Welcome to the j2 Global Q3 Earnings Conference Call. Leading today's call will be Mr. Hemi Zucker, CEO; and Mr. Scott Turicchi, President and CFO. At this time, all participants' are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Scott Turicchi. Thank you, you may begin.

Thank you. Good afternoon and welcome to j2 Global's investor conference call for the third fiscal quarter of 2017. As the operator just mentioned, I'm Scott Turicchi, the President and CFO of j2 Global, and with me today is Hemi Zucker, our Chief Executive Officer for his final earnings call, his 50th. Q3 was another strong quarter producing record revenues, an all-time record, and a third fiscal quarter record of EBITDA and non-GAAP earnings. In addition, during the quarter we sold our Web24, a web hosting asset in Australia, and just after the quarter ended disposed of Tea Leaves. Our board has increased the quarterly dividend by $0.01 to $39.05 per share. We will use a presentation for today's call, a copy of which is available at our website. There's a new enhanced webcast facility. So when you launch the webcast you will see that there is an icon, which is in the middle of the page and when you press on it, it will enlarge, so the slides take up the full page and you'll be able to read not only the contents of the slide, but also the footnotes. If you've not yet received a copy of the press release, you can access it through our corporate website at j2global.com/press. You can also access the website or webcast from this site. After we complete our presentation, we will conduct the Q&A session. At that time, the operator will instruct you as to the procedures regarding the asking of a question. However, at any time you may e-mail questions to us at investor at investor@j2global.com. Before beginning the prepared remarks, I'll read the Safe Harbor language. As you know this call and webcast includes forward-looking statements. Such statements involve risks and uncertainties that could cause actual results to differ…

Thank you, Scott, and good afternoon everybody. This is symbolically my 50th earning call. Let's enjoy it. Let's enjoy this last one, the same way we do all the others. And I also want to say a special thank you for the analysts that have been following us for so many years getting used to my Israeli accent. With that, let's go to page 9, where I will discuss our third quarter Cloud Connect fax and voice highlight. Q3 had again a all-time high Cloud Connect revenue of $97 million, which is 5% year-over-year. I believe that in the next few quarters, we have a chance to cross the $100 million revenue based on our still growing fax business and voice business. The Fax revenue was $80 million and continues to grow versus last year. We also have an all-time high fax revenue in Q3 2017 up 3.5% versus prior year. Voice revenue of $70 million, also grew 10% versus last year same quarter. Corporate fax revenue continued to grow up 7% versus Q3 2016. And we have successfully completed integration of Fax87. We are still working on the integration of Sfax. In the bottom here, we decided to do some demonstration of the growth of Corporate fax since 2013. Compounded annual growth rate (07:55) since 2013 was 9% on the revenue, of that 4% was organic. We are positioning our fax for API growth for fax. We see strong demand in compliance-oriented verticals like health, pharma, legal and finance. Next page, page 10, I will discuss the Cloud Backup highlights. Q3 revenue was $28 million, international revenue grew 5%. We now have 40% approximately of the Cloud Backup outside the U.S. EBITDA continues to be at 50% level. Cancel rate is favorable versus prior year, driven by KeepItSafe and…

Thank you, Hemi. Thank you for the kind words. Before we turn it over to Q&A, I've got two more slides; one is on 16, which is reconfirming our guidance. And to remind you, that's for a revenue range for 2017 of between $1,107 million of revs and $1,147 million of revenues and adjusted non-GAAP EPS of between $5.60 a share and $6 a share. Although, this is not the point in the year at which we give fiscal 2018 guidance. I would remind everybody, particularly those that already are building models that with the disposition of Cambridge earlier in the year, Tea Leaves and Web24, it was about $35 million in revenue in 2017 that will not be there in 2018 as we roll forward. We talked previously about the amount of revenue that we would lose in the balance of this year of $23 million, but just remember that other chunk of revenue that doesn't roll forward into 2018. And then finally before we go to the question and answers, a lot of times these calls as they need to be are very short-term focused. We're talking about the quarterly results. We're talking about our expectations for the not too distant future, one or two quarters in advance, but Hemi clearly has been a contributor for more than 20 years at j2. And so my own small tribute to him is on slide 17, to give you a little bit of perspective of the contribution that he has made in the various roles over 21 years of service. He started in October of 1996 when, to say, JFAX that time was a start up was probably even generous, as the company was in New York and ultimately moved to Los Angeles and was really restarted in the summer…

Thank you, Scott, and thank you, everybody. I know that many of the employees are listening. I want to take this opportunity to thank everybody and I'm continuing to be a big fan of the company, watch you and I am going to help the next year to Vivek in succeeding and I am looking forward for him to succeed even more than I did and I think we can open it for the analysts.

