110 |
Goodwill, Acquired During Period | 126,774 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 205 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets Noncurrent | 100 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable and Accrued Expenses | (7,948) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | (33,153) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Capital Lease Obligation | (956) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Income Taxes Payable | (1,414) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | (12,312) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | (3,265) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 207,033 |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 23,381 |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 63,090 |
Other Intangible Assets [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 29,212 |
Investments Cost Method Investm
Investments Cost Method Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | ||
Cost Method Investments, Original Cost | $ 34,977 | $ 34,977 |
Cost-method Investments, Other than Temporary Impairment | 0 | 0 |
Unrealized Loss on Securities | (3,678) | 0 |
Cost Method Investments | $ 31,299 | $ 34,977 |
Investments Available-for-Sale
Investments Available-for-Sale Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 23,256 | $ 22,745 |
Available-for-sale Securities, Gross Unrealized Gain | 45 | 0 |
Available-for-sale Securities, Gross Unrealized Loss | (1,898) | 0 |
Available-for-sale Securities | 21,403 | 22,745 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, within One Year, Fair Value | 0 | 0 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, after One Through Five Years, Fair Value | 21,403 | 22,745 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, after Five Through Ten Years, Fair Value | 0 | 0 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, after 10 Years, Fair Value | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 20,846 | 22,745 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 1,898 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 0 | 0 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 20,846 | 22,745 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,898 | $ 0 |
Investments Equity Method Inves
Investments Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |||||
Variable Interest Entity, Qualitative or Quantitative Information, Date Involvement Began | Sep. 25, 2017 | ||||
Variable Interest Entity, Financial or Other Support, Amount | $ 200,000 | ||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 66.70% | ||||
Variable Interest Entity, Measure of Activity, Other, Amount | $ 35,800 | ||||
Variable Interest Entity, Measure of Activity, Purchases | 34,800 | ||||
Net loss in earnings of equity method investment | $ 610 | $ 0 | 3,581 | $ 0 | |
Equity Method Investments | 29,815 | 29,815 | $ 0 | ||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 29,800 | $ 29,800 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Fair Values Of Financial Instruments Measured On Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Total assets measured at fair value | $ 63,230 | $ 23,198 |
Contingent consideration | 41,142 | 20,477 |
Contingent interest derivative | 768 | 768 |
Total liabilities measured at fair value | 41,910 | 21,245 |
Money Market Funds [Member] | ||
Money market and other funds | 41,827 | 453 |
Corporate Debt Securities [Member] | ||
Corporate debt securities | 21,403 | 22,745 |
Level 1 [Member] | ||
Total assets measured at fair value | 41,827 | 453 |
Contingent consideration | 0 | 0 |
Contingent interest derivative | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 1 [Member] | Money Market Funds [Member] | ||
Money market and other funds | 41,827 | 453 |
Level 1 [Member] | Corporate Debt Securities [Member] | ||
Corporate debt securities | 0 | 0 |
Level 2 [Member] | ||
Total assets measured at fair value | 21,403 | 22,745 |
Contingent consideration | 0 | 0 |
Contingent interest derivative | 768 | 768 |
Total liabilities measured at fair value | 768 | 768 |
Level 2 [Member] | Money Market Funds [Member] | ||
Money market and other funds | 0 | 0 |
Level 2 [Member] | Corporate Debt Securities [Member] | ||
Corporate debt securities | 21,403 | 22,745 |
