Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 24, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-25965 | ||
Entity Registrant Name | J2 GLOBAL, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-1053457 | ||
Entity Address, Address Line One | 700 S. Flower Street | ||
Entity Address, Address Line Two | 15th Floor | ||
Entity Address, City or Town | Los Angeles | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90017 | ||
City Area Code | 323 | ||
Local Phone Number | 860-9200 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | JCOM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,056,955,800 | ||
Entity Common Stock, Shares Outstanding | 45,170,544 | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement to be delivered to stockholders in connection with the Annual Meeting of Stockholders to be held May 7, 2021 are incorporated by reference into Part III of this Form 10-K. This Annual Report on Form 10-K includes 138 pages with the Index to Exhibits located on page 133. | ||
Entity Central Index Key | 0001084048 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 242,652 | $ 575,615 |
Short-term investments | 663 | 0 |
Accounts receivable, net of allowances of $16,018 and $12,701, respectively | 325,619 | 261,928 |
Prepaid expenses and other current assets | 53,909 | 49,347 |
Total current assets | 622,843 | 886,890 |
Long-term investments | 97,495 | 100,079 |
Property and equipment, net | 156,577 | 127,817 |
Operating lease right-of-use assets | 105,845 | 125,822 |
Trade names, net | 187,902 | 138,029 |
Customer relationships, net | 377,194 | 238,502 |
Goodwill | 1,867,430 | 1,633,033 |
Other purchased intangibles, net | 176,473 | 180,022 |
Deferred income taxes, noncurrent | 56,545 | 59,976 |
Other assets | 17,027 | 15,676 |
TOTAL ASSETS | 3,665,331 | 3,505,846 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable and accrued expenses | 230,651 | 238,059 |
Income taxes payable, current | 31,753 | 17,758 |
Deferred revenue, current | 190,644 | 162,855 |
Operating lease liabilities, current | 32,211 | 26,927 |
Current portion of long-term debt | 396,801 | 385,532 |
Other current liabilities | 497 | 1,973 |
Total current liabilities | 882,557 | 833,104 |
Total long-term debt, less current portion | 1,182,220 | 1,062,929 |
Deferred revenue, noncurrent | 14,440 | 12,744 |
Operating lease liabilities, noncurrent | 99,177 | 104,070 |
Income taxes payable, noncurrent | 11,675 | 11,675 |
Liability for uncertain tax positions | 57,081 | 52,451 |
Deferred income taxes, noncurrent | 162,700 | 107,453 |
Other long-term liabilities | 44,463 | 10,228 |
TOTAL LIABILITIES | 2,454,313 | 2,194,654 |
Commitments and contingencies | 0 | 0 |
Common stock, $0.01 par value. Authorized 95,000,000 at December 31, 2020 and 2019; total issued and outstanding 44,346,630 and 47,654,929 shares at December 31, 2020 and 2019, respectively. | 443 | 476 |
Additional paid-in capital | 456,274 | 465,652 |
Retained earnings | 809,107 | 891,526 |
Accumulated other comprehensive loss | (54,806) | (46,462) |
TOTAL STOCKHOLDERS’ EQUITY | 1,211,018 | 1,311,192 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 3,665,331 | 3,505,846 |
Series A Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | 0 | 0 |
Series B Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 16,018 | $ 12,701 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 95,000,000 | 95,000,000 |
Common stock, shares issued (in shares) | 44,346,630 | 47,654,929 |
Common stock, shares outstanding (in shares) | 44,346,630 | 47,654,929 |
Series A Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 6,000 | 6,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 1,489,593 | $ 1,372,054 | $ 1,207,295 |
Cost of revenues | 231,782 | 237,323 | 201,074 |
Gross profit | 1,257,811 | 1,134,731 | 1,006,221 |
Operating expenses: | |||
Sales and marketing | 413,474 | 379,183 | 338,304 |
Research, development and engineering | 64,295 | 54,396 | 48,370 |
General and administrative | 445,431 | 424,072 | 375,267 |
Total operating expenses | 923,200 | 857,651 | 761,941 |
Income from operations | 334,611 | 277,080 | 244,280 |
Interest expense, net | 131,975 | 69,546 | 61,987 |
Gain on sale of businesses | (17,122) | 0 | 0 |
Loss on investments, net | 20,991 | 4,211 | 73 |
Other (income) expense , net | (31,632) | 3,725 | 4,633 |
Income before income taxes and net loss in earnings of equity method investment | 230,399 | 199,598 | 177,587 |
Income tax expense (benefit) | 68,393 | (19,376) | 44,760 |
Net loss in earnings of equity method investment | 11,338 | 168 | 4,140 |
Net income | $ 150,668 | $ 218,806 | $ 128,687 |
Net income per common share: | |||
Basic (in dollars per share) | $ 3.24 | $ 4.52 | $ 2.64 |
Diluted (in dollars per share) | $ 3.18 | $ 4.39 | $ 2.59 |
Weighted average shares outstanding: | |||
Basic (in shares) | 46,308,825 | 47,647,397 | 47,950,746 |
Diluted (in shares) | 47,122,511 | 49,025,684 | 48,927,791 |
Cash dividends paid per common share (in dollars per share) | $ 0 | $ 0.90 | $ 1.68 |
Share-based compensation expense | $ 24,006 | $ 23,922 | $ 28,093 |
Cost of revenues | |||
Weighted average shares outstanding: | |||
Share-based compensation expense | 535 | 525 | 510 |
Sales and marketing | |||
Weighted average shares outstanding: | |||
Share-based compensation expense | 1,454 | 1,547 | 1,798 |
Research, development and engineering | |||
Weighted average shares outstanding: | |||
Share-based compensation expense | 1,779 | 1,477 | 1,553 |
General and administrative | |||
Weighted average shares outstanding: | |||
Share-based compensation expense | $ 20,238 | $ 20,373 | $ 24,232 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 150,668 | $ 218,806 | $ 128,687 |
Other comprehensive loss, net of tax: | |||
Foreign currency translation adjustment | (8,902) | (1,626) | (15,471) |
Change in fair value on available-for-sale investments, net of tax expense (benefit) of $181, $149 and $(460) for the years ended December 31, 2020, 2019 and 2018, respectively | 558 | 1,143 | (1,418) |
Other comprehensive loss, net of tax | (8,344) | (483) | (16,889) |
Comprehensive income | $ 142,324 | $ 218,323 | $ 111,798 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Tax expense (benefit) for unrealized holding gain (loss) on available-for-sale investments | $ 181 | $ 149 | $ (460) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 150,668,000 | $ 218,806,000 | $ 128,687,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 228,737,000 | 232,032,000 | 187,174,000 |
Amortization of financing costs and discounts | 28,476,000 | 14,038,000 | 11,385,000 |
Non-cash operating lease costs | 17,686,000 | 21,419,000 | 0 |
Share-based compensation | 24,006,000 | 23,922,000 | 28,093,000 |
Provision for doubtful accounts | 13,283,000 | 13,134,000 | 17,338,000 |
Deferred income taxes, net | 5,840,000 | (63,444,000) | 25,050,000 |
Loss on extinguishment of debt | 37,969,000 | 0 | 0 |
Gain on sale of businesses | (17,122,000) | 0 | 0 |
Lease asset impairments and other charges | 12,121,000 | 0 | 0 |
Changes in fair value of contingent consideration | (80,000) | 6,318,000 | 18,944,000 |
Foreign currency remeasurement gain | (34,646,000) | 0 | 0 |
Loss on equity method investments | 11,338,000 | 139,000 | 10,506,000 |
Loss on equity and debt investments | 20,826,000 | 4,164,000 | 0 |
Decrease (increase) in: | |||
Accounts receivable | (31,611,000) | (30,680,000) | 4,034,000 |
Prepaid expenses and other current assets | 3,046,000 | (8,685,000) | 2,211,000 |
Other assets | (3,000) | (4,083,000) | 2,391,000 |
Increase (decrease) in: | |||
Accounts payable and accrued expenses | 2,184,000 | (770,000) | (35,220,000) |
Income taxes payable | 6,489,000 | (1,738,000) | (29,042,000) |
Deferred revenue | 4,720,000 | 6,844,000 | 11,991,000 |
Operating lease liabilities | (16,439,000) | (20,240,000) | 0 |
Liability for uncertain tax positions | 9,391,000 | (453,000) | 7,694,000 |
Other long-term liabilities | 3,200,000 | 1,816,000 | 10,089,000 |
Net cash provided by operating activities | 480,079,000 | 412,539,000 | 401,325,000 |
Cash flows from investing activities: | |||
Distribution from equity method investment | 0 | 10,288,000 | 0 |
Purchases of equity method investment | (31,937,000) | (29,584,000) | (36,635,000) |
Purchase of equity investments | (1,246,000) | 0 | 0 |
Purchases of available-for-sale investments | 0 | 0 | (500,000) |
Purchases of property and equipment | (92,552,000) | (70,588,000) | (56,379,000) |
Proceeds from sale of assets | 507,000 | 0 | 0 |
Acquisition of businesses, net of cash received | (482,227,000) | (415,343,000) | (312,430,000) |
Proceeds from sale of businesses, net of cash divested | 24,353,000 | 0 | 0 |
Purchases of intangible assets | (3,118,000) | (46,000) | (669,000) |
Net cash used in investing activities | (586,220,000) | (505,273,000) | (406,613,000) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 750,000,000 | 550,000,000 | 0 |
Payment of note payable | (400,000) | 0 | 0 |
Debt issuance cost | (7,272,000) | (12,862,000) | 0 |
Payment of debt | (650,000,000) | (5,100,000) | (2,204,000) |
Debt extinguishment costs | (29,250,000) | 0 | 0 |
Proceeds from line of credit | 0 | 185,000,000 | 0 |
Repayment of line of credit | 0 | (185,000,000) | 0 |
Repurchase of common stock | (275,654,000) | (20,803,000) | (47,102,000) |
Issuance of common stock under employee stock purchase plan | 7,382,000 | 4,512,000 | 2,084,000 |
Exercise of stock options | 1,619,000 | 5,274,000 | 1,540,000 |
Dividends paid | 0 | (43,918,000) | (82,572,000) |
Deferred payments for acquisitions | (29,180,000) | (18,876,000) | (3,558,000) |
Other | (1,878,000) | (1,532,000) | 450,000 |
Net cash (used in) provided by financing activities | (234,633,000) | 456,695,000 | (131,362,000) |
Effect of exchange rate changes on cash and cash equivalents | 7,811,000 | 2,180,000 | (4,821,000) |
Net change in cash and cash equivalents | (332,963,000) | 366,141,000 | (141,471,000) |
Cash and cash equivalents at beginning of year | 575,615,000 | 209,474,000 | 350,945,000 |
Cash and cash equivalents at end of year | $ 242,652,000 | $ 575,615,000 | $ 209,474,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Additional paid-in capital | Treasury stock | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss) |
Beginning balance (in shares) at Dec. 31, 2017 | 47,854,510 | 0 | ||||||
Beginning balance at Dec. 31, 2017 | $ 1,020,305 | $ 1,599 | $ 479 | $ 325,854 | $ 0 | $ 723,062 | $ 1,599 | $ (29,090) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 128,687 | 128,687 | ||||||
Other comprehensive income, net of tax | (16,889) | (16,889) | ||||||
Dividends | $ (82,573) | (82,573) | ||||||
Exercise of stock options (in shares) | 67,898 | 67,898 | ||||||
Exercise of stock options | $ 1,540 | $ 1 | 1,539 | |||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 33,262 | |||||||
Issuance of shares under Employee Stock Purchase Plan | 2,084 | 2,084 | ||||||
Vested restricted stock (in shares) | 169,512 | |||||||
Vested restricted stock | 0 | $ 2 | (2) | |||||
Repurchase and retirement of common stock (in shares) | (52,912) | (600,000) | ||||||
Repurchase and retirement of common stock | (47,102) | $ (1) | (3,230) | $ (42,543) | (1,328) | |||
Exchange of Series B preferred stock (in shares) | 10,530 | |||||||
Exchange of Series B preferred stock | 0 | |||||||
Share based compensation | 28,093 | 27,965 | 128 | |||||
Ending balance at Dec. 31, 2018 | 1,035,744 | $ 481 | 354,210 | $ (42,543) | 769,575 | (45,979) | ||
Ending balance (in shares) at Dec. 31, 2018 | 48,082,800 | (600,000) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 218,806 | 218,806 | ||||||
Other comprehensive income, net of tax | (483) | (483) | ||||||
Dividends | $ (43,918) | (43,918) | ||||||
Exercise of stock options (in shares) | 189,436 | 189,436 | ||||||
Exercise of stock options | $ 5,274 | $ 2 | 5,272 | |||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 66,413 | |||||||
Issuance of shares under Employee Stock Purchase Plan | 4,512 | $ 1 | 4,511 | |||||
Equity portion of convertible debt | 88,138 | 88,138 | ||||||
Vested restricted stock (in shares) | 185,227 | |||||||
Vested restricted stock | 0 | $ 1 | (1) | |||||
Repurchase and retirement of common stock (in shares) | (868,947) | 600,000 | ||||||
Repurchase and retirement of common stock | (20,803) | $ (9) | (10,334) | $ 42,543 | (53,003) | |||
Share based compensation | 23,922 | 23,856 | 66 | |||||
Ending balance at Dec. 31, 2019 | 1,311,192 | $ 476 | 465,652 | $ 0 | 891,526 | (46,462) | ||
Ending balance (in shares) at Dec. 31, 2019 | 47,654,929 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 150,668 | 150,668 | ||||||
Other comprehensive income, net of tax | $ (8,344) | (8,344) | ||||||
Exercise of stock options (in shares) | 42,740 | 42,740 | ||||||
Exercise of stock options | $ 1,619 | 1,619 | ||||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 118,629 | |||||||
Issuance of shares under Employee Stock Purchase Plan | 7,382 | $ 1 | 7,381 | |||||
Exercise of 3.25% Convertible Note | (12) | (12) | ||||||
Vested restricted stock (in shares) | 273,201 | |||||||
Vested restricted stock | 0 | $ 3 | (3) | |||||
Repurchase and retirement of common stock (in shares) | (3,742,869) | |||||||
Repurchase and retirement of common stock | (275,654) | $ (37) | (42,530) | (233,087) | ||||
Share based compensation | 24,006 | 24,006 | ||||||
Other, net | 161 | 161 | ||||||
Ending balance at Dec. 31, 2020 | $ 1,211,018 | $ 443 | $ 456,274 | $ 0 | $ 809,107 | $ (54,806) | ||
Ending balance (in shares) at Dec. 31, 2020 | 44,346,630 | 0 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tax expense (benefit) of other comprehensive income (loss) | $ 181 | $ 149 | $ (460) |
The Company
The Company | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The CompanyJ2 Global, Inc., together with its subsidiaries (“J2 Global”, the “Company”, “our”, “us”, or “we”), is a leading provider of internet information and services. The Company’s Digital Media business specializes in the technology, shopping, gaming, and healthcare markets, offering content, tools and services to consumers and businesses. Through its Cloud Services business, the Company provides cloud-based subscription services to consumers and businesses including cloud fax, cybersecurity, privacy and marketing technology. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies (a) Principles of Consolidation The accompanying 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. (b) Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. 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, fair value of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowance 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. In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID-19”) as a pandemic. The global impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets and creating increasing volatility and overall uncertainty. The full impact of the COVID-19 pandemic is unknown and cannot be reasonably estimated. However, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are differences between these estimates and the actual results, our consolidated financial statements could be materially affected. (c) Allowances for Doubtful Accounts J2 Global maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expenses in the Consolidated Statements of Operations. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status. It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. On an ongoing basis, management evaluates the adequacy of these reserves. (d) 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. (e) Fair Value Measurements J2 Global complies with the provisions of 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. The carrying values 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 debt instruments with similar terms and maturities when available. 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. (f) Cash and Cash Equivalents J2 Global considers cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of three months or less at the purchase date. (g) Investments J2 Global accounts for its investments in debt securities in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 320, Investments - Debt Securities (“ASC 320”). The Company’s debt investments are typically comprised of corporate debt securities, which it classifies as available-for-sale. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. All debt securities are accounted for on a specific identification basis. The Company’s available-for-sale debt securities are carried at an estimated fair value with any unrealized gains or losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in loss on investments, net on our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in accumulated comprehensive loss in stockholders’ equity. 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). The Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions (see Note 5 - Investments). (h) 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 the right to 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 impact 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). OCV qualifies as an investment company under ASC 946 - Financial Services, Investment Companies (“ASC 946”). Under ASC Topic 323, Investments - Equity Method and Joint Ventures, an investor that holds investments that qualify for specialized industry accounting for investment companies in accordance with ASC 946 should record its share of the earnings or losses, realized or unrealized, as reported by its equity method investees in the Consolidated Statements of Operations. 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 that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. (i) 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 using the effective interest method. (j) Derivative Instruments J2 Global currently holds an embedded derivative instrument related to contingent interest in connection with its 3.25% Convertible Notes issued on June 10, 2014. This embedded derivative instrument is carried at fair value with changes recorded to interest expense (see Note 7 - Fair Value Measurements). (k) Concentration of Credit Risk All of the Company’s cash, cash equivalents and marketable securities are invested at major financial institutions primarily within the United States, United Kingdom and Ireland. These institutions are required to invest the Company’s cash in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns commensurate with preservation of capital. The Company’s investment policy also requires that investments in marketable securities be in only highly rated instruments, with limitations on investing in securities of any single issuer. However, these investments are not insured against the possibility of a total or near complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the underlying issuer and general credit market risks. At December 31, 2020, the Company’s cash and cash equivalents were maintained in accounts in qualifying financial institutions that are insured up to the limit determined by the applicable governmental agency. These institutions are primarily in the United States and United Kingdom, however, the Company has accounts within several other countries including Australia, Austria, China, Denmark, France, Germany, Italy, Japan, New Zealand, Netherlands, Norway, and Sweden. (l) Foreign Currency Some of J2 Global’s foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. Dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive income/(loss). Net translation loss was $8.9 million, $1.6 million and $15.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. Realized gains and losses from foreign currency transactions are recognized within other expense (income), net. Foreign exchange gains (losses) amounted to $28.5 million, $(4.0) million and $(2.3) million for the years ended December 31, 2020, 2019 and 2018, respectively. (m) Property and Equipment Property and equipment are stated at cost. Equipment under finance 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 and is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations. 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 finance 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. (n) Impairment or Disposal of Long-Lived and Intangible Assets J2 Global accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of FASB ASC Topic No. 360, Property, Plant, and Equipment (“ASC 360”), which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. The Company assesses the impairment of identifiable definite-lived intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it consider important which could individually or in combination trigger an impairment review include the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for J2 Global’s overall business; • Significant negative industry or economic trends; • Significant decline in the Company’s stock price for a sustained period; and • The Company’s market capitalization relative to net book value. If the Company determined that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value. J2 Global assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. In the year ended December 31, 2020, the Company recorded impairments of certain operating right-of-use assets and associated property and equipment (see Note 11 - Leases). No impairment was recorded in fiscal year 2019 or 2018. The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale. (o) Business Combinations and Valuation of Goodwill and Intangible Assets J2 Global applies the acquisition method of accounting for business combinations in accordance with GAAP and uses of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets, including identifiable intangible assets, and liabilities acquired. Such estimates may be based on significant unobservable inputs and assumptions such as, but not limited to, revenue growth rates, gross margins, customer attrition rates, royalty rates, discount rates and terminal growth rate assumptions. J2 Global uses established valuation techniques and may engage reputable valuation specialists to assist with the valuations. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. 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. Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from one In addition, the COVID-19 pandemic could have an adverse impact on the Company’s consolidated financial results in 2021, and possibly longer. As of December 31, 2020, there were no indications that the carrying value of goodwill and other intangible assets may not be recoverable. However, a prolonged adverse impact of the COVID-19 pandemic on the Company’s consolidated financial results may require an impairment charge related to one or more of these assets in a future period. No impairments to goodwill or other intangible assets were recorded during the years ended December 31, 2020, 2019, or 2018 as a result of COVID-19. (p) Contingent Consideration Certain of J2 Global’s acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future income thresholds or other metrics. The contingent earn-out arrangements are based upon the Company’s valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheets. J2 Global considers several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former shareholders of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of the Company’s other key employees. The contingent earn-out payments are not affected by employment termination. J2 Global measures its 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 7 - 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 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 amounts. Changes in the estimated fair value of our contingent earn-out liabilities and adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in general and administrative expenses on the Consolidated Statements of Operations. (q) Self-Insurance Program J2 Global provides health and dental insurance plans to 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 differ from recorded self-insurance liabilities. (r) Income Taxes J2 Global’s income is subject to taxation in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. J2 Global establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. J2 Global adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. J2 Global accounts for income taxes in accordance with FASB ASC Topic No. 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. GAAP also requires that deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time. In assessing this valuation allowance, J2 Global reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable. GAAP provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain income tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. J2 Global recognized accrued interest and penalties related to uncertain income tax positions in income tax expense on its Consolidated Statements of Operations. In addition, on March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (“CARES”) Act” was enacted into law providing for changes to various tax laws that impact business. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company did not directly seek to borrow any funds under the program. However, as a result of an acquisition that closed during the quarter ended December 31, 2020, the Company assumed outstanding PPP loans that had started the process of being forgiven prior to the closing of the acquisition. The amount of the outstanding loan did not have a significant impact to our financial statements. We do not believe these provisions have a significant impact to our current and deferred income tax balances. The Company will benefit from the technical correction to tax depreciation related to qualified improvement property and has elected to defer income tax payments and employer side social security payments where eligible. (s) Share-Based Compensation J2 Global accounts for share-based awards to employees and non-employees in accordance with the provisions of FASB ASC Topic No. 718, Compensation - Stock Compensation (“ASC 718”). Accordingly, J2 Global measures share-based compensation expense at the grant date, based on the fair value of the award, and recognizes the expense over the employee’s requisite service period using the straight-line method. The measurement of share-based compensation expense is based on several criteria, including but not limited to the valuation model used and associated input factors, such as expected term of the award, stock price volatility, risk free interest rate, dividend rate and award cancellation rate. These inputs are subjective and are determined using management’s judgment. If differences arise between the assumptions used in determining share-based compensation expense and the actual factors, which become known over time, J2 Global may change the input factors used in determining future share-based compensation expense. Any such changes could materially impact the Company’s results of operations in the period in which the changes are made and in periods thereafter. The Company estimates the expected term based upon the historical exercise behavior of our employees. (t) Earnings Per Common Share (“EPS”) EPS is calculated pursuant to the two-class method as defined in ASC Topic No. 260, Earnings per Share (“ASC 260”), which specifies that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS pursuant to the two-class method. Basic EPS is calculated by dividing net distributed and undistributed earnings allocated to common shareholders, excluding participating securities, by the weighted-average number of common shares outstanding. The Company’s participating securities consist of its unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the impact of other potentially dilutive shares outstanding during the period. The dilutive effect of participating securities is calculated under the more dilutive of either the treasury method or the two-class method. (u) Research, Development and Engineering Research, development and engineering costs are expensed as incurred. Costs for software development incurred subsequent to establishing technological feasibility, in the form of a working model, are capitalized and amortized over their estimated useful lives. (v) Segment Reporting FASB ASC Topic No. 280, Segment Reporting (“ASC 280”), 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. ASC 280 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 an |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Digital Media Digital Media revenues are earned primarily from the delivery of advertising services, from subscriptions to services and information. 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 includes 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 its numerous proprietary Cloud Services solutions, the Company also generates revenues by reselling various third-party solutions, primarily through its email security and online backup lines of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s 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. 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 standard 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 Consolidated Statements of Stockholders’ Equity). Revenues from external customers classified by revenue source are as follows (in thousands). See Note 18, “Segment Information” for additional information. Years ended December 31, Digital Media 2020 2019 2018 Advertising $ 616,197 $ 515,702 $ 468,325 Subscription 186,718 185,559 138,689 Other 8,445 9,250 2,360 Total Digital Media revenues $ 811,360 $ 710,511 $ 609,374 Cloud Services Subscription $ 678,013 $ 660,814 $ 597,281 Other 448 1,021 694 Total Cloud Services revenues $ 678,461 $ 661,835 $ 597,975 Corporate $ 1 $ 8 $ 6 Elimination of inter-business revenues (229) (300) (60) Total Revenues $ 1,489,593 $ 1,372,054 $ 1,207,295 Timing of revenue recognition Point in time $ 27,685 $ 32,983 $ 4,752 Over time 1,461,908 1,339,071 1,202,543 Total $ 1,489,593 $ 1,372,054 $ 1,207,295 The Company has recorded $157.4 million and $122.7 million of revenue for the years ended December 31, 2020 and 2019, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year. As of December 31, 2020 and 2019, the Company acquired $22.4 million and $28.0 million, respectively, of deferred revenue in connection with the Company’s business acquisitions (see Note 4 - Business Acquisitions) which are subject to purchase accounting adjustments, as appropriate. 