Okay. Questions now.

We will now be conducting a question-and-answer session. Our first question is from Shyam Patil with Susquehanna. Please proceed with your question.

Hi. Thanks, guys. Hemi, my congrats as well on all your accomplishments at j2 and the next gig. It's been a pleasure.

Thank you very much.

I have a few questions. I guess the first one Scott, on the point you made on the revenue lost from acquisitions for next year. Can you talk about just how much the recent M&A either that you've done in 3Q or that you're confident in doing in the 4Q, kind of how much of that $35 million you think you can offset and then kind of as you go through next year, do you think you'll be able to offset that with the M&A you have planned for 2018?

Yeah. First of all, the M&A in Q3 was rather light. A lot of our focus not that we weren't focused on M&A, but the divestitures of Web24 and Tea Leaves were very important even though Tea Leaves actually closed in the fourth fiscal quarter, a lot of the work was done in Q3. So, the M&A transactions on the Cloud side that were done in Q3 will offset to a very modest way some of that $35 million. I am optimistic that what we have in the pipeline now and certainly as we look forward into Q1 of 2018, we probably will be able to offset a big chunk, if not all, of that $35 million of revenue. I was just highlighting that for people to understand sort of where the pro forma or the correct starting point is as we go into 2018. And as you know, I'm always a little bit reticent to commit so much on the M&A side because, you know, things fall out sometimes at the 11th hour, other things come in to replace it, but our pipeline is healthy. And I'm optimistic as much as I ever can be in M&A that, yes we will, through the end of this year and early next year, complete transactions that should substantially offset most of that $35 million, if not all of it.

Okay. And then just on the M&A, when you think about the Cloud business and the Media business, where do you see the most opportunity for, you know, mid-size or larger deals from an M&A standpoint. I guess specifically when you look at Media, any particular verticals there? Is it health, is it games? And then for Cloud, which service areas do you think you see the most opportunity for that size for M&A?

Sure. I think that in short, there is a desire to particularly, in our smaller business units and quite frankly most of them whether you're talking Media or Cloud, we consider still to be not necessarily under-scale from an economic standpoint, but smaller than we would like them to be. The one exception to that would be the digital fax space, which I think is of a size, that is both scaled economically and as a result, experiences the fullness of its margins and it's also a material player within its space. So, if we look at the rest of the businesses; voice, backups, email security, email and marketing, the tech vertical of which there're several different areas, the games vertical, even in healthcare, there's different subcomponents and then there's an international piece, the answer would be you know we're looking at all of those. So, I don't think that there's necessarily in – the units that are the smallest, if we had our choice, we would probably be most interested in doing transactions in those areas, because they're going to give us more prominence within the respective space that we're operating in and also on the margin more leverage from an operating cost standpoint. So that's where our preferences would be, but having said that we are servicing all of the business units across both Cloud and Digital Media. And in terms of – as you know we're active across all the spaces and sectors, as I say, I think the goal is first and foremost to feed the existing business units as opposed to creating new business units, although sometimes those things happen. You run into a transaction that is very attractive, but it doesn't necessarily fit into one of the existing business units of j2, that prompts us then to start a new business unit. But all things being equal, the existing business units of which there are 12 or 13 depending on how you count, would be the first priority. And then as I say, feeding probably the smaller ones where they can then bulk up in size more rapidly.

Okay. Thanks. And as I said...

We'll do the deals as they come. And sometimes you don't always get your wish list in terms of the prioritization. So we are engaged in all segments and all sectors.

Got it. And then I just had one modeling one left. In terms of the $35 million number that you mentioned for next year. Can you just help us understand how much of that was kind of in Media with Tea Leaves and how much was in Cloud with the Cloud asset, just so, can we get a sense of the breakout?

Yeah. Remember, this is the piece that is missing for this year. So it's not as an annualized revenues. So of that $35 million, you're talking about just around $30 million in Media and approximately $5 million in Cloud. The $5 million in Cloud of course only relates to one asset Web24.

Got it. Thank you.

Thank you, Shyam.

Our next question is from Jon Tanwanteng with CJS Securities. Please proceed with your question.

Good afternoon, guys. Thank you for taking my questions and congratulations Hemi on the move. And I don't know, Vivek's on, but on the promotion as well.

Since he's not, we'll pass it along to him.

Okay. Could you just talk about the investment rationale in OCV. Do you think you can get a better return there that you can otherwise get in your core M&A strategy, just a little bit more about the decision to go that route?

