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Segment Information | 3 Months Ended
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Mar. 31, 2021
Segment Reporting [Abstract] |
Segment Information | Segment InformationThe 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: Digital Media and Cloud Services. However, in accordance with the aggregation criteria within ASC Topic 280, J2 Global’s operating segments have been aggregated into three reportable segments: (i) Digital Media; (ii) Voice, Backup, Security, and Consumer Privacy and Protection; and (iii) Fax and Martech. 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 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 accounting policies of the businesses are the same as those described in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2021. The Company evaluates performance based on revenue, gross margin and profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses. Information on reportable segments and reconciliation to consolidated income from operations is as follows (in thousands):
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Revenue by reportable segment: |  |  |  |  |  |  |
Digital Media |  |  |  |  | $ | 226,874 |  |  | $ | 162,691 |
Cloud Services |  |  |  |  |  |  |
Fax and Martech |  |  |  |  | 100,376 |  |  | 94,667 |
Voice, Backup, Security, and CPP |  |  |  |  | 71,053 |  |  | 75,117 |
Cloud Services Total |  |  |  |  | 171,429 |  |  | 169,784 |
Elimination of inter-segment revenues |  |  |  |  | (118) |  |  | (83) |
Total segment revenues |  |  |  |  | 398,185 |  |  | 332,392 |
Corporate (1) |  |  |  |  | — |  |  | 1 |
Total revenues |  |  |  |  | $ | 398,185 |  |  | $ | 332,393 |
Gross profit by reportable segment: |  |  |  |  |  |  |
Digital Media |  |  |  |  | $ | 206,081 |  |  | $ | 141,920 |
Cloud Services |  |  |  |  |  |  |
Fax and Martech |  |  |  |  | 83,795 |  |  | 82,166 |
Voice, Backup, Security, and CPP |  |  |  |  | 50,670 |  |  | 49,258 |
Cloud Services Total |  |  |  |  | 134,465 |  |  | 131,424 |
Elimination of inter-segment gross profit |  |  |  |  | (118) |  |  | (83) |
Total segment gross profit |  |  |  |  | 340,428 |  |  | 273,261 |
Corporate (1) |  |  |  |  | (65) |  |  | 1 |
Total gross profit |  |  |  |  | $ | 340,363 |  |  | $ | 273,262 |
Direct costs by reportable segment (2): |  |  |  |  |  |  |
Digital Media (3) |  |  |  |  | $ | 175,428 |  |  | $ | 133,467 |
Cloud Services |  |  |  |  |  |  |
Fax and Martech (3) |  |  |  |  | 30,926 |  |  | 29,928 |
Voice, Backup, Security, and CPP (3) |  |  |  |  | 40,075 |  |  | 42,556 |
Cloud Services Total |  |  |  |  | 71,001 |  |  | 72,484 |
Elimination of inter-segment direct costs |  |  |  |  | (118) |  |  | (83) |
Total segment direct costs |  |  |  |  | 246,311 |  |  | 205,868 |
Corporate (1) |  |  |  |  | 15,572 |  |  | 12,147 |
Total direct costs (2) |  |  |  |  | $ | 261,883 |  |  | $ | 218,015 |
Operating income by reportable segment: |  |  |  |  |  |  |
Digital Media |  |  |  |  | $ | 30,653 |  |  | $ | 8,453 |
Cloud Services |  |  |  |  |  |  |
Fax and Martech |  |  |  |  | 52,869 |  |  | 52,238 |
Voice, Backup, Security, and CPP |  |  |  |  | 10,595 |  |  | 6,702 |
Cloud Services Total |  |  |  |  | 63,464 |  |  | 58,940 |
Total segment operating income |  |  |  |  | 94,117 |  |  | 67,393 |
Corporate (1) |  |  |  |  | (15,637) |  |  | (12,146) |
Total income from operations |  |  |  |  | $ | 78,480 |  |  | $ | 55,247 |
(1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment.
(2) Direct costs for each segment include other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.
(3) Beginning in the third quarter of 2020, certain expenses associated with the Corporate entity that were previously allocated to the Cloud Services business and the Digital Media business for shared costs incurred by the Corporate entity were no longer allocated. 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 Digital Media and Cloud Services. Accordingly, the following segment information is presented for Digital Media and Cloud Services.
| March 31, 2021 |  | December 31, 2020
Assets: |  |  |
Digital Media | $ | 1,975,836 |  |  | $ | 2,088,397 |
Cloud Services (1) | 1,531,624 |  |  | 1,473,398 |
Total assets from Digital Media and Cloud Services | 3,507,460 |  |  | 3,561,795 |
Corporate | 196,197 |  |  | 103,536 |
Total assets | $ | 3,703,657 |  |  | $ | 3,665,331 |
(1) Assets of $135.7 million, which were classified as held for sale, were included within Cloud Services at March 31, 2021 (see Note 6 - Assets Held For Sale).
| Three Months Ended March 31,
| 2021 |  | 2020
Capital expenditures: |  |  |
Digital Media | $ | 16,819 |  |  | $ | 15,637 |
Cloud Services | 9,450 |  |  | 11,248 |
Total capital expenditures from Digital Media and Cloud Services | 26,269 |  |  | 26,885 |
Corporate | — |  |  | — |
Total capital expenditures | $ | 26,269 |  |  | $ | 26,885 |
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Depreciation and amortization: |  |  |  |  |  |  |
Digital Media |  |  |  |  | $ | 48,350 |  |  | $ | 32,556 |
Cloud Services |  |  |  |  | 17,047 |  |  | 20,839 |
Total depreciation and amortization from Digital Media and Cloud Services |  |  |  |  | 65,397 |  |  | 53,395 |
Corporate |  |  |  |  | 95 |  |  | 585 |
Total depreciation and amortization |  |  |  |  | $ | 65,492 |  |  | $ | 53,980 |
J2 Global maintains operations in the U.S., Canada, Ireland, Japan and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Revenues: |  |  |  |  |  |  |
United States |  |  |  |  | $ | 322,968 |  |  | $ | 270,309 |
Canada |  |  |  |  | 19,474 |  |  | 16,570 |
Ireland |  |  |  |  | 15,425 |  |  | 13,003 |
All other countries |  |  |  |  | 40,318 |  |  | 32,511 |
|  |  |  |  | $ | 398,185 |  |  | $ | 332,393 |
| March 31, 2021 |  | December 31, 2020
Long-lived assets: |  |  |
United States | $ | 844,109 |  |  | $ | 918,125 |
All other countries | 79,287 |  |  | 54,073 |
Total (1) | $ | 923,396 |  |  | $ | 972,198 |
(1) Long-lived assets of $37.3 million, which were classified as assets held for sale, were included within the schedule above at March 31, 2021.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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