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 product, 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, CPP, 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 • Consumer privacy services are provided • Security solutions, including email and endpoint are provided • 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 customers with amortization periods determined to be greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit. In addition, the Company partners with various affiliates in order to generate a portion of its revenue for certain lines of business. The commissions earned by the Company’s affiliates are incentive based and are paid on the acquisition of new customers in a given period. For those customers with amortization periods determined to be 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 Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business AcquisitionsThe 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 year ended December 31, 2020, paying the purchase price in cash in each transaction: (a) an asset purchase of EDC Systems Inc. (operating under the name “SRFax”), acquired on February 18, 2020, a Canadian-based provider of fax solutions; (b) a share purchase of the entire issued capital of RetailMeNot, Inc. acquired on October 28, 2020, a Texas-based provider of marketing solutions; (c) a share purchase of the entire issued capital of Inspired eLearning, LLC, acquired on November 2, 2020, a Texas-based platform for cybersecurity awareness and compliance training; (d) a share purchase of the entire issued capital of The Aberdeen Group, LLC and The Big Willow, Inc., acquired on November 20, 2020, a Massachusetts-based provider in digital marketing solutions; and (e) other immaterial acquisitions of email marketing, security and digital media businesses. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2020, reflect the results of operations of all 2020 acquisitions. For the year ended December 31, 2020, these acquisitions contributed $61.9 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 $497.8 million, net of cash acquired and assumed liabilities and 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 all 2020 acquisitions (in thousands): Assets and Liabilities Valuation Accounts receivable $ 46,332 Prepaid expenses and other current assets 9,105 Property and equipment 2,248 Operating lease right of use asset 10,644 Trade names 67,670 Customer relationships 222,582 Goodwill 218,745 Other intangibles 56,802 Other long-term assets 685 Deferred tax asset 992 Accounts payables and accrued expenses (29,073) Deferred revenue (22,436) Operating lease liabilities, current (4,520) Long-term debt (910) Operating lease liabilities, noncurrent (13,104) Income taxes payable (3,297) Liability for uncertain tax positions (1,576) Deferred tax liability (53,870) Other long-term liabilities (9,269) Total $ 497,750 During 2020, the purchase price accounting has been finalized for the following acquisitions: Highwinds Capital, Inc. and Cloak Holdings, LLC, OffsiteDataSync, Inc., BabyCenter LLC, Spiceworks, Inc., and immaterial digital media and consumer privacy and protection businesses. The initial accounting for all 2020 acquisitions is incomplete due to timing of available information and are 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 year ended December 31, 2020, the Company recorded adjustments to prior period acquisitions due to changes in the initial working capital and related purchase accounting within the Voice, Backup, Security and CPP businesses, which resulted in a net decrease in goodwill of $2.1 million. In addition, the Company recorded adjustments to prior period acquisitions due to changes in the initial working capital and related purchase accounting within the Digital Media business, which resulted in a net increase in goodwill of $9.7 million (see Note 9 - Goodwill and Intangible Assets). Such adjustments had an immaterial impact to amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2020. The fair value of the assets acquired includes accounts receivable of $46.3 million. The gross amount due under contracts is $53.2 million, of which $6.9 million is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. 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 in connection with these acquisitions during the year ended December 31, 2020 is $218.7 million, of which $70.8 million is expected to be deductible for income tax purposes. RetailMeNot, Inc. On October 28, 2020, the Company acquired all the outstanding issued capital of RetailMeNot, Inc. at a purchase consideration of $414.4 million, net of cash acquired and assumed liabilities. RetailMeNot, Inc. (“RMN”) is a leading savings destination that influences purchase decisions through the power of savings and coupons. The multinational Company operates digital savings websites and mobile applications connecting consumers, both online and in-store, to retailers that advertise with RMN. The acquisition of RMN is expected to further increase retail sales and is believed to, if combined with the Company’s current commerce business and leveraging its editorial strengths, can drive even greater scale and margin expansion. The Consolidated Statement of Operations since the date of acquisition and balance sheet as of December 31, 2020, reflect the results of operations of RetailMeNot, Inc. For the year ended December 31, 2020, RetailMeNot, Inc. contributed $47.6 million to the Company’s revenues. Net income contributed by RetailMeNot, Inc. was not separately identifiable due to J2 Global’s integration activities and is impracticable to provide. The following table summarizes the allocation of the purchase consideration for the RetailMeNot, Inc. acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 40,525 Prepaid expenses and other current assets 7,367 Property and equipment 587 Operating lease right of use asset 10,313 Trade names 62,940 Customer relationships 198,840 Goodwill 169,581 Other intangibles 42,610 Other long-term assets 494 Deferred tax asset 605 Accounts payables and accrued expenses (24,526) Deferred revenue (11,175) Operating lease liabilities, current (4,029) Operating lease liabilities, noncurrent (13,085) Income taxes payable (3,308) Liability for uncertain tax positions (1,576) Deferred tax liability (52,504) Other long-term liabilities (9,275) Total $ 414,384 The fair value of the assets acquired includes accounts receivable of $40.5 million. The gross amount due under contracts is $47.2 million, of which $6.7 million is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. 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 in connection with this acquisition during the year ended December 31, 2020 is $169.6 million, of which $36.6 million is expected to be deductible for income tax purposes. Pro Forma Financial Information for RetailMeNot, Inc. Acquisition The following unaudited pro forma supplemental information is based on estimates and assumptions that J2 Global believes are reasonable. However, this information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had J2 Global and the acquired businesses been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2019 and do not take into consideration the exiting of any acquired lines of business. The Company acquired a line of business, through the RetailMeNot, Inc. acquisition which was in the process of being exited prior to the acquisition. This line of business accounts for $0.1 million and $28.2 million of revenue in 2020 and 2019, respectively, which is included in the pro forma results below. In addition, during 2020, the Company sold certain Voice assets in Australia and New Zealand. This divestiture represented $8.4 million and $13.9 million of revenue during the 2020 and 2019 fiscal years, respectively. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and RetailMeNot, Inc. as if the acquisition had occurred on January 1, 2019 (in thousands, except per share amounts): Year ended December 31, 2020 December 31, 2019 (unaudited) (unaudited) Revenues $ 1,639,495 $ 1,589,437 Net income $ 140,880 $ 190,709 EPS - Basic $ 3.03 $ 3.94 EPS - Diluted $ 2.98 $ 3.83 Pro Forma Financial Information for All 2020 Acquisitions The following unaudited pro forma supplemental information is based on estimates and assumptions that J2 Global believes are reasonable. However, this information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had J2 Global and the acquired businesses been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2019 and do not take into consideration the exiting of any acquired lines of business. The Company acquired a line of business, through the RetailMeNot, Inc. acquisition which was in the process of being exited prior to the acquisition. This line of business accounts for $0.1 million and $28.2 million of revenue in 2020 and 2019, respectively, which is included in the pro forma results below. In addition, during 2020, the Company sold certain Voice assets in Australia and New Zealand. This divestiture represented $8.4 million and $13.9 million of revenue during the 2020 and 2019 fiscal years, respectively. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2020 acquisitions as if each acquisition had occurred on January 1, 2019 (in thousands, except per share amounts): Year ended December 31, 2020 December 31, 2019 (unaudited) (unaudited) Revenues $ 1,671,955 $ 1,633,861 Net income $ 140,534 $ 178,654 EPS - Basic $ 3.02 $ 3.69 EPS - Diluted $ 2.97 $ 3.59 2019 The Company completed the following acquisitions during the year ended December 31, 2019, paying the purchase price with a combination of cash and note payable: (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; (c) a share purchase of the entire issued capital of Highwinds Capital, Inc. and Cloak Holdings, LLC, acquired on April 2, 2019, a Texas-based provider in solutions for virtual private network (“VPN”) services; (d) an asset purchase of OffsiteDataSync, Inc., acquired on July 1, 2019, a New York-based provider in backup and disaster recovery solutions; (e) an asset and a share purchase of the entire issued capital of BabyCenter LLC., acquired on August 19, 2019, a California-based provider in digital parenting and pregnancy resources; (f) a share purchase of the entire issued capital of Spiceworks, Inc., acquired on August 21, 2019, a Texas-based provider in digital media advertising solutions; and (g) other immaterial acquisitions of online data backup, consumer privacy and protection, and digital media businesses. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2019, reflect the results of operations of all 2019 acquisitions. For the year ended December 31, 2019, these acquisitions contributed $126.3 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 $429.5 million, net of cash acquired and assumed liabilities and 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 all 2019 acquisitions (in thousands): Assets and Liabilities Valuation Accounts receivable $ 22,796 Prepaid expenses and other current assets 4,528 Property and equipment 4,625 Operating lease right of use asset 4,982 Trade names 10,773 Customer relationships 123,611 Goodwill 253,096 Trademarks 32,540 Other intangibles 48,446 Other long-term assets 660 Accounts payables and accrued expenses (31,292) Other current liabilities (516) Deferred revenue (27,953) Operating lease liabilities, current (1,768) Operating lease liabilities, noncurrent (3,215) Income taxes payable (762) Liability for uncertain tax positions (170) Deferred tax liability (10,229) Other long-term liabilities (635) Total $ 429,517 During the year ended December 31, 2019, the Company recorded adjustments to prior period acquisitions due to the finalization of the purchase accounting in the Fax and Martech business which resulted in a net increase in goodwill of $0.2 million. In addition, the Company recorded adjustments to the initial working capital and to the purchase accounting due to the finalization of prior period acquisitions in the Digital Media business, which resulted in a net decrease in goodwill of $0.9 million (see Note 9 - Goodwill and Intangible Assets). Such adjustments had an immaterial impact to amortization expense within the Consolidated Statement of Operations for the year ended December 31, 2019. The fair value of the assets acquired includes accounts receivable of $22.8 million. The gross amount due under contracts is $23.7 million, of which $0.9 million is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. 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 in connection with these acquisitions during the year ended December 31, 2019 is $253.1 million, of which $95.1 million is expected to be deductible for income tax purposes. Pro Forma Financial Information for All 2019 Acquisitions The following unaudited pro forma supplemental information is based on estimates and assumptions that J2 Global believes are reasonable. However, this information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had J2 Global and the acquired businesses been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2018. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2019 acquisitions as if each acquisition had occurred on January 1, 2018 (in thousands, except per share amounts): Year ended December 31, 2019 December 31, 2018 (unaudited) (unaudited) Revenues $ 1,474,132 $ 1,427,914 Net income $ 211,303 $ 104,710 EPS - Basic $ 4.36 $ 2.15 EPS - Diluted $ 4.24 $ 2.11 2018 The Company completed the following acquisitions during the year ended December 31, 2018, paying the purchase price in cash for each transaction: (a) a share purchase of the entire issued capital of ThreatTrack Security Holdings, Inc., acquired on January 26, 2018, a Florida-based provider of cybersecurity solutions; (b) an asset purchase of Line2, Inc., acquired on June 18, 2018, a California-based provider of voice solutions; (c) a share purchase of all the membership interests of Mosaik Solutions, LLC, acquired on June 18, 2018, a Tennessee-based provider of mobile coverage data and network intelligence for mobile operators and network-dependent enterprises; (d) a share purchase of DemandShore Solutions Private Limited, acquired on July 19, 2018, an India-based provider of software and other solutions to sales and marketing professionals; (e) a share purchase of DW PRIME Holdings, Inc., acquired on August 20, 2018, a Florida-based accredited provider of continuing medical education for medical professionals; (f) a share purchase of The Communicator Corporation Limited, acquired on September 25, 2018, an United Kingdom-based provider of email marketing services; (g) a share purchase of Ekahau Inc., acquired on October 10, 2018, a Virginia-based provider of solutions for enterprise Wi-Fi network design, troubleshooting, and optimization; and (h) other immaterial acquisitions of digital health and data analysis businesses. The Consolidated Statement of Operations since the date of each acquisition and balance sheet, as of December 31, 2018, reflect the results of operations of all 2018 acquisitions. For the year ended December 31, 2018, these acquisitions contributed $56.2 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 $324.7 million, net of cash acquired and assumed liabilities and 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 all 2018 acquisitions (in thousands): Assets and Liabilities Valuation Cash (1) $ 15,532 Accounts receivable 11,321 Prepaid expenses and other current assets 3,480 Property and equipment 4,755 Trade names 33,750 Customer relationships 66,516 Goodwill 194,282 Trademarks 3,285 Other intangibles 84,907 Other long-term assets 341 Deferred tax asset 821 Accounts payables and accrued expenses (10,864) Deferred revenue (37,113) Finance lease (956) Income tax payable (1,458) Deferred tax liability (22,990) Other long-term liabilities (5,410) Total $ 340,199 (1) Cash contains an immaterial amount of restricted cash associated with a pre-acquisition relationship with a vendor. The entire balance has been released during the third quarter of 2018. During the year ended December 31, 2018, the Company recorded adjustments to prior period acquisitions primarily due to the finalization of the purchase accounting in the Voice, Backup, Security and CPP business (CPP established in 2019) which resulted in a net decrease in goodwill of $1.0 million. In addition, the Company recorded adjustments to the initial working capital related to prior period acquisitions in the Digital Media business, which resulted in a net increase in goodwill of $0.2 million. Such adjustments had an immaterial impact to amortization expense within the Consolidated Statement of Operations for the year ended December 31, 2018. The fair value of the assets acquired includes accounts receivable of $15.5 million. The gross amount due under contracts is $11.6 million, of which $0.3 million is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. 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 in connection with these acquisitions during the year ended December 31, 2018 is $194.3 million, of which $38.3 million is expected to be deductible for income tax purposes. Pro Forma Financial Information for All 2018 Acquisitions The following unaudited pro forma supplemental information is based on estimates and assumptions, that J2 Global believes are reasonable. However, this information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had J2 Global and the acquired businesses been combined companies during the periods presented. These pro forma results exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2017 and do not take into consideration the exiting of any acquired lines of business. During 2017, the Company sold Cambridge BioMarketing Group, LLC (“Cambridge”), a subsidiary within the Digital Media business; j2 Australia Hosting Pty Ltd (dba “Web24”), a subsidiary within the Cloud Services business; and Tea Leaves, a subsidiary within the Digital Media business. These divestitures represented $22.7 million of revenue within the 2017 fiscal year. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2018 acquisitions as if each acquisition had occurred on January 1, 2017 (in thousands, except per share amounts): Year ended December 31, 2018 December 31, 2017 (unaudited) (unaudited) Revenues $ 1,264,544 $ 1,218,530 Net income $ 121,727 $ 123,378 EPS - Basic $ 2.50 $ 2.56 EPS - Diluted $ 2.45 $ 2.50 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [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 and can be reasonable known. Any changes in the carrying value of the equity securities will be reported in earnings as a (gain) loss on investment. In addition, the Company determined that the shares of redeemable preferred stock that were also received as part of the consideration for the sale Tea Leaves are corporate debt securities and are classified as available-for-sale-securities. These debt securities were subsequently exchanged in a non-cash transaction in the first quarter of 2020. Furthermore, the COVID-19 pandemic had an adverse impact on the global financial markets. A prolonged adverse impact of the COVID-19 pandemic could result in a decline in the equity and debt securities estimated fair value and, thus, a resulting charge to earnings in a future period. The following table summarizes the gross unrealized losses and estimated fair values for the Company’s securities without a readily determinable fair value (in thousands): Cost Impairment Adjustments Reported Amount December 31, 2020 Equity securities $ 50,384 $ (19,605) $ (479) $ 30,300 Total $ 50,384 $ (19,605) $ (479) $ 30,300 December 31, 2019 Equity securities $ 34,977 $ (4,164) $ (3,678) $ 27,135 Total $ 34,977 $ (4,164) $ (3,678) $ 27,135 In the first quarter of 2020, in a non-cash transaction of $18.3 million, the Company exchanged shares of redeemable preferred stock that were previously classified as available-for-sale corporate debt securities (identified in the table below) for a new series of preferred stock, classified as equity securities without a readily determinable fair value. The Company recognized a loss on exchange of $4.4 million, which is reflected in loss on investments, net in the Consolidated Statements of Operations. During the year ended December 31, 2020, the Company recorded a $19.6 million impairment loss related to a decline in value primarily due to the recapitalization of the investee and overall market volatility. During the year ended December 31, 2019, the Company recorded a $4.2 million impairment loss related to a decline in overall market volatility. At December 31, 2020, cumulative impairment losses on these securities were $23.8 million. The impairment losses are recorded in loss on investments, net on the Consolidated Statements of Operations. The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale (in thousands): Amortized Gross Gross Fair December 31, 2020 Corporate debt securities $ 511 $ 152 $ — $ 663 Total $ 511 $ 152 $ — $ 663 December 31, 2019 Corporate debt securities $ 23,256 $ 112 $ (698) $ 22,670 Total $ 23,256 $ 112 $ (698) $ 22,670 At December 31, 2020, 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): December 31, 2020 December 31, 2019 Due within 1 year $ 663 $ — Due within more than 1 year but less than 5 years — 22,670 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 663 $ 22,670 Recognition and Measurement of Credit Loss of Debt Securities The Company adopted ASU 2016-13, Financial Instrument-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments in the first quarter of 2020. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. This ASU also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than a reduction in the amortized cost basis of the securities. These changes will result in the earlier recognition of credit losses, if any. The Company’s available-for-sale debt securities are carried at an estimated fair value with any unrealized gains or losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in loss on investments, net on our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in accumulated comprehensive loss in stockholders’ equity. The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands). There were no investments in an unrealized loss position as of December 31, 2020. As of December 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 $ — $ — $ 22,047 $ (698) $ 22,047 $ (698) Total $ — $ — $ 22,047 $ (698) $ 22,047 $ (698) As of December 31, 2020, 2019 and 2018, the Company did not recognize any other-than-temporary impairment losses on its debt securities. On September 25, 2017, the Company entered into a commitment to invest $200 million (approximately 76.6% of equity) in the OCV Fund. 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 2020, the Company received capital call notices from the management of OCV Management, LLC for $32.9 million inclusive of certain management fees, of which $31.9 million has been paid for the year ended December 31, 2020. During 2019, the Company received capital call notices from the management of OCV Management, LLC for $29.6 million inclusive of certain management fees, of which $29.6 million has been paid for the year ended December 31, 2019. During 2019, the Company received a distribution from OCV of $10.3 million. 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 that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. During the years ended December 31, 2020, 2019, and 2018, the Company recognized a net loss in earnings of its equity method investment of $11.3 million, $0.2 million, and $4.1 million, net of tax benefit, respectively. The fiscal 2020 loss was primarily a result of the impairment of two of its investments as a result of COVID-19 in the amount of $7.0 million net of tax benefit. In addition, the Company recognized an investment loss in fiscal 2020 in the amount of $4.3 million, net of tax benefit. During the years ended December 31, 2020, 2019, and 2018 the Company recognized management fees of $3.0 million, $3.0 million, and $4.5 million, net of tax benefit, respectively. The following table discloses the carrying amount for the Company’s equity method investment (in thousands): December 31, 2020 December 31, 2019 Equity securities $ 67,195 $ 50,274 Maximum exposure to loss $ 67,195 $ 50,274 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. |
Sale of Assets
Sale of Assets | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Assets | Sale of AssetsDuring the second quarter of 2020, the Company committed to a plan to sell certain Voice assets in Australia and New Zealand as they were determined to be non-core assets. Such assets were recorded within the Voice, Backup, Security, and CPP reportable segment. On August 31, 2020, in a cash transaction, the Company sold these Voice assets for a gain of $17.1 million which was recorded in gain on sale of businesses on the Consolidated Statement of Operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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. The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs. 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 was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings in 2019, which are Level 2 inputs. The fair value of the MUFG Credit Facility approximated its carrying amount due to its variable interest rate, which approximated a market interest rate, and was considered a Level 2 input. The fair value of the Company’s debt instruments was $2.0 billion and $1.8 billion, at December 31, 2020 and December 31, 2019, respectively (see Note 10 - Long-Term Debt). In addition, the 3.25% Convertible Notes contain terms that may require the Company to pay contingent interest on the 3.25% Convertible Notes which is accounted for as a derivative with fair value adjustments being recorded to interest expense (see Note 10 - 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. In 2019, the Company entered into a $5.5 million note payable that was short-term in nature and associated with the quarter’s acquisition activity. In the same year, the Company paid down $5.1 million of the outstanding note and in the third quarter of 2020, the balance of the note payable was paid in full. 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. For similar reasons, certain of the Company’s available-for-sale debt securities were classified within Level 3. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. The following table presents the fair values, valuation techniques, unobservable inputs, and ranges of the Company’s financial liabilities categorized within Level 3. The weighted averages below are a product of the unobservable input and fair value of the contingent consideration arrangement as of December 31, 2020. Valuation Technique Unobservable Input Range Weighted Average Contingent Consideration Option-Based Model Risk free rate 1.9% 1.9 % Debt spread 0.0% - 33.5% 11.0 % Probabilities 5.0% - 100.0% 62.3 % Present value factor 3.6% - 3.9% 3.7 % Discount rate 28.6% 28.6 % 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): December 31, 2020 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 10,413 $ — $ — $ 10,413 $ 10,413 Corporate debt securities — 663 — 663 663 Total assets measured at fair value $ 10,413 $ 663 $ — $ 11,076 $ 11,076 Liabilities: Contingent consideration $ — $ — $ 9,094 $ 9,094 $ 9,094 Long-term debt 1,960,527 — — 1,960,527 1,579,021 Total liabilities measured at fair value $ 1,960,527 $ — $ 9,094 $ 1,969,621 $ 1,588,115 December 31, 2019 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 395,664 $ — $ — $ 395,664 $ 395,664 Corporate debt securities — 623 22,047 22,670 22,670 Total assets measured at fair value $ 395,664 $ 623 $ 22,047 $ 418,334 $ 418,334 Liabilities: Contingent consideration $ — $ — $ 37,887 $ 37,887 $ 37,887 Long-term debt — 1,833,062 — 1,833,062 1,448,461 Total liabilities measured at fair value $ — $ 1,833,062 $ 37,887 $ 1,870,949 $ 1,486,348 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 year ended December 31, 2020, the Company transferred the fair value of its long-term debt from Level 2 to Level 1. For the year ended December 31, 2019, there were no transfers that 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 Total fair value adjustments reported in earnings (768) Interest expense, net Balance as of December 31, 2019 $ — The following tables 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 5,079 Total fair value adjustments reported in earnings 6,318 General and administrative Contingent consideration payments (23,545) Not Applicable Balance as of December 31, 2019 $ 37,887 Contingent consideration 8,932 Total fair value adjustments reported in earnings (80) General and administrative Contingent consideration payments (37,645) Not Applicable Balance as of December 31, 2020 $ 9,094 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 zero and $20.0 million at December 31, 2020 and December 31, 2019, respectively. Due to the Company’s achievement of certain EBITDA targets for the year ended December 31, 2019 and 2018 and the amended contingent consideration agreement, $20.0 million and $20.0 million was paid during the year ended December 31, 2020 and 2019, respectively. 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 zero and $9.1 million at December 31, 2020 and December 31, 2019, respectively. Due to the achievement of certain thresholds, $9.1 million was paid during the year ended December 31, 2020. In connection with the Company’s other acquisition activity, contingent consideration of up to $23.3 million may be payable upon achieving certain future EBITDA, revenue, and/or unique visitor thresholds and had a combined fair value of $9.1 million and $8.8 million at December 31, 2020 and December 31, 2019, respectively. Due to the achievement of certain thresholds, $8.6 million was paid during the year ended December 31, 2020. During the year ended December 31, 2020, the Company recorded a net decrease in the fair value of the contingent consideration of $0.1 million and reported such decrease in general and administrative expenses. The following tables presents a reconciliation of the Company’s Level 3 financial assets related to certain available-for-sale debt securities that are measured at fair value on a recurring basis (in thousands): Level 3 Balance as of January 1, 2019 $ 20,846 Total fair value adjustments reported in other comprehensive income 1,201 Balance as of December 31, 2019 $ 22,047 Exchange of available-for-sale corporate debt securities (Note 5) (22,047) Balance as of December 31, 2020 $ — |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, stated at cost, at December 31, 2020 and 2019 consisted of the following (in thousands): 2020 2019 Computers and related equipment $ 350,735 $ 334,768 Furniture and equipment 2,721 1,977 Leasehold improvements 9,010 17,374 362,466 354,119 Less: Accumulated depreciation and amortization (205,889) (226,302) Total property and equipment, net $ 156,577 $ 127,817 Depreciation and amortization expense was $63.8 million, $51.4 million and $41.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
