Exhibit 99 CONTACTS: Becky Yeamans, Juno Investor Relations (212) 597-9274 or ir@support.juno.com Gary Baker, Juno Public Relations (212) 597-9005 or pr@support.juno.com JUNO REPORTS RECORD THIRD-QUARTER RESULTS * 130% YEAR-OVER-YEAR INCREASE IN QUARTERLY REVENUES * SUBSCRIBER BASE GROWS TO 12.77 MILLION REGISTERED, 3.70 MILLION ACTIVE * NET LOSS DECREASES BY 32%, CASH PORTION OF NET LOSS BY 60%, COMPARED WITH Q2 NEW YORK, NY (October 24, 2000) -- Juno Online Services, Inc. (Nasdaq: JWEB), one of the nation's largest Internet access providers, today reported revenues of $30.1 million for the quarter ended September 30, 2000, an increase of 130% over the third quarter of 1999. Juno derives revenue from subscription fees it charges for its premium Web access services, from the sale of advertising, and from various forms of electronic commerce. Juno's base of active subscribers increased to 3.70 million in the month of September 2000, up from 3.38 million in June 2000. Juno's BILLABLE subscriber base also continued to grow during the third quarter, to 750,000 at September 30, up from 730,000 at June 30. During the same period, Juno's total registered subscriber base grew by 16%, to 12.77 million. As of September 2000, 88% of Juno's active subscribers had full Web access, up from 85% in the previous quarter. With 3.70 million active subscribers, Juno is the nation's third-largest provider of dial-up Internet services, after AOL and EarthLink, but ahead of AT&T, Microsoft, NetZero, and Prodigy, among others. In addition to its (free and billable) dial-up services, Juno has begun offering a variety of broadband and wireless services, including high-speed DSL access through a relationship with Covad, handheld wireless service through a relationship with Palm, and high-speed mobile wireless access through a relationship with Metricom. Juno has also announced plans to begin offering high-speed access by satellite through an alliance with Hughes Network Systems, and to participate in cable broadband access trials with Time Warner Cable and AT&T Broadband. Juno's net loss for the third quarter improved significantly compared to the second quarter, as measures the company implemented to reduce its expenses (and in particular its cash expenditures) began taking effect. Juno followed through on its previously announced plans to suspend its use of direct mail and reduce its use of certain other cash-intensive marketing channels, thus significantly reducing expenditures for subscriber acquisition. The company also benefited from the effect of significantly reduced telecommunications rates from a number of its telecom vendors. Juno's net loss improved by approximately 32%, dropping to $29.3 million from $42.9 million in the second quarter. The cash portion of Juno's net loss improved by 60% in the third quarter, dropping to approximately $16 million from about $41 million in the second quarter. As of September 30, Juno held approximately $69 million in cash and cash equivalents. On October 13, the company announced an equity financing commitment from a private investment fund, structured as an "equity line" facility. Certain additional information relating to this facility (including restrictions on the amount of capital, if any, that may be available to Juno) is available in a Form 8-K filed by the company with the Securities and Exchange Commission on October 13, 2000. Revenues in the third quarter of 2000 totaled $30.1 million, up slightly from $29.6 million in the second quarter. Billable service revenues rose to $19.0 million in the third quarter, up from $18.4 million in the second quarter. Revenues from advertising and transaction fees and from direct product sales increased to $11.2 million on a combined basis in the third quarter, as compared with $11.1 million in the second quarter. Cost of revenues improved to 47.7% of total revenues in the third quarter, as compared with 51.5% in the second quarter. This improvement reflects the decline in Juno's effective telecommunications rate and improvements in the per-subscriber cost of providing customer service. Operations, free service expenses increased to $11.8 million in the third quarter from $9.5 million in the second quarter. This rise reflects a 45% increase in average monthly hours of connection time per free service subscriber as well as continued growth in the size of Juno's active subscriber base. The increase was offset in part by a decline of almost 20% in Juno's effective