Yeah. The investment in other types of transactions is something that j2 actually has looked at since about 2012. In fact, we actually approved and formed an entity called j2 Ventures sometime during 2012. We never funded it. In large part, we never were able to pursue it internally within j2 because of allocation of internal resources. I don't mean money. I mean people's time and who would really be the quarterback for that. And so, as the whole process of management evolution began to unfold, there was an opportunity through this related entity called OCV for us to make an investment and with Hemi moving over into that capacity to also give us confidence of two things, that one, there would be a focus as I'm sure that would have been anyway on delivering high returns and returns consistent with the returns that we are used to experiencing at j2, but giving us greater diversity in terms of the types of transactions that we invest in. j2 does wholly-owned transactions, I think all 158 deals that I referenced over 17 years, we buy the companies and we drive our synergies according to a variety of playbooks to get our returns. What we don't do are minority investments. We don't do lending. We don't do early stage more venture capital type investments, all of which are within the purview of an OCV. So we look at it as we have an opportunity to deploy yet additional capital, think of it very similarly to buying in the Digital Media. And at the time people said, well that's not what you do. You do Cloud Services. We said no. We really have a playbook and it can be applied to another area to drive a return. So we have yet another means of driving those returns and of investing capital. And so that's how we looked at it. We think that there's going to be – it will occur of course over time because their investments will have different maturity timeframes, but I think, yes we're going to get those kinds of similar returns and we're going get exposure to other types of transactions that j2 would not find appropriate to do within the j2 structure.

Great. That's very helpful. And then, can you talk about any kind of strategic changes or operational changes at all with the change in the driver seat position with effective now. Are you planning anything. Is there anything that might be on or off the table now that the management has changed?

No. I would say this. First of all remember, Hemi is the CEO during the year. So while we're sending him away today on the earnings calls because it's his last earnings call, but he's still very much the CEO of j2 till 12/31. Having said that, and this was by design, we wanted there to be an overlap. He has an incredible wealth of knowledge because he's been here for 21 years and we didn't want there to be just a handover. And so there have been numerous meetings with Hemi, Vivek, the existing GMs, presidents, department heads. They have different titles based on the kind of business units they run, and I think one of these we've been looking at and I don't think we have an answer whether what kind of incremental benefit it will produce, if any, but how do we look at j2 maybe differently than the way we historically looked at it. And as you know – and there were a variety of reasons why we did this. We always had Digital Media very distinct from the Cloud business. They're obviously in separate locations for the most part in terms of their management and their employees, but they were kept very much apart. And you know, if you look at j2 from a different perspective and you lay out the individual business units, you can look at it as we are in a series of subscription-based businesses, most of which exist on the Cloud side but not all. Look whose (29:54) heavy subscription business these days on the Media side and we have advertising businesses most of which exist in the Media side. Well, are there their best practices that might be learned one from the other where there happens to be crossover. We've…

Great. Thank you very helpful. And just one last quick one, just the rationale for the Web24 sale, are you getting out of web hosting or just getting a good valuation for that?

Yeah. We do. We made a little bit of money on it. We owned it for about three years. So we both collected EBITDA while we owned it. And then we actually made a modest gain. I mean that's not a big asset to begin with. It's very typical of j2 that we will enter a space particularly when we enter the web hosting space several years ago on a small basis, in part to get our feet wet and see whether we correctly understand a space and can we both use the roll up strategy to build a bigger presence in the space and also can it be multi-jurisdictional? And I think what we learned over the time, we picked Australia because it was a modestly competitive environment. At the time we were looking to enter the space, we found valuations in Europe and North America to be very high. And also there were fairly large players then and now that exist in the space. So we said let's go to a more limited competition environment and get our feet wet and buy an asset, and maybe we can create a nice little business in Australia and New Zealand. And at some point, over an in-a-year period, there might be valuation corrections in other part of the world where we could then enter in a more serious way and it could be more impactful to j2. Now, few things happened over that timeframe. One, we got obviously much bigger. So the business shrunk as a percentage of j2's total revenues. Market conditions did not materially change in North America and Western Europe, to be able to enter. And we found even doing the rollups in Australia and New Zealand was somewhat more difficult because there were others that were looking to do the same, and in fact we sold Web24 to one of the ones that we actually ran up against in a couple of situations down under. So we decided that at some point an asset just becomes too small. And if it doesn't have an opportunity to really be impactful to j2, there is a management drain that you just can't justify. And we had a few million dollars in revenue a year and with limited opportunities in our larger core markets, we felt that if we could divest it, get a gain, do it at a successful price, it made sense. By the way, not dissimilar from the view we have when we bought Everyday Health as it related to Cambridge and Tea Leaves. There's not a criticism of any of these assets. It's a function though of their value and their fit within j2's respective business units and allocation of management time, and Web24 of those three assets, was at the smallest end of the spectrum.

