Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | J2 GLOBAL, INC. | |
Entity Central Index Key | 0001084048 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 48,938,239 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 226,612,000 | $ 209,474,000 |
Accounts receivable, net of allowances of $11,152 and $10,422, respectively | 176,741,000 | 221,615,000 |
Prepaid expenses and other current assets | 32,208,000 | 29,242,000 |
Total current assets | 435,561,000 | 460,331,000 |
Long-term investments | 93,731,000 | 83,828,000 |
Property and equipment, net | 104,635,000 | 98,813,000 |
Operating Lease, Right-of-Use Asset | 69,289,000 | 0 |
Trade names, net | 142,154,000 | 142,888,000 |
Patent and patent licenses, net | 6,629,000 | 7,346,000 |
Customer relationships, net | 194,231,000 | 191,208,000 |
Goodwill | 1,415,635,000 | 1,380,376,000 |
Other purchased intangibles, net | 170,440,000 | 185,026,000 |
Other assets | 10,608,000 | 11,014,000 |
Total assets | 2,642,913,000 | 2,560,830,000 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable and accrued expenses | 186,964,000 | 166,521,000 |
Income taxes payable, current | 10,641,000 | 12,915,000 |
Deferred revenue, current | 129,964,000 | 127,568,000 |
Operating Lease, Liability, Current | 18,941,000 | 0 |
Other current liabilities | 2,013,000 | 318,000 |
Total current liabilities | 348,523,000 | 307,322,000 |
Long-term debt | 1,015,967,000 | 1,013,129,000 |
Deferred revenue, noncurrent | 11,839,000 | 13,200,000 |
Operating Lease, Liability, Noncurrent | 54,626,000 | 0 |
Accrued Income Taxes, Noncurrent | 11,675,000 | 11,675,000 |
Liability for uncertain tax positions | 54,096,000 | 59,644,000 |
Deferred income taxes, non-current | 68,103,000 | 69,048,000 |
Other long-term liabilities | 21,430,000 | 51,068,000 |
Total liabilities | 1,586,259,000 | 1,525,086,000 |
Commitments and contingencies | 0 | 0 |
Common stock, $0.01 par value. Authorized 95,000,000; total issued 47,661,015 and 48,082,800 shares at March 31, 2019 and December 31, 2018, respectively; total outstanding 47,661,015 and 47,482,800 shares at March 31, 2019 and December 31, 2018, respectively. | 477,000 | 481,000 |
Additional paid-in capital | 358,932,000 | 354,210,000 |
Treasury stock, at cost (zero and 600,000 shares, at March 31, 2019 and December 31, 2018, respectively). | 0 | (42,543,000) |
Retained earnings | 742,173,000 | 769,575,000 |
Accumulated other comprehensive loss | (44,928,000) | (45,979,000) |
Stockholders' Equity Attributable to Parent | 1,056,654,000 | 1,035,744,000 |
Total liabilities and stockholders’ equity | 2,642,913,000 | 2,560,830,000 |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 11,152 | $ 10,422 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 47,661,015 | 48,082,800 |
Common stock, shares outstanding | 47,661,015 | 47,482,800 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Treasury Stock, Shares | 0 | 600,000 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Revenues | $ 299,893 | $ 280,623 |
Cost of Revenue | 51,013 | 48,145 |
Gross profit | 248,880 | 232,478 |
Operating expenses: | ||
Sales and marketing (1) | 86,880 | 86,311 |
Research, development and engineering (1) | 12,984 | 12,210 |
General and administrative (1) | 98,154 | 87,799 |
Total operating expenses | 198,018 | 186,320 |
Income from operations | 50,862 | 46,158 |
Interest expense, net | 16,019 | 15,751 |
Other expense, net | 2,215 | 4,519 |
Income before income taxes and net loss in earnings of equity method investment | 32,628 | 25,888 |
Income tax (benefit) expense | (295) | 7,017 |
Net loss in earnings of equity method investment | 474 | 0 |
Net income | $ 32,449 | $ 18,871 |
Net income per common share: | ||
Basic | $ 0.67 | $ 0.39 |
Diluted EPS impact | $ 0.66 | $ 0.38 |
Weighted average shares outstanding: | ||
Basic | 47,560,749 | 47,873,007 |
Diluted | 48,509,181 | 48,706,717 |
Allocated Share-based Compensation Expense | $ 5,086 | $ 6,420 |
Cost of Sales [Member] | ||
Allocated Share-based Compensation Expense | 132 | 121 |
Selling and Marketing Expense [Member] | ||
Allocated Share-based Compensation Expense | 404 | 365 |
Research and Development Expense [Member] | ||
Allocated Share-based Compensation Expense | 358 | 432 |
General and Administrative Expense [Member] | ||
Allocated Share-based Compensation Expense | $ 4,192 | $ 5,502 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net income | $ 32,449 | $ 18,871 |
Foreign currency translation adjustment | 491 | 6,310 |
Change in fair value on available-for-sale investments, net of tax expense of $177 and zero for the three months ended March 31, 2019 and 2018, respectively | 560 | (2,500) |
Other comprehensive income, net of tax | 1,051 | 3,810 |
Comprehensive income | $ 33,500 | $ 22,681 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Foreign currency translation adjustment | $ 0 | $ 0 |
Unrealized gain on available-for-sale investments | $ 177 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 32,449 | $ 18,871 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 49,209 | 42,618 |
Amortization of financing costs and discounts | 2,965 | 2,852 |
Operating Lease Right of Use Asset Amortization | 4,796 | 0 |
Share-based compensation | 5,086 | 6,420 |
Provision for doubtful accounts | 2,888 | 4,134 |
Deferred income taxes, net | 548 | 354 |
Changes in fair value of contingent consideration | 5,003 | 4,100 |
Loss on equity investments | 628 | 3,678 |
Decrease (increase) in: | ||
Accounts receivable | 41,926 | 59,647 |
Prepaid expenses and other current assets | (2,143) | 2,574 |
Other assets | (144) | 2,132 |
(Decrease) increase in: | ||
Accounts payable and accrued expenses | (10,422) | (45,144) |
Income taxes payable | (2,333) | (1,721) |
Deferred revenue | (2,352) | 3,210 |
Increase Decrease in Operating Lease Liabilities | (4,526) | 0 |
Liability for uncertain tax positions | (5,464) | 933 |
Other long-term liabilities | (1,260) | (748) |
Net cash provided by operating activities | 116,854 | 103,910 |
Cash flows from investing activities: | ||
Payments to Acquire Equity Method Investments | (9,794) | (13,403) |
Purchases of property and equipment | (12,531) | (13,165) |
Acquisition of businesses, net of cash received | (59,339) | (80,223) |
Purchases of intangible assets | 0 | (175) |
Net cash used in investing activities | (81,664) | (106,966) |
Cash flows from financing activities: | ||
Repurchase of common stock | (1,177) | (611) |
Issuance of common stock under employee stock purchase plan | 0 | 64 |
Exercise of stock options | 5,259 | 594 |
Dividends paid | (21,483) | (19,884) |
Deferred payments for acquisitions | (1,395) | (189) |
Other | (480) | (54) |
Net cash used in financing activities | (19,276) | (20,080) |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 1,224 | 3,960 |
Net change in cash and cash equivalents | 17,138 | (19,176) |
Cash and cash equivalents at beginning of period | 209,474 | 350,945 |
Cash and cash equivalents at end of period | $ 226,612 | $ 331,769 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements Of Stockholders' Equity Statement - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares, Outstanding | 47,854,510 | 0 | ||||
Stockholders' Equity Attributable to Parent | $ 1,020,305 | $ 479 | $ 325,854 | $ 0 | $ 723,062 | $ (29,090) |
Net income | 18,871 | 18,871 | ||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 22,681 | 3,810 | ||||
Other Comprehensive Income (Loss), Net of Tax | 3,810 | |||||
Dividends, Common Stock, Cash | (19,884) | (19,884) | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 27,679 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 594 | $ 0 | 594 | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 851 | |||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | 64 | $ 0 | 64 | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 18,052 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | 0 | $ 0 | 0 | |||
Common Shares Repurchased And Retired During Period Shares | (7,942) | |||||
Stock Repurchased and Retired During Period, Value | (611) | $ 0 | (495) | (116) | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 6,420 | 6,390 | 30 | |||
Shares, Outstanding | 47,893,150 | 0 | ||||
Stockholders' Equity Attributable to Parent | 1,031,168 | $ 479 | 332,407 | $ 0 | 723,562 | (25,280) |
Shares, Outstanding | 48,082,800 | (600,000) | ||||
Stockholders' Equity Attributable to Parent | 1,035,744 | $ 481 | 354,210 | $ (42,543) | 769,575 | (45,979) |
Cumulative Effect of New Accounting Principle in Period of Adoption | 1,599 | 1,599 | ||||
Net income | 32,449 | 32,449 | ||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 33,500 | 1,051 | ||||
Other Comprehensive Income (Loss), Net of Tax | 1,051 | |||||
Dividends, Common Stock, Cash | $ (21,758) | (21,758) | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 155,538 | 155,538 | ||||
Stock Issued During Period, Value, Stock Options Exercised | $ 5,259 | $ 2 | 5,257 | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 39,077 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 0 | 0 | ||||
Common Shares Repurchased And Retired During Period Shares | (16,400) | |||||
Stock Repurchased and Retired During Period, Value | $ (1,177) | $ 0 | (1,201) | 24 | ||
Treasury Stock, Shares, Retired | 600,000 | (600,000) | ||||
Treasury Stock, Retired, Cost Method, Amount | $ (6) | (4,385) | $ 42,543 | (38,152) | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | $ 5,086 | 5,051 | 35 | |||
Shares, Outstanding | 47,661,015 | 0 | ||||
Stockholders' Equity Attributable to Parent | $ 1,056,654 | $ 477 | $ 358,932 | $ 0 | $ 742,173 | $ (44,928) |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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 business, we provide cloud services to consumers and businesses and license our intellectual property (“IP”) to third parties. In addition, the Cloud Services business includes fax, voice, backup, security and email marketing products. Our Digital Media business specializes in the technology, gaming, broadband, business to business (“B2B”), healthcare, and international 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 accounting principles generally accepted in the United States of America (“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, 2018 included in our Annual Report (Form 10-K) filed with the SEC on March 1, 2019. 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 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. The Company believes that its most significant estimates are those related to revenue recognition, valuation and impairment of investments, its assessment of ownership interests as variable interest entities and the related determination of consolidation, share-based compensation expense, 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 business 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 business are typically driven by past due invoices based on historical experience. On an ongoing basis, management evaluates the adequacy of these reserves. Revenue Recognition 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. 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 March 31, 2019 , 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. 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 debt 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. See Note 5, “Investments”. 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. 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. 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. 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. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. Self-Insurance Program j2 Global provides health and dental insurance plans for certain of its employees through a self-insurance structure. The Company has secured reinsurance in the form of 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’s business segments are based on the organization structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance. The chief operating decision maker views the Company in two businesses: Cloud Services and Digital Media. However, in accordance with the aggregation criteria within the accounting guidance, j2 Global’s operating segments have been aggregated into three reportable segments: (i) Fax and Email Marketing; (ii) Voice, Backup, and Security; and (iii) Digital Media. Reclassifications Certain prior year reported amounts have been reclassified to conform to the 2019 presentation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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 and all the related amendments are 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. 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. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU amends guidance related to sales taxes and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. The ASU provides for an accounting policy election for lessors similar to that provided in ASU 2016-12; it clarifies that costs excluded from the consideration in a contract that are paid directly to a third party by a lessor and reimbursed by the lessee are lessor costs to be accounted for as vendor payments; requires lessors to exclude from variable payments and, thus from lease revenue, lessor costs paid by a lessee directly to a third party; and clarifies the accounting by lessors for variable payments that relate to both a lease component and a nonlease component. The Company has adopted the new lease standard and related amendments as of January 1, 2019 using the optional transitional method. Results for reporting periods beginning after the adoption date are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840 (see Note 9 - Leases). Finance leases are not material to the Company’s condensed consolidated financial statements and are therefore not included in the disclosures. 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. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. The amendments in this ASU align the implementation date for nonpublic entities’ annual financial statements with the implementation date for their interim financial statements. In addition, the amendment clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20; instead impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842: Leases. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of these ASUs is not expected to have a material impact on the Company’s 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 Company has adopted this ASU and has determined that there is no impact on its financial statements and related disclosures as of January 1, 2019. 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. The Company has adopted this ASU on a prospective basis and has determined there to be no impact on its 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 Company has adopted this ASU on a modified-retrospective basis and has determined there to be no impact on its 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 its 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 its financial statements and related disclosures. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
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, from subscriptions to services, data and information, and from licensing. 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, 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 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 revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered. j2 Global also generates Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the Company has had an approved contract and is committed to perform the respective obligations and (ii) the Company can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation. Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period when they are available. The Company is obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed. 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. 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 Company adopted ASU 2014-09 and its related standard updates in January 2018 using a modified-retrospective approach with the cumulative effect of initially applying the Update recognized at the date of application in retained earnings. The change in accounting principle in the first quarter of 2018 resulted in an adjustment to the Company’s retained earnings of $1.6 million (see Condensed Consolidated Statements of Shareholders’ Equity). Revenues from external customers classified by revenue source are as follows (in thousands): Three Months Ended March 31, Digital Media 2019 2018 Advertising $ 105,600 $ 96,338 Subscription 40,378 29,350 Other (1) 1,705 5,473 Total Digital Media revenues $ 147,683 $ 131,161 Cloud Services Subscription $ 151,790 $ 149,322 Other 455 163 Total Cloud Services revenues $ 152,245 $ 149,485 Corporate $ 1 $ 1 Elimination of inter-segment revenues (36 ) (24 ) Total Revenues $ 299,893 $ 280,623 Timing of revenue recognition Point in time $ 1,392 $ 1,075 Over time 298,501 279,548 Total $ 299,893 $ 280,623 (1) In the second quarter of 2018, the Company reclassified the Other revenues associated with its Digital Media business to Advertising revenue. The Company has recorded $53.2 million and $38.9 million of revenue for the three months ended March 31, 2019 and 2018 , respectively, which was previously included in the contract liability balance as of the beginning of the each respective year. As of March 31, 2019 , the Company acquired $3.6 million of deferred revenue in connection with the Company’s business acquisitions (see Note 4 - Business Acquisitions) which are subject to 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 business upon delivery of services to its customers. 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 business 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. 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 business 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 business 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 business 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 the issuance or 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. Revenues Invoiced The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. |
Business Acquisition
Business Acquisition | 3 Months Ended |
Mar. 31, 2019 | |
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, and acquire skilled personnel. The Company completed the following acquisitions during the first three months of fiscal 2019, paying the purchase price in cash in each transaction: (a) an asset purchase of iContact, LLC, acquired on January 22, 2019, a North Carolina-based provider of email marketing solutions; (b) a share purchase of the entire issued capital of Safe Send AS, acquired on March 29, 2019, a Norwegian-based provider of email security solutions; and (c) other immaterial acquisitions of online data backup businesses. The condensed consolidated statement of income since the date of each acquisition and balance sheet as of March 31, 2019 , reflect the results of operations of all 2019 acquisitions. For the three months ended March 31, 2019 , these acquisitions contributed $4.7 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 $60.6 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 Accounts receivable $ 568 Prepaid expenses and other current assets 161 Property and equipment 1,887 Trade names 2,200 Customer relationships 17,504 Goodwill 37,397 Trademarks 696 Other intangibles 3,838 Other long-term assets 58 Accounts payable and accrued expenses (132 ) Deferred revenue (3,575 ) Total $ 60,602 During the three months ended March 31, 2019 , no purchase price accounting has been finalized related to acquisitions that were completed during the first quarter of 2019 or to the prior year’s acquisitions for which the purchase accounting was preliminary at December 31, 2018. The initial accounting for all 2019 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 three months ended March 31, 2019 , the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media business, which resulted in a net decrease in goodwill of $1.5 million (see Note 7 - Goodwill and Intangible Assets). Such adjustments had an immaterial impact on the amortization expense within the condensed consolidated statement of income for the three months ended March 31, 2019 . 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 three months ended March 31, 2019 is $37.4 million , of which $33.2 million is expected to be deductible for income tax purposes. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments [Abstract] | |
Investments | Investments Investments consist of equity and debt securities. The Company determined 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. Any changes in the carrying value of the equity securities will be reported in current earnings as Other expense, 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 March 31, 2019 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 December 31, 2018 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 During the year ended December 31, 2018, the Company recorded an unrealized losses 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 March 31, 2019 Corporate debt securities $ 23,256 $ 79 $ (1,220 ) $ 22,115 Total $ 23,256 $ 79 $ (1,220 ) $ 22,115 December 31, 2018 Corporate debt securities $ 23,256 $ 21 $ (1,899 ) $ 21,378 Total $ 23,256 $ 21 $ (1,899 ) $ 21,378 At March 31, 2019 , the Company’s available-for-sale debt securities are carried at fair value, with the unrealized gains and losses reported as a component of other comprehensive income. 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): March 31, 2019 December 31, 2018 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 22,115 21,378 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 22,115 $ 21,378 Recognition and Measurement of Other-Than-Temporary Impairment of Debt Securities Regardless of the classification of the debt 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 re sults of these analyses, as required under business policies; and • information provided by third-party valuation experts. For these debt 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 debt 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 March 31, 2019 and December 31, 2018 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands): As of March 31, 2019 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ — $ — $ 21,525 $ (1,220 ) $ 21,525 $ (1,220 ) Total $ — $ — $ 21,525 $ (1,220 ) $ 21,525 $ (1,220 ) As of December 31, 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 $ (1,899 ) $ — $ — $ 20,846 $ (1,899 ) Total $ 20,846 $ (1,899 ) $ — $ — $ 20,846 $ (1,899 ) As of March 31, 2019 and December 31, 2018 , 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, OCV Management, LLC, 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 2019, the Company received capital call notices from the management of OCV Management, LLC. for $9.8 million , inclusive of certain management fees, of which $9.8 million has been paid for the three months ended March 31, 2019 . 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 months ended March 31, 2019 and 2018 , the Company recognized an investment loss of $0.5 million and zero , net of tax benefit, respectively. During the three months ended March 31, 2019 and 2018 , the Company recognized management fees of $0.8 million and zero , 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): March 31, 2019 December 31, 2018 Equity securities $ 40,317 $ 31,151 Maximum exposure to loss $ 40,317 $ 31,151 As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company 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 | 3 Months Ended |
Mar. 31, 2019 | |
