<PAGE>
Exhibit 99
CONTACTS:
Becky Yeamans, Juno Investor Relations
(212) 597-9274 or [email protected]
Gary Baker, Juno Public Relations
(212) 597-9005 or [email protected]
JUNO REPORTS RECORD THIRD-QUARTER RESULTS
* 130% YEAR-OVER-YEAR INCREASE IN QUARTERLY REVENUES
* SUBSCRIBER BASE GROWS TO 12.77 MILLION REGISTERED, 3.70 MILLION ACTIVE
* NET LOSS DECREASES BY 32%, CASH PORTION OF NET LOSS BY 60%, COMPARED WITH Q2
NEW YORK, NY (October 24, 2000) -- Juno Online Services, Inc. (Nasdaq: JWEB),
one of the nation's largest Internet access providers, today reported revenues
of $30.1 million for the quarter ended September 30, 2000, an increase of 130%
over the third quarter of 1999. Juno derives revenue from subscription fees it
charges for its premium Web access services, from the sale of advertising, and
from various forms of electronic commerce.
Juno's base of active subscribers increased to 3.70 million in the month of
September 2000, up from 3.38 million in June 2000. Juno's BILLABLE subscriber
base also continued to grow during the third quarter, to 750,000 at September
30, up from 730,000 at June 30. During the same period, Juno's total registered
subscriber base grew by 16%, to 12.77 million. As of September 2000, 88% of
Juno's active subscribers had full Web access, up from 85% in the previous
quarter.
With 3.70 million active subscribers, Juno is the nation's third-largest
provider of dial-up Internet services, after AOL and EarthLink, but ahead of
AT&T, Microsoft, NetZero, and Prodigy, among others. In addition to its (free
and billable) dial-up services, Juno has begun offering a variety of broadband
and wireless services, including high-speed DSL access through a relationship
with Covad, handheld wireless service through a relationship with Palm, and
high-speed mobile wireless access through a relationship with Metricom. Juno has
also announced plans to begin offering high-speed access by satellite through an
alliance with Hughes Network Systems, and to participate in cable broadband
access trials with Time Warner Cable and AT&T Broadband.
Juno's net loss for the third quarter improved significantly compared to the
second quarter, as measures the company implemented to reduce its expenses (and
in particular its cash expenditures) began taking effect. Juno followed through
on its previously announced plans to suspend its use of direct mail and reduce
its use of certain other cash-intensive marketing channels, thus significantly
reducing expenditures for subscriber acquisition. The company also benefited
from the effect of significantly reduced telecommunications rates from a number
of its telecom vendors. Juno's net loss improved by approximately 32%, dropping
to $29.3
<PAGE>
million from $42.9 million in the second quarter. The cash portion of Juno's net
loss improved by 60% in the third quarter, dropping to approximately $16 million
from about $41 million in the second quarter.
As of September 30, Juno held approximately $69 million in cash and cash
equivalents. On October 13, the company announced an equity financing commitment
from a private investment fund, structured as an "equity line" facility. Certain
additional information relating to this facility (including restrictions on the
amount of capital, if any, that may be available to Juno) is available in a Form
8-K filed by the company with the Securities and Exchange Commission on October
13, 2000.
Revenues in the third quarter of 2000 totaled $30.1 million, up slightly from
$29.6 million in the second quarter. Billable service revenues rose to $19.0
million in the third quarter, up from $18.4 million in the second quarter.
Revenues from advertising and transaction fees and from direct product sales
increased to $11.2 million on a combined basis in the third quarter, as compared
with $11.1 million in the second quarter.
Cost of revenues improved to 47.7% of total revenues in the third quarter, as
compared with 51.5% in the second quarter. This improvement reflects the decline
in Juno's effective telecommunications rate and improvements in the
per-subscriber cost of providing customer service.