And you know j2 developed the strategy to be very profitable and have small investment in capital assets which was not the case on Web24. Also to say, I've calculated. We made cash-on-cash more than 20% a year on the Web24. So all in, it was a profitable test. Sometimes, we might do tests that are not profitable. This was, we were lucky and just as Scott said, and the target company that we had in mind and we had one large target company in Australia that we met several times, their price started to go high and they changed their model to become more kind of servicing the Australian government. So we decided it's the right thing to do and we are very happy with it.

Great. Thank you very much.

You're welcome.

Our next question is from Greg Burns with Sidoti & Company. Please proceed with your question. Greg J. Burns - Sidoti & Co. LLC: Afternoon. In addition to the divestitures you had in the past, talked about walking away from some low calorie revenue that Everyday Health was going after. Have you exited that business?

Yeah. Greg J. Burns - Sidoti & Co. LLC: How much was that revenue and how much won't be recurring next year?

The answer is, yes. We talked about that – a few comments on Everyday Health. I think one is that you should understand that we are basically done and have been done with the integration of Everyday Health, the heavy lifting, which in part included the divestiture of the two assets previously discussed. The elimination of some non-profitable revenue and the change of a significant portion of the senior management team at Everyday Health. So I give a lot of kudos to our Media team that spent solid nine months, 10 months really working that. There were a lot of moving pieces. And direct answer to your question, $20-some-million – between $20 million and $25 million of revenues was expunged from what I'll call the core of Everyday Health. We believe over time that revenue will come back albeit in a different form, but certainly not in the immediacy of the next, say quarter or so. But as we look forward to 2018, we're obviously still deep in the budgeting in terms of how much of that revenue we would expect to come back in 2018. And part of that will be a function of looking at the three business units, their opportunities as Hemi mentioned, there's a number of changes that have been made. He highlighted what's going on at WhatToExpect. But there's also been changes made at MedPages which is for the doctors and everydayhealth.com which is consumer patient. So it does take a little while for those changes to bear total fruit. So I'd say this is a partial year of bearing the fruit, but the big things that have been accomplished and there's been substantial margin improvement in the business that we retain from Everyday Health.

Also the landscape for pharma changed a little bit all those things are things that we are catching up with and improving towards. Greg J. Burns - Sidoti & Co. LLC: Okay. And when we look at the Backup business, it looks like – I mean, your growth stalled out a little bit here. I'm assuming it's not growing much organically. But what's your view on that business, its ability to grow organically or the things that you could do to maybe run it differently to generate some organic growth?

Yeah. As you know our – and we've said this fairly consistently, that the Backup business really all of the smaller businesses in the Cloud, but led by the Backup have been premised on and they've been tasked with almost a purely M&A driven growth. And the idea behind that was to get to a degree of scale and critical mass, which we've targeted in the $175 million range of revenues and really not overly exert in the area of organic growth. Now two things have occurred in that space over the last probably 9 months to 12 months, say mostly this year. Part of it was us. In the late-2015 through probably most of 2016 period, we did a lot of small transactions in the Backup space. I want to say it was something like 12. Now, that meant there were 12 integrations to do and generally speaking 12 different technologies and platforms to integrate. So the team had asked actually at some point in 2016, if instead of you know having X revenue across 12 deals, we could have X revenue across one-third of 12 deals, 4 deals, 3 deals and do focus on somewhat larger deals, not gargantuan deals, but somewhat larger deals where there would be fewer integrations, so we tried to accommodate that this year. And I guess it was a good news and bad news. The good news is we found situations, but we also found that some of the situations invited bidding competition and we were not successful in acquiring those assets. So, as a result, there's been a very little M&A done for the Cloud Backup. So it's something we're reviewing now as we go into 2018. Do we want to continue to pursue that more chunky strategy or go back to…

And let me add something. Scott said it very well. We are doing strategic sessions and I was presented with the competitive landscape. More than 90%, maybe 95% of the companies that are active in the backup are smaller than j2. Our run rate is over $110 million. Those companies, we were trying to beat up some of them. We couldn't. Companies of $10 million, $20 million and everything. I strongly believe that the they cannot exist on the long run. It's a space that is consolidating, will consolidate, a lot of development there. I think that we are positioned well. And you'll remember we came from a background of patience and discipline. And I believe that those with patience and discipline will survive and capture the market, what we have developed is basically a very expanded range of Backup businesses that we can absorb. So I think, it's a matter of time. It's a matter of discipline. I just cannot believe that 95% of the companies in this space can survive in the smaller scales. We've seen them, they're not profitable. I think it's just a matter of time. So I'm optimistic about it. Greg J. Burns - Sidoti & Co. LLC: Yeah. Thank you.