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: § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § 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. § 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. Certain of 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 March 31, 2019 and December 31, 2018 was $1.2 billion and $1.1 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). The fair value of this derivative is determined 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. For similar reasons, certain of the Company’s available-for-sale debt securities are classified within Level 3. The fair value of these debt securities was derived using a hybrid approach consisting of two scenarios and subsequent allocation among each of the outstanding securities. Both scenarios consider unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. 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): March 31, 2019 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 407 $ — $ — $ 407 Corporate debt securities — 590 21,525 22,115 Total assets measured at fair value $ 407 $ 590 $ 21,525 $ 22,522 Liabilities: Contingent consideration $ — $ — $ 55,265 $ 55,265 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 55,265 $ 56,033 December 31, 2018 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 450 $ — $ — $ 450 Corporate debt securities — 532 20,846 21,378 Total assets measured at fair value $ 450 $ 532 $ 20,846 $ 21,828 Liabilities: Contingent consideration $ — $ — $ 50,035 $ 50,035 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 50,035 $ 50,803 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 three months ended March 31, 2019 , 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, 2019 $ 768 Balance as of March 31, 2019 $ 768 The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration 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, 2019 $ 50,035 Contingent consideration 1,072 Total fair value adjustments reported in earnings 5,003 General and administrative Contingent consideration payments (845 ) Not Applicable Balance as of March 31, 2019 $ 55,265 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 $40.0 million and $40.0 million at March 31, 2019 and December 31, 2018 , respectively. Due to the Company’s achievement of certain EBITDA targets for the year ended December 31, 2018 and due to the amended contingent consideration agreement, $40.0 million is payable and is classified as a current liability on the consolidated balance sheet. 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 $1.5 million and $1.5 million at March 31, 2019 and December 31, 2018 , respectively. 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 and $1.3 million at March 31, 2019 and December 31, 2018 , respectively. 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 $2.8 million and $3.6 million at March 31, 2019 and December 31, 2018 , respectively. In connection with achieving certain visitor thresholds, contingent consideration of $0.8 million was paid to the seller during the first quarter of 2019 in connection with this acquisition. In connection with the acquisition of Ekahau Inc., on October 10, 2018, contingent consideration of up to an aggregate of $15.0 million may be payable upon achieving certain future revenue thresholds and had a fair value of $8.6 million and $3.7 million at March 31, 2019 and December 31, 2018 , respectively. In connection with the acquisition of Safe Send AS, on March 29, 2019, contingent consideration of up to an aggregate of $1.0 million may be payable upon achieving certain future revenue thresholds and had a fair value of $1.0 million at March 31, 2019 . During the three months ended March 31, 2019 , the Company recorded an increase in the fair value of the contingent consideration of $5.0 million and reported such increase in general and administrative expenses. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 are as follows (in thousands): Fax and Email Marketing Voice, Backup, and Security Total Cloud Services Digital Media Consolidated Balance as of January 1, 2019 $ 366,270 $ 300,718 $ 666,988 $ 713,388 $ 1,380,376 Goodwill acquired (Note 4) 33,184 4,213 37,397 — 37,397 Purchase accounting adjustments (1) — — — (1,451 ) (1,451 ) Foreign exchange translation (525 ) (142 ) (667 ) (20 ) (687 ) Balance as of March 31, 2019 $ 398,929 $ 304,789 $ 703,718 $ 711,917 $ 1,415,635 (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 March 31, 2019 and December 31, 2018 as follows (in thousands): March 31, December 31, Trade names $ 27,379 $ 27,379 Other 4,306 4,306 Total $ 31,685 $ 31,685 Intangible Assets Subject to Amortization: As of March 31, 2019 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 10.8 years $ 184,581 $ 69,806 $ 114,775 Patent and patent licenses 6.5 years 67,874 61,245 6,629 Customer relationships (1) 8.6 years 524,692 330,461 194,231 Other purchased intangibles 4.5 years 310,986 144,852 166,134 Total $ 1,088,133 $ 606,364 $ 481,769 (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, 2018 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 10.9 years $ 181,231 $ 65,722 $ 115,509 Patent and patent licenses 6.5 years 67,887 60,541 7,346 Customer relationships (1) 9.1 years 507,330 316,122 191,208 Other purchased intangibles 4.4 years 307,554 126,834 180,720 Total $ 1,064,002 $ 569,219 $ 494,783 (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 $37.3 million and $33.1 million for the three months ended March 31, 2019 and 2018 , respectively. Amortization expense is estimated to approximate $137.1 million , $95.0 million , $64.4 million , $42.9 million and $34.5 million for the remaining nine months of fiscal year 2019 through fiscal year 2023 , respectively, and $107.9 million thereafter through the duration of the amortization period. |
Long Term Debt
Long Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 . 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 March 31, 2019 , restrict j2 Cloud’s ability to pay dividends to j2 Global, Inc. The company is in compliance with its debt covenants as of March 31, 2019 . As of March 31, 2019 and December 31, 2018 , the estimated fair value of the 6.0% Senior Notes was approximately $677.6 million and $645.5 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 March 31, 2019 , the conversion rate is 14.7316 shares of j2 Global common stock for each $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $67.88 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 March 31, 2019 , the remaining period over which the unamortized debt discount will be amortized is 2.2 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 March 31, 2019 and December 31, 2018 , the estimated fair value of the Convertible Notes was approximately $539.1 million and $457.0 million , respectively. Long-term debt as of March 31, 2019 and December 31, 2018 consists of the following (in thousands): March 31, 2019 December 31, 2018 6.0% Senior Notes $ 650,000 $ 650,000 3.25% Convertible Notes 402,500 402,500 Less: Unamortized discount (30,647 ) (33,191 ) Deferred issuance costs (5,886 ) (6,180 ) Total long-term debt 1,015,967 1,013,129 Less: Current portion — — Total long-term debt, less current portion $ 1,015,967 $ 1,013,129 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | Leases j2 Global leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2026. Office and equipment leases are typically for terms of three to five years and generally provide renewal options for terms up to an additional five years. Some of the Company’s leases include options to terminate within one year. In certain agreements in which the Company leases office space where the Company is the tenant, it subleases the site to various other companies through a sublease agreement. Upon adoption of ASU 2016-02 and its related Updates, the Company recorded approximately $72.0 million of right-of-use assets and approximately $75.0 million of operating lease liabilities. The components of lease expense were as follows for the three months ended (in thousands): Three Months Ended March 31, 2019 Operating lease cost $ 6,216 Supplemental balance sheet information related to leases was as follows (in thousands): March 31, 2019 Operating leases Operating lease right-of-use assets $ 69,289 Total operating lease right-of-use assets $ 69,289 Operating lease liability, current $ 18,941 Operating lease liabilities, noncurrent 54,626 Total operating lease liabilities $ 73,567 Supplemental cash flow information related to leases was as follows (in thousands): March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,243 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,748 Other supplemental operating lease information consists of the following: Weighted average remaining lease term 4.8 years Weighted average discount rate 4.23 % Maturities of operating lease liabilities as of March 31, 2019 were as follows (in thousands): Operating Leases Fiscal Year: 2019 $ 16,049 2020 18,804 2021 16,767 2022 14,964 2023 12,855 Thereafter 6,735 Total lease payments $ 86,174 Less: Imputed interest (12,607 ) Present value of operating lease liabilities $ 73,567 Rental expense for operating leases classified under ASC 840 for the three months ended March 31, 2018 was $5.3 million and was predominantly recorded within general and administrative expenses. As of December 31, 2018, future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) are as follows (in thousands): Lease Payments Fiscal Year: 2019 $ 19,267 2020 16,196 2021 13,881 2022 12,654 2023 10,977 Thereafter 5,456 Total minimum lease payments $ 78,431 Sublease Total sublease income for the three months ended March 31, 2019 and 2018 was $0.9 million and $0.6 million , respectively. Total estimated aggregate sublease income to be received in the future is $7.7 million . Significant Judgments Discount Rate The majority of the j2 Global’s leases are discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is not readily determinable. Options The lease term is generally the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs. Practical Expedients As a practical expedient, the Company has not separated lease components from nonlease components for its real property operating leases. Certain of the Company’s leases contain nonlease components such as maintenance and certain utility costs. In addition, the Company elected and applied the available transition practical expedients upon adoption. By electing these practical expedients, the Company did: • 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; and • not reassess whether previously capitalized initial direct costs would qualify for capitalization under Topic 842. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