Operations, free service expenses increased to $11.8 million in the third
quarter from $9.5 million in the second quarter. This rise reflects a 45%
increase in average monthly hours of connection time per free service subscriber
as well as continued growth in the size of Juno's active subscriber base. The
increase was offset in part by a decline of almost 20% in Juno's effective
telecommunications rate. Operations, free service expenses and the portion of
cost of revenues that is associated with the free service averaged approximately
$1.65 per active free subscriber per month on a combined basis in the third
quarter, up from approximately $1.60 per month in the second quarter. This
per-subscriber cost remains substantially better than the best Juno's management
has seen reported by any competitor. Juno believes its cost advantage to be due
in part to the use of its patented offline technology.
Revenues associated with free service subscribers averaged approximately $1.10
per active free subscriber per month, down from approximately $1.20 per
subscriber per month in the second quarter, principally due to softness in the
overall market for Internet advertising. This softness, exacerbated by an
increase in the percentage of Juno's advertisers that are Internet-related
companies, is reflected in the company's backlog of advertising contracts, which
remained essentially unchanged between the end of the second quarter and the end
of the third quarter; in the reduction or cancellation of certain contracts; and
in an increased risk of uncollectible receivables. Because such softness has
continued into the current quarter, management currently expects that revenues
associated with the free service will continue to be exceeded by the sum of the
expenses reported on the Operations, free service line and the portion of the
Cost of revenues line associated with the free service through at least the end
of this year, and that, given the firm's current focus on the continued
reduction of expenses and on the continued improvement of its bottom-line
performance, firmwide revenues are unlikely to increase during the fourth
quarter.
As planned, Juno reduced its subscriber acquisition expenses, to $24.9 million
in the third quarter from $38.1 million in the second quarter. The $24.9 million
total was divided roughly evenly between cash expenditures and non-cash
subscriber acquisition expenses, such as fees payable in Juno common stock in
connection with
<PAGE>
the company's subscriber referral agreements with former Internet service
providers WorldSpy and Freewwweb. Juno currently expects a significant further
reduction in subscriber acquisition expenses during the fourth quarter, part of
an overall effort to bring expenses more in line with company revenues and
reduce Juno's reliance on external sources of capital in the context of a less
hospitable current market environment.
The company's net loss improved to ($0.75) per share in the third quarter of
2000, compared to a net loss of ($1.11) per share in the second quarter.
Subscriber acquisition expenses accounted for approximately 85% of the ($0.75)
total, leaving a net loss BEFORE subscriber acquisition expenses of just ($0.11)
per share.
In light of recent changes in the market environment, Juno's management
currently expects to continue (at least for the time being) its recent shift of
focus from the aggressive, cash-intensive growth of its subscriber base to the
reduction of its cash outflows and the exploration and development of additional
potential revenue sources. "Instead of spending aggressively to attract new
subscribers, we expect to concentrate to a greater extent over the next few
quarters on segmenting our subscriber base and extracting value from the most
productive and least costly segments while taking steps to control the costs
associated with the least productive and most costly," said Charles Ardai,
Juno's president and chief executive officer. "More than half of the telecom
costs associated with our free service are attributable to the 5% of our free
subscribers who use that service most heavily. One of our goals will be to
improve the balance between revenues and expenses by encouraging heavy users to
upgrade to one of our billable services, participate in other revenue-generating
activities, or modify their usage patterns. While this initiative may result in
a certain amount of subscriber attrition, we believe this increased emphasis on
the profitability of various segments of our subscriber base to be appropriate,
particularly in light of recent changes in the Internet market environment."
ABOUT JUNO
Juno Online Services, Inc. is a leading provider of Internet access to millions
of computer users throughout the United States. Founded in 1996, the company
provides multiple levels of service, including free basic Internet access,
billable premium dial-up service, and (in certain markets) high-speed broadband
access. Juno's revenues are derived primarily from the subscription fees charged
for its billable premium services, from the sale of advertising, and from
various forms of electronic commerce.
Based on its total of 3.70 million active subscribers during the month of
September 2000, Juno is currently the nation's third largest provider of dial-up
Internet services, after AOL and EarthLink. As of September 30, 2000, Juno had
approximately 12.77 million total registered subscriber accounts.
For more information about Juno, visit www.juno.com/corp. To get a free copy of
the Juno software, go to www.juno.com or call 1-800-TRY-JUNO.