Level 3 [Member] | ||
Total assets measured at fair value | 0 | 0 |
Contingent consideration | 41,142 | 20,477 |
Contingent interest derivative | 0 | 0 |
Total liabilities measured at fair value | 41,142 | 20,477 |
Level 3 [Member] | Money Market Funds [Member] | ||
Money market and other funds | 0 | 0 |
Level 3 [Member] | Corporate Debt Securities [Member] | ||
Corporate debt securities | $ 0 | $ 0 |
Fair Value Measurements (Deriva
Fair Value Measurements (Derivative Summary) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Liability | $ 768 | $ 768 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Liability | $ 768 | $ 768 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule Of Changes In Fair Value Of Level 3 Financial Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business Combination, Contingent Consideration, Liability | $ 41,142 | $ 20,477 |
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business Combination, Contingent Consideration, Liability | 41,142 | $ 20,477 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 14,400 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | 7,042 | |
Other Payments to Acquire Businesses | $ (777) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term Debt, Fair Value | $ 1,200,000 | $ 1,188,700 | |
Business Combination, Contingent Consideration, Liability | 41,142 | 20,477 | |
Changes in fair value of contingent consideration | 14,400 | $ (600) | |
Level 3 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration, Liability | 41,142 | 20,477 | |
Payments to Employees | 777 | ||
Humble Bundle [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 40,000 | ||
Business Combination, Contingent Consideration, Liability | 34,100 | $ 19,700 | |
Black Friday [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Payments to Employees | 800 | ||
Mosaik [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 1,000 | ||
Business Combination, Contingent Consideration, Liability | 800 | ||
bestblackfriday.com [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 2,000 | ||
Business Combination, Contingent Consideration, Liability | 2,000 | ||
DemandShore [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 1,900 | ||
Business Combination, Contingent Consideration, Liability | 1,300 | ||
DownDetector [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 3,700 | ||
Business Combination, Contingent Consideration, Liability | $ 2,900 |
Goodwill And Intangible Asset_2
Goodwill And Intangible Assets (Changes In Carrying Amounts Of Goodwill And Other Intangible Assets) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Line Items] | |
Balance as of January 1, 2018 | $ 1,196,611 |
Goodwill acquired (Note 4) | 126,774 |
Purchase accounting adjustments (1) | (1,291) |
Foreign exchange translation | 7,793 |
Balance as of September 30, 2018 | 1,314,301 |
Cloud Services Segment [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2018 | 603,753 |
Goodwill acquired (Note 4) | 72,737 |
Purchase accounting adjustments (1) | (1,014) |
Foreign exchange translation | 6,811 |
Balance as of September 30, 2018 | 668,665 |
Digital Media Segment [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2018 | 592,858 |
Goodwill acquired (Note 4) | 54,037 |
Purchase accounting adjustments (1) | (277) |
Foreign exchange translation | (982) |
Balance as of September 30, 2018 | $ 645,636 |
Goodwill And Intangible Asset_3
Goodwill And Intangible Assets (Indefinite Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Intangible assets | $ 31,685 | $ 32,811 |
Trade Names [Member] | ||
Intangible assets | 27,379 | 27,379 |
Other Intangible Assets [Member] | ||
Intangible assets | $ 4,306 | $ 5,432 |
Goodwill And Intangible Asset_4
Goodwill And Intangible Assets (Schedule Of Intangible Assets Subject To Amortization) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Historical Cost | $ 993,333 | $ 881,419 |
Accumulated Amortization | (528,036) | (428,479) |
Net | $ 465,297 | $ 452,940 |
Trade Names [Member] | ||
Weighted-Average Amortization Period, years | 11 years | 11 years 2 months 12 days |
Historical Cost | $ 171,055 | $ 147,997 |
Accumulated Amortization | (61,686) | (51,429) |
Net | $ 109,369 | $ 96,568 |
Patents And Patent Licenses [Member] | ||