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 and the Company paid and expensed the tax assessment. On February 27, 2019, the Appellate Tax Board promulgated its findings of fact and conclusions of law. j2 Cloud Services has filed a notice of appeal. 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 . On December 11, 2018, the Eight Circuit Court of Appeals denied the j2 Global affiliates’ petition for panel rehearing and petition for rehearing en banc . On January 29, 2019, the case was remanded to the Arkansas state court. j2 Global does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing accrued liabilities, 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. Credit Agreement On January 7, 2019, j2 Cloud Services, LLC entered into a Credit Agreement (the “Credit Agreement”) with certain lenders from time to time party thereto (collectively, the “Lenders”) and MUFG Union Bank, N.A., as sole lead arranger and as administrative agent for the Lenders (the “Agent”). Pursuant to the Credit Agreement, the Lenders have provided j2 Cloud Services with a credit facility of $100.0 million (the “Credit Facility”) with an option to request an increase of up to $50.0 million . The proceeds of the Credit Facility are intended to be used for working capital and general corporate purposes of j2 Cloud and its subsidiaries, including to finance certain permitted acquisitions and capital expenditures in accordance with the terms of the Credit Agreement. As of March 31, 2019 , the Company had not drawn on the Credit Facility. At j2 Cloud’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) a base rate equal to the greatest of (x) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus 1/2 of 1% per annum, (y) the rate of interest per annum most recently announced by the Agent as its U.S. Dollar “Reference Rate” and (z) one month LIBOR plus 1.00% or (ii) a rate per annum equal to LIBOR divided by 1.00 minus the LIBOR Reserve Requirements (as defined in the Credit Agreement), in each case, plus an applicable margin. The applicable margin relating to any base rate loan will range from 0.50% to 1.50% and the applicable margin relating to any LIBOR loan will range from 1.50% to 2.50%, in each case, depending on the total leverage ratio of j2 Cloud. The final maturity of the Credit Facility will occur on January 7, 2024. j2 Cloud is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty. The obligations under the Credit Facility and certain cash management and hedging obligations are and will be fully and unconditionally guaranteed by certain of j2 Cloud’s existing and subsequently acquired or organized direct and indirect domestic subsidiaries pursuant to a guarantee agreement and secured by a lien on the equity interests of certain of j2 Cloud’s foreign subsidiaries. The Credit Agreement contains financial maintenance covenants, including (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 3.00:1.00 for j2 Cloud and its restricted subsidiaries; (ii) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 3.25:1.00 for j2 and its restricted subsidiaries; and (iii) a minimum EBITDA of not less than $50,000,000 for any fiscal quarter for j2 Cloud and its restricted subsidiaries. The Credit Agreement also contains restrictive covenants that limit, among other things, j2 Cloud’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold any investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents and change their lines of business and fiscal years, in each case, subject to customary exceptions. The Credit Agreement also sets forth customary events of default, including, among other things, the failure to make timely payments under the Credit Facility, the failure to satisfy certain covenants, cross-default and cross-acceleration to other material debt for borrowed money, the occurrence of a change of control and specified events of bankruptcy and insolvency. The Company has capitalized the total of $0.4 million in debt issuance costs, which are being amortized to interest expense over the life of the Credit Facility. As of March 31, 2019 , these debt issuance costs, net of amortization, were $0.4 million . The related interest expense was zero for the three months ended March 31, 2019 . 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 March 31, 2019 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 (0.9)% and 27.1% for the three months ended March 31, 2019 and 2018 , respectively. Income before income taxes included income from domestic operations of $2.5 million and $(8.7) million for the three months ended March 31, 2019 and 2018 , respectively, and income from foreign operations of $30.1 million and $34.6 million for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , the Company had $54.1 million and $59.6 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 $6.7 million and $5.4 million for the three months ended March 31, 2019 and 2018 , 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 zero at March 31, 2019 and December 31, 2018 , 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 is currently under audit by the French tax authorities for tax years 2011 to 2016. The Company has accrued a reserve for any potential liability that may arise from this audit. The audit is in the final stages. 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 20, 2020. On November 29, 2018, the Company entered into a Rule 10b5-1 trading plan with a broker to facilitate the repurchase program. 600,000 shares were repurchased under the share repurchase program in 2018 at an aggregate cost of $42.5 million and were subsequently retired in March 2019. During the three month period ended March 31, 2019 , the Company repurchased zero shares under this program. Cumulatively at March 31, 2019 , 2.7 million shares were repurchased at an aggregate cost of $101.1 million (including an immaterial amount of commission fees). As a result of the purchase of j2 Global common stock through the Company’s share repurchase program, the number of shares available for purchase under the 2012 Program is 1,338,689 shares of j2 Global common stock. 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 March 31, 2019 , the Company purchased 16,400 shares from plan participants for this purpose. Dividends The following is a summary of each dividend declared during fiscal year 2019 and 2018 : Declaration Date Dividend per Common Share Record Date Payment Date 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 October 29, 2018 $ 0.4350 November 19, 2018 December 5, 2018 February 6, 2019 $ 0.4450 February 25, 2019 March 12, 2019 Future dividends are subject to Board approval. See Note 17 - Subsequent Events for the Board’s decision to suspend dividend payments for the foreseeable future after the June 4, 2019 payment. |
Stock Options And Employee Stoc
Stock Options And Employee Stock Purchase Plan | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 , 129,239 shares underlying options and 3,080 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 Plan since no further grants will be made under the 2007 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 March 31, 2019 , 423,000 shares underlying options and 37,312 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 three months ended March 31, 2019 : Number of Shares Weighted- Weighted-Average Aggregate Outstanding at January 1, 2019 707,777 $ 56.84 Granted — — Exercised (155,538 ) 33.81 Canceled — — Outstanding at March 31, 2019 552,239 $ 63.33 7.0 $ 12,853,259 Exercisable at March 31, 2019 193,039 $ 41.91 3.8 $ 8,626,659 Vested and expected to vest at March 31, 2019 420,068 $ 59.66 6.4 $ 11,318,687 The total intrinsic values of options exercised during the three months ended March 31, 2019 and 2018 were $8.0 million and $1.5 million , respectively. The Company recognized $0.2 million and $0.2 million of compensation expense related to stock options for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , unrecognized stock compensation related to non-vested stock options granted under each of the share-based compensation plans approximated $7.6 million and $6.9 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 6.6 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 12.63% and 10.74% as of March 31, 2019 and 2018 , 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. 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 three months ended March 31, 2019 and 2018 , the Company awarded 72,734 and 400,000 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 three months ended March 31, 2019 and 2018 were $69.99 and $49.92 , respectively. The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions: March 31, 2019 March 31, 2018 Underlying stock price at valuation date $ 84.58 $ 75.03 Expected volatility 28.3 % 28.4 % Risk-free interest rate 2.53 % 2.34 % Restricted stock award activity for the three months ended March 31, 2019 is set forth below: Shares Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2019 1,207,011 $ 64.82 Granted 146,897 77.23 Vested (34,394 ) 73.95 Canceled (75,694 ) 71.43 Nonvested at March 31, 2019 1,243,820 $ 65.66 Restricted stock unit award activity for the three months ended March 31, 2019 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2019 41,231 Granted 3,844 Vested (4,683 ) Canceled — Outstanding at March 31, 2019 40,392 2.3 $ 3,497,947 Vested and expected to vest at March 31, 2019 30,673 1.8 $ 2,656,288 The Company recognized $4.5 million and $6.2 million of compensation expense related to restricted stock and restricted stock units for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 and December 31, 2018 , the Company had unrecognized share-based compensation cost of approximately $63.9 million and $61.6 million , respectively, associated with these awards. This cost is expected to be recognized over a weighted-average period of 5.4 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 85% of the lesser of the fair market value of a share of common stock of the Company on the beginning or the end of the offering period. j2 Global 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 1.96% as of March 31, 2019 . For the three months ended March 31, 2019 and 2018 , zero and 851 shares were purchased under the Purchase Plan, respectively. Cash received upon the issuance of j2 Global common stock under the Purchase Plan was zero and $65,000 for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 , 1,589,981 shares were available under the Purchase Plan for future issuance. The Company recognized $0.4 million and zero of compensation expense related to the Purchase Plan for the three months ended March 31, 2019 and 2018 , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Numerator for basic and diluted net income per common share: Net income attributable to j2 Global, Inc. common shareholders $ 32,449 $ 18,871 Net income available to participating securities (a) (424 ) (217 ) Net income available to j2 Global, Inc. common shareholders $ 32,025 $ 18,654 Denominator: Weighted-average outstanding shares of common stock 47,560,749 47,873,007 Dilutive effect of: Equity incentive plans 89,013 123,305 Convertible debt (b) 859,419 710,405 Common stock and common stock equivalents 48,509,181 48,706,717 Net income per share: Basic $ 0.67 $ 0.39 Diluted $ 0.66 $ 0.38 (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 March 31, 2019 and 2018 , 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 | 3 Months Ended |
Mar. 31, 2019 | |
Segments, Geographical Areas [Abstract] | |
Segment and Geographic Information | Segment Information In accordance with ASC Topic 280, Segment Reporting: (Topic 280), the Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”) for making operating and investment decisions and for assessing performance. The CODM views the Company as two businesses: Cloud Services and Digital Media. However, in accordance with the aggregation criteria within ASC Topic 280, j2 Global’s operating segments have been aggregated into three reportable segments: (i) Fax and Email Marketing; (ii) Voice, Backup, and Security; and (iii) Digital Media. Prior period segment information has been retrospectively revised to reflect the Company’s new reportable segments, as disclosed in the Company’s audited financial statements for the year ended December 31, 2018. The Company’s Cloud Services business 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 business 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 business is driven primarily by advertising and subscription revenues, has relatively higher sales and marketing expense and has seasonal strength in the fourth quarter. The accounting policies of the businesses are the same as those described in Note 1 - Basis of Presentation. The Company evaluates performance based on revenue, 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 March 31, 2019 2018 Revenue by reportable segment: Fax and Email Marketing $ 93,283 $ 91,103 Voice, Backup, and Security 58,962 58,382 Cloud Services Total 152,245 149,485 Digital Media 147,683 131,161 Elimination of inter-segment revenues (36 ) (24 ) Total segment revenues 299,892 280,622 Corporate (1) 1 1 Total revenues $ 299,893 $ 280,623 Gross profit by reportable segment: Fax and Email Marketing $ 78,719 $ 81,954 Voice, Backup, and Security 41,043 36,530 Cloud Services Total 119,762 118,484 Digital Media 129,153 114,017 Elimination of inter-segment gross profit (36 ) (24 ) Total segment gross profit 248,879 232,477 Corporate (1) 1 1 Total gross profit $ 248,880 $ 232,478 Direct costs by reportable segment (2) : Fax and Email Marketing $ 34,102 $ 33,323 Voice, Backup, and Security 27,127 28,270 Cloud Services Total 61,229 61,593 Digital Media 130,167 117,438 Elimination of inter-segment direct costs (36 ) (24 ) Total segment direct costs 191,360 179,007 Corporate (1) 6,658 7,313 Total direct costs (2) $ 198,018 $ 186,320 