telecommunications rate. Operations, free service expenses and the portion of cost of revenues that is associated with the free service averaged approximately $1.65 per active free subscriber per month on a combined basis in the third quarter, up from approximately $1.60 per month in the second quarter. This per-subscriber cost remains substantially better than the best Juno's management has seen reported by any competitor. Juno believes its cost advantage to be due in part to the use of its patented offline technology. Revenues associated with free service subscribers averaged approximately $1.10 per active free subscriber per month, down from approximately $1.20 per subscriber per month in the second quarter, principally due to softness in the overall market for Internet advertising. This softness, exacerbated by an increase in the percentage of Juno's advertisers that are Internet-related companies, is reflected in the company's backlog of advertising contracts, which remained essentially unchanged between the end of the second quarter and the end of the third quarter; in the reduction or cancellation of certain contracts; and in an increased risk of uncollectible receivables. Because such softness has continued into the current quarter, management currently expects that revenues associated with the free service will continue to be exceeded by the sum of the expenses reported on the Operations, free service line and the portion of the Cost of revenues line associated with the free service through at least the end of this year, and that, given the firm's current focus on the continued reduction of expenses and on the continued improvement of its bottom-line performance, firmwide revenues are unlikely to increase during the fourth quarter. As planned, Juno reduced its subscriber acquisition expenses, to $24.9 million in the third quarter from $38.1 million in the second quarter. The $24.9 million total was divided roughly evenly between cash expenditures and non-cash subscriber acquisition expenses, such as fees payable in Juno common stock in connection with the company's subscriber referral agreements with former Internet service providers WorldSpy and Freewwweb. Juno currently expects a significant further reduction in subscriber acquisition expenses during the fourth quarter, part of an overall effort to bring expenses more in line with company revenues and reduce Juno's reliance on external sources of capital in the context of a less hospitable current market environment. The company's net loss improved to ($0.75) per share in the third quarter of 2000, compared to a net loss of ($1.11) per share in the second quarter. Subscriber acquisition expenses accounted for approximately 85% of the ($0.75) total, leaving a net loss BEFORE subscriber acquisition expenses of just ($0.11) per share. In light of recent changes in the market environment, Juno's management currently expects to continue (at least for the time being) its recent shift of focus from the aggressive, cash-intensive growth of its subscriber base to the reduction of its cash outflows and the exploration and development of additional potential revenue sources. "Instead of spending aggressively to attract new subscribers, we expect to concentrate to a greater extent over the next few quarters on segmenting our subscriber base and extracting value from the most productive and least costly segments while taking steps to control the costs associated with the least productive and most costly," said Charles Ardai, Juno's president and chief executive officer. "More than half of the telecom costs associated with our free service are attributable to the 5% of our free subscribers who use that service most heavily. One of our goals will be to improve the balance between revenues and expenses by encouraging heavy users to upgrade to one of our billable services, participate in other revenue-generating activities, or modify their usage patterns. While this initiative may result in a certain amount of subscriber attrition, we believe this increased emphasis on the profitability of various segments of our subscriber base to be appropriate, particularly in light of recent changes in the Internet market environment." ABOUT JUNO Juno Online Services, Inc. is a leading provider of Internet access to millions of computer users throughout the United States. Founded in 1996, the company provides multiple levels of service, including free basic Internet access, billable premium dial-up