Click here to close now.

Welcome!

Microsoft Cloud Authors: Aleksei Gavrilenko, Elizabeth White, Liz McMillan, Pat Romanski, Jaynesh Shah

News Feed Item

Neustar Reports Results for Third Quarter 2012

Neustar, Inc. (NYSE: NSR), a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors, today announced results for the quarter ended September 30, 2012 and updated its guidance for full-year 2012.

GAAP Results for Third Quarter 2012 Compared to Third Quarter 2011

  • Revenue increased 38% to $211.2 million
  • Income from continuing operations increased 21% to $45.8 million. Income from continuing operations for the third quarter of 2012 includes $5.2 million of discrete income tax benefits
  • Income from continuing operations per diluted share increased 33% to $0.68

Non-GAAP Results for Third Quarter 2012 Compared to Third Quarter 2011

  • Adjusted net income from continuing operations increased 36% to $60.7 million. Adjusted net income from continuing operations for the third quarter of 2012 includes $5.2 million of discrete income tax benefits
  • Adjusted earnings per diluted share increased 50% to $0.90

“In the third quarter, we continued to execute well on our priorities – working towards the renewal of the NPAC contract, integrating Information Services and capitalizing on the opportunities it brings us, transforming our culture and achieving our financial performance targets,” said Lisa Hook, Neustar’s president and chief executive officer. “With strong year-to-date results and continued progress in implementing our strategic plan, we are well-positioned to achieve both our short-term objectives and our long-term strategic goals.”

Paul Lalljie, Neustar’s chief financial officer added, “We generated solid profits in the third quarter while continuing to invest in the long-term growth of our business. We continue to produce consistently high margins and strong cash flows through our operational efficiencies, which gives us the flexibility to continue to return capital to our shareholders. We are updating our full-year guidance given our results and visibility into our key performance indicators.”

Discussion of Third Quarter Results

Consolidated revenue totaled $211.2 million, a 38% increase from $152.5 million in the third quarter of 2011. In particular:

  • Carrier Services revenue totaled $125.2 million, a 10% increase from $114.2 million in 2011. This increase was due to an $11.1 million increase in NPAC Services revenue;
  • Enterprise Services revenue totaled $43.6 million, a 14% increase from $38.3 million in 2011. This increase was due to higher revenue in both Internet Infrastructure and Registry Services; and
  • Information Services contributed $42.3 million of revenue in the third quarter of 2012. This business segment was created as a result of the TARGUSinfo acquisition completed in the fourth quarter of 2011. Revenue from Information Services was comprised of $24.2 million in Identification Services, $13.1 million in Verification & Analytics Services, and $5.0 million in Local Search & Licensed Data Services.

Total operating expense increased 45% to $136.5 million from $94.4 million in the third quarter of 2011. This $42.1 million increase was driven by the addition of $31.4 million in operating expense from the acquisition of our Information Services business segment. The remaining $10.7 million increase represents growth of 11% in the company’s operating expense. In particular, personnel and personnel-related expense increased $8.9 million due to increased headcount in technology and operations, research and development, and sales and marketing.

For the third quarter of 2012, adjusted net income totaled $60.7 million, including the impact of discrete tax benefits primarily associated with a domestic production activities deduction. Excluding the impact of these discrete tax benefits, our effective tax rate was approximately 38.8%.

Cash, cash equivalents and investments totaled $269.2 million as of September 30, 2012, compared to $235.0 million as of June 30, 2012 and $135.3 million as of December 31, 2011. In the third quarter of 2012, the company purchased approximately 688,000 shares of common stock at an average price of $36.34 per share, for a total purchase price of $25.0 million.

Business Outlook for 2012

The company updated its full-year 2012 guidance, previously provided on July 26, 2012:

  • Revenue range remains unchanged at $825 to $835 million;
  • Adjusted net income to range from $200 to $206 million. Prior adjusted net income guidance was $189 to $197 million; and
  • Adjusted net income per diluted share to range from $2.94 to $3.03. Prior adjusted net income per diluted share range was $2.78 to $2.90

Conference Call

As announced on October 29, 2012, Neustar will conduct an investor conference call to discuss the company’s results today at 4:30 p.m. (Eastern Time). Prior to the call, investors may access the conference call over the Internet via the Investor Relations tab of the company’s website (www.neustar.biz).