#
STATEMENTS IN THIS PRESS RELEASE REGARDING JUNO ONLINE SERVICES, INC. THAT ARE
NOT HISTORICAL FACTS ARE FORWARD-LOOKING STATEMENTS AND ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE SUCH STATEMENTS TO DIFFER MATERIALLY FROM ACTUAL
FUTURE EVENTS OR RESULTS. ANY SUCH FORWARD-LOOKING STATEMENTS ARE MADE
<PAGE>
PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. THE FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE JUNO'S
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN A FORWARD-LOOKING
STATEMENT: LIMITED HISTORY OF OFFERING JUNO'S BILLABLE PREMIUM SERVICES AND FREE
BASIC SERVICE IN ITS CURRENT FORM; HISTORY OF LOSSES; FAILURE TO RETAIN OR GROW
JUNO'S SUBSCRIBER BASE; INCREASING COMPETITION FROM EXISTING OR NEW COMPETITORS;
INABILITY TO SUSTAIN CURRENT LEVELS OF SUBSCRIBER ACQUISITION OR RETENTION;
INABILITY TO SUCCESSFULLY MIGRATE FREE SUBSCRIBERS TO, OR TO RETAIN SUBSCRIBERS
IN, JUNO'S BILLABLE PREMIUM SERVICES; RAPID TECHNOLOGICAL CHANGE; POSSIBLE
UNAVAILABILITY OF FINANCING AS AND IF NEEDED; DECREASES IN THE POPULARITY OF THE
INTERNET AMONG CONSUMERS OR AS AN ADVERTISING MEDIUM; DEPENDENCE ON A LIMITED
NUMBER OF PARTNERS AND VENDORS FOR THE PROVISION AND ROLL-OUT OF THE JUNO
EXPRESS BROADBAND SERVICE; POSSIBLE INDUSTRY CONSOLIDATION; AND POTENTIAL
FLUCTUATIONS IN QUARTERLY AND ANNUAL RESULTS. THIS LIST IS INTENDED TO IDENTIFY
ONLY CERTAIN OF THE PRINCIPAL FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER.
READERS ARE REFERRED TO THE REPORTS AND DOCUMENTS FILED BY JUNO WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE QUARTERLY REPORT ON FORM 10-Q
FILED AUGUST 14, 2000, FOR A DISCUSSION OF THESE AND OTHER IMPORTANT RISK
FACTORS.
"EBITDA" AND "CASH PORTION OF NET LOSS" ARE NOT MEASUREMENTS OF FINANCIAL
PERFORMANCE UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND SHOULD NOT BE
CONSIDERED ALTERNATIVES TO NET LOSS. EBITDA (EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION) EXCLUDES INTEREST, TAXES AND NON-CASH EXPENSES
SUCH AS DEPRECIATION, AMORTIZATION, AND CHARGES FOR STOCK-BASED SUBSCRIBER
ACQUISITION. "CASH PORTION OF NET LOSS" IS SIMILAR TO EBITDA, BUT ALSO INCLUDES
THE BENEFIT OF INTEREST INCOME, NET.
COMPARISON OF THE SIZE OF JUNO'S SUBSCRIBER BASE TO THOSE OF AOL, EARTHLINK,
AT&T, MICROSOFT, NETZERO, AND PRODIGY IS BASED ON THE MOST RECENT DATA PUBLISHED
BY EACH COMPANY AND KNOWN TO JUNO'S MANAGEMENT AS OF THE DATE HEREOF.