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 and is assigned to the reporting unit that is expected to benefit from the synergies of the 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 The changes in carrying amounts of goodwill for the years ended December 31, 2020 and 2019 are as follows (in thousands): Fax and Martech Voice, Backup, Security and CPP 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) 31,672 179,293 210,965 42,131 253,096 Purchase Accounting Adjustments (1) 177 — 177 (858) (681) Foreign exchange translation (331) 73 (258) 500 242 Balance as of December 31, 2019 $ 397,788 $ 480,084 $ 877,872 $ 755,161 $ 1,633,033 Goodwill acquired (Note 4) 21,738 19,056 40,794 177,951 218,745 Goodwill written off related to sale of a business (2) — (4,751) (4,751) — (4,751) Purchase accounting adjustments (1) — (2,130) (2,130) 9,721 7,591 Foreign exchange translation 5,945 6,766 12,711 101 12,812 Balance as of December 31, 2020 $ 425,471 $ 499,025 $ 924,496 $ 942,934 $ 1,867,430 (1) Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 4 - Business Acquisitions). (2) On August 31, 2020, in a cash transaction, the Company sold certain of its Voice assets in Australia and New Zealand which resulted in $4.8 million of goodwill being written off (see Note 6 - Sale of Assets). Intangible assets are summarized as of December 31, 2020 and 2019 as follows (in thousands): Intangible Assets with Indefinite Lives: 2020 2019 Trade names $ 27,460 $ 27,379 Other 4,329 4,306 Total $ 31,789 $ 31,685 Intangible Assets Subject to Amortization: As of December 31, 2020, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.0 years $ 260,715 $ 100,273 $ 160,442 Patent and patent licenses 5.5 years 67,980 66,964 1,016 Customer relationships (1) 8.0 years 848,875 471,681 377,194 Other purchased intangibles 4.3 years 436,352 265,224 171,128 Total $ 1,613,922 $ 904,142 $ 709,780 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four During the year ended December 31, 2020, the Company acquired RetailMeNot, Inc. (see Note 4 - Business Acquisitions). The identified intangible assets were recognized as part of the acquisition and their respective estimated weighted average amortizations were as follows (in thousands): Weighted-Average Amortization Period Fair Value Trade names 10.0 years $ 62,940 Customer relationships 7.0 years 198,840 Other purchased intangibles 3.0 years 42,610 Total $ 304,390 During the year ended December 31, 2020, the Company completed acquisitions which were individually immaterial. The identified intangible assets were recognized as part of all 2020 acquisitions and their respective estimated weighted average amortizations were as follows (in thousands): Weighted-Average Amortization Period Fair Value Trade names 9.7 years $ 67,670 Customer relationships 6.9 years 222,582 Other purchased intangibles 3.3 years 56,802 Total $ 347,054 As of December 31, 2019, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.2 years $ 193,202 $ 82,552 $ 110,650 Patent and patent licenses 6.5 years 67,921 63,143 4,778 Customer relationships (1) 8.5 years 630,730 392,228 238,502 Other purchased intangibles 4.3 years 383,195 212,257 170,938 Total $ 1,275,048 $ 750,180 $ 524,868 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four Expected amortization expenses for intangible assets subject to amortization at December 31, 2020 are as follows (in thousands): Fiscal Year: 2021 $ 181,679 2022 134,289 2023 108,410 2024 77,965 2025 55,118 Thereafter 152,319 Total expected amortization expense $ 709,780 Amortization expense was $164.9 million, $180.6 million and $145.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt as of December 31, 2020 and 2019 consists of the following (in thousands): 2020 2019 6.0% Senior Notes $ — $ 650,000 4.625% Senior Notes 750,000 — Convertible Notes: 3.25% Convertible Notes 402,414 402,500 1.75% Convertible Notes 550,000 550,000 Total Notes 1,702,414 1,602,500 Paycheck Protection Program Loan 910 — Less: Unamortized discount (112,798) (139,981) Deferred issuance costs (11,505) (14,058) Total long-term debt $ 1,579,021 $ 1,448,461 Less: Current portion (396,801) (385,532) Total long-term debt, less current portion $ 1,182,220 $ 1,062,929 At December 31, 2020, future principal payments for debt were as follows (in thousands): Years Ended December 31, 2021 $ 402,414 2022 910 2023 — 2024 — 2025 — Thereafter 1,300,000 $ 1,703,324 Interest expense was $133.8 million, $70.2 million and $63.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. 6.0% Senior Notes On June 27, 2017, J2 Cloud Services, LLC (“J2 Cloud”) and J2 Cloud Co-Obligor, Inc. (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. J2 Cloud received proceeds of $636.5 million, after deducting the initial purchasers’ discounts, commissions and offering expenses. The 6.0% Senior Notes were presented as long-term debt, net of deferred issuance costs, on the Consolidated Balance Sheet as of December 31, 2019. The 6.0% Senior Notes bore interest at a rate of 6.0% per annum, payable semi-annually in arrears on January 15 and July 15 of each year. On October 7, 2020, the Company redeemed all of its outstanding $650 million 6.0% Senior Notes due in 2025 for $694.6 million, including an early redemption premium of $29.2 million and accrued and unpaid interest of $15.4 million. The Company recorded a loss on extinguishment of $38.0 million which is recorded in interest expense, net in the Consolidated Statements of Operations. As of December 31, 2019, the estimated fair value of the 6.0% Senior Notes was approximately $689.8 million, and was based on quoted market prices or dealer quotes for the 6.0% Senior Notes which are Level 1 inputs (see Note 7 - Fair Value Measurements). The following table provides additional information related to our 6% Senior Notes (in thousands): 2019 Principal amount of 6% Senior Notes $ 650,000 Less: Unamortized discount (8,425) Less: Debt issuance costs (1,466) Net carrying amount of 6% Senior Notes $ 640,109 4.625% Senior Notes On October 7, 2020, J2 Global, Inc. completed the issuance and sale of $750 million aggregate principal amount of its 4.625% senior notes due 2030 (the “4.625% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. The Company received proceeds of $742.7 million after deducting the initial purchasers’ discounts, commissions and offering expenses. The 4.625% Senior Notes are presented as long-term debt, net of deferred issuance costs, on the Consolidated Balance Sheets as of December 31, 2020. The net proceeds were used to redeem all of its outstanding 6.0% Senior Notes due in 2025 and, to the extent any proceeds remain thereafter, for general corporate purposes which may include acquisitions and the repurchase or redemption of other outstanding indebtedness. The 4.625% Senior Notes bear interest at a rate of 4.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. The 4.625% Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”). If J2 Global, Inc. or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625% Senior Notes were issued (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 Company’s obligations under the 4.625% Senior Notes. The Company may redeem some or all of the 4.625% Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, to, but excluding the redemption date. Before October 15, 2023, and following certain equity offerings, the Company also may redeem up to 40% of the 4.625% Senior Notes at a price equal to 104.625% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding the redemption date. The Company may make such redemption only if, after such redemption, at least 50% of the aggregate principal amount of the 4.625% Senior Notes remains outstanding. In addition, at any time prior to October 15, 2025, the Company may redeem some or all of the 4.625% 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 covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock or repurchase the Company’s capital stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if J2 Global, Inc. and subsidiaries designated as restricted subsidiaries has a net leverage ratio of greater than 3.5 to 1.0. In addition, if such net leverage ratio is in excess of 3.5 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not to exceed the greater of (A) $250 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants as of December 31, 2020. As of December 31, 2020, the estimated fair value of the 4.625% Senior Notes was approximately $796.9 million, and was based on recent quoted market prices or dealer quotes for the 4.625% Senior Notes which are Level 1 inputs (see Note 7 - Fair Value Measurements). The following table provides additional information on our 4.625% Senior Notes (in thousands): 2020 Principal amount of 4.625% Senior Notes $ 750,000 Less: Unamortized discount (5,523) Less: Debt issuance costs (1,761) Net carrying amount of 4.625% Senior Notes $ 742,716 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 “3.25% Convertible Notes”). The 3.25% 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 3.25% Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the 3.25% 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 3.25% Convertible Notes will be in addition to the regular interest payable on the 3.25% Convertible Notes. Holders may surrender their 3.25% 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 3.25% 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 3.25% 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 3.25% 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 3.25% 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. During the fourth quarter of 2019, the last reported sale price of the Company’s common stock exceeded 130% of the conversion price for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 3.25% Convertible Notes were convertible at the option of the holder during the quarter beginning January 1, 2020 and ending March 31, 2020. During the fourth quarter of 2020, the last reported sale price of the Company’s common stock exceeded 130% of the conversion price for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the quarter. As a result, the 3.25% Convertible Notes are convertible at the option of the holder during the quarter beginning January 1, 2021 and ending March 31, 2021. Since the Company currently intends to settle the principal amount in cash, the net carrying amount of the 3.25% Convertible Notes is classified within current liabilities on the Consolidated Balance Sheet as of December 31, 2020 and December 31, 2019. As of December 31, 2020, the conversion rate is 14.7632 shares of J2 Global common stock for each $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $67.74 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 3.25% 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 3.25% Convertible Notes prior to June 20, 2021. On or after June 20, 2021, J2 Global may redeem for cash all or part of the 3.25% Convertible Notes at a redemption price equal to 100% of the principal amount of the 3.25% Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 3.25% Convertible Notes. Holders have the right to require J2 Global to repurchase for cash all or part of their 3.25% 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 3.25% 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 3.25% Convertible Notes, occurs prior to the maturity date, holders may require J2 Global to repurchase for cash all or part of their 3.25% Convertible Notes at a repurchase price equal to 100% of the principal amount of the 3.25% Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As a result of the Holders’ repurchase option on June 15, 2021, the net carrying value of the 3.25% Convertible Notes is classified within current liabilities on the Consolidated Balance Sheet as of December 31, 2020. The 3.25% 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 3.25% 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 3.25% 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 3.25% 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 3.25% Convertible Notes using an interest rate of 5.81%. As of December 31, 2020, the remaining period over which the unamortized debt discount will be amortized is 0.5 years. The 3.25% Convertible Notes are carried at face value less any unamortized debt discount and debt issuance costs. The fair value of the 3.25% Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the 3.25% Convertible Notes, which are Level 1 inputs (see Note 7 - 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 December 31, 2020 and 2019, the estimated fair value of the 3.25% Convertible Notes was approximately $593.1 million and $583.6 million, respectively. As of December 31, 2020 and 2019, the if-converted value of our 3.25% Convertible Notes exceeded the principal amount by $173.3 million and $154.3 million, respectively. The following table provides additional information related to our 3.25% Convertible Notes (in thousands): 2020 2019 Additional paid-in capital $ 37,688 $ 37,700 Principal amount of 3.25% Convertible Notes $ 402,414 $ 402,500 Less: Unamortized discount of the liability component (4,644) (14,363) Less: Carrying amount of debt issuance costs (855) (2,605) Net carrying amount of 3.25% Convertible Notes $ 396,915 $ 385,532 The following table provides the components of interest expense related to our 3.25% Convertible Notes (in thousands): 2020 2019 2018 Cash interest expense (coupon interest expense) $ 13,080 $ 13,081 $ 13,081 Non-cash amortization of discount on 3.25% Convertible Notes 9,717 9,171 8,655 Amortization of debt issuance costs 1,749 1,600 1,462 Total interest expense related to 3.25% Convertible Notes $ 24,546 $ 23,852 $ 23,198 The Company has recorded changes in fair value associated with the contingent interest feature of the 3.25% Convertible Notes in interest expense for the years ended December 31, 2020, 2019, and 2018 of zero, $(0.8) million, and zero, respectively (see Note 7 - Fair Value Measurements). 1.75% Convertible Notes On November 15, 2019, J2 Global issued $550.0 million aggregate principal amount of 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes”). J2 Global received proceeds of $537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs. A portion of the net proceeds were used to pay off all amounts outstanding under the MUFG Credit Facility (see Note 12 - Commitments and Contingencies). The 1.75% Convertible Notes bear interest at a rate of 1.75% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The 1.75% Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased. Holders may surrender their 1.75% Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price of J2 Global common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding the calendar quarter is greater than 130% of the applicable conversion price of the 1.75% Convertible Notes on each such applicable trading day; (ii) during the five business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 1.75% Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of J2 Global common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after July 1, 2026, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances. J2 Global will settle conversions of the 1.75% 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. Holders of the notes will have the right to require the Company to repurchase for cash all or any portion of their notes upon the occurrence of certain corporate events, subject to certain conditions. As of December 31, 2020 and December 31, 2019, the market trigger conditions did not meet the conversion requirements of the 1.75% Convertible Notes and, accordingly, the 1.75% Convertible Notes are classified as long-term debt on the Consolidated Balance Sheets. As of December 31, 2020, the initial conversion rate is 7.9864 shares of J2 Global common stock for each $1,000 principal amount of 1.75% Convertible Notes, which represents a conversion price of approximately $125.21 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 1.75% Convertible Notes, but will not be adjusted for accrued interest. In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 1.75% Convertible Note Indenture), J2 Global will increase the conversion rate for a holder that elects to convert its 1.75% Convertible Notes in connection with such a corporate event in certain circumstances. J2 Global may not redeem the 1.75% Convertible Notes prior to November 1, 2026, and no sinking fund is provided for the 1.75% Convertible Notes. The 1.75% Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 1.75% Convertible Notes; (ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated, including its existing 3.25% Convertible Notes due 2029; (iii) effectively junior 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 and other liabilities incurred by the Company’s subsidiaries, including the former 6.0% Senior Notes due 2025. Accounting for the 1.75% 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 effective 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 maturity date of November 1, 2026. J2 Global estimated the borrowing rates of similar debt without the conversion feature at origination to be 5.5% for the 1.75% Convertible Notes and determined the debt discount to be $118.9 million. As a result, a conversion premium after tax of $88.1 million (net of $2.8 million of the deferred issuance costs) are recorded in additional paid-in capital. The aggregate debt discount is amortized as interest expense over the period from the issuance date through the maturity date of November 1, 2026, which management believes is the expected life of the 1.75% Convertible Notes using an interest rate of 5.5%. As of December 31, 2020, the remaining period over which the unamortized debt discount will be amortized is 5.8 years. In connection with the issuance of the 1.75% Convertible Notes, the Company incurred $12.9 million of deferred issuance costs, which primarily consisted of the underwriters’ discount, legal and other professional service fees. Of the total deferred issuance costs incurred, $10.1 million of such deferred issuance costs were attributable to the liability component and are recorded within other assets and are being amortized to interest expense through the maturity date. The unamortized balance, as of December 31, 2020, was $8.9 million. The remaining $2.8 million of the deferred issuance costs were netted with the equity component in additional paid-in capital at the issuance date The 1.75% Convertible Notes are carried at face value less any unamortized debt discount and issuance costs. The fair value of the 1.75% Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the 1.75% Convertible Notes, which are Level 1 inputs (see Note 7 - 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 December 31, 2020 and December 31, 2019, the estimated fair value of the 1.75% Convertible Notes was approximately $569.7 million and $559.6 million, respectively. The following table provides additional information related to our 1.75% Convertible Notes (in thousands): 2020 2019 Additional paid-in capital $ 88,138 $ 88,138 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Unamortized discount of the liability component (102,631) (117,193) Less: Carrying amount of debt issuance costs (8,889) (9,987) Net carrying amount of 1.75% Convertible Notes $ 438,480 $ 422,820 The following table provides the components of interest expense related to our 1.75% Convertible Notes (in thousands): 2020 2019 Cash interest expense (coupon interest expense) $ 9,653 $ 1,174 Non-cash amortization of discount on 1.75% Convertible Notes 14,563 1,718 Amortization of debt issuance costs 1,098 122 Total interest expense related to 1.75% Convertible Notes $ 25,314 $ 3,014 MUFG Credit Facility On October 7, 2020, the Company terminated the Credit Agreement (see Note 12 - Commitments and Contingencies). During the year ended December 31, 2019, the Company drew down $185.0 million and repaid $185.0 million under its MUFG Credit Facility. The Company had capitalized the total of $0.4 million in debt issuance costs, which were being amortized to interest expense over the life of the MUFG Credit Facility. As of December 31, 2019, these debt issuance costs, net of amortization, were $0.3 million. The related interest expense was zero and $3.4 million for the years ended December 31, 2020 and 2019, respectively. Paycheck Protection Program Loan |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases J2 Global leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031. Office and equipment leases are typically for terms of three During 2020, the Company decided to exit and seek subleases for certain leased facilities in the Digital Media reportable segment primarily due to a permanent “remote” or “partial remote” work model for a significant number of employees arising from the COVID-19 pandemic. The Company recorded a non-cash impairment charge of $12.1 million related to operating lease right-of-use assets for the affected facilities and an impairment charge of $3.6 million for associated property and equipment. The impairment was determined by comparing the fair value of the impacted right-of-use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment. The fair value of the right-of-use asset was based on the estimated sublease income for the affected facilities taking into consideration the time it will take to obtain a sublease tenant, the applicable discount rate and the sublease rate which represents Level 3 unobservable inputs. The impairment is presented in general and administrative expenses on the Consolidated Statements of Operations . No impairment was recorded in 2019 or 2018. 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. The Company adopted the new lease standard and related amendments as of January 1, 2019 using the optional transition 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. Finance leases are not material to the Company’s consolidated financial statements and are therefore not included in the disclosures. Upon adoption of ASC 842, 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, recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations, were as follows for the year ended (in thousands): Years ended December 31, 2020 2019 Operating lease cost $ 42,025 $ 23,681 Short-term lease cost 1,807 1,918 Total lease cost $ 43,832 $ 25,599 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating leases Operating lease right-of-use assets $ 105,845 $ 125,822 Total operating lease right-of-use assets $ 105,845 $ 125,822 Operating lease liability, current $ 32,211 $ 26,927 Operating lease liabilities, noncurrent 99,177 104,070 Total operating lease liabilities $ 131,388 $ 130,997 Supplemental cash flow information related to leases was as follows (in thousands): Years ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28,677 $ 24,750 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 31,669 $ 73,163 Other supplemental operating lease information consists of the following: December 31, 2020 December 31, 2019 Operating leases: Weighted average remaining lease term 5.2 years 5.9 years Weighted average discount rate 3.93 % 3.95 % Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands): Operating Leases Fiscal Year: 2021 $ 34,636 2022 32,137 2023 26,255 2024 18,288 2025 9,843 Thereafter 38,447 Total lease payments $ 159,606 Less: Imputed interest (28,218) Present value of operating lease liabilities $ 131,388 Rental expense for operating leases classified under ASC 840 for the year ended December 31, 2018 was $21.0 million and was predominantly recorded within general and administrative expenses. Sublease Total sublease income for the years ended December 31, 2020, 2019 and 2018 was $2.6 million, $3.5 million and $2.8 million, respectively. Total estimated aggregate sublease income to be received in the future is $4.5 million. In 2020, the Company recorded $2.1 million of impairment associated with one of its sublease tenants in default as a result of the economic effects of COVID-19. The impairment is presented in general and administrative expenses on the Consolidated Statement of Operations. 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. Rates are obtained from various large banks to determine the appropriate incremental borrowing rate each quarter for collateralized loans with a maturity similar to the lease term. 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 | 12 Months Ended |
Dec. 31, 2020 | |
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, with the exception of one issue. There is an anticipated trial date of September 2021. 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 removed to the U.S. District Court for the Eastern District of Arkansas (No. 4:16-cv-00682). On March 20, 2017, the District Court granted a motion for judgment on the pleadings filed by the J2 Global affiliates and 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. On January 29, 2019, after further appeals were exhausted, the case was remanded to the Arkansas state court. On April 1, 2019, the state court granted a motion for class certification filed by the plaintiff in 2016. Because the prior removal to federal court had deprived the state court of jurisdiction, the J2 Global affiliates had not yet filed an opposition brief to the 2016 motion when the state court granted the motion. The J2 Global affiliates appealed the order. On July 15, 2019, the J2 Global affiliates removed the case to federal court pursuant to the Class Action Fairness Act of 2005. On November 26, 2019 the court denied the Plaintiff’s motion to remand. On December 20, 2019, the court granted the Plaintiff’s motion for leave to amend its complaint. On May 21, 2020, the court denied J2 Global affiliates’ motion to dismiss. On August 11, 2020, the court approved an opt-in class notice. Notice has not yet been issued and the J2 Global affiliates have moved to decertify the class. On December 2, 2020, the parties provided notice to the Court that they have reached a tentative settlement in the matter, and on February 18, 2021, the parties filed a motion for preliminary approval of the class settlement, certification of a settlement class and for permission to disseminate notice. On July 8, 2020, Jeffrey Garcia filed a putative class action lawsuit against J2 Global in the Central District of California (20-cv-06906), alleging violations of federal securities laws. J2 Global has moved to dismiss the consolidated class action complaint. On September 24, 2020, International Union of Operating Engineers of Eastern Pennsylvania and Delaware filed a lawsuit in the Delaware Court of Chancery (C.A. No. 2020-0819-VCL) asserting derivative claims against directors of J2 Global, Inc. and other third parties. On November 17, 2020, the court entered an order allowing Orlando Police Pension Fund to intervene as a plaintiff in the case. The lawsuit alleges violations of breach of fiduciary duty and usurpation of corporate opportunity. J2 Global and its directors and officers intend to defend against the lawsuit. On December 11, 2020, Danning Huang filed a lawsuit in the District of Delaware (20-cv-01687-LPS) asserting derivative claims against directors of J2 Global, Inc. and other third parties. The lawsuit alleges violations of Section 14(a), Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as breach of fiduciary duty, unjust enrichment and abuse of control. J2 Global and its directors and officers intend to defend against the lawsuit. 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 accrued approximately $4.5 million in connection with potential loss contingencies relating to these legal proceedings because they are 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, as amended in July and August 2019, the Lenders provided J2 Cloud Services with a credit facility of $200.0 million (the “MUFG Credit Facility”) through December 31, 2020. On November 15, 2019, the Company reduced its borrowing capacity from $200.0 million to $100.0 million. The proceeds of the MUFG Credit Facility were 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. On October 7, 2020, the Company terminated the Credit Agreement. Non-Income Related Taxes The Company does not collect and remit sales and use, telecommunication, or similar taxes in certain jurisdictions where the Company believes that 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 Company is currently under audit or is subject to audit for indirect taxes in various states, municipalities and foreign jurisdictions. The Company has a $22.5 million reserve established for these matters which is included in other long-term liabilities and accounts payable and accrued expenses on the Consolidated Balance Sheet at December 31, 2020. It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could materially impact our financial results. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income tax consisted of the following (in thousands): Years Ended December 31, 2020 2019 2018 Current: Federal $ 20,943 $ 23,306 $ 17,233 State 5,223 4,774 (617) Foreign 36,387 15,988 3,094 Total current 62,553 44,068 19,710 Deferred: Federal (6,173) (1,903) 16,083 State 694 (5,620) 2,965 Foreign 11,319 (55,921) 6,002 Total deferred 5,840 (63,444) 25,050 Total provision $ 68,393 $ (19,376) $ 44,760 A reconciliation of the statutory federal income tax rate with J2 Global’s effective income tax rate is as follows: Years Ended December 31, 2020 2019 2018 Statutory tax rate 21 % 21 % 21 % State income taxes, net 1.5 0.9 1.2 Foreign rate differential (0.1) (3.8) (7.7) Foreign income inclusion 0.8 1.4 1.5 Foreign tax credit (1.3) (0.9) (1.4) Reserve for uncertain tax positions 3.5 (0.4) 4.1 Valuation allowance 3.7 0.2 0.2 Intra-entity tax benefit — (26.9) — Impact on deferred taxes of enacted tax law and rate changes 1.1 (1.3) 0.1 Contingent liabilities — 0.6 2.4 Unrecognized loss on intercompany sale — — 1.9 Other (0.5) (0.5) 1.9 Effective tax rates 29.7 % (9.7) % 25.2 % The effective tax rate for the year ended December 31, 2020 differs from the federal statutory rate primarily due recording a valuation allowance on deferred tax assets related to realized and unrealized capital losses. In addition, the Company recorded a net increase in the reserve for uncertain tax positions during 2020. The effective tax rate for 2019 differs from the federal statutory rate primarily due to a tax benefit recognized as a result of an intra-entity asset transfer. In December 2019, the Company completed an intra-entity asset transfer between two of its foreign subsidiaries as part of the reorganization of its international operating structure. The transfer caused the recognition of a net tax benefit for $53.7 million and a corresponding deferred tax asset. Additionally, the jurisdictional mix of income and disallowance of certain losses and expenses caused further differences from the federal statutory rate. The effective tax rate for 2018 differs from the federal statutory rate primarily due to impacts of the jurisdictional mix of income and disallowance of certain losses and expenses. Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows (in thousands): Years Ended December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 21,183 $ 43,352 Tax credit carryforwards 9,022 4,152 Accrued expenses 19,572 9,946 Allowance for bad debt 4,366 2,547 Share-based compensation expense 5,923 4,669 Impairment of investments 6,762 1,675 Deferred revenue 1,334 — State taxes 5,124 3,206 Other 12,045 9,958 85,331 79,505 Less: valuation allowance (8,307) (608) Total deferred tax assets $ 77,024 $ 78,897 Deferred tax liabilities: Basis difference in property and equipment $ (18,995) $ (15,767) Basis difference in intangible assets (93,162) (42,880) Prepaid insurance (2,905) (1,847) Convertible debt (65,192) (65,217) Other (2,925) (663) Total deferred tax liabilities (183,179) (126,374) Net deferred tax liabilities $ (106,155) $ (47,477) The Company had approximately $77.0 million and $78.9 million in deferred tax assets as of December 31, 2020 and 2019, respectively, related primarily to net operating loss carryforwards, basis difference in intangible assets including differences related to intra-entity transfers, tax credit carryforwards and accrued expenses treated differently between its financial statements and its tax returns. Based on the weight of available evidence, the Company assesses whether it is more likely than not that some portion or all of a deferred tax asset will not be realized. If necessary, J2 Global records a valuation allowance sufficient to reduce the deferred tax asset to the amount that is more likely that not to be realized. The deferred tax assets should be realized through future operating results and the reversal of temporary differences. The Company had a valuation allowance on deferred tax assets of $8.3 million and $0.6 million as of December 31, 2020 and 2019, respectively. The valuation allowance increased $7.7 million as a result of impairment and sales of investments that would result in a capital loss in the year of sale. The deduction for the capital losses would be limited to other capital gains recognized during the year. As of December 31, 2020, the Company had federal net operating loss carryforwards (“NOLs”) of $60.2 million, after considering substantial restrictions on the utilization of these NOLs due to “ownership changes”, as defined in the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). J2 Global currently estimates that all of the above-mentioned federal NOLs will be available for use before their expiration. $59.7 million of NOLs for losses incurred prior to January 1, 2018 expire through the year 2037. The NOLs for losses incurred after January 1, 2018 of $0.5 million have an indefinite carryforward period. Additionally, the Company has foreign NOLs of $5.8 million as of December 31, 2020 in various foreign jurisdictions which generally have an indefinite carryforward period. As of December 31, 2020 and 2019, the Company had no foreign tax credit carryforward. In addition, as of December 31, 2020 and 2019, the Company had state research and development tax credits of $9.1 million and $3.2 million, respectively, which can be carried forward indefinitely. The Company has not provided deferred taxes on approximately $454.5 million of undistributed earnings from foreign subsidiaries as of December 31, 2020. The Company has not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss that would be due when cash is actually repatriated to the U.S. because those foreign earnings are considered permanently reinvested in the business or may be remitted substantially free of any additional taxes. Because of the various avenues in which to repatriate the earnings, the determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings if eventually remitted is not practicable. Certain tax payments are prepaid during the year and included within prepaid expenses and other current assets on the Consolidated Balance Sheet. The Company’s prepaid tax payments were $3.0 million and $3.7 million at December 31, 2020 and 2019, respectively. Income before income taxes included income from domestic operations of $47.3 million, $81.6 million and $19.9 million for the years ended December 31, 2020, 2019 and 2018, respectively, and income from foreign operations of $183.1 million, $118.0 million and $157.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Uncertain Income Tax Positions Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities in the Consolidated Balance Sheets. As of December 31, 2020, the total amount of unrecognized tax benefits was $49.1 million, of which $46.0 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2019, the total amount of unrecognized tax benefits was $46.7 million, of which $43.9 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2018, the total amount of unrecognized tax benefits was $51.3 million, of which $46.8 million, if recognized would affect the Company’s effective tax rate. The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2020, 2019 and 2018, is as follows (in thousands): Years Ended December 31, 2020 2019 2018 Beginning balance $ 46,703 $ 51,271 $ 45,012 Increases related to tax positions during a prior year 3,952 5,285 2,508 Decreases related to tax positions taken during a prior year (245) (7,441) — Increases related to tax positions taken in the current year 4,299 4,069 3,751 Settlements (5,627) (5,831) — Decreases related to expiration of statute of limitations — (650) — Ending balance $ 49,082 $ 46,703 $ 51,271 The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2020, 2019 and 2018, the total amount of interest and penalties accrued was $8.1 million, $5.8 million and $8.4 million, respectively, which is classified as a liability for uncertain tax positions on the Consolidated Balance Sheets. In connection with tax matters, the Company recognized interest and penalty expense (benefit) in 2020, 2019 and 2018 of $2.3 million, $(1.8) million and $1.2 million, respectively. Uncertain income tax positions are reasonably possible to significantly change during the next 12 months as a result of completion of income tax audits and expiration of statutes of limitations. At this point it is not possible to provide an estimate of the amount, if any, of significant changes in reserves for uncertain income tax positions as a result of the completion of income tax audits that are reasonably possible to occur in the next 12 months. In addition, the Company cannot currently estimate the amount of, if any, uncertain income tax positions which will be released in the next 12 months as a result of expiration of statutes of limitations due to ongoing audits. As a result of ongoing federal, state and foreign income tax audits (discussed below), it is reasonably possible that the Company’s entire reserve for uncertain income tax positions for the periods under audit will be released. It is also reasonably possible that the Company’s reserves will be inadequate to cover the entire amount of any such income tax liability. 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. As of December 31, 2020, the audits are ongoing. The Company is under audit by the California Franchise Tax Board (“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. As of December 31, 2020, the audits are ongoing. In June 2019, the New York State Department of Taxation and Finance (“NYS”) notified the Company that it will commence an audit for tax year 2015. In April 2020, the NYS notified the Company that it will also commence an audit for tax years 2016 and 2017. As of December 31, 2020, the audits are ongoing. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock Exchange In November 2014, the Company provided holders of the Company’s Series A Preferred Stock (“J2 Series A Stock”) and the Company’s Series B Preferred Stock (“J2 Series B Stock”) an exchange right in which shares may be exchanged for J2 common stock. The exchange right associated with the shares of J2 Series A Stock provided that such shares were immediately exercisable at an exchange ratio of 20.4319 shares of J2 common stock per share of J2 Series A Stock (the “Series A Exchange Ratio”). Both holders of the J2 Series A Stock exercised this exchange right which resulted in the issuance of 235,665 shares of J2 common stock. The exchange right associated with the vested shares of the J2 Series B Stock is exercisable during specified exchange periods at an exchange ratio of 31.8094 shares of J2 common stock per share of J2 Series B Stock (the “Series B Exchange Ratio”). Holders of vested J2 Series B Stock exercised this exchange right which resulted in the issuance of zero, zero and 10,530 shares of J2 common stock during fiscal years 2020, 2019, and 2018 respectively. In connection with the exercise of the exchange right and the resulting extinguishment of the J2 Series A Stock, the Company recorded the difference between the carrying value of the Series A and the fair value of the J2 common stock exchanged within retained earnings as a preferred stock dividend. In connection with the exercise of the exchange right associated with J2 Series B Stock, the Company recognized incremental fair value in the amount of $6.3 million and recorded additional share-based compensation in the amount of zero, zero and $1.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2018, all incremental fair value associated with the exchange right of J2 Series B Stock had been recognized. The Series B Exchange Ratio is adjusted in the event of a subdivision of the outstanding J2 common stock or J2 Series B Stock, a declaration of a dividend payable in shares of J2 common stock or J2 Series B Stock, a declaration of a dividend payable in a form other than shares in an amount that has a material effect on the value of shares of J2 common stock or J2 Series B Stock, a combination or consolidation of the outstanding J2 common stock or J2 Series B Stock into a lesser number of shares of J2 common stock or J2 Series B Stock, respectively, specified changes in control, a recapitalization, a reclassification, or a similar occurrence, the Company shall adjust the Series B Exchange Ratio as it deems appropriate in its sole discretion. 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 J2 Global common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 20, 2021. In July 2016, the Company acquired and subsequently retired 935,231 shares of J2 Global common stock in connection with the acquisition of Integrated Global Concepts, Inc. As a result of the purchase of J2 Global common stock, the Company’s Board of Directors approved a reduction in the number of shares available for purchase under the 2012 Program by the same amount. In November 2018 and May 2019, the Company entered into a Rule 10b5-1 trading plan with a broker to facilitate the repurchase program. 600,000 shares were repurchased in 2018 at an aggregate cost of $42.5 million and were subsequently retired in March 2019. During the year ended December 31, 2019, the Company repurchased 197,870 shares at an aggregate cost of $16.0 million which were subsequently retired in the same year. During the year ended December 31, 2020, the Company repurchased 1,140,819 shares at an aggregate cost of $87.5 million which were subsequently retired in the same year. As of December 31, 2020, all of the available shares were repurchased under the 2012 Program at an aggregate cost of $204.6 million (including an immaterial amount of commission fees). On August 6, 2020, the Company’s Board of Directors approved a program authorizing the repurchase of up to ten million shares of our common stock through August 6, 2025 (the “2020 Program”) in addition to the five million shares repurchased under the 2012 Program. During the year ended December 31, 2020, the Company entered into a Rule 10b5-1 trading plan and repurchased 2,490,599 shares at an aggregate cost of $177.8 million (including an immaterial amount of commission fees) under the 2020 Program, which were subsequently retired. As a result of the Company’s share repurchase programs, the number of shares available for purchase is 7,509,401 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 year ended December 31, 2020, the Company purchased 111,451 shares from plan participants for this purpose. Dividends The following is a summary of each dividend declared during fiscal year 2019: Declaration Date Dividend per Common Share Record Date Payment Date February 6, 2019 $ 0.4450 February 25, 2019 March 12, 2019 May 2, 2019 $ 0.4550 May 20, 2019 June 4, 2019 Future dividends are subject to Board approval. 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 suspended dividend payments for the foreseeable future after the June 4, 2019 payment. |
Stock Options and Employee Stoc
Stock Options and Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options and Employee Stock Purchase Plan | Stock Options and Employee Stock Purchase Plan J2 Global’s share-based compensation plans include the 2015 Stock Plan and the 2001 Employee Stock Purchase Plan. Each plan is described below. (a) The 2015 Stock Option Plan In May 2015, J2 Global’s Board of Directors adopted the J2 Global, Inc. 2015 Stock Option Plan (the “2015 Plan”). The 2015 Plan provides for the grant 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. 4,200,000 shares of 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. At December 31, 2020, 2019 and 2018, options to purchase 175,601, 163,741 and 298,577 shares of common stock were exercisable under and outside of the 2015 Plan, at weighted average exercise prices of $60.35, $45.94, and $32.15, respectively. Stock options generally expire after 10 years and vest over a 5-year period. All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m). Stock Options Stock option activity for the years ended December 31, 2020, 2019 and 2018 is summarized as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2018 375,675 $ 31.30 Granted 400,000 75.03 Exercised (67,898) 22.68 Canceled — — Options outstanding at December 31, 2018 707,777 $ 56.84 Granted — — Exercised (189,436) 32.39 Canceled — — Options outstanding at December 31, 2019 518,341 $ 65.77 Granted — — Exercised (42,740) 23.11 Canceled — — Options outstanding at December 31, 2020 475,601 $ 69.61 6.2 $13,355,721 Exercisable at December 31, 2020 175,601 $ 60.35 4.7 $6,557,721 Vested and expected to vest at December 31, 2020 393,281 $ 68.47 6.0 $11,490,350 For the years ended December 31, 2020, 2019 and 2018, J2 Global granted zero, zero and 400,000 options, respectively, to purchase shares of common stock pursuant to the 2015 Plan. These stock options vest 20% per year and expire 10 years from the date of grant. The per share weighted-average grant-date fair values of stock options granted during the period ended December 31, 2018 was $19.39. The total intrinsic values of options exercised during the years ended December 31, 2020, 2019 and 2018 was $3.0 million, $10.4 million, and $3.8 million, respectively. The total fair value of options vested during the years ended December 31, 2020, 2019 and 2018 was $1.0 million, $1.0 million and $0.1 million, respectively. Cash received from options exercised under all share-based payment arrangements for the years ended December 31, 2020, 2019 and 2018 was $1.6 million, $5.3 million and $1.5 million, respectively. The actual tax benefit realized for the tax deductions from option exercises under the share-based payment arrangements totaled $0.7 million, $2.4 million and $0.9 million, respectively, for the years ended December 31, 2020, 2019 and 2018, respectively. The following table summarizes information concerning outstanding and exercisable options as of December 31, 2020: Options Outstanding Exercisable Options Range of Number Outstanding December 31, 2020 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable December 31, 2020 Weighted Average Exercise Price $29.34 45,351 0.36 years $ 29.34 45,351 $ 29.34 29.53 7,250 1.17 years 29.53 7,250 29.53 67.35 23,000 4.35 years 67.35 23,000 67.35 75.03 400,000 7.00 years 75.03 100,000 75.03 $29.34 - $75.03 475,601 6.15 years $ 69.61 175,601 $ 60.35 As discussed in Note 14, “Stockholders’ Equity”, the Company provided holders of J2 Series B Stock an exchange right in which J2 Series B Stock may be exchanged for J2 common stock during specified exchange periods. At December 31, 2020, there were 2,019,350 additional shares underlying options, shares of restricted stock and other share-based awards available for grant under the 2015 Plan. The Company recognized $0.9 million, $0.9 million and $0.9 million of compensation expense related to stock options for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $5.8 million of total unrecognized compensation expense related to nonvested share-based compensation options granted under the 2015 Plan. That expense is expected to be recognized ratably over a weighted average period of 5.00 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 its 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 13.0%, 13.9% and 11.8% as of December 31, 2020, 2019 and 2018, respectively. The weighted-average fair values of stock options granted have been estimated utilizing the following assumptions: Years ended December 31, 2020 2019 2018 Risk-free interest rate —% —% 2.4% Expected term (in years) 0.0 0.0 6.7 Dividend yield —% —% 2.2% Expected volatility —% —% 29.2% Weighted average volatility —% —% 29.2% 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 the 2015 Plan. 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. The Company granted 129,786, 117,566 and 376,799 shares of restricted stock and restricted units (excluding awards with market conditions below) during the years ended December 31, 2020, 2019 and 2018, respectively. On May 7, 2020, the Board of Directors approved the contract modification of an insignificant number of shares of restricted stock awards whereby selected participants waived their right to receive dividends with respect to outstanding and unvested restricted shares under their restricted stock agreements. There was no incremental compensation cost as a result of the modification. 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 years ended December 31, 2020, 2019, and 2018 the Company awarded 82,112, 74,051, and 473,501 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 years ended December 31, 2020, 2019 and 2018 were $70.99, $69.99 and $52.95, respectively. The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions: December 31, 2020 December 31, 2019 December 31, 2018 Underlying stock price at valuation date $ 91.17 $ 84.58 $ 82.11 Expected volatility 27.0 % 28.3 % 28.4 % Risk-free interest rate 0.7 % 2.5 % 2.9 % The Company recognized $21.2 million, $21.7 million and $26.4 million, respectively of compensation expense related to its restricted stock, restricted stock units, and market-based restricted stock. As of December 31, 2020, the Company had unrecognized share-based compensation cost of $38.6 million associated with these awards. This cost is expected to be recognized over a weighted-average period of 4.2 years for awards and 4.5 years for units. The total fair value of restricted stock and restricted stock units vested during the years ended December 31, 2020, 2019 and 2018 was $18.6 million, $12.7 million and $9.7 million, respectively. The actual tax benefit realized for the tax deductions from the vesting of restricted stock awards and units totaled $2.1 million, $2.4 million and $2.4 million, respectively, for the years ended December 31, 2020, 2019 and 2018. Share-based compensation is recognized on dividends paid related to nonvested restricted stock not expected to vest, which amounted to approximately zero, $0.1 million and $0.1 million for the years ended December 31, 2020, 2019, and 2018, respectively. Restricted stock award activity for the years ended December 31, 2020, 2019 and 2018 is set forth below: Shares Weighted-Average Nonvested at January 1, 2018 605,566 $ 51.57 Granted 830,256 63.55 Vested (157,972) 61.29 Canceled (70,839) 74.84 Nonvested at December 31, 2018 1,207,011 $ 64.82 Granted 187,773 79.00 Vested (172,884) 73.65 Canceled (116,841) 72.58 Nonvested at December 31, 2019 1,105,059 $ 64.76 Granted 1,268 98.63 Vested (264,172) 70.25 Canceled (21,589) 79.34 Nonvested at December 31, 2020 820,566 $ 62.66 Restricted stock unit activity for the years ended December 31, 2020, 2019 and 2018 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2018 38,400 Granted 20,044 Vested (11,540) Canceled (5,673) Outstanding at December 31, 2018 41,231 Granted 3,844 Vested (12,343) Canceled (11,858) Outstanding at December 31, 2019 20,874 Granted 210,630 Vested (9,029) Canceled (12,691) Outstanding at December 31, 2020 209,784 3.5 $ 20,493,799 Vested and expected to vest at December 31, 2020 135,944 2.7 $ 13,280,344 Employee Stock Purchase Plan (“ESPP”) In May of 2001, J2 Global established the J2 Global, Inc. 2001 Employee Stock Purchase Plan, as amended (the “Purchase Plan”), which provides for the issuance of a maximum of 2,000,000 shares of 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’s common stock at certain plan-defined dates. The price of the common stock purchased under the Purchase Plan for the offering periods is equal to 95% of the fair market value of the common stock at the end of the offering period. On February 2, 2018, the Company approved an amendment to the Company’s Amended and Restated 2001 Employee Stock Purchase Plan, to be effective May 1, 2018, such that (i) the purchase price for each offering period shall be 85% of the lesser of the fair market value of a share of common stock of the Company (a “Share”) on the beginning or the end of the offering period, rather than 95% of the fair market value of a Share at the end of the offering period, and (ii) each offering period will be six months, rather than three months. J2 Global performed an analysis of the Amendment terms and determined that a plan provision exists which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature. The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and the Company to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period. The Company recognized $2.0 million, $1.3 million and $0.7 million of compensation expense related to the Purchase Plan for the years ended December 31, 2020, 2019 and 2018, respectively. 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 11.15%, 5.80% and 1.96% as of December 31, 2020, 2019, and 2018, respectively. |
Defined Contribution 401(k) Sav
Defined Contribution 401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Defined Contribution 401(k) Savings Plan | Defined Contribution 401(k) Savings PlanJ2 Global has several 401(k) Savings Plans that qualify under Section 401(k) of the Internal Revenue Code. Eligible employees may contribute a portion of their salary through payroll deductions, subject to certain limitations. The Company may make annual contributions at its sole discretion to these plans. For the years ended December 31, 2020, 2019 and 2018, the Company made contributions of $3.5 million, $3.7 million and $3.6 million, respectively, to these 401(k) Savings Plans. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
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): Years Ended December 31, 2020 2019 2018 Numerator for basic and diluted net income per common share: Net income attributable to J2 Global, Inc. common shareholders $ 150,668 $ 218,806 $ 128,687 Net income available to participating securities (1) (632) (3,496) (1,885) Net income available to J2 Global, Inc. common shareholders $ 150,036 $ 215,310 $ 126,802 Denominator: Weighted-average outstanding shares of common stock 46,308,825 47,647,397 47,950,746 Dilutive effect of: Equity incentive plans 25,232 78,076 146,906 Convertible debt (2) 788,454 1,300,211 830,139 Common stock and common stock equivalents 47,122,511 49,025,684 48,927,791 Net income per share: Basic $ 3.24 $ 4.52 $ 2.64 Diluted $ 3.18 $ 4.39 $ 2.59 (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (2) Represents the incremental shares issuable upon conversion of the 3.25% Convertible Notes due June 15, 2029 and 1.75% Convertible Notes due November 1, 2026 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 10 - Long Term Debt). For the years ended December 31, 2020, 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 Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information 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 Martech (formerly Email Marketing); (ii) Voice, Backup, Security, and Consumer Privacy and Protection; and (iii) Digital Media. In connection with the Highwinds Capital, Inc. and Cloak Holdings, LLC acquisition in the second quarter of 2019 (see Note 4 - Business Acquisitions), the Company renamed its Voice, Backup and Security reportable segment to include its newly acquired consumer privacy and protection business, now the Voice, Backup, Security and Consumer Privacy and Protection segment. 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 minor seasonal weakness in the fourth quarter. 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 2 - Basis of Presentation and Summary of Significant Accounting Policies. 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): Years Ended December 31, 2020 2019 2018 Revenue by reportable segment: Fax and Martech (1) $ 386,276 $ 378,444 $ 360,479 Voice, Backup, Security, and CPP (1) 292,185 283,391 237,496 Cloud Services Total 678,461 661,835 597,975 Digital Media 811,360 710,511 609,374 Elimination of inter-segment revenues (229) (300) (60) Total segment revenues 1,489,592 1,372,046 1,207,289 Corporate (2) 1 8 6 Total revenues 1,489,593 1,372,054 1,207,295 Gross profit by reportable segment: Fax and Martech (1) 320,714 318,677 311,534 Voice, Backup, Security, and CPP (1) 203,486 198,888 164,287 Cloud Services Total 524,200 517,565 475,821 Digital Media 733,887 617,458 530,455 Elimination of inter-segment gross profit (229) (300) (60) Total segment gross profit 1,257,858 1,134,723 1,006,216 Corporate (2) (47) 8 5 Total gross profit 1,257,811 1,134,731 1,006,221 Direct costs by reportable segment (3) : Fax and Martech (1)(4) 116,923 119,574 125,963 Voice, Backup, Security, and CPP (1)(4) 158,074 150,451 113,666 Cloud Services Total 274,997 270,025 239,629 Digital Media (4) 594,807 540,193 483,167 Elimination of inter-segment direct costs (229) (300) (60) Total segment direct costs 869,575 809,918 722,736 Corporate (2) 53,625 47,733 39,205 Total direct costs (3) 923,200 857,651 761,941 Operating income by reportable segment: Fax and Martech 203,791 199,103 185,571 Voice, Backup, Security, and CPP 45,412 48,437 50,621 Cloud Services Total 249,203 247,540 236,192 Digital Media 139,080 77,265 47,288 Total segment operating income 388,283 324,805 283,480 Corporate (2) (53,672) (47,725) (39,200) Total income from operations $ 334,611 $ 277,080 $ 244,280 (1) The Company reclassified certain intercompany revenue and expenses in 2019 and 2018 for Cloud Services in order to better align with a stand-alone presentation. (2) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. (3) 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. (4) Table above has been recast to remove the impact of certain expenses associated with the Corporate entity that were previously allocated to the Cloud Services and Digital Media businesses. 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. 2020 2019 Assets: Cloud Services $ 1,473,398 $ 1,466,969 Digital Media 2,088,397 1,561,024 Total assets from Cloud Services and Digital Media 3,561,795 3,027,993 Corporate 103,536 477,853 Total assets $ 3,665,331 $ 3,505,846 2020 2019 2018 Capital expenditures: Cloud Services $ 32,859 $ 21,826 $ 13,832 Digital Media 59,693 48,736 42,547 Total capital expenditures from Cloud Services and Digital Media 92,552 70,562 56,379 Corporate — 26 — Total capital expenditures $ 92,552 $ 70,588 $ 56,379 Depreciation and amortization: Cloud Services $ 79,754 $ 80,970 $ 60,754 Digital Media 145,321 148,575 122,843 Total depreciation and amortization from Cloud Services and Digital Media 225,075 229,545 183,597 Corporate 3,662 2,487 3,577 Total depreciation and amortization $ 228,737 $ 232,032 $ 187,174 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 markets where revenues are reported (in thousands). Years ended December 31, 2020 2019 2018 Revenues: United States $ 1,215,281 $ 1,100,298 $ 924,051 Canada 70,073 67,518 73,742 Ireland 55,917 59,009 69,291 All other countries 148,322 145,229 140,211 Total $ 1,489,593 $ 1,372,054 $ 1,207,295 December 31, December 31, Long-lived assets: United States $ 918,125 $ 701,580 All other countries 54,073 76,927 Total $ 972,198 $ 778,507 |
Supplemental Cash Flows Informa
Supplemental Cash Flows Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flows Information | Supplemental Cash Flows InformationCash paid for interest on outstanding debt during the years ended December 31, 2020, 2019 and 2018 was $106.0 million, $55.4 million and $54.0 million, respectively, which is the primary contributor for total cash paid for interest. Cash paid for income taxes net of refunds received was $45.0 million, $45.9 million and $37.6 million during the years ended December 31, 2020, 2019 and 2018, respectively. During the years ended December 31, 2020, 2019 and 2018, J2 Global recorded the tax benefit from the exercise of stock options and restricted stock as a reduction of its income tax liability of $2.9 million, $4.8 million and $3.3 million, respectively. In the first quarter of 2020, in a non-cash transaction of $18.3 million, the Company exchanged shares of redeemable preferred stock that were previously classified as available-for-sale corporate debt securities for a new series of preferred stock, classified as equity securities without a readily determinable fair value (see Note 5 - Investments). |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the years ended December 31, 2020, 2019, and 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2018 $ — $ (29,090) $ (29,090) Other comprehensive loss before reclassifications (1,418) (15,471) (16,889) Net current period other comprehensive loss (1,418) (15,471) (16,889) Balance as of December 31, 2018 $ (1,418) $ (44,561) $ (45,979) Other comprehensive income (loss) before reclassifications 1,143 (1,626) (483) Net current period other comprehensive income (loss) 1,143 (1,626) (483) Balance as of December 31, 2019 $ (275) $ (46,187) $ (46,462) Other comprehensive income (loss) before reclassifications 558 (8,902) (8,344) Net current period other comprehensive income (loss) 558 (8,902) (8,344) Balance as of December 31, 2020 $ 283 $ (55,089) $ (54,806) The following table provides details about reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2020, 2019, and 2018. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statements of Operations For the years ending December 31, 2020 2019 2018 Unrealized loss on available-for-sale investments $ 698 $ — $ — Loss on investments, net 698 — — Income before income taxes — — — Income tax expense Total reclassifications for the period $ 698 $ — $ — Net Income |
Quarterly Results (unaudited)