The conference call is also accessible via telephone by dialing 866-382-9489 (international callers dial 706-679-4287) and entering PIN 43902736. For those who cannot listen to the live broadcast, a replay will be available through 11:59 p.m. (Eastern Time) on Tuesday, November 13, 2012 by dialing 855-859-2056 (international callers dial 404-537-3406) and entering replay PIN 43902736, or by going to the Investor Relations tab of the company’s website (www.neustar.biz).

This press release, the financial tables and other supplemental information, including a reconciliation of segment contribution to the nearest comparable GAAP measure and reconciliations of certain other non-GAAP measures to their nearest comparable GAAP measures that may be used periodically by management when discussing the company’s financial results with investors and analysts, are available on the company’s website under the Investor Relations tab.

About Neustar, Inc.

Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the company’s expectations, beliefs and business results in the future, such as guidance regarding its 2012 results. The company has attempted, whenever possible, to identify these forward-looking statements using words such as “may,” “will,” “should,” “projects,” “estimates,” “expects,” “plans,” “intends,” “anticipates,” “believes” and variations of these words and similar expressions. Similarly, statements herein that describe the company’s business strategy, prospects, opportunities, outlooks, objectives, plans, intentions or goals are also forward-looking statements. The company cannot assure you that its expectations will be achieved or that any deviations will not be material. Forward-looking statements are subject to many assumptions, risks and uncertainties that may cause future results to differ materially from those anticipated. These potential risks and uncertainties include, among others, general economic conditions in the regions and industries in which the company operates; the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as disruptions to the company’s operations, modifications to or terminations of its material contracts, its ability to successfully identify and complete acquisitions, integrate and support the operations of businesses the company acquires, increasing competition, market acceptance of its existing services, its ability to successfully develop and market new services, the uncertainty of whether new services will achieve market acceptance or result in any revenue, and business, regulatory and statutory changes in the communications industry. More information about potential factors that could affect the company’s business and financial results is included in its filings with the Securities and Exchange Commission, including, without limitation, the company’s most recent Annual Report on Form 10-K and subsequent periodic and current reports. All forward-looking statements are based on information available to the company on the date of this press release, and the company undertakes no obligation to update any of the forward-looking statements after the date of this press release.

 
NEUSTAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
 

 

Three Months Ended

 

 

Nine Months Ended

 

September 30,

 

September 30,

 

2011

 

 

2012

 

2011

 

 

2012

 

(unaudited)

Revenue:
Carrier Services $ 114,155 $ 125,202 $ 334,604 $ 375,922
Enterprise Services 38,342 43,630 111,671 125,204
Information Services   42,340     116,090  
Total revenue 152,497 211,172 446,275 617,216
Operating expense:
Cost of revenue (excluding depreciation and
amortization shown separately below) 34,194 46,339 96,663 137,364
Sales and marketing 25,069 38,040 76,275 117,466
Research and development 3,746 7,663 11,183 23,483
General and administrative 20,960 20,915 63,124 61,999
Depreciation and amortization 10,486 23,622 29,018 69,041
Restructuring (recoveries) charges (33 ) (32 ) 387   492  
94,422   136,547   276,650   409,845  
Income from operations 58,075 74,625 169,625 207,371
Other (expense) income:
Interest and other expense (675 ) (8,517 ) (1,148 ) (25,114 )
Interest and other income 304   140   1,437   479  
Income from continuing operations before income taxes 57,704 66,248 169,914 182,736
Provision for income taxes, continuing operations 19,931   20,495   65,060   64,429  
Income from continuing operations 37,773 45,753 104,854 118,307
Income from discontinued operations, net of tax     37,249    
Net income $ 37,773   $ 45,753   $ 142,103   $ 118,307  
 
Basic net income per common share:
Continuing operations $ 0.52 $ 0.69 $ 1.42 $ 1.77
Discontinued operations     0.51    
Basic net income per common share $ 0.52   $ 0.69   $ 1.93   $ 1.77  
 
