ZIFF DAVIS, INC. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “JCOM”. Holders We had 246 registered stockholders as of February 24, 2021. That number excludes the beneficial owners of shares held in “street” name or held through participants in depositories. Dividends We initiated a quarterly cash dividend program in August 2011 with a payment of $0.20 per share of common stock on September 19, 2011. We have paid an increasing quarterly cash dividend in each subsequent calendar quarter through June 4, 2019. 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. Recent Sales of Unregistered Securities Not applicable. Issuer Purchases of Equity Securities Effective February 15, 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of our common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 20, 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, we had repurchased all of the available shares under the 2012 Program at an aggregated cost of $204.6 million (including an immaterial amount of commission fees). See Note 14 “Stockholders’ Equity” of the Notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K, which is incorporated herein by reference. -39- 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 (see Note 14 - Stockholders’ Equity of the Notes to consolidated financial statements included elsewhere in this Annual Report on Form 10-K, which is incorporated herein by reference). 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. The following table details the repurchases that were made under and outside the 2020 Program during the three months ended December 31, 2020: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2020 - October 31, 2020 22,186 $ 67.50 20,723 7,979,277 November 1, 2020 - November 30, 2020 469,876 $ 73.64 469,876 7,509,401 December 1, 2020 - December 31, 2020 101 $ 94.00 — 7,509,401 Total 492,163 490,599 7,509,401 (1) Includes shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with employee stock options and/or the vesting of restricted stock issued to employees. Equity Compensation Plan Information The following table provides information as of December 31, 2020 regarding shares outstanding and available for issuance under J2 Global’s existing equity compensation plans: Plan Category Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) Equity compensation plans approved by security holders 475,601 $ 69.61 3,424,289 Equity compensation plans not approved by security holders — — — Total 475,601 $ 69.61 3,424,289 The number of securities remaining available for future issuance includes 2,019,350 and 1,404,939 under our 2015 Stock Option Plan and 2001 Employee Stock Purchase Plan, respectively. Refer to Note 15 to the accompanying consolidated financial statements for a description of these Plans. -40- Performance Graph This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of J2 Global under the Securities Act of 1933, as amended, or the Exchange Act. The following graph compares the cumulative total stockholder return for J2 Global, the Nasdaq Computer Index and an index of companies that J2 Global has selected as its peer group in the cloud services for business space. J2 Global’s peer group index for 2020 consists of IAC/InterActive Corp., TripAdvisor, Inc., LivePerson, Inc., Zillow Group, Inc., Salesforce.com, Inc., Open Text Corp. and Tyler Technologies, Inc. The Company removed LogMeIn, Inc. since it was acquired during the current year. There were no companies added to the peer group index for 2020. Measurement points are December 31, 2015 and the last trading day in each of J2 Global’s fiscal quarters through the end of fiscal 2020. The graph assumes that $100 was invested on December 31, 2015 in J2 Global’s common stock and in each of the indices, and assumes reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance. Measurement Nasdaq 2020 Peer Date J2 Global Computer Index Group Index Dec-15 100.00 100.00 100.00 Mar-16 75.58 100.86 90.83 Jun-16 77.92 96.87 100.33 Sep-16 82.52 110.99 95.11 Dec-16 101.40 112.27 88.93 Mar-17 104.41 126.73 101.60 Jun-17 106.30 132.04 109.30 Sep-17 93.15 143.58 115.54 Dec-17 95.03 155.80 123.38 Mar-18 100.24 159.72 142.03 Jun-18 110.09 170.95 161.86 Sep-18 106.04 184.23 185.13 Dec-18 90.20 150.06 158.24 Mar-19 111.66 178.11 181.40 Jun-19 115.00 185.00 178.85 Sep-19 117.34 193.20 175.05 Dec-19 120.85 225.59 193.58 Mar-20 97.94 199.77 165.93 Jun-20 83.80 265.03 222.29 Sep-20 91.10 297.95 294.46 Dec-20 125.70 337.98 284.44 -41- [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -42- Item 6. Selected Financial Data The following selected consolidated financial data should be read in conjunction with our consolidated financial statements, the related notes contained in this Annual Report on Form 10-K and the information contained herein in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. Historical results are not necessarily indicative of future results. Years Ended December 31, 2020 2019 2018 2017 2016 (In thousands, except for share and per share amounts) Statement of Income Data: Revenues $ 1,489,593 $ 1,372,054 $ 1,207,295 $ 1,117,838 $ 874,255 Cost of revenues 231,782 237,323 201,074 172,313 147,100 Gross profit 1,257,811 1,134,731 1,006,221 945,525 727,155 Operating expenses: Sales and marketing 413,474 379,183 338,304 330,296 206,871 Research, development and engineering 64,295 54,396 48,370 46,004 38,046 General and administrative 445,431 424,072 375,267 323,517 239,672 Total operating expenses 923,200 857,651 761,941 699,817 484,589 Income from operations 334,611 277,080 244,280 245,708 242,566 Interest expense, net 131,975 69,546 61,987 67,777 41,370 Gain on sale of businesses (17,122) — — (25,128) (7,625) Loss on investments, net 20,991 4,211 73 4,002 — Other (income) expense, net (31,632) 3,725 4,633 (909) (2,618) Income before income taxes and net loss in earnings of equity method investment 230,399 199,598 177,587 199,966 211,439 Income tax expense (benefit) 68,393 (19,376) 44,760 60,541 59,000 Net loss in earnings of equity method investment 11,338 168 4,140 — — Net income $ 150,668 $ 218,806 $ 128,687 $ 139,425 $ 152,439 Net income per common share: Basic $ 3.24 $ 4.52 $ 2.64 $ 2.89 $ 3.15 Diluted $ 3.18 $ 4.39 $ 2.59 $ 2.83 $ 3.13 Weighted average shares outstanding: Basic 46,308,825 47,647,397 47,950,746 47,586,242 47,668,357 Diluted 47,122,511 49,025,684 48,927,791 48,669,027 47,963,226 Cash dividends declared per common share $ — $ 0.9000 $ 1.6800 $ 1.5200 $ 1.3600 2020 2019 2018 2017 2016 (In thousands) Balance Sheet Data: Cash and cash equivalents $ 242,652 $ 575,615 $ 209,474 $ 350,945 $ 123,950 Working capital (259,714) 53,786 153,009 355,325 (106,090) Total assets 3,665,331 3,505,846 2,560,830 2,453,093 2,062,328 Other long-term liabilities 44,463 10,228 51,068 31,434 3,475 Total stockholders’ equity $ 1,211,018 $ 1,311,192 $ 1,035,744 $ 1,020,305 $ 914,536 -43-