Quarterly Results (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (unaudited) | Quarterly Results (unaudited) The following tables contain selected unaudited Statements of Operations information for each quarter of 2020 and 2019 (in thousands, except share and per share data). J2 Global believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Year Ended December 31, 2020 Fourth Quarter Third Quarter Second Quarter First Quarter Revenues $ 469,240 $ 356,976 $ 330,984 $ 332,393 Gross profit 409,213 301,154 274,182 273,262 Net income 58,088 60,883 38,101 (6,404) Net income per common share: Basic $ 1.30 $ 1.31 $ 0.81 $ (0.13) Diluted $ 1.27 $ 1.31 $ 0.80 $ (0.13) Weighted average shares outstanding Basic 44,504,222 46,279,515 46,850,944 47,620,774 Diluted 45,642,292 46,309,072 47,437,555 47,620,774 Year Ended December 31, 2019 Fourth Third Second First Revenues $ 405,588 $ 344,141 $ 322,432 $ 299,893 Gross profit 341,260 282,425 262,166 248,880 Net income (1) 123,023 30,745 32,589 32,449 Net income per common share: Basic $ 2.54 $ 0.63 $ 0.67 $ 0.67 Diluted $ 2.45 $ 0.62 $ 0.66 $ 0.66 Weighted average shares outstanding Basic 47,626,833 47,673,211 47,727,786 47,560,749 Diluted 49,425,395 49,064,272 49,102,879 48,509,181 (1) The increase in the Company’s net income in the fourth quarter of 2019 is primarily driven by the tax benefit recognized as a result of an intra-entity asset transfer (see Note 13 - Income Taxes). |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In February 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets. Such assets are recorded within the Voice, Backup, Security, and CPP reportable segment. On February 9, 2021, in a cash transaction, the Company completed the sale of these assets. Also in February 2021, the Company’s Board of Directors approved the exploration of strategic alternatives for the Company’s B2B Backup business. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (In thousands) Description Balance at Beginning of Period Additions: Charged to Costs and Expenses Deductions: Write-offs (1) and recoveries Balance at End of Period Year Ended December 31, 2020: Allowance for doubtful accounts $ 12,701 $ 13,283 $ (9,966) $ 16,018 Deferred tax asset valuation allowance $ 608 $ 9,456 $ (1,757) $ 8,307 Year Ended December 31, 2019: Allowance for doubtful accounts $ 10,422 $ 13,134 $ (10,855) $ 12,701 Deferred tax asset valuation allowance $ 44 $ 595 $ (31) $ 608 Year Ended December 31, 2018: Allowance for doubtful accounts $ 8,701 $ 17,338 $ (15,617) $ 10,422 Deferred tax asset valuation allowance $ 197 $ — $ (153) $ 44 ______________________ (1) Represents specific amounts written off that were considered to be uncollectible. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of ConsolidationThe accompanying 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. |
Use of Estimates | Use of EstimatesThe preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. 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, fair value of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies and allowance 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 AccountsJ2 Global maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expenses in the Consolidated Statements of Operations. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status. It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. On an ongoing basis, management evaluates the adequacy of these reserves. |
Revenue Recognition | Revenue RecognitionJ2 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. Digital Media Digital Media revenues are earned primarily from the delivery of advertising services, from subscriptions to services and information. 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 includes 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 its numerous proprietary Cloud Services solutions, the Company also generates revenues by reselling various third-party solutions, primarily through its email security and online backup lines of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s 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. 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 product, 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, CPP, 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 • Consumer privacy services are provided • Security solutions, including email and endpoint are provided • 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 customers with amortization periods determined to be greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit. In addition, the Company partners with various affiliates in order to generate a portion of its revenue for certain lines of business. The commissions earned by the Company’s affiliates are incentive based and are paid on the acquisition of new customers in a given period. For those customers with amortization periods determined to be 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. |
Fair Value Measurements | Fair Value Measurements J2 Global complies with the provisions of 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. The carrying values 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 debt instruments with similar terms and maturities when available. 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. |
Cash and Cash Equivalents | Cash and Cash EquivalentsJ2 Global considers cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of three months or less at the purchase date. |
Investments | Investments J2 Global accounts for its investments in debt securities in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic No. 320, Investments - Debt Securities (“ASC 320”). The Company’s debt investments are typically comprised of corporate debt securities, which it classifies as available-for-sale. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. All debt securities are accounted for on a specific identification basis. The Company’s available-for-sale debt securities are carried at an estimated fair value with any unrealized gains or losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in loss on investments, net on our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in accumulated comprehensive loss in stockholders’ equity. 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”) | 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 the right to 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 impact 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). OCV qualifies as an investment company under ASC 946 - Financial Services, Investment Companies (“ASC 946”). Under ASC Topic 323, Investments - Equity Method and Joint Ventures, an investor that holds investments that qualify for specialized industry accounting for investment companies in accordance with ASC 946 should record its share of the earnings or losses, realized or unrealized, as reported by its equity method investees in the Consolidated Statements of Operations. 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 that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt DiscountJ2 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 using the effective interest method. |
Derivative Instruments | Derivative InstrumentsJ2 Global currently holds an embedded derivative instrument related to contingent interest in connection with its 3.25% Convertible Notes issued on June 10, 2014. This embedded derivative instrument is carried at fair value with changes recorded to interest expense |
Concentration of Credit Risk | Concentration of Credit RiskAll of the Company’s cash, cash equivalents and marketable securities are invested at major financial institutions primarily within the United States, United Kingdom and Ireland. These institutions are required to invest the Company’s cash in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns commensurate with preservation of capital. The Company’s investment policy also requires that investments in marketable securities be in only highly rated instruments, with limitations on investing in securities of any single issuer. However, these investments are not insured against the possibility of a total or near complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the underlying issuer and general credit market risks. |
Foreign Currency | Foreign CurrencySome of J2 Global’s foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses are translated into U.S. Dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive income/(loss). |
Property and Equipment | Property and EquipmentProperty and equipment are stated at cost. Equipment under finance 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 and is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations. 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 finance 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. |
Impairment or Disposal of Long-Lived and Intangible Assets | Impairment or Disposal of Long-Lived and Intangible AssetsJ2 Global accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of FASB ASC Topic No. 360, Property, Plant, and Equipment (“ASC 360”), which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. The Company assesses the impairment of identifiable definite-lived intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it consider important which could individually or in combination trigger an impairment review include the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for J2 Global’s overall business; • Significant negative industry or economic trends; • Significant decline in the Company’s stock price for a sustained period; and • The Company’s market capitalization relative to net book value. If the Company determined that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value. J2 Global assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. In the year ended December 31, 2020, the Company recorded impairments of certain operating right-of-use assets and associated property and equipment (see Note 11 - Leases). No impairment was recorded in fiscal year 2019 or 2018. The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale. |
Business Combinations and Valuation of Goodwill and Intangible Assets | Business Combinations and Valuation of Goodwill and Intangible AssetsJ2 Global applies the acquisition method of accounting for business combinations in accordance with GAAP and uses of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets, including identifiable intangible assets, and liabilities acquired. Such estimates may be based on significant unobservable inputs and assumptions such as, but not limited to, revenue growth rates, gross margins, customer attrition rates, royalty rates, discount rates and terminal growth rate assumptions. J2 Global uses established valuation techniques and may engage reputable valuation specialists to assist with the valuations. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.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. Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from one |
Contingent Consideration | Contingent Consideration Certain of J2 Global’s acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future income thresholds or other metrics. The contingent earn-out arrangements are based upon the Company’s valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheets. J2 Global considers several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former shareholders of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of the Company’s other key employees. The contingent earn-out payments are not affected by employment termination. J2 Global measures its 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 7 - 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 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 amounts. Changes in the estimated fair value of our contingent earn-out liabilities and adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in general and administrative expenses on the Consolidated Statements of Operations. |
Self-Insurance Program | Self-Insurance ProgramJ2 Global provides health and dental insurance plans to 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 differ from recorded self-insurance liabilities. |
Income Taxes | Income Taxes J2 Global’s income is subject to taxation in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. J2 Global establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. J2 Global adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. J2 Global accounts for income taxes in accordance with FASB ASC Topic No. 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. GAAP also requires that deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time. In assessing this valuation allowance, J2 Global reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable. GAAP provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain income tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. J2 Global recognized accrued interest and penalties related to uncertain income tax positions in income tax expense on its Consolidated Statements of Operations. |
Share-Based Compensation | Share-Based CompensationJ2 Global accounts for share-based awards to employees and non-employees in accordance with the provisions of FASB ASC Topic No. 718, Compensation - Stock Compensation (“ASC 718”). Accordingly, J2 Global measures share-based compensation expense at the grant date, based on the fair value of the award, and recognizes the expense over the employee’s requisite service period using the straight-line method. The measurement of share-based compensation expense is based on several criteria, including but not limited to the valuation model used and associated input factors, such as expected term of the award, stock price volatility, risk free interest rate, dividend rate and award cancellation rate. These inputs are subjective and are determined using management’s judgment. If differences arise between the assumptions used in determining share-based compensation expense and the actual factors, which become known over time, J2 Global may change the input factors used in determining future share-based compensation expense. Any such changes could materially impact the Company’s results of operations in the period in which the changes are made and in periods thereafter. The Company estimates the expected term based upon the historical exercise behavior of our employees. |
Earnings Per Common Share (“EPS”) | Earnings Per Common Share (“EPS”) EPS is calculated pursuant to the two-class method as defined in ASC Topic No. 260, Earnings per Share (“ASC 260”), which specifies that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS pursuant to the two-class method. Basic EPS is calculated by dividing net distributed and undistributed earnings allocated to common shareholders, excluding participating securities, by the weighted-average number of common shares outstanding. The Company’s participating securities consist of its unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the impact of other potentially dilutive shares outstanding during the period. The dilutive effect of participating securities is calculated under the more dilutive of either the treasury method or the two-class method. |
Research, Development and Engineering | Research, Development and EngineeringResearch, development and engineering costs are expensed as incurred. Costs for software development incurred subsequent to establishing technological feasibility, in the form of a working model, are capitalized and amortized over their estimated useful lives. |
Segment Reporting | Segment Reporting FASB ASC Topic No. 280, Segment Reporting (“ASC 280”), 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. ASC 280 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 ASC Topic 280, J2 Global’s operating segments have been aggregated into three reportable segments: (i) Fax and Martech (formerly Email Marketing); (ii) Voice, Backup, Security, and Consumer Privacy and Protection; and (iii) Digital Media. |
Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Financial Instruments. The amendments in this ASU further clarify certain aspects of ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief. The amendments in this ASU provide transition relief for ASU No. 2016-13 by providing an option to irrevocably elect the fair value option for certain financial assets measured at an amortized cost basis. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. This ASU clarifies the effective dates of each related standards update and staggers such dates among filers and other types of entities. Also in November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies or addresses certain aspects of Update 2016-13. Specifically, it addresses (1) expected recoveries for purchased financial assets with credit deterioration; (2) transition relief for troubled debt restructuring; (3) disclosures related to accrued interest variables; (4) financial assets secured by collateral maintenance provisions; and (5) a conforming Amendment to Subtopic 805-20. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU codifies SEC Staff Accounting Bulletin No. 119. The Company has adopted these ASUs in the first quarter of 2020 using the modified retrospective method and has determined there is an immaterial 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. The Company has adopted this ASU in the first quarter of 2020 and has determined there to be an impact on its disclosures (see Note 7 - Fair Value Measurements). In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects to adopt this ASU on January 1, 2021 and does not expect the adoption to have a material effect on its financial statements or disclosures. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investment - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the accounting for certain forward contracts and purchased options under Topic 815. This ASU identifies two main areas for improvement: (1) accounting for certain equity securities upon the application or discontinuation of the equity method of accounting and (2) scope considerations for forward contracts and purchased options on certain securities. The amendment states, as it is related to the first area of improvement, that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendment also states, as it is relates to forward contracts and purchased options on certain securities, an entity should consider certain criteria to determine the accounting for those forward contracts and purchased options. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects to adopt this ASU on January 1, 2021 and does not expect the adoption to have a material effect on its financial statements or disclosures. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments. The amendments in this ASU clarify or address seven areas of improvement: (1) fair value option disclosures; (2) applicability of the portfolio exception in Topic 820 to nonfinancial items; (3) disclosures for depository and lending institutions; (4) cross-reference to line-of-credit or revolving-debt arrangements guidance in Subtopic 470-50; (5) cross-reference to net asset value practical expedient in Subtopic 820-10; (6) interaction of Topic 842 and Topic 326; and (7) interaction of Topic 326 and Subtopic 860-20. This ASU is effective for certain issues upon adoption and others in 2020. The Company has adopted this ASU in the first quarter of 2020 and has determined there is no impact on its financial statements and related disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this ASU provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. LIBOR is expected to phased out by 2021. The amendments in this ASU are effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the effect of this ASU on its financial statements and related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendments in this ASU reduce the number of accounting models for convertible debt instruments and convertible preferred stock in order to simplify the accounting for convertible instruments and reduce complexity. In addition, it amends the guidance for scope exception surrounding derivatives for contracts in an entity’s own equity. In each case, the related guidance surrounding EPS has also been amended. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. The Company is currently evaluating the effect of this ASU on its financial statements and related disclosures. In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. The amendments in this ASU improve the consistency of the codification and reorganize the guidance into appropriate sections providing less opportunities for disclosures to be missed. The amendments in this update do not change GAAP and are not expected to result in a significant change in practice. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020. Early |
Reclassifications | ReclassificationsCertain prior year reported amounts have been reclassified to conform with the 2020 presentation. |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues from external customers classified by revenue source are as follows (in thousands). See Note 18, “Segment Information” for additional information. Years ended December 31, Digital Media 2020 2019 2018 Advertising $ 616,197 $ 515,702 $ 468,325 Subscription 186,718 185,559 138,689 Other 8,445 9,250 2,360 Total Digital Media revenues $ 811,360 $ 710,511 $ 609,374 Cloud Services Subscription $ 678,013 $ 660,814 $ 597,281 Other 448 1,021 694 Total Cloud Services revenues $ 678,461 $ 661,835 $ 597,975 Corporate $ 1 $ 8 $ 6 Elimination of inter-business revenues (229) (300) (60) Total Revenues $ 1,489,593 $ 1,372,054 $ 1,207,295 Timing of revenue recognition Point in time $ 27,685 $ 32,983 $ 4,752 Over time 1,461,908 1,339,071 1,202,543 Total $ 1,489,593 $ 1,372,054 $ 1,207,295 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Allocation of Aggregate Purchase Consideration | The following table summarizes the allocation of the purchase consideration for all 2020 acquisitions (in thousands): Assets and Liabilities Valuation Accounts receivable $ 46,332 Prepaid expenses and other current assets 9,105 Property and equipment 2,248 Operating lease right of use asset 10,644 Trade names 67,670 Customer relationships 222,582 Goodwill 218,745 Other intangibles 56,802 Other long-term assets 685 Deferred tax asset 992 Accounts payables and accrued expenses (29,073) Deferred revenue (22,436) Operating lease liabilities, current (4,520) Long-term debt (910) Operating lease liabilities, noncurrent (13,104) Income taxes payable (3,297) Liability for uncertain tax positions (1,576) Deferred tax liability (53,870) Other long-term liabilities (9,269) Total $ 497,750 The following table summarizes the allocation of the purchase consideration for the RetailMeNot, Inc. acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 40,525 Prepaid expenses and other current assets 7,367 Property and equipment 587 Operating lease right of use asset 10,313 Trade names 62,940 Customer relationships 198,840 Goodwill 169,581 Other intangibles 42,610 Other long-term assets 494 Deferred tax asset 605 Accounts payables and accrued expenses (24,526) Deferred revenue (11,175) Operating lease liabilities, current (4,029) Operating lease liabilities, noncurrent (13,085) Income taxes payable (3,308) Liability for uncertain tax positions (1,576) Deferred tax liability (52,504) Other long-term liabilities (9,275) Total $ 414,384 The following table summarizes the allocation of the purchase consideration for all 2019 acquisitions (in thousands): Assets and Liabilities Valuation Accounts receivable $ 22,796 Prepaid expenses and other current assets 4,528 Property and equipment 4,625 Operating lease right of use asset 4,982 Trade names 10,773 Customer relationships 123,611 Goodwill 253,096 Trademarks 32,540 Other intangibles 48,446 Other long-term assets 660 Accounts payables and accrued expenses (31,292) Other current liabilities (516) Deferred revenue (27,953) Operating lease liabilities, current (1,768) Operating lease liabilities, noncurrent (3,215) Income taxes payable (762) Liability for uncertain tax positions (170) Deferred tax liability (10,229) Other long-term liabilities (635) Total $ 429,517 The following table summarizes the allocation of the purchase consideration for all 2018 acquisitions (in thousands): Assets and Liabilities Valuation Cash (1) $ 15,532 Accounts receivable 11,321 Prepaid expenses and other current assets 3,480 Property and equipment 4,755 Trade names 33,750 Customer relationships 66,516 Goodwill 194,282 Trademarks 3,285 Other intangibles 84,907 Other long-term assets 341 Deferred tax asset 821 Accounts payables and accrued expenses (10,864) Deferred revenue (37,113) Finance lease (956) Income tax payable (1,458) Deferred tax liability (22,990) Other long-term liabilities (5,410) Total $ 340,199 (1) Cash contains an immaterial amount of restricted cash associated with a pre-acquisition relationship with a vendor. The entire balance has been released during the third quarter of 2018. |
Supplementary Information on Unaudited Pro Forma Financial Basis | The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and RetailMeNot, Inc. as if the acquisition had occurred on January 1, 2019 (in thousands, except per share amounts): Year ended December 31, 2020 December 31, 2019 (unaudited) (unaudited) Revenues $ 1,639,495 $ 1,589,437 Net income $ 140,880 $ 190,709 EPS - Basic $ 3.03 $ 3.94 EPS - Diluted $ 2.98 $ 3.83 The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2020 acquisitions as if each acquisition had occurred on January 1, 2019 (in thousands, except per share amounts): Year ended December 31, 2020 December 31, 2019 (unaudited) (unaudited) Revenues $ 1,671,955 $ 1,633,861 Net income $ 140,534 $ 178,654 EPS - Basic $ 3.02 $ 3.69 EPS - Diluted $ 2.97 $ 3.59 The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2019 acquisitions as if each acquisition had occurred on January 1, 2018 (in thousands, except per share amounts): Year ended December 31, 2019 December 31, 2018 (unaudited) (unaudited) Revenues $ 1,474,132 $ 1,427,914 Net income $ 211,303 $ 104,710 EPS - Basic $ 4.36 $ 2.15 EPS - Diluted $ 4.24 $ 2.11 The supplemental information on an unaudited pro forma financial basis presents the combined results of J2 Global and its 2018 acquisitions as if each acquisition had occurred on January 1, 2017 (in thousands, except per share amounts): Year ended December 31, 2018 December 31, 2017 (unaudited) (unaudited) Revenues $ 1,264,544 $ 1,218,530 Net income $ 121,727 $ 123,378 EPS - Basic $ 2.50 $ 2.56 EPS - Diluted $ 2.45 $ 2.50 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Securities without Readily Determinable Fair Value | The following table summarizes the gross unrealized losses and estimated fair values for the Company’s securities without a readily determinable fair value (in thousands): Cost Impairment Adjustments Reported Amount December 31, 2020 Equity securities $ 50,384 $ (19,605) $ (479) $ 30,300 Total $ 50,384 $ (19,605) $ (479) $ 30,300 December 31, 2019 Equity securities $ 34,977 $ (4,164) $ (3,678) $ 27,135 Total $ 34,977 $ (4,164) $ (3,678) $ 27,135 |
Summary of Available-for-sale Investments | The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale (in thousands): Amortized Gross Gross Fair December 31, 2020 Corporate debt securities $ 511 $ 152 $ — $ 663 Total $ 511 $ 152 $ — $ 663 December 31, 2019 Corporate debt securities $ 23,256 $ 112 $ (698) $ 22,670 Total $ 23,256 $ 112 $ (698) $ 22,670 |
Available-for-Sale Securities 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): December 31, 2020 December 31, 2019 Due within 1 year $ 663 $ — Due within more than 1 year but less than 5 years — 22,670 Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 663 $ 22,670 |
Fair Value of Available-for-sale Investments in Unrealized Loss Position | The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands). There were no investments in an unrealized loss position as of December 31, 2020. As of December 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 $ — $ — $ 22,047 $ (698) $ 22,047 $ (698) Total $ — $ — $ 22,047 $ (698) $ 22,047 $ (698) |
Carrying Amount for Equity Method Investment | The following table discloses the carrying amount for the Company’s equity method investment (in thousands): December 31, 2020 December 31, 2019 Equity securities $ 67,195 $ 50,274 Maximum exposure to loss $ 67,195 $ 50,274 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The following table presents the fair values, valuation techniques, unobservable inputs, and ranges of the Company’s financial liabilities categorized within Level 3. The weighted averages below are a product of the unobservable input and fair value of the contingent consideration arrangement as of December 31, 2020. Valuation Technique Unobservable Input Range Weighted Average Contingent Consideration Option-Based Model Risk free rate 1.9% 1.9 % Debt spread 0.0% - 33.5% 11.0 % Probabilities 5.0% - 100.0% 62.3 % Present value factor 3.6% - 3.9% 3.7 % Discount rate 28.6% 28.6 % |
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): December 31, 2020 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 10,413 $ — $ — $ 10,413 $ 10,413 Corporate debt securities — 663 — 663 663 Total assets measured at fair value $ 10,413 $ 663 $ — $ 11,076 $ 11,076 Liabilities: Contingent consideration $ — $ — $ 9,094 $ 9,094 $ 9,094 Long-term debt 1,960,527 — — 1,960,527 1,579,021 Total liabilities measured at fair value $ 1,960,527 $ — $ 9,094 $ 1,969,621 $ 1,588,115 December 31, 2019 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 395,664 $ — $ — $ 395,664 $ 395,664 Corporate debt securities — 623 22,047 22,670 22,670 Total assets measured at fair value $ 395,664 $ 623 $ 22,047 $ 418,334 $ 418,334 Liabilities: Contingent consideration $ — $ — $ 37,887 $ 37,887 $ 37,887 Long-term debt — 1,833,062 — 1,833,062 1,448,461 Total liabilities measured at fair value $ — $ 1,833,062 $ 37,887 $ 1,870,949 $ 1,486,348 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | 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 Total fair value adjustments reported in earnings (768) Interest expense, net Balance as of December 31, 2019 $ — |
Reconciliation of Level 3 Financial Liabilities Measured on Recurring Basis | The following tables 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 5,079 Total fair value adjustments reported in earnings 6,318 General and administrative Contingent consideration payments (23,545) Not Applicable Balance as of December 31, 2019 $ 37,887 Contingent consideration 8,932 Total fair value adjustments reported in earnings (80) General and administrative Contingent consideration payments (37,645) Not Applicable Balance as of December 31, 2020 $ 9,094 |
