Welcome!

.NET Authors: Yeshim Deniz, Carmen Gonzalez, Greg O'Connor, Pat Romanski, Elizabeth White

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
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers.

SUNNYVALE, Calif., Oct. 20, 2014 /PRNewswire/ -- Spansion Inc. (NYSE: CODE), a global leader in embedded systems, today added 96 new products to the Spansion® FM4 Family of flexible microcontrollers (MCUs). Based on the ARM® Cortex®-M4F core, the new MCUs boast a 200 MHz operating frequency and support a diverse set of on-chip peripherals for enhanced human machine interfaces (HMIs) and machine-to-machine (M2M) communications. The rich set of periphera...

The Internet of Things (IoT) is making everything it touches smarter – smart devices, smart cars and smart cities. And lucky us, we’re just beginning to reap the benefits as we work toward a networked society. However, this technology-driven innovation is impacting more than just individuals. The IoT has an environmental impact as well, which brings us to the theme of this month’s #IoTuesday Twitter chat. The ability to remove inefficiencies through connected objects is driving change throughout every sector, including waste management. BigBelly Solar, located just outside of Boston, is trans...
SYS-CON Events announced today that Matrix.org has been named “Silver Sponsor” of Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Matrix is an ambitious new open standard for open, distributed, real-time communication over IP. It defines a new approach for interoperable Instant Messaging and VoIP based on pragmatic HTTP APIs and WebRTC, and provides open source reference implementations to showcase and bootstrap the new standard. Our focus is on simplicity, security, and supporting the fullest feature set.
Predicted by Gartner to add $1.9 trillion to the global economy by 2020, the Internet of Everything (IoE) is based on the idea that devices, systems and services will connect in simple, transparent ways, enabling seamless interactions among devices across brands and sectors. As this vision unfolds, it is clear that no single company can accomplish the level of interoperability required to support the horizontal aspects of the IoE. The AllSeen Alliance, announced in December 2013, was formed with the goal to advance IoE adoption and innovation in the connected home, healthcare, education, aut...
SYS-CON Events announced today that Red Hat, the world's leading provider of open source solutions, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Red Hat is the world's leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, a...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic strategies that utility/cloud computing provides. Whether public, private, or in a hybrid form, clo...
Software AG helps organizations transform into Digital Enterprises, so they can differentiate from competitors and better engage customers, partners and employees. Using the Software AG Suite, companies can close the gap between business and IT to create digital systems of differentiation that drive front-line agility. We offer four on-ramps to the Digital Enterprise: alignment through collaborative process analysis; transformation through portfolio management; agility through process automation and integration; and visibility through intelligent business operations and big data.
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Be Among the First 100 to Attend & Receive a Smart Beacon. The Physical Web is an open web project within the Chrome team at Google. Scott Jenson leads a team that is working to leverage the scalability and openness of the web to talk to smart devices. The Physical Web uses bluetooth low energy beacons to broadcast an URL wirelessly using an open protocol. Nearby devices can find all URLs in the room, rank them and let the user pick one from a list. Each device is, in effect, a gateway to a web page. This unlocks entirely new use cases so devices can offer tiny bits of information or simple i...
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, will address the big issues involving these technologies and, more important, the results they will achieve. How important are public, private, and hybrid cloud to the enterprise? How does one define Big Data? And how is the IoT tying all this together?
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
TechCrunch reported that "Berlin-based relayr, maker of the WunderBar, an Internet of Things (IoT) hardware dev kit which resembles a chunky chocolate bar, has closed a $2.3 million seed round, from unnamed U.S. and Switzerland-based investors. The startup had previously raised a €250,000 friend and family round, and had been on track to close a €500,000 seed earlier this year — but received a higher funding offer from a different set of investors, which is the $2.3M round it’s reporting."
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. Over the summer Gartner released its much anticipated annual Hype Cycle report and the big news is that Internet of Things has now replaced Big Data as the most hyped technology. Indeed, we're hearing more and more about this fascinating new technological paradigm. Every other IT news item seems to be about IoT and its implications on the future of digital busines...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things needs an entirely new security model, or does it? Can we save some old and tested controls for the latest emerging and different technology environments? In his session at Internet of @ThingsExpo, Davi Ottenheimer, EMC Senior Director of Trust, will review hands-on lessons with IoT devices and reveal privacy options and a new risk balance you might not expect.
IoT is still a vague buzzword for many people. In his session at Internet of @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, will discuss the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. The presentation will also discuss how IoT is perceived by investors and how venture capitalist access this space. Other topics to discuss are barriers to success, what is new, what is old, and what the future may hold.
Swiss innovators dizmo Inc. launches its ground-breaking software, which turns any digital surface into an immersive platform. The dizmo platform seamlessly connects digital and physical objects in the home and at the workplace. Dizmo breaks down traditional boundaries between device, operating systems, apps and software, transforming the way users work, play and live. It supports orchestration and collaboration in an unparalleled way enabling any data to instantaneously be accessed on any surface, anywhere and made interactive. Dizmo brings fantasies as seen in Sci-fi movies such as Iro...