Operating income by reportable segment: Fax and Email Marketing $ 44,617 $ 48,631 Voice, Backup, and Security 13,916 8,260 Cloud Services Total 58,533 56,891 Digital Media (1,014 ) (3,421 ) Total segment operating income 57,519 53,470 Corporate (1) (6,657 ) (7,312 ) Total income from operations $ 50,862 $ 46,158 (1) 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. (2) 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. The CODM does not use Balance Sheet and Cash Flow information in connection with operating and investment decisions other than as presented for Cloud Services and Digital Media. Accordingly, the following segment information is presented for Cloud Services and Digital Media. March 31, 2019 December 31, 2018 Assets: Cloud Services $ 1,113,350 $ 1,047,245 Digital Media 1,437,765 1,455,620 Total assets from Cloud Services and Digital Media 2,551,115 2,502,865 Corporate 91,798 57,965 Total assets $ 2,642,913 $ 2,560,830 Three Months Ended March 31, 2019 2018 Capital expenditures: Cloud Services $ 3,502 $ 2,874 Digital Media 9,029 10,291 Total capital expenditures from Cloud Services and Digital Media 12,531 13,165 Corporate — — Total capital expenditures $ 12,531 $ 13,165 Three Months Ended March 31, 2019 2018 Depreciation and amortization: Cloud Services $ 13,349 $ 14,378 Digital Media 35,179 27,114 Total depreciation and amortization from Cloud Services and Digital Media 48,528 41,492 Corporate 681 1,126 Total depreciation and amortization $ 49,209 $ 42,618 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 March 31, 2019 2018 Revenues: United States $ 231,343 $ 209,076 Canada 17,053 19,622 Ireland 15,623 17,101 All other countries 35,874 34,824 $ 299,893 $ 280,623 March 31, December 31, Long-lived assets: United States $ 573,817 $ 530,785 All other countries 81,874 62,810 Total $ 655,691 $ 593,595 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Comprehensive Income 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 March 31, 2019 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ (1,418 ) $ (44,561 ) $ (45,979 ) Other comprehensive income 560 491 1,051 Net current period other comprehensive income 560 491 1,051 Ending balance $ (858 ) $ (44,070 ) $ (44,928 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 2, 2019, in a cash transaction, the Company acquired through a share purchase all the issued capital of Highwinds Capital, Inc. and Cloak Holdings, LLC, a Texas-based provider in solutions for virtual private network (“VPN”) services. In connection with the acquisition, the Company drew down $100.0 million of its Credit Facility. On May 2, 2019 , the Company’s Board of Directors approved a quarterly cash dividend of $0.4550 per share of j2 Global common stock payable on June 4, 2019 to all stockholders of record as of the close of business on May 20, 2019 . Based on the significant number of current investment opportunities within the Company’s portfolio of businesses and the historic returns from prior investments, the Board of Directors has decided to suspend dividend payments for the foreseeable future after the June 4, 2019 payment. |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use Of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with 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. The Company believes that its most significant estimates are those related to revenue recognition, valuation and impairment of investments, its assessment of ownership interests as variable interest entities and the related determination of consolidation, share-based compensation expense, 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 business 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 business 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 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. |
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 March 31, 2019 , 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. |
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 debt 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. See Note 5, “Investments”. 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. |
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. |
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. |
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. 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 provides health and dental insurance plans for certain of its employees through a self-insurance structure. The Company has secured reinsurance in the form of 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’s business segments are based on the organization structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance. The chief operating decision maker views the Company in two businesses: Cloud Services and Digital Media. However, in accordance with the aggregation criteria within the accounting guidance, j2 Global’s operating segments have been aggregated into three reportable segments: (i) Fax and Email Marketing; (ii) Voice, Backup, and Security; and (iii) Digital Media. |
Comparability of Prior Year Financial Data | Reclassifications Certain prior year reported amounts have been reclassified to conform to the 2019 presentation. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, Digital Media 2019 2018 Advertising $ 105,600 $ 96,338 Subscription 40,378 29,350 Other (1) 1,705 5,473 Total Digital Media revenues $ 147,683 $ 131,161 Cloud Services Subscription $ 151,790 $ 149,322 Other 455 163 Total Cloud Services revenues $ 152,245 $ 149,485 Corporate $ 1 $ 1 Elimination of inter-segment revenues (36 ) (24 ) Total Revenues $ 299,893 $ 280,623 Timing of revenue recognition Point in time $ 1,392 $ 1,075 Over time 298,501 279,548 Total $ 299,893 $ 280,623 (1) In the second quarter of 2018, the Company reclassified the Other revenues associated with its Digital Media business to Advertising revenue. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 Accounts receivable $ 568 Prepaid expenses and other current assets 161 Property and equipment 1,887 Trade names 2,200 Customer relationships 17,504 Goodwill 37,397 Trademarks 696 Other intangibles 3,838 Other long-term assets 58 Accounts payable and accrued expenses (132 ) Deferred revenue (3,575 ) Total $ 60,602 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 December 31, 2018 Equity securities $ 34,977 $ — $ (3,678 ) $ 31,299 Total $ 34,977 $ — $ (3,678 ) $ 31,299 |
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 March 31, 2019 Corporate debt securities $ 23,256 $ 79 $ (1,220 ) $ 22,115 Total $ 23,256 $ 79 $ (1,220 ) $ 22,115 December 31, 2018 Corporate debt securities $ 23,256 $ 21 $ (1,899 ) $ 21,378 Total $ 23,256 $ 21 $ (1,899 ) $ 21,378 |
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): March 31, 2019 December 31, 2018 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 22,115 21,378 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 22,115 $ 21,378 |
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 March 31, 2019 and December 31, 2018 , aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands): As of March 31, 2019 Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Corporate debt securities $ — $ — $ 21,525 $ (1,220 ) $ 21,525 $ (1,220 ) Total $ — $ — $ 21,525 $ (1,220 ) $ 21,525 $ (1,220 ) As of December 31, 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 $ (1,899 ) $ — $ — $ 20,846 $ (1,899 ) Total $ 20,846 $ (1,899 ) $ — $ — $ 20,846 $ (1,899 ) |
Equity Method Investments | The following table discloses the carrying amount for the Company’s equity method investment (in thousands): March 31, 2019 December 31, 2018 Equity securities $ 40,317 $ 31,151 Maximum exposure to loss $ 40,317 $ 31,151 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): March 31, 2019 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 407 $ — $ — $ 407 Corporate debt securities — 590 21,525 22,115 Total assets measured at fair value $ 407 $ 590 $ 21,525 $ 22,522 Liabilities: Contingent consideration $ — $ — $ 55,265 $ 55,265 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 55,265 $ 56,033 December 31, 2018 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market and other funds $ 450 $ — $ — $ 450 Corporate debt securities — 532 20,846 21,378 Total assets measured at fair value $ 450 $ 532 $ 20,846 $ 21,828 Liabilities: Contingent consideration $ — $ — $ 50,035 $ 50,035 Contingent interest derivative — 768 — 768 Total liabilities measured at fair value $ — $ 768 $ 50,035 $ 50,803 |
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, 2019 $ 768 Balance as of March 31, 2019 $ 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 liabilities related to contingent consideration 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, 2019 $ 50,035 Contingent consideration 1,072 Total fair value adjustments reported in earnings 5,003 General and administrative Contingent consideration payments (845 ) Not Applicable Balance as of March 31, 2019 $ 55,265 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Carrying Amounts Of Goodwill | The changes in carrying amounts of goodwill for the three months ended March 31, 2019 are as follows (in thousands): Fax and Email Marketing Voice, Backup, and Security Total Cloud Services Digital Media Consolidated Balance as of January 1, 2019 $ 366,270 $ 300,718 $ 666,988 $ 713,388 $ 1,380,376 Goodwill acquired (Note 4) 33,184 4,213 37,397 — 37,397 Purchase accounting adjustments (1) — — — (1,451 ) (1,451 ) Foreign exchange translation (525 ) (142 ) (667 ) (20 ) (687 ) Balance as of March 31, 2019 $ 398,929 $ 304,789 $ 703,718 $ 711,917 $ 1,415,635 (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 March 31, 2019 and December 31, 2018 as follows (in thousands): March 31, December 31, Trade names $ 27,379 $ 27,379 Other 4,306 4,306 Total $ 31,685 $ 31,685 |
Finite-Lived Intangible Assets By Major Class | Intangible Assets Subject to Amortization: As of March 31, 2019 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 10.8 years $ 184,581 $ 69,806 $ 114,775 Patent and patent licenses 6.5 years 67,874 61,245 6,629 Customer relationships (1) 8.6 years 524,692 330,461 194,231 Other purchased intangibles 4.5 years 310,986 144,852 166,134 Total $ 1,088,133 $ 606,364 $ 481,769 (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, 2018 , intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Cost Accumulated Amortization Net Trade names 10.9 years $ 181,231 $ 65,722 $ 115,509 Patent and patent licenses 6.5 years 67,887 60,541 7,346 Customer relationships (1) 9.1 years 507,330 316,122 191,208 Other purchased intangibles 4.4 years 307,554 126,834 180,720 Total $ 1,064,002 $ 569,219 $ 494,783 (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) | 3 Months Ended |
Mar. 31, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt as of March 31, 2019 and December 31, 2018 consists of the following (in thousands): March 31, 2019 December 31, 2018 6.0% Senior Notes $ 650,000 $ 650,000 3.25% Convertible Notes 402,500 402,500 Less: Unamortized discount (30,647 ) (33,191 ) Deferred issuance costs (5,886 ) (6,180 ) Total long-term debt 1,015,967 1,013,129 Less: Current portion — — Total long-term debt, less current portion $ 1,015,967 $ 1,013,129 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The components of lease expense were as follows for the three months ended (in thousands): Three Months Ended March 31, 2019 Operating lease cost $ 6,216 |
Supplemental Balance Sheet Disclosures [Text Block] | Supplemental balance sheet information related to leases was as follows (in thousands): March 31, 2019 Operating leases Operating lease right-of-use assets $ 69,289 Total operating lease right-of-use assets $ 69,289 Operating lease liability, current $ 18,941 Operating lease liabilities, noncurrent 54,626 Total operating lease liabilities $ 73,567 |
Schedule Of Cash Flow Information Relating To Leases [Table Text Block] | Supplemental cash flow information related to leases was as follows (in thousands): March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,243 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,748 |