Reconciliation of Level 3 Financial Assets Measured on Recurring Basis | The following tables presents a reconciliation of the Company’s Level 3 financial assets related to certain available-for-sale debt securities that are measured at fair value on a recurring basis (in thousands): Level 3 Balance as of January 1, 2019 $ 20,846 Total fair value adjustments reported in other comprehensive income 1,201 Balance as of December 31, 2019 $ 22,047 Exchange of available-for-sale corporate debt securities (Note 5) (22,047) Balance as of December 31, 2020 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, stated at cost, at December 31, 2020 and 2019 consisted of the following (in thousands): 2020 2019 Computers and related equipment $ 350,735 $ 334,768 Furniture and equipment 2,721 1,977 Leasehold improvements 9,010 17,374 362,466 354,119 Less: Accumulated depreciation and amortization (205,889) (226,302) Total property and equipment, net $ 156,577 $ 127,817 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Carrying Amounts Of Goodwill | The changes in carrying amounts of goodwill for the years ended December 31, 2020 and 2019 are as follows (in thousands): Fax and Martech Voice, Backup, Security and CPP 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) 31,672 179,293 210,965 42,131 253,096 Purchase Accounting Adjustments (1) 177 — 177 (858) (681) Foreign exchange translation (331) 73 (258) 500 242 Balance as of December 31, 2019 $ 397,788 $ 480,084 $ 877,872 $ 755,161 $ 1,633,033 Goodwill acquired (Note 4) 21,738 19,056 40,794 177,951 218,745 Goodwill written off related to sale of a business (2) — (4,751) (4,751) — (4,751) Purchase accounting adjustments (1) — (2,130) (2,130) 9,721 7,591 Foreign exchange translation 5,945 6,766 12,711 101 12,812 Balance as of December 31, 2020 $ 425,471 $ 499,025 $ 924,496 $ 942,934 $ 1,867,430 (1) Purchase accounting adjustments relate to adjustments to goodwill in connection with prior year business acquisitions (see Note 4 - Business Acquisitions). (2) On August 31, 2020, in a cash transaction, the Company sold certain of its Voice assets in Australia and New Zealand which resulted in $4.8 million of goodwill being written off (see Note 6 - Sale of Assets). |
Indefinite Intangible Assets | Intangible Assets with Indefinite Lives: 2020 2019 Trade names $ 27,460 $ 27,379 Other 4,329 4,306 Total $ 31,789 $ 31,685 |
Intangible Assets Subject to Amortization | Intangible Assets Subject to Amortization: As of December 31, 2020, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.0 years $ 260,715 $ 100,273 $ 160,442 Patent and patent licenses 5.5 years 67,980 66,964 1,016 Customer relationships (1) 8.0 years 848,875 471,681 377,194 Other purchased intangibles 4.3 years 436,352 265,224 171,128 Total $ 1,613,922 $ 904,142 $ 709,780 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four As of December 31, 2019, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.2 years $ 193,202 $ 82,552 $ 110,650 Patent and patent licenses 6.5 years 67,921 63,143 4,778 Customer relationships (1) 8.5 years 630,730 392,228 238,502 Other purchased intangibles 4.3 years 383,195 212,257 170,938 Total $ 1,275,048 $ 750,180 $ 524,868 (1) Historically, the Company has amortized its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four |
Expected Amortization Expenses for Intangible Assets Subject To Amortization | Expected amortization expenses for intangible assets subject to amortization at December 31, 2020 are as follows (in thousands): Fiscal Year: 2021 $ 181,679 2022 134,289 2023 108,410 2024 77,965 2025 55,118 Thereafter 152,319 Total expected amortization expense $ 709,780 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | During the year ended December 31, 2020, the Company acquired RetailMeNot, Inc. (see Note 4 - Business Acquisitions). The identified intangible assets were recognized as part of the acquisition and their respective estimated weighted average amortizations were as follows (in thousands): Weighted-Average Amortization Period Fair Value Trade names 10.0 years $ 62,940 Customer relationships 7.0 years 198,840 Other purchased intangibles 3.0 years 42,610 Total $ 304,390 During the year ended December 31, 2020, the Company completed acquisitions which were individually immaterial. The identified intangible assets were recognized as part of all 2020 acquisitions and their respective estimated weighted average amortizations were as follows (in thousands): Weighted-Average Amortization Period Fair Value Trade names 9.7 years $ 67,670 Customer relationships 6.9 years 222,582 Other purchased intangibles 3.3 years 56,802 Total $ 347,054 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt as of December 31, 2020 and 2019 consists of the following (in thousands): 2020 2019 6.0% Senior Notes $ — $ 650,000 4.625% Senior Notes 750,000 — Convertible Notes: 3.25% Convertible Notes 402,414 402,500 1.75% Convertible Notes 550,000 550,000 Total Notes 1,702,414 1,602,500 Paycheck Protection Program Loan 910 — Less: Unamortized discount (112,798) (139,981) Deferred issuance costs (11,505) (14,058) Total long-term debt $ 1,579,021 $ 1,448,461 Less: Current portion (396,801) (385,532) Total long-term debt, less current portion $ 1,182,220 $ 1,062,929 |
Components of Interest Expense Related to Convertible Notes | The following table provides the components of interest expense related to our 3.25% Convertible Notes (in thousands): 2020 2019 2018 Cash interest expense (coupon interest expense) $ 13,080 $ 13,081 $ 13,081 Non-cash amortization of discount on 3.25% Convertible Notes 9,717 9,171 8,655 Amortization of debt issuance costs 1,749 1,600 1,462 Total interest expense related to 3.25% Convertible Notes $ 24,546 $ 23,852 $ 23,198 The following table provides the components of interest expense related to our 1.75% Convertible Notes (in thousands): 2020 2019 Cash interest expense (coupon interest expense) $ 9,653 $ 1,174 Non-cash amortization of discount on 1.75% Convertible Notes 14,563 1,718 Amortization of debt issuance costs 1,098 122 Total interest expense related to 1.75% Convertible Notes $ 25,314 $ 3,014 |
Additional Information Related to Senior Notes | The following table provides additional information related to our 6% Senior Notes (in thousands): 2019 Principal amount of 6% Senior Notes $ 650,000 Less: Unamortized discount (8,425) Less: Debt issuance costs (1,466) Net carrying amount of 6% Senior Notes $ 640,109 The following table provides additional information on our 4.625% Senior Notes (in thousands): 2020 Principal amount of 4.625% Senior Notes $ 750,000 Less: Unamortized discount (5,523) Less: Debt issuance costs (1,761) Net carrying amount of 4.625% Senior Notes $ 742,716 |
Additional Information Related to Convertible Notes | The following table provides additional information related to our 3.25% Convertible Notes (in thousands): 2020 2019 Additional paid-in capital $ 37,688 $ 37,700 Principal amount of 3.25% Convertible Notes $ 402,414 $ 402,500 Less: Unamortized discount of the liability component (4,644) (14,363) Less: Carrying amount of debt issuance costs (855) (2,605) Net carrying amount of 3.25% Convertible Notes $ 396,915 $ 385,532 The following table provides additional information related to our 1.75% Convertible Notes (in thousands): 2020 2019 Additional paid-in capital $ 88,138 $ 88,138 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Unamortized discount of the liability component (102,631) (117,193) Less: Carrying amount of debt issuance costs (8,889) (9,987) Net carrying amount of 1.75% Convertible Notes $ 438,480 $ 422,820 |
Future Principal Payments for Debt | At December 31, 2020, future principal payments for debt were as follows (in thousands): Years Ended December 31, 2021 $ 402,414 2022 910 2023 — 2024 — 2025 — Thereafter 1,300,000 $ 1,703,324 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense, recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations, were as follows for the year ended (in thousands): Years ended December 31, 2020 2019 Operating lease cost $ 42,025 $ 23,681 Short-term lease cost 1,807 1,918 Total lease cost $ 43,832 $ 25,599 Supplemental cash flow information related to leases was as follows (in thousands): Years ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 28,677 $ 24,750 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 31,669 $ 73,163 |
Balance Sheet and Other Supplemental Operating Lease Information | Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2020 December 31, 2019 Operating leases Operating lease right-of-use assets $ 105,845 $ 125,822 Total operating lease right-of-use assets $ 105,845 $ 125,822 Operating lease liability, current $ 32,211 $ 26,927 Operating lease liabilities, noncurrent 99,177 104,070 Total operating lease liabilities $ 131,388 $ 130,997 Other supplemental operating lease information consists of the following: December 31, 2020 December 31, 2019 Operating leases: Weighted average remaining lease term 5.2 years 5.9 years Weighted average discount rate 3.93 % 3.95 % |
Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands): Operating Leases Fiscal Year: 2021 $ 34,636 2022 32,137 2023 26,255 2024 18,288 2025 9,843 Thereafter 38,447 Total lease payments $ 159,606 Less: Imputed interest (28,218) Present value of operating lease liabilities $ 131,388 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Tax | The provision for income tax consisted of the following (in thousands): Years Ended December 31, 2020 2019 2018 Current: Federal $ 20,943 $ 23,306 $ 17,233 State 5,223 4,774 (617) Foreign 36,387 15,988 3,094 Total current 62,553 44,068 19,710 Deferred: Federal (6,173) (1,903) 16,083 State 694 (5,620) 2,965 Foreign 11,319 (55,921) 6,002 Total deferred 5,840 (63,444) 25,050 Total provision $ 68,393 $ (19,376) $ 44,760 |
Reconciliation of Statutory Federal Income Tax Rate with Effective Income Tax Rate | A reconciliation of the statutory federal income tax rate with J2 Global’s effective income tax rate is as follows: Years Ended December 31, 2020 2019 2018 Statutory tax rate 21 % 21 % 21 % State income taxes, net 1.5 0.9 1.2 Foreign rate differential (0.1) (3.8) (7.7) Foreign income inclusion 0.8 1.4 1.5 Foreign tax credit (1.3) (0.9) (1.4) Reserve for uncertain tax positions 3.5 (0.4) 4.1 Valuation allowance 3.7 0.2 0.2 Intra-entity tax benefit — (26.9) — Impact on deferred taxes of enacted tax law and rate changes 1.1 (1.3) 0.1 Contingent liabilities — 0.6 2.4 Unrecognized loss on intercompany sale — — 1.9 Other (0.5) (0.5) 1.9 Effective tax rates 29.7 % (9.7) % 25.2 % |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows (in thousands): Years Ended December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 21,183 $ 43,352 Tax credit carryforwards 9,022 4,152 Accrued expenses 19,572 9,946 Allowance for bad debt 4,366 2,547 Share-based compensation expense 5,923 4,669 Impairment of investments 6,762 1,675 Deferred revenue 1,334 — State taxes 5,124 3,206 Other 12,045 9,958 85,331 79,505 Less: valuation allowance (8,307) (608) Total deferred tax assets $ 77,024 $ 78,897 Deferred tax liabilities: Basis difference in property and equipment $ (18,995) $ (15,767) Basis difference in intangible assets (93,162) (42,880) Prepaid insurance (2,905) (1,847) Convertible debt (65,192) (65,217) Other (2,925) (663) Total deferred tax liabilities (183,179) (126,374) Net deferred tax liabilities $ (106,155) $ (47,477) |
Reconciliation of Unrecognized Tax Benefits | The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2020, 2019 and 2018, is as follows (in thousands): Years Ended December 31, 2020 2019 2018 Beginning balance $ 46,703 $ 51,271 $ 45,012 Increases related to tax positions during a prior year 3,952 5,285 2,508 Decreases related to tax positions taken during a prior year (245) (7,441) — Increases related to tax positions taken in the current year 4,299 4,069 3,751 Settlements (5,627) (5,831) — Decreases related to expiration of statute of limitations — (650) — Ending balance $ 49,082 $ 46,703 $ 51,271 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of Dividends Declared | The following is a summary of each dividend declared during fiscal year 2019: Declaration Date Dividend per Common Share Record Date Payment Date February 6, 2019 $ 0.4450 February 25, 2019 March 12, 2019 May 2, 2019 $ 0.4550 May 20, 2019 June 4, 2019 |
Stock Options and Employee St_2
Stock Options and Employee Stock Purchase Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options Activity | Stock option activity for the years ended December 31, 2020, 2019 and 2018 is summarized as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2018 375,675 $ 31.30 Granted 400,000 75.03 Exercised (67,898) 22.68 Canceled — — Options outstanding at December 31, 2018 707,777 $ 56.84 Granted — — Exercised (189,436) 32.39 Canceled — — Options outstanding at December 31, 2019 518,341 $ 65.77 Granted — — Exercised (42,740) 23.11 Canceled — — Options outstanding at December 31, 2020 475,601 $ 69.61 6.2 $13,355,721 Exercisable at December 31, 2020 175,601 $ 60.35 4.7 $6,557,721 Vested and expected to vest at December 31, 2020 393,281 $ 68.47 6.0 $11,490,350 |
Summarized Information Concerning Outstanding and Exercisable Options | The following table summarizes information concerning outstanding and exercisable options as of December 31, 2020: Options Outstanding Exercisable Options Range of Number Outstanding December 31, 2020 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable December 31, 2020 Weighted Average Exercise Price $29.34 45,351 0.36 years $ 29.34 45,351 $ 29.34 29.53 7,250 1.17 years 29.53 7,250 29.53 67.35 23,000 4.35 years 67.35 23,000 67.35 75.03 400,000 7.00 years 75.03 100,000 75.03 $29.34 - $75.03 475,601 6.15 years $ 69.61 175,601 $ 60.35 |
Valuation Assumptions of Stock Options Granted | The weighted-average fair values of stock options granted have been estimated utilizing the following assumptions: Years ended December 31, 2020 2019 2018 Risk-free interest rate —% —% 2.4% Expected term (in years) 0.0 0.0 6.7 Dividend yield —% —% 2.2% Expected volatility —% —% 29.2% Weighted average volatility —% —% 29.2% |
Valuation Assumptions of Market-based Restricted Stock Awards Granted | The weighted-average fair values of market-based restricted stock awards granted have been estimated utilizing the following assumptions: December 31, 2020 December 31, 2019 December 31, 2018 Underlying stock price at valuation date $ 91.17 $ 84.58 $ 82.11 Expected volatility 27.0 % 28.3 % 28.4 % Risk-free interest rate 0.7 % 2.5 % 2.9 % |
Restricted Stock and Restricted Stock Unit Award Activity | Restricted stock award activity for the years ended December 31, 2020, 2019 and 2018 is set forth below: Shares Weighted-Average Nonvested at January 1, 2018 605,566 $ 51.57 Granted 830,256 63.55 Vested (157,972) 61.29 Canceled (70,839) 74.84 Nonvested at December 31, 2018 1,207,011 $ 64.82 Granted 187,773 79.00 Vested (172,884) 73.65 Canceled (116,841) 72.58 Nonvested at December 31, 2019 1,105,059 $ 64.76 Granted 1,268 98.63 Vested (264,172) 70.25 Canceled (21,589) 79.34 Nonvested at December 31, 2020 820,566 $ 62.66 Number of Weighted-Average Aggregate Outstanding at January 1, 2018 38,400 Granted 20,044 Vested (11,540) Canceled (5,673) Outstanding at December 31, 2018 41,231 Granted 3,844 Vested (12,343) Canceled (11,858) Outstanding at December 31, 2019 20,874 Granted 210,630 Vested (9,029) Canceled (12,691) Outstanding at December 31, 2020 209,784 3.5 $ 20,493,799 Vested and expected to vest at December 31, 2020 135,944 2.7 $ 13,280,344 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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): Years Ended December 31, 2020 2019 2018 Numerator for basic and diluted net income per common share: Net income attributable to J2 Global, Inc. common shareholders $ 150,668 $ 218,806 $ 128,687 Net income available to participating securities (1) (632) (3,496) (1,885) Net income available to J2 Global, Inc. common shareholders $ 150,036 $ 215,310 $ 126,802 Denominator: Weighted-average outstanding shares of common stock 46,308,825 47,647,397 47,950,746 Dilutive effect of: Equity incentive plans 25,232 78,076 146,906 Convertible debt (2) 788,454 1,300,211 830,139 Common stock and common stock equivalents 47,122,511 49,025,684 48,927,791 Net income per share: Basic $ 3.24 $ 4.52 $ 2.64 Diluted $ 3.18 $ 4.39 $ 2.59 (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (2) Represents the incremental shares issuable upon conversion of the 3.25% Convertible Notes due June 15, 2029 and 1.75% Convertible Notes due November 1, 2026 by applying the treasury stock method when the average stock price exceeds the conversion price of the Convertible Notes (see Note 10 - Long Term Debt). |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Total Segment Operating Income to Consolidated Operating Income | Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands): Years Ended December 31, 2020 2019 2018 Revenue by reportable segment: Fax and Martech (1) $ 386,276 $ 378,444 $ 360,479 Voice, Backup, Security, and CPP (1) 292,185 283,391 237,496 Cloud Services Total 678,461 661,835 597,975 Digital Media 811,360 710,511 609,374 Elimination of inter-segment revenues (229) (300) (60) Total segment revenues 1,489,592 1,372,046 1,207,289 Corporate (2) 1 8 6 Total revenues 1,489,593 1,372,054 1,207,295 Gross profit by reportable segment: Fax and Martech (1) 320,714 318,677 311,534 Voice, Backup, Security, and CPP (1) 203,486 198,888 164,287 Cloud Services Total 524,200 517,565 475,821 Digital Media 733,887 617,458 530,455 Elimination of inter-segment gross profit (229) (300) (60) Total segment gross profit 1,257,858 1,134,723 1,006,216 Corporate (2) (47) 8 5 Total gross profit 1,257,811 1,134,731 1,006,221 Direct costs by reportable segment (3) : Fax and Martech (1)(4) 116,923 119,574 125,963 Voice, Backup, Security, and CPP (1)(4) 158,074 150,451 113,666 Cloud Services Total 274,997 270,025 239,629 Digital Media (4) 594,807 540,193 483,167 Elimination of inter-segment direct costs (229) (300) (60) Total segment direct costs 869,575 809,918 722,736 Corporate (2) 53,625 47,733 39,205 Total direct costs (3) 923,200 857,651 761,941 Operating income by reportable segment: Fax and Martech 203,791 199,103 185,571 Voice, Backup, Security, and CPP 45,412 48,437 50,621 Cloud Services Total 249,203 247,540 236,192 Digital Media 139,080 77,265 47,288 Total segment operating income 388,283 324,805 283,480 Corporate (2) (53,672) (47,725) (39,200) Total income from operations $ 334,611 $ 277,080 $ 244,280 (1) The Company reclassified certain intercompany revenue and expenses in 2019 and 2018 for Cloud Services in order to better align with a stand-alone presentation. (2) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. (3) 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. (4) Table above has been recast to remove the impact of certain expenses associated with the Corporate entity that were previously allocated to the Cloud Services and Digital Media businesses. |
Total Assets, Capital Expenditures, Depreciation and Amortization | 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. 2020 2019 Assets: Cloud Services $ 1,473,398 $ 1,466,969 Digital Media 2,088,397 1,561,024 Total assets from Cloud Services and Digital Media 3,561,795 3,027,993 Corporate 103,536 477,853 Total assets $ 3,665,331 $ 3,505,846 2020 2019 2018 Capital expenditures: Cloud Services $ 32,859 $ 21,826 $ 13,832 Digital Media 59,693 48,736 42,547 Total capital expenditures from Cloud Services and Digital Media 92,552 70,562 56,379 Corporate — 26 — Total capital expenditures $ 92,552 $ 70,588 $ 56,379 Depreciation and amortization: Cloud Services $ 79,754 $ 80,970 $ 60,754 Digital Media 145,321 148,575 122,843 Total depreciation and amortization from Cloud Services and Digital Media 225,075 229,545 183,597 Corporate 3,662 2,487 3,577 Total depreciation and amortization $ 228,737 $ 232,032 $ 187,174 |
Revenues and Long-lived Assets by Geographic Information | 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 markets where revenues are reported (in thousands). Years ended December 31, 2020 2019 2018 Revenues: United States $ 1,215,281 $ 1,100,298 $ 924,051 Canada 70,073 67,518 73,742 Ireland 55,917 59,009 69,291 All other countries 148,322 145,229 140,211 Total $ 1,489,593 $ 1,372,054 $ 1,207,295 December 31, December 31, Long-lived assets: United States $ 918,125 $ 701,580 All other countries 54,073 76,927 Total $ 972,198 $ 778,507 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Loss (Income) | The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the years ended December 31, 2020, 2019, and 2018 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2018 $ — $ (29,090) $ (29,090) Other comprehensive loss before reclassifications (1,418) (15,471) (16,889) Net current period other comprehensive loss (1,418) (15,471) (16,889) Balance as of December 31, 2018 $ (1,418) $ (44,561) $ (45,979) Other comprehensive income (loss) before reclassifications 1,143 (1,626) (483) Net current period other comprehensive income (loss) 1,143 (1,626) (483) Balance as of December 31, 2019 $ (275) $ (46,187) $ (46,462) Other comprehensive income (loss) before reclassifications 558 (8,902) (8,344) Net current period other comprehensive income (loss) 558 (8,902) (8,344) Balance as of December 31, 2020 $ 283 $ (55,089) $ (54,806) |
Reclassification out of Accumulated Other Comprehensive Loss | The following table provides details about reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2020, 2019, and 2018. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statements of Operations For the years ending December 31, 2020 2019 2018 Unrealized loss on available-for-sale investments $ 698 $ — $ — Loss on investments, net 698 — — Income before income taxes — — — Income tax expense Total reclassifications for the period $ 698 $ — $ — Net Income |
Quarterly Results (unaudited) (
Quarterly Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Unaudited Quarterly Financial Information | The following tables contain selected unaudited Statements of Operations information for each quarter of 2020 and 2019 (in thousands, except share and per share data). J2 Global believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Year Ended December 31, 2020 Fourth Quarter Third Quarter Second Quarter First Quarter Revenues $ 469,240 $ 356,976 $ 330,984 $ 332,393 Gross profit 409,213 301,154 274,182 273,262 Net income 58,088 60,883 38,101 (6,404) Net income per common share: Basic $ 1.30 $ 1.31 $ 0.81 $ (0.13) Diluted $ 1.27 $ 1.31 $ 0.80 $ (0.13) Weighted average shares outstanding Basic 44,504,222 46,279,515 46,850,944 47,620,774 Diluted 45,642,292 46,309,072 47,437,555 47,620,774 Year Ended December 31, 2019 Fourth Third Second First Revenues $ 405,588 $ 344,141 $ 322,432 $ 299,893 Gross profit 341,260 282,425 262,166 248,880 Net income (1) 123,023 30,745 32,589 32,449 Net income per common share: Basic $ 2.54 $ 0.63 $ 0.67 $ 0.67 Diluted $ 2.45 $ 0.62 $ 0.66 $ 0.66 Weighted average shares outstanding Basic 47,626,833 47,673,211 47,727,786 47,560,749 Diluted 49,425,395 49,064,272 49,102,879 48,509,181 (1) The increase in the Company’s net income in the fourth quarter of 2019 is primarily driven by the tax benefit recognized as a result of an intra-entity asset transfer (see Note 13 - Income Taxes). |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($)businesssegment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 10, 2014 | |
Net translation foreign currency translation (loss)/gain | $ (8,902,000) | $ (1,626,000) | $ (15,471,000) | |
Foreign exchange realized gains (losses) | 28,500,000 | (4,000,000) | (2,300,000) | |
Impairment of long-lived assets to be disposed of | 0 | 0 | ||
Impairment of goodwill and intangible assets | $ 0 | 0 | 0 | |
Number of businesses | business | 2 | |||
Number of reportable segments | segment | 3 | |||
Advertising costs incurred | $ 163,700,000 | 158,200,000 | 149,700,000 | |
COVID-19 | ||||
Impairment of goodwill and intangible assets | 0 | $ 0 | $ 0 | |
Backup | ||||
Impairment of goodwill and intangible assets | $ 0 | |||
Minimum | ||||
Weighted-Average Amortization Period | 1 year | |||
Maximum | ||||
Weighted-Average Amortization Period | 20 years | |||
Equipment | Minimum | ||||
Estimated useful lives of property and equipment | 1 year | |||
Equipment | Maximum | ||||
Estimated useful lives of property and equipment | 10 years | |||
Software and Software Development Costs | Minimum | ||||
Estimated useful lives of property and equipment | 1 year | |||
Software and Software Development Costs | Maximum | ||||
Estimated useful lives of property and equipment | 5 years | |||
3.25% Convertible Notes | Convertible Debt | ||||
Stated interest rate | 3.25% |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Cumulative effect of adoption to retained earning | $ 1,211,018 | $ 1,311,192 | $ 1,035,744 | $ 1,020,305 |
Contract liability, revenue recognized | 157,400 | 122,700 | ||
Deferred revenue acquired | 22,400 | 28,000 | ||
Retained earnings | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Cumulative effect of adoption to retained earning | $ 809,107 | $ 891,526 | $ 769,575 | 723,062 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Cumulative effect of adoption to retained earning | 1,599 | |||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Cumulative effect of adoption to retained earning | $ 1,599 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 469,240 | $ 356,976 | $ 330,984 | $ 332,393 | $ 405,588 | $ 344,141 | $ 322,432 | $ 299,893 | $ 1,489,593 | $ 1,372,054 | $ 1,207,295 |
Point in time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 27,685 | 32,983 | 4,752 | ||||||||
Over time | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 1,461,908 | 1,339,071 | 1,202,543 | ||||||||
Reportable segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 1,489,592 | 1,372,046 | 1,207,289 | ||||||||
Reportable segments | Digital Media | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 811,360 | 710,511 | 609,374 | ||||||||
Reportable segments | Digital Media | Advertising | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 616,197 | 515,702 | 468,325 | ||||||||
Reportable segments | Digital Media | Subscription | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 186,718 | 185,559 | 138,689 | ||||||||
Reportable segments | Digital Media | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 8,445 | 9,250 | 2,360 | ||||||||
Reportable segments | Cloud Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 678,461 | 661,835 | 597,975 | ||||||||
Reportable segments | Cloud Services | Subscription | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 678,013 | 660,814 | 597,281 | ||||||||
Reportable segments | Cloud Services | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 448 | 1,021 | 694 | ||||||||
Corporate, Non-Segment | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 1 | 8 | 6 | ||||||||
Intersegment Eliminations | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ (229) | $ (300) | $ (60) |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Oct. 28, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | $ 7,591 | $ (681) | |||
Goodwill | 218,745 | 253,096 | |||
Fiscal 2020 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenues contributed through acquisitions | 61,900 | ||||
Total consideration of transactions | 497,800 | ||||
Fair value of accounts receivable acquired | 46,300 | ||||
Gross amount due under contracts | 53,200 | ||||
Amount expected to be uncollectible | 6,900 | ||||
Goodwill | 218,700 | ||||
Expected income tax deductible amount | 70,800 | ||||
Revenues | 1,671,955 | 1,633,861 | |||
Fiscal 2020 Acquisitions | Voice, Backup, Security, and CPP | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | (2,100) | ||||
Fiscal 2020 Acquisitions | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | 9,700 | ||||
RetailMeNot, Inc. | |||||
Business Acquisition [Line Items] | |||||
Revenues contributed through acquisitions | 47,600 | ||||
Total consideration of transactions | $ 414,400 | ||||
Fair value of accounts receivable acquired | 40,500 | ||||
Gross amount due under contracts | 47,200 | ||||
Amount expected to be uncollectible | $ 6,700 | ||||
Goodwill | 169,600 | ||||
Expected income tax deductible amount | 36,600 | ||||
Revenues | 1,639,495 | 1,589,437 | |||
Pro forma net income for existing line of business | 100 | 28,200 | |||
Pro forma net income for assets sold | $ 8,400 | 13,900 | |||
Fiscal 2019 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenues contributed through acquisitions | 126,300 | ||||
Total consideration of transactions | 429,500 | ||||
Fair value of accounts receivable acquired | 22,800 | ||||
Gross amount due under contracts | 23,700 | ||||
Amount expected to be uncollectible | 900 | ||||
Goodwill | 253,100 | ||||
Expected income tax deductible amount | 95,100 | ||||
Revenues | 1,474,132 | $ 1,427,914 | |||
Fiscal 2019 Acquisitions | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | (900) | ||||
Fiscal 2019 Acquisitions | Fax and Martech | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | $ 200 | ||||
Fiscal 2018 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenues contributed through acquisitions | 56,200 | ||||
Total consideration of transactions | 324,700 | ||||
Fair value of accounts receivable acquired | 15,500 | ||||
Gross amount due under contracts | 11,600 | ||||
Amount expected to be uncollectible | 300 | ||||
Goodwill | 194,300 | ||||
Expected income tax deductible amount | 38,300 | ||||
Revenues | 1,264,544 | $ 1,218,530 | |||
Pro forma net income for subsidiaries sold | $ 22,700 | ||||
Fiscal 2018 Acquisitions | Voice, Backup, Security, and CPP | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | (1,000) | ||||
Fiscal 2018 Acquisitions | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | $ 200 |
Business Acquisitions - Allocat
Business Acquisitions - Allocation of Aggregate Purchase Consideration (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Oct. 28, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,867,430 | $ 1,633,033 | $ 1,380,376 | |
Deferred revenue | (22,400) | (28,000) | ||
Fiscal 2020 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | 46,332 | |||
Prepaid expenses and other current assets | 9,105 | |||
Property and equipment | 2,248 | |||
Operating lease right of use asset | 10,644 | |||
Goodwill | 218,745 | |||
Other long-term assets | 685 | |||
Deferred tax asset | 992 | |||
Accounts payables and accrued expenses | (29,073) | |||
Deferred revenue | (22,436) | |||
Operating lease liabilities, current | (4,520) | |||
Long-term debt | (910) | |||
Operating lease liabilities, noncurrent | (13,104) | |||
Income taxes payable | (3,297) | |||
Liability for uncertain tax positions | (1,576) | |||
Deferred tax liability | (53,870) | |||
Other long-term liabilities | (9,269) | |||
Total | 497,750 | |||
Fiscal 2020 Acquisitions | Trade names | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 67,670 | |||
Fiscal 2020 Acquisitions | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 222,582 | |||
Fiscal 2020 Acquisitions | Other intangibles | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $ 56,802 | |||
RetailMeNot, Inc. | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 40,525 | |||
Prepaid expenses and other current assets | 7,367 | |||
Property and equipment | 587 | |||
Operating lease right of use asset | 10,313 | |||
Goodwill | 169,581 | |||
Other long-term assets | 494 | |||
Deferred tax asset | 605 | |||
Accounts payables and accrued expenses | (24,526) | |||
Deferred revenue | (11,175) | |||
Operating lease liabilities, current | (4,029) | |||
Operating lease liabilities, noncurrent | (13,085) | |||
Income taxes payable | (3,308) | |||
Liability for uncertain tax positions | (1,576) | |||
Deferred tax liability | (52,504) | |||
Other long-term liabilities | (9,275) | |||
Total | 414,384 | |||
RetailMeNot, Inc. | Trade names | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 62,940 | |||