Weighted-Average Amortization Period, years | 6 years 6 months | 6 years 7 months 6 days |
Historical Cost | $ 67,862 | $ 67,724 |
Accumulated Amortization | (59,800) | (56,853) |
Net | $ 8,062 | $ 10,871 |
Customer Relationships [Member] | ||
Weighted-Average Amortization Period, years | 9 years 1 month 6 days | 8 years 10 months 24 days |
Historical Cost | $ 505,843 | $ 447,070 |
Accumulated Amortization | (298,888) | (253,464) |
Net | $ 206,955 | $ 193,606 |
Other Purchased Intangibles [Member] | ||
Weighted-Average Amortization Period, years | 4 years 9 months 18 days | 4 years 9 months 18 days |
Historical Cost | $ 248,573 | $ 218,628 |
Accumulated Amortization | (107,662) | (66,733) |
Net | $ 140,911 | $ 151,895 |
Goodwill And Intangible Asset_5
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 35.8 | $ 31.7 | $ 102.7 | $ 94.3 |
Estimated future amortization expense in year 2018 | 204.4 | 204.4 | ||
Estimated future amortization expense in year 2019 | 93.5 | 93.5 | ||
Estimated future amortization expense in year 2020 | 59.2 | 59.2 | ||
Estimated future amortization expense in year 2021 | 45.1 | 45.1 | ||
Estimated future amortization expense in year 2022 | 36.2 | 36.2 | ||
Estimated future amortization expense thereafter | $ 129.7 | $ 129.7 | ||
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 1 year | |||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 20 years |
Long Term Debt Long Term Debt_2
Long Term Debt Long Term Debt (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)$ / shares | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Long-term Debt, Fair Value | $ 1,200,000 | $ 1,188,700 |
Debt Instrument, Unamortized Discount | 35,446 | 42,902 |
Unamortized Debt Issuance Expense | (6,488) | (7,654) |
Debt, Long-term and Short-term, Combined Amount | 1,010,566 | 1,001,944 |
Current maturities of long-term debt | 0 | 0 |
Total long-term debt, less current portion | $ 1,010,566 | 1,001,944 |
6% Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Issuance Date | Jun. 27, 2017 | |
Debt Instrument, Face Amount | $ 650,000 | 650,000 |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |
Debt Instrument, Frequency of Periodic Payment | semi-annually | |
Debt Instrument, Maturity Date | Jul. 15, 2025 | |
Long-term Debt, Fair Value | $ 669,500 | 684,100 |
Convertible Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Issuance Date | Jun. 10, 2014 | |
Debt Instrument, Face Amount | $ 402,500 | 402,500 |
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
Debt Instrument, Frequency of Periodic Payment | semiannually | |
Debt Instrument, Maturity Date | Jun. 15, 2029 | |
Common Stock, Conversion Features | 14.6680 | |
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 68.18 | |
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 37,700 | |
Debt Instrument, Convertible, Remaining Discount Amortization Period | 2 years 8 months 16 days | |
Long-term Debt, Fair Value | $ 525,300 | $ 504,500 |
Debt Instrument, Unamortized Discount | $ 59,000 |
Commitments And Contingencies C
Commitments And Contingencies Contingencies (Details) $ in Millions | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingency Accrual | $ 4.6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes [Line Items] | |||||||||||
Effective income tax rate | 22.90% | 22.10% | 22.20% | 23.70% | |||||||
Income before income taxes, domestic operations | $ 4,300 | $ 13,700 | |||||||||
Income before income taxes, foreign operations | 100,700 | 103,700 | |||||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Change in Tax Rate, Deferred Tax Liability, Provisional Income Tax Benefit | $ 33,300 | ||||||||||
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | 49,200 | ||||||||||
Liabilities for uncertain income tax positions | $ 55,700 | 55,700 | 52,200 | ||||||||
Cash paid for income taxes | 21,900 | $ 46,600 | |||||||||
Prepaid tax payments | $ 0 | $ 0 | $ 6,000 | ||||||||
California Franchise Tax Board [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Tax Examination, Year under Examination | 2,016 | 2,015 | 2,013 | 2,012 | |||||||
Internal Revenue Service (IRS) [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Tax Examination, Year under Examination | 2,016 | 2,015 | 2,014 | 2,013 | 2,012 | ||||||