Other Supplemental Lease Information [Table Text Block] | Other supplemental operating lease information consists of the following: Weighted average remaining lease term 4.8 years Weighted average discount rate 4.23 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of operating lease liabilities as of March 31, 2019 were as follows (in thousands): Operating Leases Fiscal Year: 2019 $ 16,049 2020 18,804 2021 16,767 2022 14,964 2023 12,855 Thereafter 6,735 Total lease payments $ 86,174 Less: Imputed interest (12,607 ) Present value of operating lease liabilities $ 73,567 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Lease Payments Fiscal Year: 2019 $ 19,267 2020 16,196 2021 13,881 2022 12,654 2023 10,977 Thereafter 5,456 Total minimum lease payments $ 78,431 |
Stockholders' Equity Dividends
Stockholders' Equity Dividends Declared (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Dividends Declared [Abstract] | |
Dividends Declared [Table Text Block] | The following is a summary of each dividend declared during fiscal year 2019 and 2018 : Declaration Date Dividend per Common Share Record Date Payment Date 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 October 29, 2018 $ 0.4350 November 19, 2018 December 5, 2018 February 6, 2019 $ 0.4450 February 25, 2019 March 12, 2019 |
Stock Options And Employee St_2
Stock Options And Employee Stock Purchase Plan (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock Options Activity | The following table represents stock option activity for the three months ended March 31, 2019 : Number of Shares Weighted- Weighted-Average Aggregate Outstanding at January 1, 2019 707,777 $ 56.84 Granted — — Exercised (155,538 ) 33.81 Canceled — — Outstanding at March 31, 2019 552,239 $ 63.33 7.0 $ 12,853,259 Exercisable at March 31, 2019 193,039 $ 41.91 3.8 $ 8,626,659 Vested and expected to vest at March 31, 2019 420,068 $ 59.66 6.4 $ 11,318,687 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | . |
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: March 31, 2019 March 31, 2018 Underlying stock price at valuation date $ 84.58 $ 75.03 Expected volatility 28.3 % 28.4 % Risk-free interest rate 2.53 % 2.34 % |
Restricted Stock [Member] | |
Restricted Stock And Restricted Stock Unit Award Activity | Restricted stock award activity for the three months ended March 31, 2019 is set forth below: Shares Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2019 1,207,011 $ 64.82 Granted 146,897 77.23 Vested (34,394 ) 73.95 Canceled (75,694 ) 71.43 Nonvested at March 31, 2019 1,243,820 $ 65.66 |
Restricted Stock Units (RSUs) [Member] | |
Restricted Stock And Restricted Stock Unit Award Activity | Restricted stock unit award activity for the three months ended March 31, 2019 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2019 41,231 Granted 3,844 Vested (4,683 ) Canceled — Outstanding at March 31, 2019 40,392 2.3 $ 3,497,947 Vested and expected to vest at March 31, 2019 30,673 1.8 $ 2,656,288 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Numerator for basic and diluted net income per common share: Net income attributable to j2 Global, Inc. common shareholders $ 32,449 $ 18,871 Net income available to participating securities (a) (424 ) (217 ) Net income available to j2 Global, Inc. common shareholders $ 32,025 $ 18,654 Denominator: Weighted-average outstanding shares of common stock 47,560,749 47,873,007 Dilutive effect of: Equity incentive plans 89,013 123,305 Convertible debt (b) 859,419 710,405 Common stock and common stock equivalents 48,509,181 48,706,717 Net income per share: Basic $ 0.67 $ 0.39 Diluted $ 0.66 $ 0.38 (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) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Revenue by reportable segment: Fax and Email Marketing $ 93,283 $ 91,103 Voice, Backup, and Security 58,962 58,382 Cloud Services Total 152,245 149,485 Digital Media 147,683 131,161 Elimination of inter-segment revenues (36 ) (24 ) Total segment revenues 299,892 280,622 Corporate (1) 1 1 Total revenues $ 299,893 $ 280,623 Gross profit by reportable segment: Fax and Email Marketing $ 78,719 $ 81,954 Voice, Backup, and Security 41,043 36,530 Cloud Services Total 119,762 118,484 Digital Media 129,153 114,017 Elimination of inter-segment gross profit (36 ) (24 ) Total segment gross profit 248,879 232,477 Corporate (1) 1 1 Total gross profit $ 248,880 $ 232,478 Direct costs by reportable segment (2) : Fax and Email Marketing $ 34,102 $ 33,323 Voice, Backup, and Security 27,127 28,270 Cloud Services Total 61,229 61,593 Digital Media 130,167 117,438 Elimination of inter-segment direct costs (36 ) (24 ) Total segment direct costs 191,360 179,007 Corporate (1) 6,658 7,313 Total direct costs (2) $ 198,018 $ 186,320 Operating income by reportable segment: Fax and Email Marketing $ 44,617 $ 48,631 Voice, Backup, and Security 13,916 8,260 Cloud Services Total 58,533 56,891 Digital Media (1,014 ) (3,421 ) Total segment operating income 57,519 53,470 Corporate (1) (6,657 ) (7,312 ) Total income from operations $ 50,862 $ 46,158 (1) 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. (2) 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. |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | March 31, 2019 December 31, 2018 Assets: Cloud Services $ 1,113,350 $ 1,047,245 Digital Media 1,437,765 1,455,620 Total assets from Cloud Services and Digital Media 2,551,115 2,502,865 Corporate 91,798 57,965 Total assets $ 2,642,913 $ 2,560,830 Three Months Ended March 31, 2019 2018 Capital expenditures: Cloud Services $ 3,502 $ 2,874 Digital Media 9,029 10,291 Total capital expenditures from Cloud Services and Digital Media 12,531 13,165 Corporate — — Total capital expenditures $ 12,531 $ 13,165 Three Months Ended March 31, 2019 2018 Depreciation and amortization: Cloud Services $ 13,349 $ 14,378 Digital Media 35,179 27,114 Total depreciation and amortization from Cloud Services and Digital Media 48,528 41,492 Corporate 681 1,126 Total depreciation and amortization $ 49,209 $ 42,618 |
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 March 31, 2019 2018 Revenues: United States $ 231,343 $ 209,076 Canada 17,053 19,622 Ireland 15,623 17,101 All other countries 35,874 34,824 $ 299,893 $ 280,623 March 31, December 31, Long-lived assets: United States $ 573,817 $ 530,785 All other countries 81,874 62,810 Total $ 655,691 $ 593,595 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive 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 March 31, 2019 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Beginning balance $ (1,418 ) $ (44,561 ) $ (45,979 ) Other comprehensive income 560 491 1,051 Net current period other comprehensive income 560 491 1,051 Ending balance $ (858 ) $ (44,070 ) $ (44,928 ) |
Basis Of Presentation (Details)
Basis Of Presentation (Details) | 3 Months Ended |
Mar. 31, 2019 | |
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 Thousands | Dec. 31, 2018USD ($) |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Operating Leases, Future Minimum Payments Due | $ 78,431 |
Revenues (Details)
Revenues (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | $ 176,741 | $ 221,615 | |
Deferred revenue, current | 129,964 | 127,568 | |
Deferred revenue, noncurrent | 11,839 | 13,200 | |
Retained earnings | 742,173 | 769,575 | |
Cumulative Effect of New Accounting Principle in Period of Adoption | 1,599 | ||
Total revenues | 299,893 | $ 280,623 | |
Net income | $ 32,449 | $ 18,871 | |
Diluted EPS impact | $ 0.66 | $ 0.38 | |
Deferred Revenue, Revenue Recognized | $ 53,200 | $ 38,900 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | $ 3,575 | ||
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 | $ 1,600 |
Revenues - Disaggregated Revenu
Revenues - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Deferred Revenue, Revenue Recognized | $ 53,200 | $ 38,900 |
Total revenues | 299,893 | 280,623 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,392 | 1,075 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 298,501 | 279,548 |
Digital Media Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 147,683 | 131,161 |
Digital Media Segment [Member] | Advertising [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 105,600 | 96,338 |
Digital Media Segment [Member] | Subscription [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 40,378 | 29,350 |
Digital Media Segment [Member] | Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,705 | 5,473 |
Cloud Services Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 152,245 | 149,485 |
Cloud Services Segment [Member] | Subscription [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 151,790 | 149,322 |
Cloud Services Segment [Member] | Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 455 | 163 |
Corporate [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1 | 1 |
Intersegment Elimination [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ (36) | $ (24) |
Business Acquisition (Details)
Business Acquisition (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Business Acquisition Contributed Total Revenue | $ 4,700 |
Total consideration of transaction, net of cash acquired | 60,602 |
Purchase accounting adjustments (1) | (1,451) |
Goodwill, Acquired During Period | 37,397 |
Business Acquisition, Purchase Price Allocation, Goodwill, Expected Tax Deductible Amount | 33,200 |
Digital Media Segment [Member] | |
Goodwill, Acquired During Period | $ 0 |
Business Acquisition (Allocatio
Business Acquisition (Allocation of Aggregate Purchase Price) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | $ 568 |
Business Acquisition Purchase Price Allocation Current Noncurrent Assets Prepaid Expense and Other Assets | 161 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 1,887 |
Goodwill, Acquired During Period | 37,397 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 58 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable and Accrued Expenses | (132) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | (3,575) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 60,602 |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 2,200 |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 17,504 |
Trademarks [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 696 |
Other Intangible Assets [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 3,838 |
Investments Cost Method Investm
Investments Cost Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
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) | (3,678) |
Cost Method Investments | $ 31,299 | $ 31,299 |
Investments Available-for-Sale
Investments Available-for-Sale Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | $ 23,256 | $ 23,256 |
Available-for-sale Securities, Gross Unrealized Gain | 79 | 21 |
Available-for-sale Securities, Gross Unrealized Loss | (1,220) | 1,899 |
Available-for-sale Securities | 22,115 | 21,378 |
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 | 22,115 | 21,378 |
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 | 0 | 20,846 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | (1,899) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 21,525 | 0 |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (1,220) | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 21,525 | 20,846 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,220 | $ (1,899) |
Investments Equity Method Inves
Investments Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
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 | $ 9,800 | ||
Variable Interest Entity, Measure of Activity, Purchases | 9,800 | ||
Net loss in earnings of equity method investment | 474 | $ 0 | |
Equity Method Investments | 40,317 | $ 31,151 | |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 40,317 | $ 31,151 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Fair Values Of Financial Instruments Measured On Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Total assets measured at fair value | $ 22,522 | $ 21,828 |
Contingent consideration | 55,265 | 50,035 |
Contingent interest derivative | 768 | 768 |
Total liabilities measured at fair value | 56,033 | 50,803 |