Diluted net income per common share:
Continuing operations $ 0.51 $ 0.68 $ 1.40 $ 1.74
Discontinued operations     0.49    
Diluted net income per common share $ 0.51   $ 0.68   $ 1.89   $ 1.74  
 
Weighted average common shares outstanding:
Basic 73,237   66,523   73,658   66,880  
Diluted 74,632   67,623   75,079   67,961  
 
 
NEUSTAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 

December 31,

 

September 30,

2011

2012

(audited)

(unaudited)

ASSETS
Current assets:
Cash and cash equivalents $ 122,237 $ 261,049
Restricted cash 10,251 10,248
Short-term investments 10,545 8,147
Accounts receivable, net 106,274 147,564
Unbilled receivables 5,551 7,213
Notes receivable 2,786 2,860
Prepaid expenses and other current assets 30,166 18,450
Deferred costs 8,174 7,929
Income taxes receivable 38,687 4,093
Deferred tax assets 6,264   5,850  
Total current assets 340,935 473,403
 
Long-term investments 2,506
Property and equipment, net 100,102 107,825
Goodwill 573,307 573,307
Intangible assets, net 338,768 301,056
Notes receivable, long-term 3,748 1,601
Deferred costs, long-term 701 651
Other assets, long-term 22,767   19,891  
Total assets $ 1,382,834   $ 1,477,734  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,385 $ 2,906
Accrued expenses 79,334 69,200
Deferred revenue 41,080 47,595
Note payable 4,856 59,324
Capital lease obligations 3,065 2,294
Accrued restructuring reserve 4,361 741
Other liabilities 5,317   3,241  
Total current liabilities 145,398 185,301
 
Deferred revenue, long-term 10,363 10,115
Note payable, long-term 584,809 526,690
Capital lease obligations, long-term 1,918 817
Deferred tax liability, long-term 121,237 116,526
Other liabilities, long-term 16,475   20,875  
Total liabilities 880,200 860,324
 
Stockholders' equity:
Common stock 83 86
Additional paid-in capital 436,598 516,349
Treasury stock (495,790 ) (579,224 )
Accumulated other comprehensive loss (758 ) (609 )
Retained earnings 562,501   680,808  
Total stockholders' equity 502,634   617,410  
Total liabilities and stockholders' equity $ 1,382,834   $ 1,477,734  
 
 

NEUSTAR, INC.

SEGMENT REVENUE AND CONTRIBUTION
(in thousands)
 

 

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011

 

2012

2011

2012

(unaudited)

Revenue: (1)

Carrier Services $ 114,155 $ 125,202 $ 334,604 $ 375,922
Enterprise Services 38,342 43,630 111,671 125,204
Information Services 42,340   116,090  
Total revenue $ 152,497 $ 211,172 $ 446,275   $ 617,216  
 
Segment contribution:(2)
Carrier Services $ 99,302 $ 109,359 $ 293,451 $ 328,243
Enterprise Services 16,551 20,314 47,620 55,911
Information Services 24,064   59,069  
Total segment contribution $ 115,853 $ 153,737 $ 341,071   $ 443,223  
 

(1) Carrier Services:

  • Numbering Services
  • Order Management Services
  • IP Services

Enterprise Services:

  • Internet Infrastructure Services
  • Registry Services

Information Services:

  • Identification Services
  • Verification & Analytics Services
  • Local Search & Licensed Data Services
(2)   Segment contribution excludes certain unallocated costs within the following expense classifications: cost of revenue, sales and marketing, research and development, and general and administrative. In addition, depreciation and amortization and restructuring charges are excluded from segment contribution. Such unallocated costs totaled $57.8 million and $79.1 million for the three months ended September 30, 2011 and 2012, respectively, and totaled $171.4 million and $235.9 million for the nine months ended September 30, 2011 and 2012, respectively.
 

Reconciliation of Non-GAAP Financial Measures

In this press release and in other public statements, Neustar presents certain non-GAAP financial data. To place these data in an appropriate context, the following is a reconciliation of income from continuing operations to adjusted net income from continuing operations for the three and nine months ended September 30, 2011 and 2012 and the year ending December 31, 2012.