You're welcome.

Our next question is from James Breen with William Blair. Please proceed with your question. James D. Breen - William Blair & Co. LLC: Thanks for taking the question. One, just on the modeling side, Scott, you were talking about the divestitures. You said, there's about $23 million in the back half of revenue that won't be realized. Is it fair to say that that revenue mainly falls in the fourth quarter? There's maybe a couple million there, but essentially there is a sort of a $21 million change between third quarter and fourth quarter in terms of the jumping off point?

In fact, you're little bit heavy. You're directionally correct, but you're little bit heavy because remember we did sell Cambridge during early Q3. James D. Breen - William Blair & Co. LLC: Okay.

So, we actually lost Cambridge revenue in Q3. We'll lose roughly $7 million to $8 million in Q4 from Cambridge alone. James D. Breen - William Blair & Co. LLC: Okay. And then...

You're biased a little high, but you're directionally correct. James D. Breen - William Blair & Co. LLC: Okay. And then just on the margin side there, when you add up all three of those and the combined revenue what you recognize, what you have is about $57 million, what was the EBITDA assigned with that? Was it pretty much flat?

No. Cambridge was profitable, Web24 was profitable. Tea Leaves was not on an EBITDA basis. So if you take that $57 million combined, we're talking about probably $7.5 million, $8 million of EBITDA. James D. Breen - William Blair & Co. LLC: Okay. All right. Perfect. And then just on the Cloud side, as you look at the email security business getting through the McAfee transition. What will happen now? Can you think you continue to grow in that business? And obviously you want some scale there as well to get those margins from the 30%s up into the 50%s?

Yes, and yes. In fact...

Yes. It is.

I'm very happy with what's happened to that business. As you know Q1 we bore the brunt of the McAfee End-of-Life and the quarterly revenues for email security was $10 million. And now we're back to almost $11.5 million two quarters later. And that was a pretty strong growth sequentially from Q2 to Q3 as well as some growth Q3 of 2017 versus Q3 of 2016. And I would say that in Q3 of 2016, we were at the very early stages of some customers recognizing, they need to do something vis-à-vis McAfee End-of-Life. So that business is actually, well, it took a hit in Q1 has rebounded very nicely in the two succeeding quarters on both an organic basis and then also the people's time has been freed up for us to be able to do M&A so that they have time to integrate.

Yes. So, j2 people ask me, now at the time you're about to leave, what made you so successful? And I think what made the j2 so successful is, we try to have in every piece of the business an edge, an advantage that nobody else has. These advantage makes us so profitable and helps us to win the game. And in the game of FuseMail, we buy companies and we migrate them successfully to our FuseMail brand. That's not something you see, people buy brands, they stick them on the brand with a feature, we migrate them to our platform. Not only the brand, the platform , which basically generates the profitability because you see at the end of the day the platform is built on certain elements that size matters. So I'm very optimistic, like every cloud company that we bought is a Sweden company, think about the language, their market, obviously we're integrating them into FuseMail. We are doing it very successful, the conversion rate is very high. Some of those are also, we are adding features so we are updating the prices so we end up buying a company in A, migrating it, B, adding features, increasing the prices. It's a very, very good game to play and we can go into end-point and a web base, a very similar space. The same decision makers, the same buyers also buying the web securities, ability to control what the employees of the companies are doing online and all those kind of things. So I'm very, very bullish about this and of course on Campaigner as well, because Campaigner is a market that too many small players that are not being integrated because the competition there, when you to acquire companies is lesser because not too many companies are capable to integrate. So this is the special edge the j2 developed over the year, and I'm very bullish on those both spaces. Very bullish. James D. Breen - William Blair & Co. LLC: Great. Thanks. And then lastly – good luck Hemi in the next stage, you actually have some big shoes to fill in. Hopefully you'll bring good companies for j2 to invest in the future.

Absolutely and stay in touch. Thank you very much. James D. Breen - William Blair & Co. LLC: Thank you.

Thank you, Jim.

To all the analysts that cover us you should come to LA. I am known to buy good lunches and good dinners. Stay in touch.