service, and (in certain markets) high-speed broadband access. Juno's revenues are derived primarily from the subscription fees charged for its billable premium services, from the sale of advertising, and from various forms of electronic commerce. Based on its total of 3.70 million active subscribers during the month of September 2000, Juno is currently the nation's third largest provider of dial-up Internet services, after AOL and EarthLink. As of September 30, 2000, Juno had approximately 12.77 million total registered subscriber accounts. For more information about Juno, visit www.juno.com/corp. To get a free copy of the Juno software, go to www.juno.com or call 1-800-TRY-JUNO. # STATEMENTS IN THIS PRESS RELEASE REGARDING JUNO ONLINE SERVICES, INC. THAT ARE NOT HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE SUCH STATEMENTS TO DIFFER MATERIALLY FROM ACTUAL FUTURE EVENTS OR RESULTS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE JUNO'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN A FORWARD-LOOKING STATEMENT: LIMITED HISTORY OF OFFERING JUNO'S BILLABLE PREMIUM SERVICES AND FREE BASIC SERVICE IN ITS CURRENT FORM; HISTORY OF LOSSES; FAILURE TO RETAIN OR GROW JUNO'S SUBSCRIBER BASE; INCREASING COMPETITION FROM EXISTING OR NEW COMPETITORS; INABILITY TO SUSTAIN CURRENT LEVELS OF SUBSCRIBER ACQUISITION OR RETENTION; INABILITY TO SUCCESSFULLY MIGRATE FREE SUBSCRIBERS TO, OR TO RETAIN SUBSCRIBERS IN, JUNO'S BILLABLE PREMIUM SERVICES; RAPID TECHNOLOGICAL CHANGE; POSSIBLE UNAVAILABILITY OF FINANCING AS AND IF NEEDED; DECREASES IN THE POPULARITY OF THE INTERNET AMONG CONSUMERS OR AS AN ADVERTISING MEDIUM; DEPENDENCE ON A LIMITED NUMBER OF PARTNERS AND VENDORS FOR THE PROVISION AND ROLL-OUT OF THE JUNO EXPRESS BROADBAND SERVICE; POSSIBLE INDUSTRY CONSOLIDATION; AND POTENTIAL FLUCTUATIONS IN QUARTERLY AND ANNUAL RESULTS. THIS LIST IS INTENDED TO IDENTIFY ONLY CERTAIN OF THE PRINCIPAL FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER. READERS ARE REFERRED TO THE REPORTS AND DOCUMENTS FILED BY JUNO WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE QUARTERLY REPORT ON FORM 10-Q FILED AUGUST 14, 2000, FOR A DISCUSSION OF THESE AND OTHER IMPORTANT RISK FACTORS. "EBITDA" AND "CASH PORTION OF NET LOSS" ARE NOT MEASUREMENTS OF FINANCIAL PERFORMANCE UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BE CONSIDERED ALTERNATIVES TO NET LOSS. EBITDA (EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION) EXCLUDES INTEREST, TAXES AND NON-CASH EXPENSES SUCH AS DEPRECIATION, AMORTIZATION, AND CHARGES FOR STOCK-BASED SUBSCRIBER ACQUISITION. "CASH PORTION OF NET LOSS" IS SIMILAR TO EBITDA, BUT ALSO INCLUDES THE BENEFIT OF INTEREST INCOME, NET. COMPARISON OF THE SIZE OF JUNO'S SUBSCRIBER BASE TO THOSE OF AOL, EARTHLINK, AT&T, MICROSOFT, NETZERO, AND PRODIGY IS BASED ON THE MOST RECENT DATA PUBLISHED BY EACH COMPANY AND KNOWN TO JUNO'S MANAGEMENT AS OF THE DATE HEREOF. JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS) (UNAUDITED) THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, -------------------------- -------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Revenues: Billable services .................... $ 18,962 $ 8,654 $ 54,127 $ 21,529 Advertising and transaction fees ................................ 11,105 3,367 28,199 8,335 Direct product sales ................. 78 1,083 1,419 4,082 ----------- ----------- ----------- ----------- Total revenues ...................... 30,145 13,104 83,745 33,946 ----------- ----------- ----------- ----------- Cost of revenues: Billable services .................... 12,130 5,960 36,727 16,119 Advertising and transaction fees ................................ 2,174 1,120 6,186 3,362 Direct product sales ................. 74 988 1,344 3,577 ----------- ----------- ----------- ----------- Total cost of revenues .............. 14,378 8,068 44,257 23,058 ----------- ----------- ----------- ----------- Operating expenses: Operations, free service ............. 11,773 1,464 27,423 5,081 Subscriber acquisition ............... 24,874 15,028 107,744 31,648 Sales and marketing .................. 5,010 3,180 14,235 8,208 Product development .................. 2,470 1,592 8,033 5,423 General and administrative ........... 2,139 1,284 6,401 2,970 ----------- ----------- ----------- ----------- Total operating expenses ............ 46,266 22,548 163,836 53,330 ----------- ----------- ----------- ----------- Loss from operations ................ (30,499) (17,512) (124,348) (42,442) Interest income, net ................... 1,163 1,430 4,535 2,336 ----------- ----------- ----------- ----------- Net loss ............................ $ (29,336) $ (16,082) $(119,813) $ (40,106) =========== =========== =========== =========== Basic and diluted net loss per share.... $ (0.75) $ (3.13) =========== =========== Pro forma basic and diluted net loss per share ............................... $ (0.46) $ (1.39) =========== =========== Weighted average shares outstanding used in basic and diluted per share calculations ........................ 38,866 38,225 ========== =========== Weighted average shares outstanding used in pro forma basic and diluted per share calculations .............. 34,634 28,869 =========== =========== JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) SEPTEMBER 30, DECEMBER 31, 2000 1999 ------------- ------------ (UNAUDITED) ASSETS Current assets: Cash and cash equivalents ............................... $ 68,648 $ 91,497 Accounts receivable, net of allowance for doubtful accounts of $1,557 and $544 at September 30, 2000 and December 31, 1999, respectively .............. 13,573 6,370 Prepaid expenses and other current assets ............... 7,506 15,437 --------- --------- Total current assets ................................... 89,727 113,304 Fixed assets, net ......................................... 9,386 5,684 Other assets .............................................. 902 100 --------- --------- Total assets ........................................... $ 100,015 $ 119,088 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses ................... $ 36,031 $ 29,800 Current portion of capital lease obligations ............ 1,184 1,423 Deferred revenue ........................................ 17,077 14,510 --------- --------- Total current liabilities .............................. 54,292 45,733 Capital lease obligations ................................. 238 1,455 Deferred rent ............................................. 177 252 Deferred revenue .......................................... 128 -- Liabilities expected to be settled with common stock ...... 10,100 -- Stockholders' equity: Preferred stock--$.01 par value; 5,000,000 shares authorized, none issued and outstanding ............... -- -- Common stock--$.01 par value; 133,333,334 shares authorized, 38,936,504 and 34,833,568 shares issued and outstanding at September 30, 2000 and December 31, 1999 respectively .......................................... 389 348 Additional paid-in capital .............................. 206,400 123,530 Unearned compensation ................................... (411) (745) Cumulative translation adjustment ....................... (1) (1) Accumulated deficit ..................................... (171,297) (51,484) --------- --------- Total stockholders' equity ............................. 35,080 71,648 --------- --------- Total liabilities and stockholders' equity ............. $ 100,015 $ 119,088 ========= ========= JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) NINE MONTHS ENDED SEPTEMBER 30, ------------------------ 2000 1999 --------- --------- Cash flows from operating activities: Net loss ................................................. $(119,813) $ (40,106) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization .......................... 2,743 1,696 Stock-based subscriber acquisition ..................... 10,100 -- Amortization of deferred rent .......................... (61) (49) Amortization of unearned compensation .................. 165 352 Changes in operating assets and liabilities: Accounts receivable .................................. (7,203) (3,120) Prepaid expenses and other current assets ............ 7,931 (12,420) Accounts payable and accrued expenses ................ 6,217 17,950 Deferred revenue ..................................... 2,695 6,927 --------- --------- Net cash used in operating activities .............. (97,226) (28,770) --------- --------- Cash flows from investing activities: Purchases of fixed assets ................................ (6,445) (657) Other assets ............................................. (802) 68 --------- --------- Net cash used in investing activities .............. (7,247) (589) --------- --------- Cash flows from financing activities: Payments on capital lease obligations .................... (1,456) (546) Payments on senior note .................................. -- (9,129) Net proceeds from issuance of redeemable convertible preferred stock ............................ -- 61,859 Net proceeds from issuance of common stock ............... 81,080 77,285 Proceeds from issuance of common stock in connection with employee stock purchase plan ........ 1,166 -- Proceeds from issuance of common stock upon exercise of stock options ......................... 834 155 --------- --------- Net cash provided by financing activities .......... 81,624 129,624 --------- --------- Net (decrease) increase in cash and cash equivalents (22,849) 100,265 Cash and cash equivalents, beginning of period ............. 91,497 8,152 --------- --------- Cash and cash equivalents, end of period ................... $ 68,648 $ 108,417 ========= ========= Supplemental disclosure of cash flow information: Cash paid for interest ................................... $ 126 $ 293 Supplemental schedule of noncash investing and financing activities: Capital lease obligations incurred for network equipment ...................................... $ -- $ 871 JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS SEQUENTIAL QUARTERLY COMPARISON (IN THOUSANDS) (UNAUDITED) THREE MONTHS ENDED ------------------------ SEPTEMBER 30, JUNE 30, 2000 2000 ---------- -------- Revenues: Billable services .................... $ 18,962 $ 18,429 Advertising and transaction fees ..... 11,105 10,685 Direct product sales ................. 78 439 -------- -------- Total revenues ...................... 30,145 29,553 -------- -------- Cost of revenues: Billable services .................... 12,130 12,557 Advertising and transaction fees ..... 2,174 2,262 Direct product sales ................. 74 414 -------- -------- Total cost of revenues .............. 14,378 15,233 -------- -------- Operating expenses: Operations, free service ............. 11,773 9,506 Subscriber acquisition ............... 24,874 38,119 Sales and marketing .................. 5,010 5,610 Product development .................. 2,470 3,100 General and administrative ........... 2,139 2,486 -------- -------- Total operating expenses ............ 46,266 58,821 -------- -------- Loss from operations ................ (30,499) (44,501) Interest income, net ................... 1,163 1,650 -------- -------- Net loss ............................ $(29,336) $(42,851) ======== ======== Basic and diluted net loss per share ... $ (0.75) $ (1.11) ======== ======== Weighted average shares outstanding used in basic and diluted per share calculations ...................... 38,866 38,715 ======== ======== JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES (IN THOUSANDS, EXCEPT FOR SELECTED SUBSCRIBER DATA) (UNAUDITED) EBITDA: THREE MONTHS ENDED SEPTEMBER 30, JUNE 30, -------------------------- 2000 2000 ------------- ----------- Net loss ....................... $(29,336) $(42,851) Depreciation and amortization 1,041 1,017 Noncash subscriber acquisition 12,535 266 Interest income, net ......... (1,163) (1,650) -------- -------- EBITDA .................. $(16,923) $(43,218) ======== ======== SEPT. 30, JUN. 30, MAR. 31, DEC. 31, SEPT. 30, --------- -------- -------- -------- --------- SELECTED SUBSCRIBER DATA: 2000 2000 2000 1999 1999 - ------------------------- ---- ---- ---- ---- ---- Total registered subscriber accounts as of (1) ........................ 12,771,000 11,048,000 9,430,000 8,137,000 7,613,000 Active subscriber accounts in month ended (2) .............. 3,700,000 3,379,000 3,053,000 2,394,000 2,326,000 Active Web-enabled subscribers in month ended (3) .. 3,251,000 2,876,000 2,358,000 771,000 268,000 Billable subscription service accounts as of (4) .............. 750,000 730,000 661,000 550,000 400,000 - ------------------ (1) Includes all subscriber accounts created since Juno's inception, computed after deduction of any accounts that have since been cancelled, but regardless of current activity, if any. (2) Encompasses all registered subscriber accounts that connected at least once during the month, together with all subscribers to a billable service, in each case regardless of the type of activity or activities engaged in by such subscribers. (3) Refers to the subset of active subscriber accounts that have been centrally provisioned for, and provided with the client-side software necessary to access, not only e-mail, but also the World Wide Web, regardless of the extent, if any, to which such subscribers have actually used the Web. (4) Represents the subset of active subscriber accounts that carry a charge for premium functionality.