This reconciliation allows investors to appropriately consider each non-GAAP financial measure. These non-GAAP financial measures, however, should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes that these measures enhance investors’ understanding of the company’s financial performance and the comparability of the company’s operating results to prior periods, as well as against the performance of other companies. However, these non-GAAP financial measures may not be comparable with similar non-GAAP financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.

 
Reconciliation of Income from Continuing Operations to Adjusted Net Income from Continuing Operations
 
 
  Three Months Ended   Nine Months Ended   Year Ending
September 30, September 30,

December 31,

2011   2012 2011   2012

2012(1)

(in thousands, except per share data)
(unaudited)
Revenue $ 152,497   $ 211,172   $ 446,275   $ 617,216   $ 830,000  
 
Income from continuing operations $ 37,773 $ 45,753 $ 104,854 $ 118,307 $ 154,000
Add: Stock-based compensation 6,460 9,037 18,476 19,987 27,000
Add: Amortization of acquired intangible assets 1,716 12,569 3,955 37,712 50,000

Add: TARGUSinfo acquisition-related costs(2)

1,361 2,041

Add: Adjustment for provision for income taxes(3)

(2,824 ) (6,684 ) (8,589 ) (20,344 ) (28,000 )
Adjusted net income from continuing operations $ 44,486   $ 60,675   $ 120,737   $ 155,662   $ 203,000  

Adjusted net income margin from continuing operations(4)

29 % 29 % 27 % 25 % 24 %
Adjusted net income from continuing operations per diluted share $ 0.60   $ 0.90   $ 1.61   $ 2.29   $ 2.99  
Weighted average diluted common shares outstanding 74,632   67,623   75,079   67,961   68,000  
 
 
(1) The amounts expressed in this column are current estimates of the results for the full year as of the date of this press release. This reconciliation is based on the midpoint of the revenue guidance.
(2) Amounts represent costs incurred by the company in connection with its acquisition of Targus Information Corporation. These costs are not deductible for income tax purposes.
(3) Adjustment reflects the estimated tax effect of adjustments for stock-based compensation expense and amortization of acquired intangible assets based on the effective tax rate for income from continuing operations for the applicable period.
(4) Adjusted net income margin is a measure of adjusted net income from continuing operations as a percentage of revenue.
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, described how to revolutionize your archit...
SYS-CON Events announced today that Dyn, the worldwide leader in Internet Performance, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Dyn is a cloud-based Internet Performance company. Dyn helps companies monitor, control, and optimize online infrastructure for an exceptional end-user experience. Through a world-class network and unrivaled, objective intelligence into Internet conditions, Dyn ensures traffic gets delivered faster, safer, and more reliably than ever.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
To many people, IoT is a buzzword whose value is not understood. Many people think IoT is all about wearables and home automation. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed some incredible game-changing use cases and how they are transforming industries like agriculture, manufacturing, health care, and smart cities. He will discuss cool technologies like smart dust, robotics, smart labels, and much more. Prepare to be blown away with a glimpse of the future.
"We have a tagline - "Power in the API Economy." What that means is everything that is built in applications and connected applications is done through APIs," explained Roberto Medrano, Executive Vice President at Akana, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Among the proven benefits, DevOps is corr...
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than
SYS-CON Events announced today that Secure Infrastructure & Services will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Secure Infrastructure & Services (SIAS) is a managed services provider of cloud computing solutions for the IBM Power Systems market. The company helps mid-market firms built on IBM hardware platforms to deploy new levels of reliable and cost-effective computing and high availability solutions, leveraging the cloud and the benefits of Infrastructure-as-a-Service (IaaS...
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
The basic integration architecture, as defined by ESBs, hasn’t changed for more than a decade. Most cloud integration providers still rely on an ESB architecture and their proprietary connectors. As a result, enterprise integration projects suffer from constraints of availability and reliability of these connectors that are not re-usable across other integration vendors. However, the rapid adoption of APIs and almost ubiquitous availability of APIs amongst most SaaS and Cloud applications are rapidly redefining traditional integration approaches and their reliance on proprietary connectors. ...
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context wi...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fillin...
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of profound change in the industry.
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust IoT ...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world and it starts with business models and monetization strategies.
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust IT industrialization – allowing customers to provide amazing user experiences with optimized IT per...