Money Market Funds [Member] | ||
Money market and other funds | 407 | 450 |
Corporate Debt Securities [Member] | ||
Corporate debt securities | 22,115 | 21,378 |
Level 1 [Member] | ||
Total assets measured at fair value | 407 | 450 |
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 | 407 | 450 |
Level 1 [Member] | Corporate Debt Securities [Member] | ||
Corporate debt securities | 0 | 0 |
Level 2 [Member] | ||
Total assets measured at fair value | 590 | 532 |
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 | 590 | 532 |
Level 3 [Member] | ||
Total assets measured at fair value | 21,525 | 20,846 |
Contingent consideration | 55,265 | 50,035 |
Contingent interest derivative | 0 | 0 |
Total liabilities measured at fair value | 55,265 | 50,035 |
Level 3 [Member] | Money Market Funds [Member] | ||
Money market and other funds | 0 | 0 |
Level 3 [Member] | Corporate Debt Securities [Member] | ||
Corporate debt securities | $ 21,525 | $ 20,846 |
Fair Value Measurements (Deriva
Fair Value Measurements (Derivative Summary) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business Combination, Contingent Consideration, Liability | $ 55,265 | $ 50,035 |
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Business Combination, Contingent Consideration, Liability | 55,265 | $ 50,035 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | 1,072 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 5,003 | |
Contingent consideration payments | $ (845) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Income (Loss) from Equity Method Investments | $ (474) | $ 0 | |
Management Fee Expense | 755 | 0 | |
Long-term Debt, Fair Value | 1,217,000 | $ 1,102,000 | |
Business Combination, Contingent Consideration, Liability | 55,265 | 50,035 | |
Changes in fair value of contingent consideration | 5,003 | $ 4,100 | |
Level 3 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration, Liability | 55,265 | 50,035 | |
Contingent consideration payments | (845) | ||
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 | 40,000 | 40,000 | |
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 | 1,500 | 1,500 | |
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 | 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 | 2,800 | 3,600 | |
Contingent consideration payments | 800 | ||
Ekahau [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 15,000 | ||
Business Combination, Contingent Consideration, Liability | 8,600 | $ 3,700 | |
Safe Send AS [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 | $ 1,000 |
Goodwill And Intangible Asset_2
Goodwill And Intangible Assets (Changes In Carrying Amounts Of Goodwill And Other Intangible Assets) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill [Line Items] | |
Balance as of January 1, 2019 | $ 1,380,376 |
Goodwill acquired (Note 4) | 37,397 |
Purchase accounting adjustments (1) | (1,451) |
Foreign exchange translation | 687 |
Balance as of March 31, 2019 | 1,415,635 |
Fax and Email Marketing [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2019 | 366,270 |
Goodwill acquired (Note 4) | 33,184 |
Purchase accounting adjustments (1) | 0 |
Foreign exchange translation | 525 |
Balance as of March 31, 2019 | 398,929 |
Voice, Backup, and Security [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2019 | 300,718 |
Goodwill acquired (Note 4) | 4,213 |
Purchase accounting adjustments (1) | 0 |
Foreign exchange translation | 142 |
Balance as of March 31, 2019 | 304,789 |
Cloud Services Segment [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2019 | 666,988 |
Goodwill acquired (Note 4) | 37,397 |
Purchase accounting adjustments (1) | 0 |
Foreign exchange translation | 667 |
Balance as of March 31, 2019 | 703,718 |
Digital Media Segment [Member] | |
Goodwill [Line Items] | |
Balance as of January 1, 2019 | 713,388 |
Goodwill acquired (Note 4) | 0 |
Foreign exchange translation | (20) |
Balance as of March 31, 2019 | $ 711,917 |
Goodwill And Intangible Asset_3
Goodwill And Intangible Assets (Indefinite Intangible Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Intangible assets | $ 31,685 | $ 31,685 |
Trade Names [Member] | ||
Intangible assets | 27,379 | 27,379 |
Other Intangible Assets [Member] | ||
Intangible assets | $ 4,306 | $ 4,306 |
Goodwill And Intangible Asset_4
Goodwill And Intangible Assets (Schedule Of Intangible Assets Subject To Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Historical Cost | $ 1,088,133 | $ 1,064,002 |
Accumulated Amortization | (606,364) | (569,219) |
Net | $ 481,769 | $ 494,783 |
Trade Names [Member] | ||
Weighted-Average Amortization Period, years | 10 years 9 months 18 days | 10 years 10 months 24 days |
Historical Cost | $ 184,581 | $ 181,231 |
Accumulated Amortization | (69,806) | (65,722) |
Net | $ 114,775 | $ 115,509 |
Patents And Patent Licenses [Member] | ||
Weighted-Average Amortization Period, years | 6 years 6 months | 6 years 6 months |
Historical Cost | $ 67,874 | $ 67,887 |
Accumulated Amortization | (61,245) | (60,541) |
Net | $ 6,629 | $ 7,346 |
Customer Relationships [Member] | ||
Weighted-Average Amortization Period, years | 8 years 7 months 6 days | 9 years 1 month 6 days |
Historical Cost | $ 524,692 | $ 507,330 |
Accumulated Amortization | (330,461) | (316,122) |
Net | $ 194,231 | $ 191,208 |
Other Purchased Intangibles [Member] | ||
Weighted-Average Amortization Period, years | 4 years 6 months | 4 years 4 months 24 days |
Historical Cost | $ 310,986 | $ 307,554 |
Accumulated Amortization | (144,852) | (126,834) |
Net | $ 166,134 | $ 180,720 |
Goodwill And Intangible Asset_5
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 37.3 | $ 33.1 |
Estimated future amortization expense in year 2019 | 137.1 | |
Estimated future amortization expense in year 2020 | 95 | |
Estimated future amortization expense in year 2021 | 64.4 | |
Estimated future amortization expense in year 2022 | 42.9 | |
Estimated future amortization expense in year 2023 | 34.5 | |
Estimated future amortization expense thereafter | $ 107.9 | |
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 | 3 Months Ended | |
Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||
Long-term Debt, Fair Value | $ 1,217,000 | $ 1,102,000 |
Debt Instrument, Unamortized Discount | 30,647 | 33,191 |
Unamortized Debt Issuance Expense | (5,886) | (6,180) |
Debt, Long-term and Short-term, Combined Amount | 1,015,967 | 1,013,129 |
Current maturities of long-term debt | 0 | 0 |
Total long-term debt, less current portion | $ 1,015,967 | 1,013,129 |
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 | $ 677,600 | 645,500 |
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 | 14.7316 | |
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 67.88 | |
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 37,700 | |
Debt Instrument, Convertible, Remaining Discount Amortization Period | 2 years 2 months 16 days | |
Long-term Debt, Fair Value | $ 539,100 | $ 457,000 |
Debt Instrument, Unamortized Discount | $ 59,000 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 19,267,000 | |||
Operating Leases, Rent Expense, Net | $ 5,300,000 | |||
Operating Lease, Payments | $ 5,243,000 | |||
Sublease Income | 900,000 | $ 600,000 | ||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 16,049,000 | |||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 9 months 29 days | |||
Operating Lease, Right-of-Use Asset | $ 69,289,000 | $ 72,000,000 | 0 | |
Operating Lease, Cost | 6,216,000 | |||
Operating Lease, Liability, Current | 18,941,000 | 0 | ||
Operating Lease, Liability, Noncurrent | 54,626,000 | 0 | ||
Operating Lease, Liability | $ 73,567,000 | $ 75,000,000 | ||
Operating Lease, Weighted Average Discount Rate, Percent | 4.23% | |||
Lessee, Operating Lease, Liability, Payments, Due Year Two | $ 18,804,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 16,767,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 14,964,000 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 12,855,000 | |||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 6,735,000 | |||
Lessee, Operating Lease, Liability, Payments, Due | 86,174,000 | |||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (12,607,000) | |||
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals | 7,700,000 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 2,748,000 | |||
Operating Leases, Future Minimum Payments, Due in Two Years | 16,196,000 | |||
Operating Leases, Future Minimum Payments, Due in Three Years | 13,881,000 | |||
Operating Leases, Future Minimum Payments, Due in Four Years | 12,654,000 | |||
Operating Leases, Future Minimum Payments, Due in Five Years | 10,977,000 | |||
Operating Leases, Future Minimum Payments, Due Thereafter | 5,456,000 | |||
Operating Leases, Future Minimum Payments Due | $ 78,431,000 |
Commitments And Contingencies C
Commitments And Contingencies Contingencies (Details) $ in Millions | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingency Accrual | $ 4.6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2018 | |
Income Taxes [Line Items] | |||||||||
Effective income tax rate | (0.90%) | 27.10% | |||||||
Income before income taxes, domestic operations | $ 2.5 | $ (8.7) | |||||||
Income before income taxes, foreign operations | 30.1 | 34.6 | |||||||
Liabilities for uncertain income tax positions | 54.1 | $ 59.6 | |||||||
Cash paid for income taxes | 6.7 | $ 5.4 | |||||||
Prepaid tax payments | $ 0 | $ 0 | |||||||
California Franchise Tax Board [Member] | |||||||||
Income Taxes [Line Items] | |||||||||
Income Tax Examination, Year under Examination | 2016 | 2015 | 2013 | 2012 | |||||
Internal Revenue Service (IRS) [Member] | |||||||||
Income Taxes [Line Items] | |||||||||
Income Tax Examination, Year under Examination | 2016 | 2015 | 2014 | 2013 | 2012 | ||||
New York State Division of Taxation and Finance [Member] | |||||||||
Income Taxes [Line Items] | |||||||||
Income Tax Examination, Year under Examination | 2014 | 2013 | 2012 | 2011 | |||||
Ministry of the Economy, Finance and Industry, France [Member] | |||||||||
Income Taxes [Line Items] | |||||||||
Income Tax Examination, Year under Examination | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 |
Stockholders' Equity Dividend_2
Stockholders' Equity Dividends Declared (Details) - $ / shares | Feb. 06, 2019 | Oct. 29, 2018 | Aug. 08, 2018 | May 03, 2018 | Feb. 02, 2018 |
Dividends Declared [Abstract] | |||||
Dividend, declaration date | Feb. 6, 2019 | Oct. 29, 2018 | Aug. 8, 2018 | May 3, 2018 | Feb. 2, 2018 |
Dividend amount to be paid, per common share | $ 0.4450 | $ 0.4350 | $ 0.4250 | $ 0.4150 | $ 0.4050 |
Dividend, date of record | Feb. 25, 2019 | Nov. 19, 2018 | Aug. 20, 2018 | May 18, 2018 | Feb. 22, 2018 |
Dividend, date to be paid | Mar. 12, 2019 | Dec. 5, 2018 | Sep. 4, 2018 | Jun. 1, 2018 | Mar. 9, 2018 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||
Stock Repurchased | 2,700,000 | |
Treasury Stock, Value, Acquired, Cost Method | $ 101.1 | |
Shares Paid for Tax Withholding for Share Based Compensation | 16,400 | |
2012 Repurchase Program [Member] | ||
Class of Stock [Line Items] | ||
Maximum number of shares authorized to be repurchased | 5,000,000 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 1,338,689 | |
Stock Repurchased | 600,000 | 0 |
Treasury Stock, Value, Acquired, Cost Method | $ 42.5 |
Stock Options And Employee St_3
Stock Options And Employee Stock Purchase Plan (Stock Options) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of Shares, Outstanding Beginning of Period | 707,777 | |
Number of options granted | 0 | |
Number of Shares, Exercised | (155,538) | |
Number of Shares, Canceled | 0 | |
Number of Shares, Outstanding Ending of Period | 552,239 | |
Number of Shares, Exercisable | 193,039 | |
Number of Shares, Vested and expected to vest | 420,068 | |
Weighted-Average Exercise Price, Outstanding Beginning of Period | $ 56.84 | |
Weighted-Average Exercise Price, Granted | 0 | |
Weighted-Average Exercise Price, Exercised | 33.81 | |
Weighted-Average Exercise Price, Canceled | 0 | |
Weighted-Average Exercise Price, Outstanding Ending of Period | 63.33 | |