RetailMeNot, Inc. | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 198,840 | |||
RetailMeNot, Inc. | Other intangibles | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $ 42,610 | |||
Fiscal 2019 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | 22,796 | |||
Prepaid expenses and other current assets | 4,528 | |||
Property and equipment | 4,625 | |||
Operating lease right of use asset | 4,982 | |||
Goodwill | 253,096 | |||
Other long-term assets | 660 | |||
Accounts payables and accrued expenses | (31,292) | |||
Other current liabilities | (516) | |||
Deferred revenue | (27,953) | |||
Operating lease liabilities, current | (1,768) | |||
Operating lease liabilities, noncurrent | (3,215) | |||
Income taxes payable | (762) | |||
Liability for uncertain tax positions | (170) | |||
Deferred tax liability | (10,229) | |||
Other long-term liabilities | (635) | |||
Total | 429,517 | |||
Fiscal 2019 Acquisitions | Trade names | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 10,773 | |||
Fiscal 2019 Acquisitions | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 123,611 | |||
Fiscal 2019 Acquisitions | Trademarks | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 32,540 | |||
Fiscal 2019 Acquisitions | Other intangibles | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $ 48,446 | |||
Fiscal 2018 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Cash | 15,532 | |||
Accounts receivable | 11,321 | |||
Prepaid expenses and other current assets | 3,480 | |||
Property and equipment | 4,755 | |||
Goodwill | 194,282 | |||
Other long-term assets | 341 | |||
Deferred tax asset | 821 | |||
Accounts payables and accrued expenses | (10,864) | |||
Deferred revenue | (37,113) | |||
Finance lease | (956) | |||
Income taxes payable | (1,458) | |||
Deferred tax liability | (22,990) | |||
Other long-term liabilities | (5,410) | |||
Total | 340,199 | |||
Fiscal 2018 Acquisitions | Trade names | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 33,750 | |||
Fiscal 2018 Acquisitions | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 66,516 | |||
Fiscal 2018 Acquisitions | Trademarks | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 3,285 | |||
Fiscal 2018 Acquisitions | Other intangibles | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $ 84,907 |
Business Acquisitions - Supplem
Business Acquisitions - Supplementary Information on Unaudited Pro Forma Financial Basis (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RetailMeNot, Inc. | ||||
Revenues | $ 1,639,495 | $ 1,589,437 | ||
Net income | $ 140,880 | $ 190,709 | ||
EPS - Basic (in usd per share) | $ 3.03 | $ 3.94 | ||
EPS - Diluted (in usd per share) | $ 2.98 | $ 3.83 | ||
Fiscal 2020 Acquisitions | ||||
Revenues | $ 1,671,955 | $ 1,633,861 | ||
Net income | $ 140,534 | $ 178,654 | ||
EPS - Basic (in usd per share) | $ 3.02 | $ 3.69 | ||
EPS - Diluted (in usd per share) | $ 2.97 | $ 3.59 | ||
Fiscal 2019 Acquisitions | ||||
Revenues | $ 1,474,132 | $ 1,427,914 | ||
Net income | $ 211,303 | $ 104,710 | ||
EPS - Basic (in usd per share) | $ 4.36 | $ 2.15 | ||
EPS - Diluted (in usd per share) | $ 4.24 | $ 2.11 | ||
Fiscal 2018 Acquisitions | ||||
Revenues | $ 1,264,544 | $ 1,218,530 | ||
Net income | $ 121,727 | $ 123,378 | ||
EPS - Basic (in usd per share) | $ 2.50 | $ 2.56 | ||
EPS - Diluted (in usd per share) | $ 2.45 | $ 2.50 |
Investments - Summary of Securi
Investments - Summary of Securities without Readily Determinable Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Cost | $ 50,384 | $ 34,977 |
Impairment | (23,800) | |
Adjustments | (479) | (3,678) |
Reported Amount | $ 30,300 | $ 27,135 |
Investments - Narrative (Detail
Investments - Narrative (Details) | Sep. 25, 2017USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)investment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Unusual or Infrequent Item, or Both [Line Items] | |||||
Non-cash exchange of available-for-sale debt securities | $ 18,300,000 | ||||
Gain (loss) on investments | $ (4,400,000) | $ (20,991,000) | $ (4,211,000) | $ (73,000) | |
Impairment loss on equity securities without readily determinable fair value | 19,605,000 | 4,164,000 | |||
Equity securities, cumulative impairment loss | 23,800,000 | ||||
Other-than-temporary impairment losses recognized on debt securities | 0 | 0 | 0 | ||
Variable interest entity, amount committed to invest | $ 200,000,000 | ||||
Variable interest entity, ownership percentage | 76.60% | ||||
Annual management fee percentage | 2.00% | ||||
Management fee annual reduction percentage | 10.00% | ||||
Entitled carried interest percentage | 20.00% | ||||
Net investment income (loss) | (11,338,000) | (168,000) | (4,140,000) | ||
Variable interest entity, amount of capital call notices received | 32,900,000 | 29,600,000 | |||
Variable interest entity, amount paid | 31,900,000 | 29,600,000 | |||
Distribution from equity method investment | 0 | 10,288,000 | 0 | ||
Management fees recognized | 3,000,000 | $ 3,000,000 | $ 4,500,000 | ||
COVID-19 | |||||
Unusual or Infrequent Item, or Both [Line Items] | |||||
Net investment income (loss) | $ (4,300,000) | ||||
Number of investments impaired | investment | 2 | ||||
Equity method investment, impairment | $ 7,000,000 |
Investments - Summary of Availa
Investments - Summary of Available-for-sale Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 511 | $ 23,256 |
Gross Unrealized Gains | 152 | 112 |
Gross Unrealized Losses | 0 | (698) |
Fair Value | 663 | 22,670 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 511 | 23,256 |
Gross Unrealized Gains | 152 | 112 |
Gross Unrealized Losses | 0 | (698) |
Fair Value | $ 663 | $ 22,670 |
Investments - Available-for-Sal
Investments - Available-for-Sale Securities Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Due within 1 year | $ 663 | $ 0 |
Due within more than 1 year but less than 5 years | 0 | 22,670 |
Due within more than 5 years but less than 10 years | 0 | 0 |
Due 10 years or after | 0 | 0 |
Total | $ 663 | $ 22,670 |
Investments - Fair Value of Ava
Investments - Fair Value of Available-for-sale Investments in Unrealized Loss Position (Details) $ in Thousands | Dec. 31, 2020investment | Dec. 31, 2019USD ($) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Number of investments in an unrealized loss position | investment | 0 | |
Fair Value | ||
Less than 12 Months | $ 0 | |
12 Months or Greater | 22,047 | |
Total | 22,047 | |
Unrealized Loss | ||
Less than 12 Months | 0 | |
12 Months or Greater | (698) | |
Total | (698) | |
Corporate debt securities | ||
Fair Value | ||
Less than 12 Months | 0 | |
12 Months or Greater | 22,047 | |
Total | 22,047 | |
Unrealized Loss | ||
Less than 12 Months | 0 | |
12 Months or Greater | (698) | |
Total | $ (698) |
Investments - Carrying Amount f
Investments - Carrying Amount for Equity Method Investment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Equity securities | $ 67,195 | $ 50,274 |
Maximum exposure to loss | $ 67,195 | $ 50,274 |
Sale of Assets (Details)
Sale of Assets (Details) $ in Millions | Aug. 31, 2020USD ($) |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gain (Loss) on disposal | $ 17.1 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 10, 2018 | Oct. 13, 2017 | Jun. 10, 2014 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Outstanding note paid down | $ 400,000 | $ 0 | $ 0 | |||
Changes in fair value of contingent consideration | (80,000) | 6,318,000 | $ 18,944,000 | |||
Level 3 | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Gain (loss) recognized in earnings from change in the fair value of contingent consideration | 80,000 | (6,318,000) | ||||
Contingent consideration payments | 37,645,000 | 23,545,000 | ||||
Fiscal 2019 Acquisitions | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Notes payable | 5,500,000 | |||||
Outstanding note paid down | 5,100,000 | |||||
Humble Bundle | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
High-end of potential contingent consideration | $ 40,000,000 | |||||
Contingent consideration | 0 | 20,000,000 | ||||
Contingent consideration payments | 20,000,000 | 20,000,000 | ||||
Ekahau Inc. | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
High-end of potential contingent consideration | $ 15,000,000 | |||||
Contingent consideration | 0 | 9,100,000 | ||||
Contingent consideration payments | 9,100,000 | |||||
Other Business Acquisitions | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
High-end of potential contingent consideration | 23,300,000 | |||||
Contingent consideration | 9,100,000 | 8,800,000 | ||||
Contingent consideration payments | 8,600,000 | |||||
3.25% Convertible Notes | Convertible Debt | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Long-term debt | $ 593,100,000 | $ 583,600,000 | ||||
Stated interest rate | 3.25% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement Inputs and Valuation Techniques (Details) - Option-Based Model | Dec. 31, 2020 |
Risk free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.019 |
Risk free rate | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.019 |
Debt spread | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0 |
Debt spread | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.335 |
Debt spread | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.110 |
Probabilities | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.050 |
Probabilities | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 1 |
Probabilities | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.623 |
Present value factor | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.036 |
Present value factor | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.039 |
Present value factor | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.037 |
Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 28.6 |
Discount rate | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.286 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Values of Financial Instruments Measured On Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value | $ 11,076 | $ 418,334 |
Contingent consideration | 9,094 | 37,887 |
Long-term debt | 1,960,527 | 1,833,062 |
Total liabilities measured at fair value | 1,969,621 | 1,870,949 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value | 11,076 | 418,334 |
Contingent consideration | 9,094 | 37,887 |
Long-term debt | 1,579,021 | 1,448,461 |
Total liabilities measured at fair value | 1,588,115 | 1,486,348 |
Money market and other funds | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market and other funds | 10,413 | 395,664 |
Money market and other funds | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market and other funds | 10,413 | 395,664 |
Corporate debt securities | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Corporate debt securities | 663 | 22,670 |
Corporate debt securities | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Corporate debt securities | 663 | 22,670 |
Level 1 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value | 10,413 | 395,664 |
Contingent consideration | 0 | 0 |
Long-term debt | 1,960,527 | 0 |
Total liabilities measured at fair value | 1,960,527 | 0 |
Level 1 | Money market and other funds | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market and other funds | 10,413 | 395,664 |
Level 1 | Corporate debt securities | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Corporate debt securities | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 2,000,000 | 1,800,000 |
Level 2 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value | 663 | 623 |
Contingent consideration | 0 | 0 |
Long-term debt | 0 | 1,833,062 |
Total liabilities measured at fair value | 0 | 1,833,062 |
Level 2 | Money market and other funds | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market and other funds | 0 | 0 |
Level 2 | Corporate debt securities | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Corporate debt securities | 663 | 623 |
Level 3 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets measured at fair value | 0 | 22,047 |
Contingent consideration | 9,094 | 37,887 |
Long-term debt | 0 | 0 |
Total liabilities measured at fair value | 9,094 | 37,887 |
Level 3 | Money market and other funds | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market and other funds | 0 | 0 |
Level 3 | Corporate debt securities | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Corporate debt securities | $ 0 | $ 22,047 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Level 2 Derivative Liabilities (Details) - Level 2 - Embedded Derivative Financial Instruments $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value, Liabilities, Observable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of January 1, 2019 | $ 768 |
Total fair value adjustments reported in earnings | (768) |
Balance as of December 31, 2019 | $ 0 |
Fair Value Measurements - Rec_2
Fair Value Measurements - Reconciliation of Level 3 Financial Liabilities Measured on Recurring Basis (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 37,887 | $ 50,035 |
Contingent consideration | 8,932 | 5,079 |
Total fair value adjustments reported in earnings | (80) | 6,318 |
Contingent consideration payments | (37,645) | (23,545) |
Ending balance | $ 9,094 | $ 37,887 |
Fair Value Measurements - Rec_3
Fair Value Measurements - Reconciliation of Level 3 Financial Assets Measured on Recurring Basis (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Beginning balance | $ 22,047 | $ 20,846 |
Total fair value adjustments reported in other comprehensive income | 1,201 | |
Exchange of available-for-sale corporate debt securities (Note 5) | (22,047) | |
Ending balance | $ 0 | $ 22,047 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 362,466 | $ 354,119 |
Less: Accumulated depreciation and amortization | (205,889) | (226,302) |
Total property and equipment, net | 156,577 | 127,817 |
Computers and related equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 350,735 | 334,768 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,721 | 1,977 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,010 | $ 17,374 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 63.8 | $ 51.4 | $ 41.3 |
Disposals of long-lived assets | $ 0.9 | $ 0.3 | $ 0.4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 164.9 | $ 180.6 | $ 145.9 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 20 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Thousands | Aug. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Beginning balance | $ 1,633,033 | $ 1,380,376 | |
Goodwill acquired | 218,745 | 253,096 | |
Goodwill written off related to sale of a business | (4,751) | ||
Purchase accounting adjustments | 7,591 | (681) | |
Foreign exchange translation | 12,812 | 242 | |
Ending balance | 1,867,430 | 1,633,033 | |
Reportable segments | Cloud Services Total | |||
Goodwill [Line Items] | |||
Beginning balance | 877,872 | 666,988 | |
Goodwill acquired | 40,794 | 210,965 | |
Goodwill written off related to sale of a business | (4,751) | ||
Purchase accounting adjustments | (2,130) | 177 | |
Foreign exchange translation | 12,711 | (258) | |
Ending balance | 924,496 | 877,872 | |
Reportable segments | Fax and Martech | |||
Goodwill [Line Items] | |||
Beginning balance | 397,788 | 366,270 | |
Goodwill acquired | 21,738 | 31,672 | |
Goodwill written off related to sale of a business | 0 | ||
Purchase accounting adjustments | 0 | 177 | |
Foreign exchange translation | 5,945 | (331) | |
Ending balance | 425,471 | 397,788 | |
Reportable segments | Voice, Backup, Security, and CPP | |||
Goodwill [Line Items] | |||
Beginning balance | 480,084 | 300,718 | |
Goodwill acquired | 19,056 | 179,293 | |
Goodwill written off related to sale of a business | $ (4,800) | (4,751) | |
Purchase accounting adjustments | (2,130) | 0 | |
Foreign exchange translation | 6,766 | 73 | |
Ending balance | 499,025 | 480,084 | |
Reportable segments | Digital Media | |||
Goodwill [Line Items] | |||
Beginning balance | 755,161 | 713,388 | |
Goodwill acquired | 177,951 | 42,131 | |
Goodwill written off related to sale of a business | 0 | ||
Purchase accounting adjustments | 9,721 | (858) | |
Foreign exchange translation | 101 | 500 | |
Ending balance | $ 942,934 | $ 755,161 |
Goodwill And Intangible Asset_4
Goodwill And Intangible Assets - Indefinite Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Intangible assets | $ 31,789 | $ 31,685 |
Trade names | ||
Intangible assets | 27,460 | 27,379 |
Other | ||
Intangible assets | $ 4,329 | $ 4,306 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Historical Cost | $ 1,613,922 | $ 1,275,048 |
Accumulated Amortization | 904,142 | 750,180 |
Net | $ 709,780 | $ 524,868 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 1 year | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 20 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 10 years | 10 years 2 months 12 days |
Historical Cost | $ 260,715 | $ 193,202 |
Accumulated Amortization | 100,273 | 82,552 |
Net | $ 160,442 | $ 110,650 |
Patent and patent licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 5 years 6 months | 6 years 6 months |
Historical Cost | $ 67,980 | $ 67,921 |
Accumulated Amortization | 66,964 | 63,143 |
Net | $ 1,016 | $ 4,778 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years | 8 years 6 months |
Historical Cost | $ 848,875 | $ 630,730 |
Accumulated Amortization | 471,681 | 392,228 |
Net | $ 377,194 | $ 238,502 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 4 years | 4 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 5 years | 5 years |
Other purchased intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 4 years 3 months 18 days | 4 years 3 months 18 days |
Historical Cost | $ 436,352 | $ 383,195 |
Accumulated Amortization | 265,224 | 212,257 |
Net | $ 171,128 | $ 170,938 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Finite Lived Intangibles Acquired (Details) - USD ($) $ in Thousands | Oct. 28, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 10 years | 10 years 2 months 12 days | |
Fair Value | $ 67,670 | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 8 years | 8 years 6 months | |
Fair Value | $ 222,582 | ||
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 4 years 3 months 18 days | 4 years 3 months 18 days | |
Fair Value | $ 56,802 | ||
Fiscal 2020 Acquisitions | |||
Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 347,054 | ||
Fiscal 2020 Acquisitions | Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 9 years 8 months 12 days | ||
Fair Value | $ 67,670 | ||
Fiscal 2020 Acquisitions | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 6 years 10 months 24 days | ||
Fair Value | $ 222,582 | ||
Fiscal 2020 Acquisitions | Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 3 years 3 months 18 days | ||
Fair Value | $ 56,802 | ||
RetailMeNot, Inc. | |||
Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | 304,390 | ||
RetailMeNot, Inc. | Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 10 years | ||
Fair Value | 62,940 | ||
RetailMeNot, Inc. | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 7 years | ||
Fair Value | 198,840 | ||
RetailMeNot, Inc. | Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 3 years | ||
Fair Value | $ 42,610 |
Goodwill And Intangible Asset_7
Goodwill And Intangible Assets - Expected Amortization Expenses for Intangible Assets Subject To Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 181,679 | |
2022 | 134,289 | |
2023 | 108,410 | |
2024 | 77,965 | |
2025 | 55,118 | |
Thereafter | 152,319 | |
Net | $ 709,780 | $ 524,868 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Oct. 07, 2020 | Dec. 31, 2019 | Nov. 15, 2019 | Jun. 10, 2014 |
Debt Instrument [Line Items] | |||||
Gross long-term debt | $ 1,703,324 | ||||
Less: Unamortized discount | (112,798) | $ (139,981) | |||
Deferred issuance costs | (11,505) | (14,058) | |||
Total long-term debt | 1,579,021 | 1,448,461 | |||
Less: Current portion | (396,801) | (385,532) | |||
Total long-term debt, less current portion | 1,182,220 | 1,062,929 | |||
Senior Notes | 6.0% Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.00% | ||||
Gross long-term debt | 0 | 650,000 | |||
Less: Unamortized discount | (8,425) | ||||
Deferred issuance costs | (1,466) | ||||
Total long-term debt | 640,109 | ||||
Senior Notes | 4.625% Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.625% | ||||
Gross long-term debt | 750,000 | 0 | |||
Less: Unamortized discount | (5,523) | ||||
Deferred issuance costs | (1,761) | ||||
Total long-term debt | 742,716 | ||||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Gross long-term debt | 1,702,414 | 1,602,500 | |||
Convertible Debt | 3.25% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.25% | ||||
Gross long-term debt | 402,414 | 402,500 | |||
Less: Unamortized discount | (4,644) | (14,363) | $ (59,000) | ||
Deferred issuance costs | (855) | (2,605) | |||
Total long-term debt | 396,915 | 385,532 | |||
Convertible Debt | 1.75% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 1.75% | ||||
Gross long-term debt | 550,000 | 550,000 | |||
Less: Unamortized discount | (102,631) | (117,193) | $ (118,900) | ||
Deferred issuance costs | (8,889) | (9,987) | $ (2,800) | ||
Total long-term debt | 438,480 | 422,820 | |||
Loans Payable | Paycheck Protection Program, CARES Act | |||||
Debt Instrument [Line Items] | |||||
Gross long-term debt | $ 910 | $ 0 |
Long-Term Debt - Future Princip
Long-Term Debt - Future Principal Payments for Debt (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Long-term Debt, Unclassified [Abstract] | |
2021 | $ 402,414 |
2022 | 910 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 1,300,000 |
Total gross long-term debt | $ 1,703,324 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Oct. 07, 2020USD ($)fiscalQuarterPeriod | Nov. 15, 2019USD ($)tradingDay | Jun. 27, 2017USD ($) | Jun. 10, 2014USD ($)tradingDay | Dec. 31, 2020USD ($)tradingDay$ / shares | Dec. 31, 2019USD ($)tradingDay | Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Redemption premium | $ 29,250,000 | $ 0 | $ 0 | ||||||
Gain (loss) on extinguishment of debt | (37,969,000) | 0 | 0 | ||||||
Unamortized debt discount | $ 112,798,000 | $ 139,981,000 | 112,798,000 | 139,981,000 | |||||
Total fair value adjustments reported in earnings | 0 | (800,000) | 0 | ||||||
Debt issuance costs | 11,505,000 | 14,058,000 | 11,505,000 | 14,058,000 | |||||
Proceeds from line of credit | 0 | 185,000,000 | 0 | ||||||
Lines of credit paid off | 0 | 185,000,000 | 0 | ||||||
Interest expense | 133,800,000 | 70,200,000 | 63,500,000 | ||||||
Outstanding debt originating from the Paycheck Protection Program | 1,703,324,000 | 1,703,324,000 | |||||||
Senior Notes | 6.0% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 650,000,000 | ||||||||
Stated interest rate | 6.00% | ||||||||
Proceeds from debt, net of issuance costs | $ 636,500,000 | ||||||||
Redemption payment of senior notes | $ 694,600,000 | ||||||||
Redemption premium | 29,200,000 | ||||||||
Payments of interest | 15,400,000 | ||||||||
Gain (loss) on extinguishment of debt | (38,000,000) | ||||||||
Fair value of senior notes | 689,800,000 | 689,800,000 | |||||||
Unamortized debt discount | 8,425,000 | 8,425,000 | |||||||
Debt issuance costs | 1,466,000 | 1,466,000 | |||||||
Outstanding debt originating from the Paycheck Protection Program | 0 | 650,000,000 | 0 | 650,000,000 | |||||
Senior Notes | 4.625% Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 750,000,000 | ||||||||
Stated interest rate | 4.625% | ||||||||
Proceeds from debt, net of issuance costs | $ 742,700,000 | ||||||||
Covenant, leverage ratio, minimum | 3.5 | ||||||||
Fair value of senior notes | 796,900,000 | 796,900,000 | |||||||
Percentage principal outstanding to be eligible for redemption | 50.00% | ||||||||
Covenant, EBITDA minimum | 50.00% | ||||||||
Covenant, EBITDA minimum, fiscal quarter period | fiscalQuarterPeriod | 4 | ||||||||
Covenant restricted payment threshold | $ 250,000,000 | ||||||||
Unamortized debt discount | 5,523,000 | 5,523,000 | |||||||
Debt issuance costs | 1,761,000 | 1,761,000 | |||||||
Outstanding debt originating from the Paycheck Protection Program | 750,000,000 | 0 | 750,000,000 | 0 | |||||
Senior Notes | 4.625% Senior Notes | Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of principal amount redeemed | 40.00% | ||||||||
Redemption price, percentage | 104.625% | ||||||||
Senior Notes | 4.625% Senior Notes | Debt Instrument, Redemption, Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage | 100.00% | ||||||||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding debt originating from the Paycheck Protection Program | 1,702,414,000 | 1,602,500,000 | 1,702,414,000 | 1,602,500,000 | |||||
Convertible Debt | 3.25% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 402,500,000 | ||||||||
Stated interest rate | 3.25% | ||||||||
Percentage of principal amount redeemed | 100.00% | ||||||||
Fair value of senior notes | $ 593,100,000 | $ 583,600,000 | $ 593,100,000 | 583,600,000 | |||||
Contingent interest, minimum trading price per principal amount | $ 1,300 | ||||||||
Convertible debt threshold trading days | tradingDay | 20 | ||||||||
Convertible debt threshold consecutive trading days | tradingDay | 30 | 30 | |||||||
Convertible debt conversion ratio | 1.30 | 1.30 | 0.0147632 | ||||||
Convertible debt conversion price (in usd per share) | $ / shares | $ 67.74 | $ 67.74 | |||||||
Borrowing rates of similar debt without the conversion feature | 5.79% | ||||||||
Unamortized debt discount | $ 59,000,000 | $ 4,644,000 | $ 14,363,000 | $ 4,644,000 | 14,363,000 | ||||
Convertible debt carrying amount of equity component | $ 37,700,000 | 37,688,000 | 37,700,000 | 37,688,000 | 37,700,000 | ||||
Effective interest rate | 5.81% | ||||||||
If-converted value in excess of the principal amount | $ 173,300,000 | 154,300,000 | |||||||
Convertible debt remaining discount amortization period | 6 months | ||||||||
Debt issuance costs | 855,000 | 2,605,000 | $ 855,000 | 2,605,000 | |||||
Interest expense | 24,546,000 | 23,852,000 | $ 23,198,000 | ||||||
Outstanding debt originating from the Paycheck Protection Program | 402,414,000 | 402,500,000 | 402,414,000 | 402,500,000 | |||||
Convertible Debt | 3.25% Convertible Notes | Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible debt threshold trading days | tradingDay | 20 | ||||||||
Convertible debt threshold consecutive trading days | tradingDay | 30 | ||||||||
Convertible debt conversion ratio | 1.30 | ||||||||
Convertible Debt | 3.25% Convertible Notes | Debt Instrument, Redemption, Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible debt threshold consecutive trading days | tradingDay | 10 | ||||||||
Convertible debt conversion ratio | 0.98 | ||||||||
Convertible debt threshold consecutive business days | tradingDay | 5 | ||||||||
Convertible Debt | 1.75% Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 550,000,000 | ||||||||
Stated interest rate | 1.75% | ||||||||
Proceeds from debt, net of issuance costs | $ 537,100,000 | ||||||||
Fair value of senior notes | $ 569,700,000 | 559,600,000 | $ 569,700,000 | 559,600,000 | |||||
Convertible debt conversion ratio | 0.0079864 | ||||||||
Convertible debt conversion price (in usd per share) | $ / shares | $ 125.21 | $ 125.21 | |||||||
Borrowing rates of similar debt without the conversion feature | 5.50% | ||||||||
Unamortized debt discount | $ 118,900,000 | $ 102,631,000 | 117,193,000 | $ 102,631,000 | 117,193,000 | ||||
Convertible debt carrying amount of equity component | $ 88,100,000 | 88,138,000 | 88,138,000 | $ 88,138,000 | 88,138,000 | ||||
Effective interest rate | 5.50% | ||||||||
Convertible debt remaining discount amortization period | 5 years 9 months 18 days | ||||||||
Debt issuance costs | $ 2,800,000 | 8,889,000 | 9,987,000 | $ 8,889,000 | 9,987,000 | ||||
Gross debt issuance costs | 12,900,000 | ||||||||
Accumulated amortization of debt issuance costs | $ 10,100,000 | ||||||||
Unamortized debt issuance expense | 8,900,000 | 8,900,000 | |||||||
Interest expense | 25,314,000 | 3,014,000 | |||||||
Outstanding debt originating from the Paycheck Protection Program | 550,000,000 | 550,000,000 | 550,000,000 | 550,000,000 | |||||
Convertible Debt | 1.75% Convertible Notes | Debt Instrument, Redemption, Period One | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible debt threshold trading days | tradingDay | 20 | ||||||||
Convertible debt threshold consecutive trading days | tradingDay | 30 | ||||||||
Convertible debt conversion ratio | 1.30 | ||||||||
Convertible Debt | 1.75% Convertible Notes | Debt Instrument, Redemption, Period Two | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible debt threshold trading days | tradingDay | 5 | ||||||||
Convertible debt threshold consecutive trading days | tradingDay | 10 | ||||||||
Convertible debt conversion ratio | 0.98 | ||||||||
Line of Credit | MUFG Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from line of credit | 185,000,000 | ||||||||
Lines of credit paid off | 185,000,000 | ||||||||
Line of credit, debt issuance costs before accumulated amortization | 400,000 | 400,000 | |||||||
Line of credit, debt issuance costs after accumulated amortization | 300,000 | 300,000 | |||||||
Interest expense | 0 | 3,400,000 | |||||||
Loans Payable | Paycheck Protection Program, CARES Act | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding debt originating from the Paycheck Protection Program | $ 910,000 | $ 0 | $ 910,000 | $ 0 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information Related to Senior and Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 15, 2019 | Jun. 10, 2014 |
Debt Instrument [Line Items] | ||||
Principal amount | $ 1,703,324 | |||
Less: Unamortized discount | (112,798) | $ (139,981) | ||
Deferred issuance costs | (11,505) | (14,058) | ||
Total long-term debt | 1,579,021 | 1,448,461 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 1,702,414 | 1,602,500 | ||
6.0% Senior Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 0 | 650,000 | ||
Less: Unamortized discount | (8,425) | |||
Deferred issuance costs | (1,466) | |||
Total long-term debt | 640,109 | |||
4.625% Senior Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 750,000 | 0 | ||
Less: Unamortized discount | (5,523) | |||
Deferred issuance costs | (1,761) | |||
Total long-term debt | 742,716 | |||
3.25% Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Additional paid-in capital | 37,688 | 37,700 | $ 37,700 | |
Principal amount | 402,414 | 402,500 | ||
Less: Unamortized discount | (4,644) | (14,363) | $ (59,000) | |
Deferred issuance costs | (855) | (2,605) | ||
Total long-term debt | 396,915 | 385,532 | ||
1.75% Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Additional paid-in capital | 88,138 | 88,138 | $ 88,100 | |
Principal amount | 550,000 | 550,000 | ||
Less: Unamortized discount | (102,631) | (117,193) | (118,900) | |
Deferred issuance costs | (8,889) | (9,987) | $ (2,800) | |
Total long-term debt | $ 438,480 | $ 422,820 |
Long-Term Debt - Components of
Long-Term Debt - Components of Interest Expense Related to Convertible Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Total interest expense related to Convertible Notes | $ 133,800 | $ 70,200 | $ 63,500 |