New York State Division of Taxation and Finance [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Tax Examination, Year under Examination | 2,014 | 2,013 | 2,012 | 2,011 | |||||||
Georgia Department of Revenue [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Tax Examination, Year under Examination | 2,016 | 2,015 | 2,014 | ||||||||
Ministry of the Economy, Finance and Industry, France [Member] | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Tax Examination, Year under Examination | 2,016 | 2,015 | 2,014 | 2,013 | 2,012 | 2,011 |
Stockholders' Equity Dividend_2
Stockholders' Equity Dividends Declared (Details) - $ / shares | Aug. 08, 2018 | May 03, 2018 | Feb. 02, 2018 | Oct. 31, 2017 | Aug. 02, 2017 | May 04, 2017 | Feb. 09, 2017 |
Dividends Declared [Abstract] | |||||||
Dividend, declaration date | Aug. 8, 2018 | May 3, 2018 | Feb. 2, 2018 | Oct. 31, 2017 | Aug. 2, 2017 | May 4, 2017 | Feb. 9, 2017 |
Dividend amount to be paid, per common share | $ 0.4250 | $ 0.4150 | $ 0.4050 | $ 0.3950 | $ 0.3850 | $ 0.3750 | $ 0.3650 |
Dividend, date of record | Aug. 20, 2018 | May 18, 2018 | Feb. 22, 2018 | Nov. 17, 2017 | Aug. 14, 2017 | May 19, 2017 | Feb. 22, 2017 |
Dividend, date to be paid | Sep. 4, 2018 | Jun. 1, 2018 | Mar. 9, 2018 | Dec. 5, 2017 | Sep. 1, 2017 | Jun. 2, 2017 | Mar. 9, 2017 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2016 | Sep. 30, 2018 | |
Class of Stock [Line Items] | |||
Stock Repurchased | 2,100,000 | ||
Treasury Stock, Value, Acquired, Cost Method | $ 58,600,000 | ||
Shares Paid for Tax Withholding for Share Based Compensation | 9,509 | ||
2012 Repurchase Program [Member] | |||
Class of Stock [Line Items] | |||
Maximum number of shares authorized to be repurchased | 5,000,000 | 5,000,000 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,938,689 | $ 1,938,689 | |
Stock Repurchased | 0 | ||
IGC [Member] | |||
Class of Stock [Line Items] | |||
Stock Repurchased and Retired During Period, Shares | 935,231 |
Stock Options And Employee St_3
Stock Options And Employee Stock Purchase Plan (Stock Options) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Number of Shares, Outstanding Beginning of Period | 375,675 | |||
Number of options granted | 400,000 | |||
Number of Shares, Exercised | (63,098) | |||
Number of Shares, Canceled | 0 | |||
Number of Shares, Outstanding Ending of Period | 712,577 | 712,577 | ||
Number of Shares, Exercisable | 303,377 | 303,377 | ||
Number of Shares, Vested and expected to vest | 572,480 | 572,480 | ||
Weighted-Average Exercise Price, Outstanding Beginning of Period | $ 31.30 | |||
Weighted-Average Exercise Price, Granted | 75.03 | |||
Weighted-Average Exercise Price, Exercised | 22.50 | |||
Weighted-Average Exercise Price, Canceled | 0 | |||
Weighted-Average Exercise Price, Outstanding Ending of Period | $ 56.63 | 56.63 | ||
Weighted-Average Exercise Price, Exercisable | 32.03 | 32.03 | ||
Weighted-Average Exercise Price, Vested and expected to vest | $ 52.14 | $ 52.14 | ||
Weighted-Average Remaining Contractual Term, Outstanding (in years) | 6 years 1 month 6 days | |||
Weighted-Average Remaining Contractual Term, Exercisable (in years) | 1 year 9 months 18 days | |||
Weighted-Average Remaining Contractual Term, Vested and expected to vest (in years) | 5 years 3 months 7 days | |||
Aggregate Intrinsic Value, Outstanding | $ 18,687,302 | $ 18,687,302 | ||
Aggregate Intrinsic Value, Exercisable | 15,416,702 | 15,416,702 | ||
Aggregate Intrinsic Value, Vested and expected to vest | 17,582,813 | 17,582,813 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | 3,600,000 | $ 2,100,000 | ||
Allocated Share-based Compensation Expense | 7,906,000 | $ 4,563,000 | $ 21,393,000 | $ 13,740,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 11.71% | 14.07% | ||
Employee Stock Option [Member] | ||||
Allocated Share-based Compensation Expense | $ 229,000 | $ 0 | $ 688,000 | $ 107,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 7 years 1 month 13 days |
Stock Options And Employee St_4
Stock Options And Employee Stock Purchase Plan Stock Options and Employee Stock Purchase Plan (Performance Awards) (Details) - Restricted (Performance) Stock [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Price | $ 82.11 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.40% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.89% | |