Our next question is with Charles Erlikh with Robert W. Baird. Please proceed with your question. Charles Erlikh - Robert W. Baird & Co., Inc.: Hey, guys. Thanks for taking my question. I wanted to ask about the sequential growth expectations in the Digital Media business from Q3 to Q4. And it was typically a seasonally strong quarter and now you've got Everyday Health as well and have made a number of divestitures here. So I just wanted to know how we should be thinking about that sequential growth in the segment?

You're right. It's the best fiscal quarter of the four. I would point you back to the guidance we gave on the Q4 call though you need to make various adjustments for the divestitures that we talked about. We don't guide quarterly. So I'm not going to actually directly answer your question, but I think you can interpolate from both the history and what we said in February of this year, where it's fairly typical that the fourth fiscal quarter for Media represents somewhat in excess of 30% of their annual revenue. And I believe that will continue to be true this year.

The same blend goes also to Everyday Health. They're also heavier too in Q4 and as you know, we have announced that we acquired a company called Humble Bundle, which also should come into play. So I think if you get all the facts, you can come to the right conclusions. Charles Erlikh - Robert W. Baird & Co., Inc.: Did you guys disclose what the revenue contribution from Humble Bundle would be?

No.

No. No. Charles Erlikh - Robert W. Baird & Co., Inc.: Okay. No. Fair enough. And then just one more question on the Digital Media business. Could you talk a little bit about your expectations for EBITDA margin expansion, is it that your expectation to get back to that pre Everyday Health margin level and if so is that a multiyear endeavor...

Yeah. Charles Erlikh - Robert W. Baird & Co., Inc.: Or could that happen a little sooner?

No, I think, look as I mentioned, we've done the heavy lifting on the integration of everyday health. We've got rid of two lower margin businesses, through divestiture, we pruned out revenue that was non-productive. So, I think as we enter 2018, as we talked about when we bought Everyday Health, there was a shrink to growth strategy which had several different components and elements to it. And I think that we have successfully pruned Everyday Health down to its core, where now it has an opportunity to both organically grow, but also perform at EBITDA margins consistent with our Digital Media business. Now as I mentioned in budgeting, we're going to refine exactly what that means, but I think that you know when we have looked at our Digital Media business, we have felt that somewhere in the mid 30%s EBITDA margin, is the right normalized margin for that mix of assets. I'm talking about all of the Digital Media assets combined. So, clearly this year because there's been some drag of the everyday health as its margin has been catching up to that margin, will be somewhat lower than the 35%. I think that, as we look forward to 2018, we're very confident that that is an asset then that should be roughly consistent with where the rest of our Digital Media assets are at. Charles Erlikh - Robert W. Baird & Co., Inc.: Great, now that helps a lot and congratulations, Hemi.

Thank you.

Our next question is from Walter Pritchard from Citi. Please proceed with your question.

Thanks. On geographic ambitions you know coming out of Australia, I guess, is that a sign that we have some things going on over in Europe with privacy. I'm wondering how you're thinking about just geographic expansion at this time.

To be clear, we're not exiting Australia. We exited a business in Australia.

Right. It's just the pullback, just the pullback from Australia, I'm wondering what that signals?

It's the same year that we exited (53:22), we bought larger assets in Australia. So net-net Australia grew for us. In about Europe, the privacy we're dealing within for the last six months, it's a compliance issue. The company has spend all the time and we have all the experts and then we were in full compliance. GDPR, I think it's called...

Yeah.

...or something like this. We're in full compliance all our – we have to remember we have a very strong management team in Ireland. I've been there. For the last three quarters we are talking about it. It's happening not a problem at all. Actually, I hope that it would scare some of our American competitors not to acquire there while we are acquiring there with high confidence.

We think it actually can become a competitive advantage for us.

Yes. It's not an easy thing for a small company to do.

Yeah.

You have to remember, we have accountants. We have a full set in Europe. We're good. We're strong there.

Got it. Okay. And then just on – sorry, I'll let you finish.

No, no.

No...

Go ahead, Walter.

Okay, thanks. And then just on the – Scott, on the low end of the Backup business, I recall you had been kind of letting some of the lower quality subscribers churn off. Is that done at this point?

Correct.

Okay.

Yeah.

And then lastly – yeah go ahead.

The answer is yes.

Okay. And then the last one, just on, you mentioned in I think the deck this idea of the fax API. Can you talk about, is that potentially and there is you could have a voice API and there's lots of enablement in from a technology perspective across the BCS portfolio. I am wondering how big of an investment that is, if that potentially changes the trajectory in any of those businesses as you look...

Yes.

...to participate in that way?