<PAGE>
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Billable services .................... $ 18,962 $ 8,654 $ 54,127 $ 21,529
Advertising and transaction
fees ................................ 11,105 3,367 28,199 8,335
Direct product sales ................. 78 1,083 1,419 4,082
----------- ----------- ----------- -----------
Total revenues ...................... 30,145 13,104 83,745 33,946
----------- ----------- ----------- -----------
Cost of revenues:
Billable services .................... 12,130 5,960 36,727 16,119
Advertising and transaction
fees ................................ 2,174 1,120 6,186 3,362
Direct product sales ................. 74 988 1,344 3,577
----------- ----------- ----------- -----------
Total cost of revenues .............. 14,378 8,068 44,257 23,058
----------- ----------- ----------- -----------
Operating expenses:
Operations, free service ............. 11,773 1,464 27,423 5,081
Subscriber acquisition ............... 24,874 15,028 107,744 31,648
Sales and marketing .................. 5,010 3,180 14,235 8,208
Product development .................. 2,470 1,592 8,033 5,423
General and administrative ........... 2,139 1,284 6,401 2,970
----------- ----------- ----------- -----------
Total operating expenses ............ 46,266 22,548 163,836 53,330
----------- ----------- ----------- -----------
Loss from operations ................ (30,499) (17,512) (124,348) (42,442)
Interest income, net ................... 1,163 1,430 4,535 2,336
----------- ----------- ----------- -----------
Net loss ............................ $ (29,336) $ (16,082) $(119,813) $ (40,106)
=========== =========== =========== ===========
Basic and diluted net loss per share.... $ (0.75) $ (3.13)
=========== ===========
Pro forma basic and diluted net loss per
share ............................... $ (0.46) $ (1.39)
=========== ===========
Weighted average shares outstanding used
in basic and diluted per share
calculations ........................ 38,866 38,225
========== ===========
Weighted average shares outstanding used
in pro forma basic and diluted
per share calculations .............. 34,634 28,869
=========== ===========
</TABLE>
<PAGE>
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................... $ 68,648 $ 91,497
Accounts receivable, net of allowance for
doubtful accounts of $1,557 and $544 at September 30,
2000 and December 31, 1999, respectively .............. 13,573 6,370
Prepaid expenses and other current assets ............... 7,506 15,437
--------- ---------
Total current assets ................................... 89,727 113,304
Fixed assets, net ......................................... 9,386 5,684
Other assets .............................................. 902 100
--------- ---------
Total assets ........................................... $ 100,015 $ 119,088
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ................... $ 36,031 $ 29,800
Current portion of capital lease obligations ............ 1,184 1,423
Deferred revenue ........................................ 17,077 14,510
--------- ---------
Total current liabilities .............................. 54,292 45,733
Capital lease obligations ................................. 238 1,455
Deferred rent ............................................. 177 252
Deferred revenue .......................................... 128 --
Liabilities expected to be settled with common stock ...... 10,100 --
Stockholders' equity:
Preferred stock--$.01 par value; 5,000,000 shares
authorized, none issued and outstanding ............... -- --
Common stock--$.01 par value; 133,333,334 shares
authorized, 38,936,504 and 34,833,568 shares issued and
outstanding at September 30, 2000 and December 31, 1999
respectively .......................................... 389 348
Additional paid-in capital .............................. 206,400 123,530
Unearned compensation ................................... (411) (745)
Cumulative translation adjustment ....................... (1) (1)
Accumulated deficit ..................................... (171,297) (51,484)
--------- ---------
Total stockholders' equity ............................. 35,080 71,648
--------- ---------
Total liabilities and stockholders' equity ............. $ 100,015 $ 119,088
========= =========
</TABLE>
<PAGE>
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss ................................................. $(119,813) $ (40,106)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization .......................... 2,743 1,696
Stock-based subscriber acquisition ..................... 10,100 --
Amortization of deferred rent .......................... (61) (49)
Amortization of unearned compensation .................. 165 352
Changes in operating assets and liabilities:
Accounts receivable .................................. (7,203) (3,120)
Prepaid expenses and other current assets ............ 7,931 (12,420)
Accounts payable and accrued expenses ................ 6,217 17,950
Deferred revenue ..................................... 2,695 6,927
--------- ---------
Net cash used in operating activities .............. (97,226) (28,770)
