Budgeting, Planning & Forecasting

Budgeting, Planning & Forecasting

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April 26, 2011

Neustar Reports Record Revenue for First Quarter 2011



Neustar Inc., the official North American Numbering Plan administrator and provider of seamless connectivity across a myriad of networks, technologies and applications for carriers and enterprises, announced results for the quarter ended March 31, 2011 and affirmed guidance for full-year 2011.

Founded in 1996, Neustar shows consolidated revenue totaling $146.5 million, a 14% increase from $129.0 million in the first quarter of 2010.  This increase was driven by growth in both the Carrier Services and Enterprise Services business segments.

Carrier Services revenue totaled $110.0 million, a 10% increase from $99.8 million in the first quarter of 2010.  This increase is primarily due to a $10.9 million increase in the established fixed fee under the company's contracts to provide NPAC Services..  Additionally, order management services revenue increased by $2.6 million, primarily due to greater demand and usage from existing customers and the addition of new customers.  Partially offsetting these revenue increases was a $1.1 million decrease in revenue from IP Services.

Enterprise Services revenue totaled $36.5 million, a 25% increase from $29.2 million in the first quarter of 2010.  This increase is primarily due to a $5.0 million increase in Internet Infrastructure Services revenue due to greater demand and usage from existing customers and the addition of new customers utilizing the company's expansive DNS solutions, including IP geolocation services.  Additionally, Registry Services revenue increased by $2.3 million due to a greater number of common short codes and domain names under management.

“Our strong first quarter results reflect the combination of a sharpened strategic focus and excellent execution," said Lisa Hook (News - Alert), Neustar's president and chief executive officer. "In addition, we continue to make good progress in leveraging our established assets and capabilities to build new revenue streams in attractive spaces adjacent to our core business."

Paul Lalljie, Neustar's chief financial officer, added, "Our first quarter results demonstrate our Company's ability to effectively grow the top line while investing in new initiatives capable of fueling future growth.  We are particularly pleased with the 14% year-over-year revenue growth and the strong profit margins this quarter, establishing strong momentum for attaining our 2011 guidance."

Total operating expense increased 8% to $94.1 million from $87.0 million in the first quarter of 2010.  The $7.2 million increase was primarily due to additional personnel and personnel-related expense to support expansion of the Company's operations and new services, including increased stock-based compensation expense of $1.2 million attributable to the change in employment status of certain former executives. While cash equivalents and investments totaled $392.2 million as of March 31, 2011, compared to $382.4 million as of December 31, 2010.  During the first quarter, the company purchased approximately 712,000 shares of its Class A common stock at an average price of $25.95 per share, for a total purchase price of $18.5 million.

In comparison to first quarter results of last financial year, revenue increased 14% to $146.5 million whereas net income totaled $72.0 million. Excluding a $41.9 million discrete income tax benefit, adjusted net income increased 19% to $30.0 million. Earnings per diluted share of $0.96.  Excluding a $41.9 million discrete income tax benefit, adjusted earnings per diluted share increased 21% to $0.40 and EBITDA increased 19% to $61.9 million, representing a 42% margin.

In connection with the company's continued efforts to exit the converged messaging services business, the company recorded a $41.9 million income tax benefit in the first quarter of 2011, primarily associated with a worthless stock deduction for the common stock of Neustar NGM Services, Inc. As announced on April 6, 2011, Neustar will conduct an investor conference call to discuss the Company's results. Neustar will take live questions from securities analysts and institutional portfolio managers.


Neelam Malkani is a TMCnet contributor. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves
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