Shares, Granted | 473,501 | 85,825 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 52.95 | $ 72.20 |
Stock Options And Employee St_5
Stock Options And Employee Stock Purchase Plan (Restricted Stock) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Compensation cost recognized | $ 7,906,000 | $ 4,563,000 | $ 21,393,000 | $ 13,740,000 | |
Allocated Share-based Compensation Expense | 7,906,000 | 4,563,000 | 21,393,000 | 13,740,000 | |
Employee Stock Option [Member] | |||||
Compensation cost recognized | 229,000 | 0 | 688,000 | 107,000 | |
Unrecognized compensation cost related to non-vested awards granted | 7,100,000 | $ 7,100,000 | $ 200,000 | ||
Weighted-average period to recognize compensation cost (in years) | 7 years 1 month 13 days | ||||
Allocated Share-based Compensation Expense | 229,000 | 0 | $ 688,000 | 107,000 | |
Restricted Stock And Restricted Stock Unit (RSU) [Member] | |||||
Compensation cost recognized | 7,500,000 | 4,400,000 | 20,200,000 | 13,500,000 | |
Unrecognized compensation cost related to non-vested awards granted | 67,600,000 | 67,600,000 | $ 36,600,000 | ||
Allocated Share-based Compensation Expense | $ 7,500,000 | $ 4,400,000 | $ 20,200,000 | $ 13,500,000 | |
Restricted Stock [Member] | |||||
Nonvested at January 1, 2018 | 605,566 | ||||
Shares, Granted | 816,894 | ||||
Shares, Vested | (138,524) | ||||
Shares, Canceled | (68,021) | ||||
Nonvested at September 30, 2018 | 1,215,915 | 1,215,915 | |||
Weighted-Average Grant-Date Fair Value, Nonvested at January 1, 2018 | $ 51.57 | ||||
Weighted-Average Grant-Date Fair Value, Granted | 63.41 | ||||
Weighted-Average Grant-Date Fair Value, Vested | 65.42 | ||||
Weighted-Average Grant-Date Fair Value, Canceled | 74.71 | ||||
Weighted-Average Grant-Date Fair Value, Nonvested at September 30, 2018 | $ 64.24 | $ 64.24 | |||
Weighted-average period to recognize compensation cost (in years) | 5 years 7 months 28 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Nonvested at January 1, 2018 | 38,400 | ||||
Shares, Granted | 20,044 | ||||
Shares, Vested | (10,040) | ||||
Shares, Canceled | (5,193) | ||||
Nonvested at September 30, 2018 | 43,211 | 43,211 | |||
Share Based Compensation Equity Awards Other Than Options Expected To Vest Shares | 33,716 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 2 years 2 months 12 days | ||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Expected To Vest Weighted Average Remaining Contractual Term | 1 year 10 months 24 days | ||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Outstanding, Aggregate Intrinsic Value | $ 3,580,031 | $ 3,580,031 | |||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Expected To Vest Intrinsic Value | $ 2,793,404 | $ 2,793,404 | |||
Weighted-average period to recognize compensation cost (in years) | 3 years 5 months 5 days |
Stock Options And Employee St_6
Stock Options And Employee Stock Purchase Plan (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Number of options outstanding | 712,577 | 712,577 | 375,675 | ||
Cash received upon the issuance of common stock | $ 135,000 | $ 194,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 11.71% | 14.07% | |||
Allocated Share-based Compensation Expense | $ 7,906,000 | $ 4,563,000 | $ 21,393,000 | $ 13,740,000 | |
Employee Stock Option [Member] | |||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | 7,100,000 | $ 7,100,000 | $ 200,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 7 years 1 month 13 days | ||||
Allocated Share-based Compensation Expense | $ 229,000 | 0 | $ 688,000 | $ 107,000 | |
Restricted (Performance) Stock [Member] | |||||
Shares, Granted | 473,501 | 85,825 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.89% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.40% | ||||
Restricted Stock [Member] | |||||
Number of stocks outstanding | 1,215,915 | 1,215,915 | 605,566 | ||
Shares, Granted | 816,894 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 5 years 7 months 28 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Number of stocks outstanding | 43,211 | 43,211 | 38,400 | ||
Shares, Granted | 20,044 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 5 months 5 days | ||||
2007 Stock Plan [Member] | |||||
Number of options outstanding | 250,577 | 250,577 | |||