So, we have strong API in our business of Campaigner and very strong in fax. So, the fax API is actually something that we were – I would admit here, surprised to see how big it is. And we were late to the game a little bit. But as we entered it, we felt how big it is and how much is the market looking for large providers like us. And so far we have bought some companies with API that were small. So, immediately after acquiring them, we added to the API, the coverage and the other features of j2 plus the customers of API of the nature, big organization with a lot of compliance demands. They want to audit. They want to come. They want to see the Tiering (56:04) compliance. So, actually we are very, very bullish about it. And we have API features that we're adding. We just bought a company called Sfax, and we bought another company, and we're talking with some other players in this space. Definitely API is the stickiest part of fax, it gets involved and integrated into all the systems and actually that's why I made a comment in the beginning that I think that fax can – the Cloud Connect could shortly become to over $100 million per quarter because of the API. I hope I answered you Walter.

Yes. You did. Thank you. And then just maybe a question for Scott around Hemi's next activity here . For the – our capital commitment on the venture fund, was that contemplating the recent debt raise? And how are you thinking about that as it relates to your own capital structure and demands on that capital?

The answers related to the debt raise is, no. In terms of the allocation as you know, it's going to be funded as OCV finds transactions and makes capital calls. So although it's an eight-year fund, we have assumed the more front-end loaded amount of funding you know in the tune of $50 million to $60 million dollars a year on average over the next call it four years to five years. That would exhaust the $200 million commitment. So we look at our estimated free cash flows, obviously looking out a couple of years, the dividend, and feel comfortable that that given the cash balances we already have, will be sufficient to make those capital calls and still do our M&A program. There is also something that you know we've been investigating which is – and now it's very fluid right now because of what was proposed today in terms of tax reform, but there was also a fairly good likelihood, whether actually tax reform passes or not that we're agnostic as to where the cash comes from for making the OCV investments. And certainly if there is repatriation, that's demanded or required under tax reform, we'll be bringing cash back to the United States. And you know paying the appropriate tax depending on whether it's cash or un-repatriated earnings. But we'll see how that whole tax reform plays out over the next 60 days.

Okay. Great. Thank you.

Our next question is with Rishi Jaluria with JMP Securities. Please proceed with your question.

Hey guys, thanks for taking my questions. First, I'll start off by echoing the others. Hemi, it's been a pleasure. Wish you all the best at the next gig.

Thank you, Rishi. It's been a pleasure to work with you too.

Great. Hemi, since you brought up the Humble Bundle acquisition, can you help us, I guess, understand kind of the rationale and plans here especially since it appears to be more of a commerce driven asset. And I know you have properties in that area, but most of the Digital Media side and especially on the gaming vertical tends to be very much traffic and advertising driven?

Rishi, no, I promise Vivek that I'll allow him to celebrate this acquisition. So, I'll let him do most of the talking. But I can tell you, it is a very exciting business, with a very nice upside, that integrates very well into IGN, it's a really good deal. Vivek is coming in 90 days and he will be going into the deal. – I do know that, but I want to keep it for him.

I just want to add one thing though, and I think it is not the correct perception to think of our Digital Media business as only being advertising driven. If anything, we would like to find opportunities to have more subscription-based businesses within Digital Media. Right now, Ookla has been the primary asset or business unit within Digital Media that has become over the years really more of a subscription-based business than an advertising-based business. It happens to be a hybrid, it does both. And as I noted earlier, everything on the Cloud side is subscription-based. There's very little advertising, although there's technically still is some, in terms of monetization of some of the free bases of customers. So, I would say that's more of an affirmative strategy as we look forward on Digital Media to find where appropriate subscription-based businesses to knit in and not have it be purely traditional advertising.

Yeah. It has a special stickiness to it. People that play games like to play more and more games and we're very happy to cater into it. Again, I am not going to steal the thunder from Vivek, but it integrates very well, the crowd of IGN and Humble Bundle are the same people, the subscription base is growing, it is very nice.

Got it. That's helpful. Scott, can you help walk us little bit through the Tea Leaves divestment? Was this a competitive process? Any sense of size? And maybe just alongside that, I mean Tea Leaves did sound like an interesting asset, was there ever the possibility of keeping maybe a stub of it within the OCV venture?

Never thought about the latter. But it was very important to us to have some going forward participation. So an answer to your question, yes, we ran a competitive process and the difficulty in selling Tea Leaves is that, we saw great value in that asset. The question was, what was the best way in which to realize it. We did look at running it ourselves as more of a venture capital investment in the health IT space, decided that if we had to do it, we would do that. But that was not our preference because it's not really what j2 does. There is no demonstrated track record of j2. Funding a business that's going to grow 40% to 60% a year, but have EBTIDA losses along the way with the hope of some exit down the road or some form of monetization. So we always...