3.25% Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Cash interest expense (coupon interest expense) | 13,080 | 13,081 | 13,081 |
Non-cash amortization of discount on Convertible Notes | 9,717 | 9,171 | 8,655 |
Amortization of debt issuance costs | 1,749 | 1,600 | 1,462 |
Total interest expense related to Convertible Notes | 24,546 | 23,852 | $ 23,198 |
1.75% Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Cash interest expense (coupon interest expense) | 9,653 | 1,174 | |
Non-cash amortization of discount on Convertible Notes | 14,563 | 1,718 | |
Amortization of debt issuance costs | 1,098 | 122 | |
Total interest expense related to Convertible Notes | $ 25,314 | $ 3,014 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease renewal term | 5 years | |||
Lease asset impairments and other charges | $ 12,121,000 | $ 0 | $ 0 | |
Right-of-use assets recorded upon adoption | 105,845,000 | 125,822,000 | ||
Operating lease liabilities recorded upon adoption | 131,388,000 | 130,997,000 | ||
Rental expense for operating leases classified under ASC 840 | 21,000,000 | |||
Sublease income | 2,600,000 | $ 3,500,000 | $ 2,800,000 | |
Estimated aggregate sublease income to be received in the future | 4,500,000 | |||
COVID-19 | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease asset impairments and other charges | 2,100,000 | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-use assets recorded upon adoption | $ 72,000,000 | |||
Operating lease liabilities recorded upon adoption | $ 75,000,000 | |||
Building | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease asset impairments and other charges | 12,100,000 | |||
Leasehold improvements | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease asset impairments and other charges | $ 3,600,000 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease terms | 3 years | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease terms | 5 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 42,025 | $ 23,681 |
Short-term lease cost | 1,807 | 1,918 |
Total lease cost | $ 43,832 | $ 25,599 |
Leases - Balance Sheet and Othe
Leases - Balance Sheet and Other Supplemental Operating Lease Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 105,845 | $ 125,822 |
Operating lease liabilities, current | 32,211 | 26,927 |
Operating lease liabilities, noncurrent | 99,177 | 104,070 |
Total operating lease liabilities | $ 131,388 | $ 130,997 |
Weighted average remaining lease term | 5 years 2 months 12 days | 5 years 10 months 24 days |
Weighted average discount rate | 3.93% | 3.95% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 28,677 | $ 24,750 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 31,669 | $ 73,163 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2021 | $ 34,636 | |
2022 | 32,137 | |
2023 | 26,255 | |
2024 | 18,288 | |
2025 | 9,843 | |
Thereafter | 38,447 | |
Total lease payments | 159,606 | |
Less: Imputed interest | (28,218) | |
Present value of operating lease liabilities | $ 131,388 | $ 130,997 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2020 | Nov. 15, 2019 | Nov. 14, 2019 | Aug. 30, 2019 |
Line of Credit Facility [Line Items] | ||||
Loss contingency accrual | $ 4,500,000 | |||
Estimate of possible loss | $ 22,500,000 | |||
Line of Credit | MUFG Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |||
Line of credit facility, current borrowing capacity | $ 100,000,000 | $ 200,000,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)subsidiary | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Income Taxes [Line Items] | ||||
Number of foreign subsidiaries involved in intra-entity asset transfer | subsidiary | 2 | |||
Net tax expense (benefit) on intra-entity asset transfer | $ (53,700,000) | |||
Total deferred tax assets | $ 77,024,000 | 78,897,000 | ||
Valuation allowance | 8,307,000 | 608,000 | ||
Increase (decrease) in valuation allowance | 7,700,000 | |||
Foreign tax credit carryforward | 0 | 0 | ||
Research and development tax credits carryforwards | 9,100,000 | 3,200,000 | ||
Undistributed earnings from foreign subsidiaries | 454,500,000 | |||
Prepaid tax payments | 3,000,000 | 3,700,000 | ||
Income before income taxes, domestic operations | 47,300,000 | 81,600,000 | $ 19,900,000 | |
Income before income taxes, foreign operations | 183,100,000 | 118,000,000 | 157,700,000 | |
Unrecognized tax benefits | 49,082,000 | 46,703,000 | 51,271,000 | $ 45,012,000 |
Unrecognized tax benefits, if recognized, would affect the Company’s effective tax rat | 46,000,000 | 43,900,000 | 46,800,000 | |
Unrecognized tax benefits, interest and penalties accrued | 8,100,000 | 5,800,000 | 8,400,000 | |
Unrecognized tax benefits, interest and penalty expense (benefit) | 2,300,000 | $ (1,800,000) | $ 1,200,000 | |
Domestic Tax Authority | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards (“NOLs”) | 60,200,000 | |||
NOLs subject to expiration | 59,700,000 | |||
NOLs not subject to expiration | 500,000 | |||
Foreign Tax Authority | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards (“NOLs”) | $ 5,800,000 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ 20,943 | $ 23,306 | $ 17,233 |
State | 5,223 | 4,774 | (617) |
Foreign | 36,387 | 15,988 | 3,094 |
Total current | 62,553 | 44,068 | 19,710 |
Deferred: | |||
Federal | (6,173) | (1,903) | 16,083 |
State | 694 | (5,620) | 2,965 |
Foreign | 11,319 | (55,921) | 6,002 |
Total deferred | 5,840 | (63,444) | 25,050 |
Total provision | $ 68,393 | $ (19,376) | $ 44,760 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate with Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 21.00% | 21.00% | 21.00% |
State income taxes, net | 1.50% | 0.90% | 1.20% |
Foreign rate differential | (0.10%) | (3.80%) | (7.70%) |
Foreign income inclusion | 0.80% | 1.40% | 1.50% |
Foreign tax credit | (1.30%) | (0.90%) | (1.40%) |
Reserve for uncertain tax positions | 3.50% | (0.40%) | 4.10% |
Valuation allowance | 3.70% | 0.20% | 0.20% |
Intra-entity tax benefit | 0.00% | (26.90%) | 0.00% |
Impact on deferred taxes of enacted tax law and rate changes | 1.10% | (1.30%) | 0.10% |
Contingent liabilities | 0.00% | 0.60% | 2.40% |
Unrecognized loss on intercompany sale | 0.00% | 0.00% | 1.90% |
Other | (0.50%) | (0.50%) | 1.90% |
Effective tax rates | 29.70% | (9.70%) | 25.20% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 21,183 | $ 43,352 |
Tax credit carryforwards | 9,022 | 4,152 |
Accrued expenses | 19,572 | 9,946 |
Allowance for bad debt | 4,366 | 2,547 |
Share-based compensation expense | 5,923 | 4,669 |
Impairment of investments | 6,762 | 1,675 |
Deferred revenue | 1,334 | 0 |
State taxes | 5,124 | 3,206 |
Other | 12,045 | 9,958 |
Deferred tax assets, gross | 85,331 | 79,505 |
Less: valuation allowance | (8,307) | (608) |
Total deferred tax assets | 77,024 | 78,897 |
Deferred tax liabilities: | ||
Basis difference in property and equipment | (18,995) | (15,767) |
Basis difference in intangible assets | (93,162) | (42,880) |
Prepaid insurance | (2,905) | (1,847) |
Convertible debt | (65,192) | (65,217) |
Other | (2,925) | (663) |
Total deferred tax liabilities | (183,179) | (126,374) |
Net deferred tax liabilities | $ (106,155) | $ (47,477) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 46,703 | $ 51,271 | $ 45,012 |
Increases related to tax positions during a prior year | 3,952 | 5,285 | 2,508 |
Decreases related to tax positions taken during a prior year | (245) | (7,441) | 0 |
Increases related to tax positions taken in the current year | 4,299 | 4,069 | 3,751 |
Settlements | (5,627) | (5,831) | 0 |
Decreases related to expiration of statute of limitations | 0 | (650) | 0 |
Ending balance | $ 49,082 | $ 46,703 | $ 51,271 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Dec. 31, 2020 | Jul. 31, 2016 | Nov. 30, 2014 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 06, 2020 | Feb. 29, 2012 |
Class of Stock [Line Items] | ||||||||
Number of remaining shares available for purchase (in shares) | 7,509,401 | 7,509,401 | ||||||
Number of shares purchased from plan participants (in shares) | 111,451 | |||||||
Series A Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Exchange ratio (in shares) | 20.4319 | |||||||
Issuance of common stock due to preferred stock exchange (in shares) | 235,665 | |||||||
Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Exchange ratio (in shares) | 31.8094 | |||||||
Issuance of common stock due to preferred stock exchange (in shares) | 0 | 0 | 10,530 | |||||
Incremental fair value recognized | $ 6,300,000 | |||||||
Additional share-based compensation recorded | $ 0 | $ 0 | $ 1,900,000 | |||||
Integrated Global Concepts, Inc | ||||||||
Class of Stock [Line Items] | ||||||||
Shares acquired and subsequently retired (in shares) | 935,231 | |||||||
2012 Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum number of shares authorized to be repurchased (in shares) | 5,000,000 | |||||||
Shares repurchased under the program (in shares) | 1,140,819 | 197,870 | 600,000 | |||||
Aggregate cost of shares repurchased | $ 204,600,000 | $ 87,500,000 | $ 16,000,000 | $ 42,500,000 | ||||
2020 Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Maximum number of shares authorized to be repurchased (in shares) | 10,000,000 | |||||||
Shares repurchased under the program (in shares) | 2,490,599 | |||||||
Aggregate cost of shares repurchased | $ 177,800,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Dividends Declared (Details) - $ / shares | May 02, 2019 | Feb. 06, 2019 |
Equity [Abstract] | ||
Dividend per common share (in usd per share) | $ 0.4550 | $ 0.4450 |
Stock Options and Employee St_3
Stock Options and Employee Stock Purchase Plan - Narrative (Details) - USD ($) | May 07, 2020 | May 01, 2018 | May 31, 2001 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options exercisable (in shares) | 175,601 | 163,741 | 298,577 | |||
Options exercisable (in usd per share) | $ 60.35 | $ 45.94 | $ 32.15 | |||
Number of options granted (in shares) | 0 | 0 | 400,000 | |||
Weighted-average grant-date fair values of stock options granted (in usd per share) | $ 19.39 | |||||
Total intrinsic values of options exercised in period | $ 3,000,000 | $ 10,400,000 | $ 3,800,000 | |||
Total fair value of options vested | 1,000,000 | 1,000,000 | 100,000 | |||
Exercise of stock options | 1,619,000 | 5,274,000 | 1,540,000 | |||
Tax benefit realized for the tax deductions from option exercises | 700,000 | 2,400,000 | 900,000 | |||
Compensation expense recognized | $ 24,006,000 | $ 23,922,000 | $ 28,093,000 | |||
Estimated forfeiture rates | 13.00% | 13.90% | 11.80% | |||
Share-based Payment Arrangement, Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Terms of award | 10 years | |||||
Award vesting periods | 5 years | |||||
Award vesting percentage | 20.00% | |||||
Compensation expense recognized | $ 900,000 | $ 900,000 | $ 900,000 | |||
Unrecognized compensation cost related to non-vested awards granted | $ 5,800,000 | |||||
Weighted-average period to recognize compensation cost (in years) | 5 years | |||||
Restricted Stock and Restricted Stock Unit | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock and restricted units granted (in shares) | 129,786 | 117,566 | 376,799 | |||
Modification incremental compensation cost | $ 0 | |||||
Restricted Stock and Restricted Stock Unit | Board of Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting periods | 1 year | |||||
Restricted Stock and Restricted Stock Unit | Senior Staff | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting periods | 5 years | |||||
Restricted Stock and Restricted Stock Unit | Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting periods | 8 years | |||||
Market-based Restricted Stock Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average period to recognize compensation cost (in years) | 4 years 2 months 12 days | |||||
Restricted stock and restricted units granted (in shares) | 82,112 | 74,051 | 473,501 | |||
Weighted-average grant-date fair values of restricted stock awards granted (in usd per share) | $ 70.99 | $ 69.99 | $ 52.95 | |||
Restricted Stock and Restricted Stock Unit, Market-based Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Tax benefit realized for the tax deductions from option exercises | $ 2,100,000 | $ 2,400,000 | $ 2,400,000 | |||
Compensation expense recognized | 21,200,000 | 21,700,000 | 26,400,000 | |||
Unrecognized compensation cost related to non-vested awards granted | 38,600,000 | |||||
Total fair value of restricted stock and restricted stock units vested | 18,600,000 | 12,700,000 | 9,700,000 | |||
Share-based compensation, dividends paid | $ 0 | $ 100,000 | $ 100,000 | |||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average period to recognize compensation cost (in years) | 4 years 6 months | |||||
Restricted stock and restricted units granted (in shares) | 210,630 | 3,844 | 20,044 | |||
2015 Stock Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum issuance of common stock (in shares) | 4,200,000 | |||||
Number of shares available for issuance (in shares) | 2,019,350 | |||||
2015 Stock Option Plan | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Market value of common stock on the date of grant for incentive stock options | 100.00% | |||||
Employee Stock Purchase Plan | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum issuance of common stock (in shares) | 2,000,000 | |||||
Market value of common stock on the date of grant for incentive stock options | 85.00% | 95.00% | ||||
Offering period for incentive stock options | 6 months | 3 months | ||||
Number of shares available for issuance (in shares) | 1,404,939 | |||||
Compensation expense recognized | $ 2,000,000 | $ 1,300,000 | $ 700,000 | |||
Estimated forfeiture rates | 11.15% | 5.80% | 1.96% | |||
Maximum earnings withheld by the employees | 15.00% | |||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 118,629 | 66,413 | 33,262 | |||
Employee Stock Purchase Plan | Minimum | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price under the Purchase Plan (in usd per share) | $ 61.51 | |||||
Employee Stock Purchase Plan | Maximum | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price under the Purchase Plan (in usd per share) | $ 62.82 |
Stock Options and Employee St_4
Stock Options and Employee Stock Purchase Plan - Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | |||
Beginning balance (in shares) | 518,341 | 707,777 | 375,675 |
Granted (in shares) | 0 | 0 | 400,000 |
Exercised (in shares) | (42,740) | (189,436) | (67,898) |
Canceled (in shares) | 0 | 0 | 0 |
Ending balance (in shares) | 475,601 | 518,341 | 707,777 |
Exercisable (in shares) | 175,601 | 163,741 | 298,577 |
Vested and expected to vest (in shares) | 393,281 | ||
Weighted-Average Exercise Price | |||
Beginning balance (in usd per share) | $ 65.77 | $ 56.84 | $ 31.30 |
Granted (in usd per share) | 0 | 0 | 75.03 |
Exercised (in usd per share) | 23.11 | 32.39 | 22.68 |
Canceled (in usd per share) | 0 | 0 | 0 |
Ending balance (in usd per share) | 69.61 | 65.77 | 56.84 |
Exercisable (in usd per share) | 60.35 | $ 45.94 | $ 32.15 |
Vested and expected to vest (in usd per share) | $ 68.47 | ||
Weighted-Average Remaining Contractual Life (In Years) | |||
Options outstanding at December 31, 2020 | 6 years 2 months 12 days | ||
Exercisable at December 31, 2020 | 4 years 8 months 12 days | ||
Vested and expected to vest at December 31, 2020 | 6 years | ||
Aggregate Intrinsic Value | |||
Options outstanding at December 31, 2020 | $ 13,355,721 | ||
Exercisable at December 31, 2020 | 6,557,721 | ||
Vested and expected to vest at December 31, 2020 | $ 11,490,350 |
Stock Options and Employee St_5
Stock Options and Employee Stock Purchase Plan - Summarized Information Concerning Outstanding and Exercisable Options (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number outstanding (in shares) | shares | 475,601 |
Weighted average remaining contractual life | 6 years 1 month 24 days |
Options outstanding, weighted average exercise price (in usd per share) | $ 69.61 |
Number exercisable (in shares) | shares | 175,601 |
Exercisable options, weighted average exercise price (in usd per share) | $ 60.35 |
Range One | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Rnage of exercise price (in usd per share) | $ 29.34 |
Number outstanding (in shares) | shares | 45,351 |
Weighted average remaining contractual life | 4 months 9 days |
Options outstanding, weighted average exercise price (in usd per share) | $ 29.34 |
Number exercisable (in shares) | shares | 45,351 |
Exercisable options, weighted average exercise price (in usd per share) | $ 29.34 |
Range Two | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Rnage of exercise price (in usd per share) | $ 29.53 |
Number outstanding (in shares) | shares | 7,250 |
Weighted average remaining contractual life | 1 year 2 months 1 day |
Options outstanding, weighted average exercise price (in usd per share) | $ 29.53 |
Number exercisable (in shares) | shares | 7,250 |
Exercisable options, weighted average exercise price (in usd per share) | $ 29.53 |
Range Three | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Rnage of exercise price (in usd per share) | $ 67.35 |
Number outstanding (in shares) | shares | 23,000 |
Weighted average remaining contractual life | 4 years 4 months 6 days |
Options outstanding, weighted average exercise price (in usd per share) | $ 67.35 |
Number exercisable (in shares) | shares | 23,000 |
Exercisable options, weighted average exercise price (in usd per share) | $ 67.35 |
Range Four | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Rnage of exercise price (in usd per share) | $ 75.03 |
Number outstanding (in shares) | shares | 400,000 |
Weighted average remaining contractual life | 7 years |
Options outstanding, weighted average exercise price (in usd per share) | $ 75.03 |
Number exercisable (in shares) | shares | 100,000 |
Exercisable options, weighted average exercise price (in usd per share) | $ 75.03 |
Stock Options and Employee St_6
Stock Options and Employee Stock Purchase Plan - Valuation Assumptions of Stock Options and Market-based Restricted Stock Awards Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.00% | 0.00% | 2.40% |
Expected term (in years) | 0 years | 0 years | 6 years 8 months 12 days |
Dividend yield | 0.00% | 0.00% | 2.20% |
Expected volatility | 0.00% | 0.00% | 29.20% |
Weighted average volatility | 0.00% | 0.00% | 29.20% |
Market-based Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.70% | 2.50% | 2.90% |
Expected volatility | 27.00% | 28.30% | 28.40% |
Underlying stock price at valuation date (in usd per share) | $ 91.17 | $ 84.58 | $ 82.11 |
Stock Options and Employee St_7
Stock Options and Employee Stock Purchase Plan - Restricted Stock and Restricted Stock Unit Award Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock | |||
Shares | |||
Beginning balance (in shares) | 1,105,059 | 1,207,011 | 605,566 |
Granted (in shares) | 1,268 | 187,773 | 830,256 |
Vested (in shares) | (264,172) | (172,884) | (157,972) |
Canceled (in shares) | (21,589) | (116,841) | (70,839) |
Ending balance (in shares) | 820,566 | 1,105,059 | 1,207,011 |
Weighted-Average Grant-Date Fair Value | |||
Beginning balance (in usd per share) | $ 64.76 | $ 64.82 | $ 51.57 |
Granted (in usd per share) | 98.63 | 79 | 63.55 |
Vested (in usd per share) | 70.25 | 73.65 | 61.29 |
Canceled (in usd per share) | 79.34 | 72.58 | 74.84 |
Ending balance (in usd per share) | $ 62.66 | $ 64.76 | $ 64.82 |
Number of Shares | |||
Granted (in shares) | 1,268 | 187,773 | 830,256 |
Vested (in shares) | (264,172) | (172,884) | (157,972) |
Canceled (in shares) | (21,589) | (116,841) | (70,839) |
Restricted Stock Units (RSUs) | |||
Shares | |||
Granted (in shares) | 210,630 | 3,844 | 20,044 |
Vested (in shares) | (9,029) | (12,343) | (11,540) |
Canceled (in shares) | (12,691) | (11,858) | (5,673) |
Vested and expected to vest (in shares) | 135,944 | ||
Number of Shares | |||
Beginning balance (in shares) | 20,874 | 41,231 | 38,400 |
Granted (in shares) | 210,630 | 3,844 | 20,044 |
Vested (in shares) | (9,029) | (12,343) | (11,540) |
Canceled (in shares) | (12,691) | (11,858) | (5,673) |
Ending balance (in shares) | 209,784 | 20,874 | 41,231 |
Weighted-Average Remaining Contractual Life (in Years) | |||
Outstanding at December 31, 2020 | 3 years 6 months | ||
Vested and expected to vest at December 31, 2020 | 2 years 8 months 12 days | ||
Aggregate Intrinsic Value | |||
Outstanding at December 31, 2020 | $ 20,493,799 | ||
Vested and expected to vest at December 31, 2020 | $ 13,280,344 |
Defined Contribution 401(k) S_2
Defined Contribution 401(k) Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Expenses incurred for contributions | $ 3.5 | $ 3.7 | $ 3.6 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 15, 2019 | Jun. 10, 2014 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Net income attributable to J2 Global, Inc. common shareholders | $ 58,088 | $ 60,883 | $ 38,101 | $ (6,404) | $ 123,023 | $ 30,745 | $ 32,589 | $ 32,449 | $ 150,668 | $ 218,806 | $ 128,687 | ||
Net income available to participating securities | (632) | (3,496) | (1,885) | ||||||||||
Net income available to J2 Global, Inc. common shareholders | $ 150,036 | $ 215,310 | $ 126,802 | ||||||||||
Denominator: | |||||||||||||
Weighted-average outstanding shares of common stock - basic (in shares) | 44,504,222 | 46,279,515 | 46,850,944 | 47,620,774 | 47,626,833 | 47,673,211 | 47,727,786 | 47,560,749 | 46,308,825 | 47,647,397 | 47,950,746 | ||
Dilutive effect of: | |||||||||||||
Equity incentive plans (in shares) | 25,232 | 78,076 | 146,906 | ||||||||||
Convertible debt (in shares) | 788,454 | 1,300,211 | 830,139 | ||||||||||
Common stock and common stock equivalents (in shares) | 45,642,292 | 46,309,072 | 47,437,555 | 47,620,774 | 49,425,395 | 49,064,272 | 49,102,879 | 48,509,181 | 47,122,511 | 49,025,684 | 48,927,791 | ||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 1.30 | $ 1.31 | $ 0.81 | $ (0.13) | $ 2.54 | $ 0.63 | $ 0.67 | $ 0.67 | $ 3.24 | $ 4.52 | $ 2.64 | ||
Diluted (in dollars per share) | $ 1.27 | $ 1.31 | $ 0.80 | $ (0.13) | $ 2.45 | $ 0.62 | $ 0.66 | $ 0.66 | $ 3.18 | $ 4.39 | $ 2.59 | ||
3.25% Convertible Notes | Convertible Debt | |||||||||||||
Net income per share: | |||||||||||||
Stated interest rate | 3.25% | ||||||||||||
1.75% Convertible Notes | Convertible Debt | |||||||||||||
Net income per share: | |||||||||||||
Stated interest rate | 1.75% |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Options excluded from the computation of diluted earnings per share (in shares) | 0 | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2020businesssegment | |
Segment Reporting [Abstract] | |
Number of businesses | business | 2 |
Number of reportable segments | segment | 3 |
Segment Information - Reconcili
Segment Information - Reconciliation of Total Segment Operating Income to Consolidated Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 469,240 | $ 356,976 | $ 330,984 | $ 332,393 | $ 405,588 | $ 344,141 | $ 322,432 | $ 299,893 | $ 1,489,593 | $ 1,372,054 | $ 1,207,295 |
Gross profit | $ 409,213 | $ 301,154 | $ 274,182 | $ 273,262 | $ 341,260 | $ 282,425 | $ 262,166 | $ 248,880 | 1,257,811 | 1,134,731 | 1,006,221 |
Direct costs | 923,200 | 857,651 | 761,941 | ||||||||
Income from operations | 334,611 | 277,080 | 244,280 | ||||||||
Reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 1,489,592 | 1,372,046 | 1,207,289 | ||||||||
Gross profit | 1,257,858 | 1,134,723 | 1,006,216 | ||||||||
Direct costs | 869,575 | 809,918 | 722,736 | ||||||||
Income from operations | 388,283 | 324,805 | 283,480 | ||||||||
Intersegment Eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | (229) | (300) | (60) | ||||||||
Gross profit | (229) | (300) | (60) | ||||||||
Direct costs | (229) | (300) | (60) | ||||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 1 | 8 | 6 | ||||||||
Gross profit | (47) | 8 | 5 | ||||||||
Direct costs | 53,625 | 47,733 | 39,205 | ||||||||
Income from operations | (53,672) | (47,725) | (39,200) | ||||||||
Cloud Services Total | Reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 678,461 | 661,835 | 597,975 | ||||||||
Gross profit | 524,200 | 517,565 | 475,821 | ||||||||
Direct costs | 274,997 | 270,025 | 239,629 | ||||||||
Income from operations | 249,203 | 247,540 | 236,192 | ||||||||
Fax and Martech | Reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 386,276 | 378,444 | 360,479 | ||||||||
Gross profit | 320,714 | 318,677 | 311,534 | ||||||||
Direct costs | 116,923 | 119,574 | 125,963 | ||||||||
Income from operations | 203,791 | 199,103 | 185,571 | ||||||||
Voice, Backup, Security, and CPP | Reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 292,185 | 283,391 | 237,496 | ||||||||
Gross profit | 203,486 | 198,888 | 164,287 | ||||||||
Direct costs | 158,074 | 150,451 | 113,666 | ||||||||
Income from operations | 45,412 | 48,437 | 50,621 | ||||||||
Digital Media | Reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 811,360 | 710,511 | 609,374 | ||||||||
Gross profit | 733,887 | 617,458 | 530,455 | ||||||||
Direct costs | 594,807 | 540,193 | 483,167 | ||||||||
Income from operations | $ 139,080 | $ 77,265 | $ 47,288 |
Segment Information - Total Ass
Segment Information - Total Assets, Capital Expenditures, Depreciation and Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Assets | $ 3,665,331 | $ 3,505,846 | |
Capital expenditures | 92,552 | 70,588 | $ 56,379 |
Depreciation and amortization | 228,737 | 232,032 | 187,174 |
Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Assets | 3,561,795 | 3,027,993 | |
Capital expenditures | 92,552 | 70,562 | 56,379 |
Depreciation and amortization | 225,075 | 229,545 | 183,597 |
Corporate, Non-Segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Assets | 103,536 | 477,853 | |
Capital expenditures | 0 | 26 | 0 |
Depreciation and amortization | 3,662 | 2,487 | 3,577 |
Cloud Services | Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Assets | 1,473,398 | 1,466,969 | |
Capital expenditures | 32,859 | 21,826 | 13,832 |
Depreciation and amortization | 79,754 | 80,970 | 60,754 |
Digital Media | Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Assets | 2,088,397 | 1,561,024 | |
Capital expenditures | 59,693 | 48,736 | 42,547 |
Depreciation and amortization | $ 145,321 | $ 148,575 | $ 122,843 |
Segment Information - Revenues
Segment Information - Revenues and Long-lived Assets by Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 469,240 | $ 356,976 | $ 330,984 | $ 332,393 | $ 405,588 | $ 344,141 | $ 322,432 | $ 299,893 | $ 1,489,593 | $ 1,372,054 | $ 1,207,295 |
Long-lived assets | 972,198 | 778,507 | 972,198 | 778,507 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,215,281 | 1,100,298 | 924,051 | ||||||||
Long-lived assets | 918,125 | 701,580 | 918,125 | 701,580 | |||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 70,073 | 67,518 | 73,742 | ||||||||
Ireland | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 55,917 | 59,009 | 69,291 | ||||||||
All other countries | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 148,322 | 145,229 | $ 140,211 | ||||||||
Long-lived assets | $ 54,073 | $ 76,927 | $ 54,073 | $ 76,927 |
Supplemental Cash Flows Infor_2
Supplemental Cash Flows Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||||
Cash paid for interest | $ 106 | $ 55.4 | $ 54 | |
Cash paid for income taxes, net of refunds received | 45 | 45.9 | 37.6 | |
Deferred tax expense from exercise of stock options | $ 2.9 | $ 4.8 | $ 3.3 | |
Non-cash exchange of available-for-sale debt securities | $ 18.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Changes in Accumulated Balances of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,311,192 | $ 1,035,744 | $ 1,020,305 |
Other comprehensive income (loss) before reclassifications | (8,344) | (483) | (16,889) |
Net current period other comprehensive income (loss) | (8,344) | (483) | (16,889) |
Ending balance | 1,211,018 | 1,311,192 | 1,035,744 |
Unrealized Gains (Losses) on Investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (275) | (1,418) | 0 |
Other comprehensive income (loss) before reclassifications | 558 | 1,143 | (1,418) |
Net current period other comprehensive income (loss) | 558 | 1,143 | (1,418) |
Ending balance | 283 | (275) | (1,418) |
Foreign Currency Translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (46,187) | (44,561) | (29,090) |
Other comprehensive income (loss) before reclassifications | (8,902) | (1,626) | (15,471) |
Net current period other comprehensive income (loss) | (8,902) | (1,626) | (15,471) |
Ending balance | (55,089) | (46,187) | (44,561) |
Accumulated other comprehensive income (loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (46,462) | (45,979) | (29,090) |
Net current period other comprehensive income (loss) | (8,344) | (483) | (16,889) |
Ending balance | $ (54,806) | $ (46,462) | $ (45,979) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassification out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Loss on investments, net | $ (4,400) | $ (20,991) | $ (4,211) | $ (73) |
Income tax expense | 68,393 | (19,376) | 44,760 | |
Net Income | 698 | 0 | 0 | |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Loss on investments, net | 698 | 0 | 0 | |
Income before income taxes | 698 | 0 | 0 | |
Income tax expense | $ 0 | $ 0 | $ 0 |
Quarterly Results (unaudited)_2
Quarterly Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 469,240 | $ 356,976 | $ 330,984 | $ 332,393 | $ 405,588 | $ 344,141 | $ 322,432 | $ 299,893 | $ 1,489,593 | $ 1,372,054 | $ 1,207,295 |
Gross profit | 409,213 | 301,154 | 274,182 | 273,262 | 341,260 | 282,425 | 262,166 | 248,880 | 1,257,811 | 1,134,731 | 1,006,221 |
Net income | $ 58,088 | $ 60,883 | $ 38,101 | $ (6,404) | $ 123,023 | $ 30,745 | $ 32,589 | $ 32,449 | $ 150,668 | $ 218,806 | $ 128,687 |
Net income per common share: | |||||||||||
Basic (in dollars per share) | $ 1.30 | $ 1.31 | $ 0.81 | $ (0.13) | $ 2.54 | $ 0.63 | $ 0.67 | $ 0.67 | $ 3.24 | $ 4.52 | $ 2.64 |
Diluted (in dollars per share) | $ 1.27 | $ 1.31 | $ 0.80 | $ (0.13) | $ 2.45 | $ 0.62 | $ 0.66 | $ 0.66 | $ 3.18 | $ 4.39 | $ 2.59 |
Weighted average shares outstanding | |||||||||||
Basic (in shares) | 44,504,222 | 46,279,515 | 46,850,944 | 47,620,774 | 47,626,833 | 47,673,211 | 47,727,786 | 47,560,749 | 46,308,825 | 47,647,397 | 47,950,746 |
Diluted (in shares) | 45,642,292 | 46,309,072 | 47,437,555 | 47,620,774 | 49,425,395 | 49,064,272 | 49,102,879 | 48,509,181 | 47,122,511 | 49,025,684 | 48,927,791 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 12,701 | $ 10,422 | $ 8,701 |
Additions: Charged to Costs and Expenses | 13,283 | 13,134 | 17,338 |
Deductions: Write-offs and recoveries | (9,966) | (10,855) | (15,617) |
Balance at End of Period | 16,018 | 12,701 | 10,422 |
Deferred tax asset valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 608 | 44 | 197 |
Additions: Charged to Costs and Expenses | 9,456 | 595 | 0 |
Deductions: Write-offs and recoveries | (1,757) | (31) | (153) |
Balance at End of Period | $ 8,307 | $ 608 | $ 44 |
Uncategorized Items - jcom-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201409Member |