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Discontinued Operations and Disposition of Businesses | 12 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations and Disposition of Businesses | Discontinued Operations and Disposition of Businesses On October 7, 2021, the Former Parent transferred certain assets and liabilities associated with its Cloud Fax business to Consensus, including the equity interests in J2 Cloud Services, in exchange for approximately $259.1 million in cash, an asset related to the $500 million aggregate principal amount of the 6.5% Senior Notes due 2028 and the return of the assets and liabilities related to the non-fax business back to Ziff Davis. The transfer to the Former Parent of the non-fax business met the accounting requirements to be presented as a discontinued operation once the Separation was completed as the disposition of the non-fax business constitutes a strategic shift that had a major effect on the Company’s operations relative to the historical operations of J2 Cloud Services. Accordingly, the consolidated financial statements reflect the results of the non-fax business as a discontinued operation for all periods presented. The Consolidated Statements of Income report discontinued operations separate from continuing operations. The Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows (including Note 19 - Supplemental Cash Flows Information) and Consolidated Statements of Stockholders’ Deficit combine continuing and discontinued operations. The Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows and Consolidated Statements of Stockholders’ Deficit includes the non-fax business activity through October 7, 2021. The key components of (loss) income from discontinued operations that were included in the Company’s Consolidated Statement of Income are as follows (in thousands):
| Year ended December 31
| 2021 |  | 2020 |  |
Revenues | $ | 271,571 |  |  | $ | 347,293 |  |  |
Cost of revenues | 74,294 |  |  | 100,871 |  |  |
Gross profit | 197,277 |  |  | 246,422 |  |  |
Operating expenses: |  |  |  |  |
Sales and marketing | 72,425 |  |  | 72,080 |  |  |
Research, development and engineering | 16,756 |  |  | 15,681 |  |  |
General and administrative | 84,213 |  |  | 118,608 |  |  |
Goodwill impairment on business | 32,629 |  |  | — |  |  |
Total operating expenses | 206,023 |  |  | 206,369 |  |  |
(Loss) income from discontinued operations | (8,746) |  |  | 40,053 |  |  |
Interest expense | (235) |  |  | (939) |  |  |
Interest income | 693 |  |  | 963 |  |  |
(Loss) gain on sale of businesses | (21,797) |  |  | 17,122 |  |  |
Other income (expense) | 1,752 |  |  | (1,606) |  |  |
(Loss) income from discontinued operations before income taxes | (28,333) |  |  | 55,593 |  |  |
Income tax (benefit) expense | (16,160) |  |  | 25,093 |  |  |
(Loss) income from discontinued operations, net of income taxes | $ | (12,173) |  |  | $ | 30,500 |  |  |
The key components of cash flows from discontinued operations are as follows (in thousands):
| Year ended December 31
| 2021 |  | 2020 |  |
Depreciation and amortization | $ | 39,727 |  |  | $ | 67,995 |  |  |
Capital expenditure | 14,322 |  |  | 19,633 |  |  |
Share-based compensation expense | 602 |  |  | 4,138 |  |  |
Non-cash operating lease costs | 2,814 |  |  | 4,364 |  |  |
Deferred taxes | 554 |  |  | 7,723 |  |  |
Foreign currency remeasurement gain | (9) |  |  | 3,574 |  |  |
Lease asset impairments and other charges | 990 |  |  | — |  |  |
Loss (gain) on sale of businesses | 21,797 |  |  | (17,122) |  |  |
Goodwill impairment on business | 32,629 |  |  | — |  |  |
Prior to the Separation, the Company completed the following dispositions that did not meet the criteria for discontinued operations by themselves but were subsequently classified as discontinued operations as they are part of the non-fax business transferred back to the Former Parent. Voice Asset Sales (Non-Consensus) During the first quarter of 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. On February 9, 2021, in a cash transaction, the Company sold the Voice assets. For the year ended December 31, 2021, the total gain recognized on the sale was $2.8 million, which was recorded in discontinued operations on the Consolidated Statement of Income. During 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. On August 31, 2020, in a cash transaction, the Company sold the Voice assets. For the year ended December 31, 2020, the total gain recognized on the sale was $17.1 million, which was recorded in discontinued operations on the Consolidated Statement of Income. B2B Back-up (Non-Consensus)During the first quarter of 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business. During the second quarter of 2021, the Company received an offer to purchase the business. Management determined that the fair value of the business less cost to sell was lower than its carrying amount. As a result, the Company recorded an impairment to goodwill of $32.6 million which was recorded in the second quarter of 2021, and is included within discontinued operations on the Consolidated Statement of Income. On September 17, 2021, in a cash transaction, the Company sold the B2B Backup business. For the year ended December 31, 2021, the total loss recognized on the sale was $24.6 million, which is included within discontinued operations on the Consolidated Statement of Income.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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