Internet communications and fax king j2 Global
The strong results came on the back of continued expansion of voice and communications services to small businesses and enterprises. Also, price increases that the company is rolling through its subscriber base helped to boost margins. All new subscribers now pay $16.95 per month for basic eFax services, and the company has brought 80% of its existing base up to the new price level.
Alleviating a concern of mine, j2 Global reported that so far, the price increases haven't resulted in significant increases in customer defections. Actually, the company had hoped to have 85% of its customers on the new pricing plan, but the cancel rate actually dropped to 2.8% from 3.0% last quarter. While j2 Global will continue to monitor the impact of price changes the rest of the year, early indications show that customers find substantial value in the service and are willing to pay more for it.
Efficient operations at j2 Global also generated $20.6 million in free cash flow for the quarter, nearly doubling from last year's Q2 numbers of $11 million. This helped prop up the company's cash and equivalents balance to $233 million.
Similar to how other large companies such as InterDigital
By continuing to successfully capture the growth opportunities presented across its business, j2 Global is certainly showing that it can walk the talk.
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Fool contributor Dave Mock misses the days of sipping lemonade, swinging on the porch, and watching the grass grow. He owns shares of Qualcomm and is the author of The Qualcomm Equation. The Fool has a disclosure policy that unabashedly reveals the secrets of Harry Potter and the Deathly Hallows.