Number of stocks outstanding | 6,460 | 6,460 | |||
Maximum issuance of common stock | 4,500,000 | 4,500,000 | |||
2015 Stock Option Plan [Member] | |||||
Number of options outstanding | 462,000 | 462,000 | |||
Number of stocks outstanding | 36,751 | 36,751 | |||
Maximum issuance of common stock | 4,200,000 | 4,200,000 | |||
2001 Employee Stock Purchase Plan [Member] | Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.02% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.03% | ||||
Market value of common stock on the date of grant for incentive stock options | 95.00% | ||||
Maximum earnings withheld by the employees | 15.00% | 15.00% | |||
Number of shares purchased under the plan | 1,781 | 2,373 | |||
Cash received upon the issuance of common stock | $ 135,000 | $ 194,000 | |||
Number of shares available for issuance | 1,621,462 | 1,621,462 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 0.10% | ||||
Allocated Share-based Compensation Expense | $ 300,000 | $ 0 | $ 400,000 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 22.21% | ||||
Minimum [Member] | |||||
Market value of common stock on the date of grant for incentive stock options | 85.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income | $ 30,723 | $ 32,358 | $ 78,072 | $ 89,554 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 426 | 420 | 1,065 | 1,128 |
Net earnings available to common shareholders | $ 30,297 | $ 31,938 | $ 77,007 | $ 88,426 |
Weighted-average outstanding shares of common stock - basic | 48,009,953 | 47,609,819 | 47,945,264 | 47,540,593 |
Dilutive effect of equity incentive plans | 147,916 | 218,782 | 140,396 | 232,506 |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | 1,121,348 | 692,481 | 982,993 | 972,581 |
Weighted-average outstanding shares of common stock - diluted | 49,279,217 | 48,521,082 | 49,068,653 | 48,745,680 |
Basic | $ 0.63 | $ 0.67 | $ 1.61 | $ 1.86 |
Diluted EPS impact | $ 0.61 | $ 0.66 | $ 1.57 | $ 1.81 |
Share options excluded from the computation of diluted earnings per share | 0 | 0 |
Segment Information Reportable
Segment Information Reportable Segment Information (Reconciliation of Total Segment Operating Income to Consolidated Operating Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 292,724 | $ 273,616 | $ 861,236 | $ 801,458 |
Gross Profit | 243,507 | 231,245 | 716,124 | 675,119 |
Direct Costs By Segment | 186,451 | 168,288 | 558,527 | 505,627 |
Income from operations | 57,057 | 62,957 | 157,596 | 169,492 |
Global Operating Costs | (7,053) | (5,534) | (21,379) | (20,035) |
Depreciation, Depletion and Amortization, Nonproduction | 46,375 | 39,372 | 132,850 | 118,597 |
Cloud Services Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 150,094 | 145,787 | 449,876 | 432,039 |
Gross Profit | 118,326 | 115,675 | 356,427 | 342,895 |
Direct Costs By Segment | 61,237 | 59,550 | 184,266 | 172,371 |
Income from operations | 57,089 | 56,125 | 172,161 | 170,524 |
Depreciation, Depletion and Amortization, Nonproduction | 15,046 | 17,145 | 44,236 | 51,097 |
Digital Media Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 142,655 | 127,865 | 411,407 | 369,470 |
Gross Profit | 125,206 | 115,600 | 359,745 | 332,269 |
Direct Costs By Segment | 118,185 | 103,234 | 352,931 | 313,266 |
Income from operations | 7,021 | 12,366 | 6,814 | 19,003 |
Depreciation, Depletion and Amortization, Nonproduction | 30,580 | 22,227 | 85,751 | 67,500 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | (27) | (36) | (51) | (51) |
Gross Profit | (27) | (30) | (52) | (45) |
Direct Costs By Segment | (27) | (30) | (52) | (45) |
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 2 | 0 | 4 | 0 |
Gross Profit | 2 | 0 | 4 | 0 |
Direct Costs By Segment | 7,056 | 5,534 | 21,382 | 20,035 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 292,722 | 273,616 | 861,232 | 801,458 |
Gross Profit | 243,505 | 231,245 | 716,120 | 675,119 |
Direct Costs By Segment | 179,395 | 162,754 | 537,145 | 485,592 |
Income from operations | 64,110 | 68,491 | 178,975 | 189,527 |
Depreciation, Depletion and Amortization, Nonproduction | $ 45,626 | $ 39,372 | $ 129,987 | $ 118,597 |
Segment Information Reportabl_2
Segment Information Reportable Segment Information (Total Assets, Capital Expenditures, Depreciation And Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total assets | $ 2,517,163 | $ 2,517,163 | $ 2,453,093 | ||