And massive sales force did go to enterprises very long cycle to more kind of governmental and other kind of things. It wasn't our, in our sweet spot.

Right. It wasn't in our DNA, but nevertheless we said look, we want good value for that asset. We believe in this asset, we believe in this space, but that was our bottom line. So we were not prepared to give the asset away. So, we knew in certain scenarios we'd run it. Then, yes, it was competitive. And yes, there were multiple bids. But some wanted to give us all cash. That's nice. We can always use cash and redeploy it, but that would give us, you know, basically limit – well, in one case, I think there was a little bit of upside in a much larger company. In another case, it was pure cash. So we had virtually no upside in the asset. What was to us very fascinating about Welltok is that they have a suite of health IT services and Tea Leaves actually fit very nicely into their portfolio. So it makes them stronger. They have a great leader in Jeff Margolis, who has already taken a company public and done very well with it. So when they emerged as one of the bidders, then we started to think real hard about, all right, can we end up with sort of a couple of benefits, really three. Put the asset in a better set of hands who's likely to, you know, get the full value out of it. In this case, move into to a diversified portfolio. So our upside isn't limited to just what Tea Leaves does, but it's against the whole portfolio of Welltok. And also have a great senior management team who this is what they do because, this is their DNA. So from a structural standpoint, Welltok met all those criteria. Now, in terms of the price, it's about $90 million. And the reason it's about, is because we got some amount in cash. I'm not allowed to go into the exact terms, but a minority of that $90 million is in cash. We've already collected it, and the remainder is in a couple of different tranches of securities that we receive, which can be converted into equity. And so that's where our upside comes in terms of the future. We looked at the deal. We thought that certainly the total purchase price was fair and good. And we like the fact that we have a fairly meaningful back-end upside in what we think is a very powerful, exciting company in the health IT space. So we'll keep those securities, those are j2 to be clear. Those are j2 wholly-owned securities. So they're ours and at various points over the next several years based upon what Welltok does, I think there'll be various opportunities for monetization of some or all of those securities.

Got it. And just to fully understand. So j2 has a minority position in Welltok as a result of the divestment?

Right. That's correct.

Okay. Scott, I got it.

Not in Tea Leaves but in Welltok in the whole entity. And you can go to Welltok's website, you can see the various services that they are involved in in the health IT space. And as I say, it's robust. I think Tea Leaves was a very nice fit for them in terms of their whole suite of services. And so, we thought it made a lot of sense. As I say, we think they've got a great management team. We're very excited about it. But obviously, at this point, we're just you know we're an investor.

Okay, got it. And just last one from my end. On the topic of divestments, are there other assets that may be worthwhile considering divesting, you know if not now then down the line?

Look, I would in general say, no. But I always leave the caveat. We have these 12 business units. We are not firmly going out right now to do anything with those. However, if interest comes in on a business unit then we have to deal with that seriously. So, as I mentioned in response to an earlier question I think our goal right now is to look at these business units. Many of them are below their full potential in terms of size and scale. So, I think the question we're more focused on is, how do we drive to that scaled size? And what is the organic path to doing that? And what is the M&A path to doing that? And of course for j2, it's really a combination of both. But to take it business unit by business unit.

Got it...

But we do retain a certain amount of flexibility, and I'll never say never. But I think right now the goal would be to take our assets and increase them in aggregate size through both organic and M&A efforts.

Okay. Got it. Thanks and Hemi, congrats again.

Thank you, Rishi.

This concludes today's question-and-answer session. Thank you for your time. I would now like to turn the call back over to Scott Turicchi for closing statements.

Well, thank you very much, Hemi.

Thank you.

A final goodbye, but not a farewell for these 50 quarterly calls that we sat next to each other. All the best as you move on over time to OCV. And we'll be hounding you because you heard, they want great returns.

They will. They will. I promised my wife, and you know, when I promise my wife, I always deliver. So, I hope to listen to your next earning calls, and I hope that you will hear good news from the lines of OCV. And thank you very much everybody. Bye, bye.

And then finally, there are several conferences that we will be participating in between now and the end of the year. There will be press releases out in terms of the specific times, dates and ways to participate. But next week will be the RBC Conference in New York, then in December the NASDAQ conference in London, followed by the Barclays Conference in San Francisco. For our high-yield holders out there, I will be at the Merrill Lynch Conference in Boca Raton at the end of November. Those are the ones that come to mind. There may be a couple of others. So look to our website and to our press releases for the specific details. And then we will look forward to talking to you again roughly in mid-February to report Q4 results and also to talk about 2018. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.