--------- ---------
Cash flows from investing activities:
Purchases of fixed assets ................................ (6,445) (657)
Other assets ............................................. (802) 68
--------- ---------
Net cash used in investing activities .............. (7,247) (589)
--------- ---------
Cash flows from financing activities:
Payments on capital lease obligations .................... (1,456) (546)
Payments on senior note .................................. -- (9,129)
Net proceeds from issuance of redeemable
convertible preferred stock ............................ -- 61,859
Net proceeds from issuance of common stock ............... 81,080 77,285
Proceeds from issuance of common stock
in connection with employee stock purchase plan ........ 1,166 --
Proceeds from issuance of common stock
upon exercise of stock options ......................... 834 155
--------- ---------
Net cash provided by financing activities .......... 81,624 129,624
--------- ---------
Net (decrease) increase in cash and cash equivalents (22,849) 100,265
Cash and cash equivalents, beginning of period ............. 91,497 8,152
--------- ---------
Cash and cash equivalents, end of period ................... $ 68,648 $ 108,417
========= =========
Supplemental disclosure of cash flow information:
Cash paid for interest ................................... $ 126 $ 293
Supplemental schedule of noncash
investing and financing activities:
Capital lease obligations incurred for
network equipment ...................................... $ -- $ 871
</TABLE>
<PAGE>
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SEQUENTIAL QUARTERLY COMPARISON
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
SEPTEMBER 30, JUNE 30,
2000 2000
---------- --------
<S> <C> <C>
Revenues:
Billable services .................... $ 18,962 $ 18,429
Advertising and transaction fees ..... 11,105 10,685
Direct product sales ................. 78 439
-------- --------
Total revenues ...................... 30,145 29,553
-------- --------
Cost of revenues:
Billable services .................... 12,130 12,557
Advertising and transaction fees ..... 2,174 2,262
Direct product sales ................. 74 414
-------- --------
Total cost of revenues .............. 14,378 15,233
-------- --------
Operating expenses:
Operations, free service ............. 11,773 9,506
Subscriber acquisition ............... 24,874 38,119
Sales and marketing .................. 5,010 5,610
Product development .................. 2,470 3,100
General and administrative ........... 2,139 2,486
-------- --------
Total operating expenses ............ 46,266 58,821
-------- --------
Loss from operations ................ (30,499) (44,501)
Interest income, net ................... 1,163 1,650
-------- --------
Net loss ............................ $(29,336) $(42,851)
======== ========
Basic and diluted net loss per share ... $ (0.75) $ (1.11)
======== ========
Weighted average shares outstanding used
in basic and diluted per share
calculations ...................... 38,866 38,715
======== ========
</TABLE>
<PAGE>
JUNO ONLINE SERVICES, INC. AND SUBSIDIARIES
(IN THOUSANDS, EXCEPT FOR SELECTED SUBSCRIBER DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
EBITDA: THREE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
--------------------------
2000 2000
------------- -----------
<S> <C> <C>
Net loss ....................... $(29,336) $(42,851)
Depreciation and amortization 1,041 1,017
Noncash subscriber acquisition 12,535 266
Interest income, net ......... (1,163) (1,650)
-------- --------
EBITDA .................. $(16,923) $(43,218)
======== ========
</TABLE>
<TABLE>
<CAPTION>
SEPT. 30, JUN. 30, MAR. 31, DEC. 31, SEPT. 30,
--------- -------- -------- -------- ---------
SELECTED SUBSCRIBER DATA: 2000 2000 2000 1999 1999
------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total registered subscriber accounts
as of (1) ........................ 12,771,000 11,048,000 9,430,000 8,137,000 7,613,000
Active subscriber accounts
in month ended (2) .............. 3,700,000 3,379,000 3,053,000 2,394,000 2,326,000
Active Web-enabled
subscribers in month ended (3) .. 3,251,000 2,876,000 2,358,000 771,000 268,000
Billable subscription service
accounts as of (4) .............. 750,000 730,000 661,000 550,000 400,000
</TABLE>
------------------
(1) Includes all subscriber accounts created since Juno's inception, computed
after deduction of any accounts that have since been cancelled, but
regardless of current activity, if any.
(2) Encompasses all registered subscriber accounts that connected at least
once during the month, together with all subscribers to a billable
service, in each case regardless of the type of activity or activities
engaged in by such subscribers.
(3) Refers to the subset of active subscriber accounts that have been
centrally provisioned for, and provided with the client-side software
necessary to access, not only e-mail, but also the World Wide Web,
regardless of the extent, if any, to which such subscribers have actually
used the Web.
(4) Represents the subset of active subscriber accounts that carry a charge
for premium functionality.