Property, Plant and Equipment, Additions | 44,928 | $ 29,483 | |||
Depreciation, Depletion and Amortization, Nonproduction | 46,375 | $ 39,372 | 132,850 | 118,597 | |
Cloud Services Segment [Member] | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total assets | 1,020,839 | 1,020,839 | 1,078,577 | ||
Property, Plant and Equipment, Additions | 10,654 | 5,399 | |||
Depreciation, Depletion and Amortization, Nonproduction | 15,046 | 17,145 | 44,236 | 51,097 | |
Digital Media Segment [Member] | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total assets | 1,333,965 | 1,333,965 | 1,317,113 | ||
Property, Plant and Equipment, Additions | 34,274 | 24,084 | |||
Depreciation, Depletion and Amortization, Nonproduction | 30,580 | 22,227 | 85,751 | 67,500 | |
Operating Segments [Member] | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total assets | 2,354,804 | 2,354,804 | 2,395,690 | ||
Property, Plant and Equipment, Additions | 44,928 | 29,483 | |||
Depreciation, Depletion and Amortization, Nonproduction | 45,626 | 39,372 | 129,987 | 118,597 | |
Corporate [Member] | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total assets | 162,359 | 162,359 | $ 57,403 | ||
Property, Plant and Equipment, Additions | 0 | 0 | |||
Depreciation, Depletion and Amortization, Nonproduction | $ 749 | $ 0 | $ 2,863 | $ 0 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Total revenues | $ 292,724 | $ 273,616 | $ 861,236 | $ 801,458 | |
United States | 563,313 | 563,313 | $ 532,714 | ||
Total long-lived assets | 563,313 | 563,313 | 532,714 | ||
UNITED STATES | |||||
Total revenues | 221,031 | 201,543 | 649,103 | 589,797 | |
United States | 486,691 | 486,691 | 452,143 | ||
Total long-lived assets | 486,691 | 486,691 | 452,143 | ||
CANADA | |||||
Total revenues | 18,353 | 19,312 | 56,503 | 58,064 | |
IRELAND | |||||
Total revenues | 18,182 | 18,350 | 52,296 | 54,730 | |
All Other Countries [Member] | |||||
Total revenues | 35,158 | $ 34,411 | 103,334 | $ 98,867 | |
United States | 76,622 | 76,622 | 80,571 | ||
Total long-lived assets | $ 76,622 | $ 76,622 | $ 80,571 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) Roll Forward [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Debt Securities, Available-for-sale, Adjustment, after Tax | $ (1,399) | $ (1,399) | $ (1,577) | $ 0 | ||
Unrealized gain on available-for-sale investments, net of tax (benefit) | 178 | (1,399) | ||||
Other Comprehensive Income (Loss), Securities, Available-for-sale, Adjustment, after Tax | 178 | $ 0 | (1,399) | $ 0 | ||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (40,362) | (40,362) | $ (37,428) | $ (29,090) | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (2,934) | (11,272) | ||||
Foreign currency translation adjustment | (2,934) | 7,703 | (11,272) | 23,616 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (39,005) | (29,090) | ||||
Other Comprehensive Income Loss Arising During Period Total Net of Tax | (2,756) | (12,671) | ||||
Other comprehensive (loss) income, net of tax | (2,756) | $ 7,703 | (12,671) | $ 23,616 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (41,761) | $ (41,761) |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Oct. 29, 2018 | Aug. 08, 2018 | May 03, 2018 | Feb. 02, 2018 | Oct. 31, 2017 | Aug. 02, 2017 | May 04, 2017 | Feb. 09, 2017 |
Subsequent Event [Line Items] | ||||||||
Dividends declared date | Aug. 8, 2018 | May 3, 2018 | Feb. 2, 2018 | Oct. 31, 2017 | Aug. 2, 2017 | May 4, 2017 | Feb. 9, 2017 | |
Dividend amount to be paid, per common share | $ 0.4250 | $ 0.4150 | $ 0.4050 | $ 0.3950 | $ 0.3850 | $ 0.3750 | $ 0.3650 | |
Date dividend is payable | Sep. 4, 2018 | Jun. 1, 2018 | Mar. 9, 2018 | Dec. 5, 2017 | Sep. 1, 2017 | Jun. 2, 2017 | Mar. 9, 2017 | |
Date shareholders must be on record for dividend | Aug. 20, 2018 | May 18, 2018 | Feb. 22, 2018 | Nov. 17, 2017 | Aug. 14, 2017 | May 19, 2017 | Feb. 22, 2017 | |
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends declared date | Oct. 29, 2018 | |||||||
Dividend amount to be paid, per common share | $ 0.4350 | |||||||
Date dividend is payable | Dec. 5, 2018 | |||||||
Date shareholders must be on record for dividend | Nov. 19, 2018 |