Weighted-Average Exercise Price, Exercisable | 41.91 | |
Weighted-Average Exercise Price, Vested and expected to vest | $ 59.66 | |
Weighted-Average Remaining Contractual Term, Outstanding (in years) | 6 years 11 months 27 days | |
Weighted-Average Remaining Contractual Term, Exercisable (in years) | 3 years 10 months 2 days | |
Weighted-Average Remaining Contractual Term, Vested and expected to vest (in years) | 6 years 5 months 9 days | |
Aggregate Intrinsic Value, Outstanding | $ 12,853,259 | |
Aggregate Intrinsic Value, Exercisable | 8,626,659 | |
Aggregate Intrinsic Value, Vested and expected to vest | 11,318,687 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value | 8,000,000 | $ 1,500,000 |
Allocated Share-based Compensation Expense | $ 5,086,000 | $ 6,420,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 12.63% | 10.74% |
Employee Stock Option [Member] | ||
Allocated Share-based Compensation Expense | $ 200,000 | $ 200,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 6 years 7 months 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 | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares, Granted | 72,734 | 400,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 69.99 | $ 49.92 |
Share Price | $ 84.58 | $ 75.03 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.30% | 28.40% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.53% | 2.34% |
Stock Options And Employee St_5
Stock Options And Employee Stock Purchase Plan (Restricted Stock) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Compensation cost recognized | $ 5,086,000 | $ 6,420,000 | |
Allocated Share-based Compensation Expense | 5,086,000 | 6,420,000 | |
Employee Stock Option [Member] | |||
Compensation cost recognized | 200,000 | 200,000 | |
Unrecognized compensation cost related to non-vested awards granted | $ 7,600,000 | $ 6,900,000 | |
Weighted-average period to recognize compensation cost (in years) | 6 years 7 months 13 days | ||
Allocated Share-based Compensation Expense | $ 200,000 | 200,000 | |
Restricted Stock And Restricted Stock Unit (RSU) [Member] | |||
Compensation cost recognized | 4,500,000 | 6,200,000 | |
Unrecognized compensation cost related to non-vested awards granted | 63,900,000 | $ 61,600,000 | |
Allocated Share-based Compensation Expense | $ 4,500,000 | $ 6,200,000 | |
Restricted Stock [Member] | |||
Nonvested at January 1, 2019 | 1,207,011 | ||
Shares, Granted | 146,897 | ||
Shares, Vested | (34,394) | ||
Shares, Canceled | (75,694) | ||
Nonvested at March 31, 2019 | 1,243,820 | ||
Weighted-Average Grant-Date Fair Value, Nonvested at January 1, 2019 | $ 64.82 | ||
Weighted-Average Grant-Date Fair Value, Granted | 77.23 | ||
Weighted-Average Grant-Date Fair Value, Vested | 73.95 | ||
Weighted-Average Grant-Date Fair Value, Canceled | 71.43 | ||
Weighted-Average Grant-Date Fair Value, Nonvested at March 31, 2019 | $ 65.66 | ||
Weighted-average period to recognize compensation cost (in years) | 5 years 4 months 28 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Nonvested at January 1, 2019 | 41,231 | ||
Shares, Granted | 3,844 | ||
Shares, Vested | (4,683) | ||
Shares, Canceled | 0 | ||
Nonvested at March 31, 2019 | 40,392 | ||
Share Based Compensation Equity Awards Other Than Options Expected To Vest Shares | 30,673 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 2 years 3 months 4 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 2 days | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Outstanding, Aggregate Intrinsic Value | $ 3,497,947 | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Expected To Vest Intrinsic Value | $ 2,656,288 | ||
Weighted-average period to recognize compensation cost (in years) | 3 years 4 months 24 days |
Stock Options And Employee St_6
Stock Options And Employee Stock Purchase Plan (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Number of options outstanding | 552,239 | 707,777 | |
Cash received upon the issuance of common stock | $ 0 | $ 64,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 12.63% | 10.74% | |
Allocated Share-based Compensation Expense | $ 5,086,000 | $ 6,420,000 | |
Employee Stock Option [Member] | |||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 7,600,000 | $ 6,900,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 6 years 7 months 13 days | ||
Allocated Share-based Compensation Expense | $ 200,000 | $ 200,000 | |
Restricted (Performance) Stock [Member] | |||
Shares, Granted | 72,734 | 400,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.53% | 2.34% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 28.30% | 28.40% | |
Restricted Stock [Member] | |||
Number of stocks outstanding | 1,243,820 | 1,207,011 | |
Shares, Granted | 146,897 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 5 years 4 months 28 days | ||
Restricted Stock Units (RSUs) [Member] | |||
Number of stocks outstanding | 40,392 | 41,231 | |
Shares, Granted | 3,844 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 4 months 24 days | ||
2007 Stock Plan [Member] | |||
Number of options outstanding | 129,239 | ||
Number of stocks outstanding | 3,080 | ||
Maximum issuance of common stock | 4,500,000 | ||
2015 Stock Option Plan [Member] | |||
Number of options outstanding | 423,000 | ||
Number of stocks outstanding | 37,312 | ||
Maximum issuance of common stock | 4,200,000 | ||
2001 Employee Stock Purchase Plan [Member] | Common Stock [Member] | |||
Market value of common stock on the date of grant for incentive stock options | 85.00% | ||
Maximum earnings withheld by the employees | 15.00% | ||
Number of shares purchased under the plan | 0 | 851 | |
Cash received upon the issuance of common stock | $ 0 | $ 65,000 | |
Number of shares available for issuance | 1,589,981 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Estimated Forfeiture Rate | 1.96% | ||
Allocated Share-based Compensation Expense | $ 400,000 | $ 0 | |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net income | $ 32,449 | $ 18,871 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 424 | 217 |
Net earnings available to common shareholders | $ 32,025 | $ 18,654 |
Weighted-average outstanding shares of common stock - basic | 47,560,749 | 47,873,007 |
Dilutive effect of equity incentive plans | 89,013 | 123,305 |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | 859,419 | 710,405 |
Weighted-average outstanding shares of common stock - diluted | 48,509,181 | 48,706,717 |
Basic | $ 0.67 | $ 0.39 |
Diluted EPS impact | $ 0.66 | $ 0.38 |
Share options excluded from the computation of diluted earnings per share | 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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 299,893 | $ 280,623 |
Gross Profit | 248,880 | 232,478 |
Direct Costs By Segment | 198,018 | 186,320 |
Income from operations | 50,862 | 46,158 |
Depreciation, Depletion and Amortization, Nonproduction | 49,209 | 42,618 |
Fax and Email Marketing [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 93,283 | 91,103 |
Gross Profit | 78,719 | 81,954 |
Direct Costs By Segment | 34,102 | 33,323 |
Income from operations | 44,617 | 48,631 |
Voice, Backup, and Security [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 58,962 | 58,382 |
Gross Profit | 41,043 | 36,530 |
Direct Costs By Segment | 27,127 | 28,270 |
Income from operations | 13,916 | 8,260 |
Cloud Services Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 152,245 | 149,485 |
Gross Profit | 119,762 | 118,484 |
Direct Costs By Segment | 61,229 | 61,593 |
Income from operations | 58,533 | 56,891 |
Depreciation, Depletion and Amortization, Nonproduction | 13,349 | 14,378 |
Digital Media Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 147,683 | 131,161 |
Gross Profit | 129,153 | 114,017 |
Direct Costs By Segment | 130,167 | 117,438 |
Income from operations | (1,014) | (3,421) |
Depreciation, Depletion and Amortization, Nonproduction | 35,179 | 27,114 |
Intersegment Elimination [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | (36) | (24) |
Gross Profit | (36) | (24) |
Direct Costs By Segment | (36) | (24) |
Corporate Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1 | 1 |
Gross Profit | 1 | 1 |
Direct Costs By Segment | 6,658 | 7,313 |
Global Operating Costs | (6,657) | (7,312) |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 299,892 | 280,622 |
Gross Profit | 248,879 | 232,477 |
Direct Costs By Segment | 191,360 | 179,007 |
Income from operations | 57,519 | 53,470 |
Depreciation, Depletion and Amortization, Nonproduction | $ 48,528 | $ 41,492 |
Segment Information Reportabl_2
Segment Information Reportable Segment Information (Total Assets, Capital Expenditures, Depreciation And Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total assets | $ 2,642,913 | $ 2,560,830 | |
Property, Plant and Equipment, Additions | 12,531 | $ 13,165 | |
Depreciation, Depletion and Amortization, Nonproduction | 49,209 | 42,618 | |
Cloud Services Segment [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total assets | 1,113,350 | 1,047,245 | |
Property, Plant and Equipment, Additions | 3,502 | 2,874 | |
Depreciation, Depletion and Amortization, Nonproduction | 13,349 | 14,378 | |
Digital Media Segment [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total assets | 1,437,765 | 1,455,620 | |
Property, Plant and Equipment, Additions | 9,029 | 10,291 | |
Depreciation, Depletion and Amortization, Nonproduction | 35,179 | 27,114 | |
Operating Segments [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total assets | 2,551,115 | 2,502,865 | |
Property, Plant and Equipment, Additions | 12,531 | 13,165 | |
Depreciation, Depletion and Amortization, Nonproduction | 48,528 | 41,492 | |
Corporate [Member] | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total assets | 91,798 | $ 57,965 | |
Property, Plant and Equipment, Additions | 0 | 0 | |
Depreciation, Depletion and Amortization, Nonproduction | $ 681 | $ 1,126 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Total revenues | $ 299,893 | $ 280,623 | |
Total long-lived assets | 655,691 | $ 593,595 | |
UNITED STATES | |||
Total revenues | 231,343 | 209,076 | |
Total long-lived assets | 573,817 | 530,785 | |
CANADA | |||
Total revenues | 17,053 | 19,622 | |
IRELAND | |||
Total revenues | 15,623 | 17,101 | |
All Other Countries [Member] | |||
Total revenues | 35,874 | $ 34,824 | |
Total long-lived assets | $ 81,874 | $ 62,810 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) Roll Forward [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Debt Securities, Available-for-sale, Adjustment, after Tax | $ (858) | $ (1,418) | |
Unrealized gain on available-for-sale investments, net of tax (benefit) | 560 | ||
Other Comprehensive Income (Loss), Securities, Available-for-sale, Adjustment, after Tax | 560 | $ (2,500) | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (44,070) | $ (44,561) | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 491 | ||
Foreign currency translation adjustment | 491 | 6,310 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (45,979) | ||
Other Comprehensive Income Loss Arising During Period Total Net of Tax | 1,051 | ||
Other comprehensive income, net of tax | 1,051 | $ 3,810 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (44,928) |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | May 02, 2019 | Feb. 06, 2019 | Oct. 29, 2018 | Aug. 08, 2018 | May 03, 2018 | Feb. 02, 2018 |
Subsequent Event [Line Items] | ||||||
Dividends declared date | Feb. 6, 2019 | Oct. 29, 2018 | Aug. 8, 2018 | May 3, 2018 | Feb. 2, 2018 | |
Dividend amount to be paid, per common share | $ 0.4450 | $ 0.4350 | $ 0.4250 | $ 0.4150 | $ 0.4050 | |
Date dividend is payable | Mar. 12, 2019 | Dec. 5, 2018 | Sep. 4, 2018 | Jun. 1, 2018 | Mar. 9, 2018 | |
Date shareholders must be on record for dividend | Feb. 25, 2019 | Nov. 19, 2018 | Aug. 20, 2018 | May 18, 2018 | Feb. 22, 2018 | |
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared date | May 2, 2019 | |||||
Dividend amount to be paid, per common share | $ 0.4550 | |||||
Date dividend is payable | Jun. 4, 2019 | |||||
Date shareholders must be on record for dividend | May 20, 2019 |