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Press Release |
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VeriSign Reports First Quarter 2007 Results
MOUNTAIN VIEW, CA – May 2, 2007 – VeriSign, Inc. (Nasdaq: VRSN),
the leading provider of digital infrastructure for the networked world,
today reported financial results for the first quarter ended March 31,
2007.
VeriSign reported total revenue of $379 million for
the first quarter of 2007, compared with $373 million for the first
quarter of 2006. VeriSign ended the first quarter with Cash, Cash Equivalents,
Restricted Cash and Short-term Investments of $740 million and deferred
revenue of $662 million.
“With more than one billion Internet users and 2 billion
wireless users on a global basis, the world’s interactions are going
increasingly digital and we are seeing a transformation in the way our
customers think about communication, commerce and content,” said Stratton
Sclavos, chairman and chief executive officer of VeriSign. “With our
unique infrastructure that enables and protects an increasing amount
of the world’s networked interactions, we are helping our customers
more quickly and economically deliver new services that improve customer
loyalty, business productivity and operational compliance.”
“We are pleased by our execution on strategic initiatives,
the growth we delivered in our core businesses, and the investments
we are making in new strategic areas,” said Dana Evan, Chief Financial
Officer of VeriSign. “Strong performance in our core Registry and SSL
businesses continues to fuel future growth as we ended the quarter with
a record $662 million in deferred revenue, an increase of 8% over the
prior quarter.”
VeriSign is not providing detailed GAAP or non-GAAP
financials for the quarter ended March 31, 2007 due to the previously
announced restatement of certain of its historical financial statements
that have not yet been completed.
Business Highlights
- • On April 5, 2007,
VeriSign announced that as of October 15, 2007, the registry fee for
.com domain names will increase from $6.00 to $6.42 and that the registry
fee for .net domain names will increase from $3.50 to $3.85, per its
agreements with ICANN.
- • During the quarter,
VeriSign also announced Project Titan, a major initiative to expand
and diversify the capacity of its global Internet infrastructure by
ten times by the year 2010. This initiative will help to address the
increase in domain name system (DNS) queries on VeriSign’s global infrastructure
taking place as e-commerce, social networking and Internet-enabled wireless
devices place significant new demands on the Internet.
- • In VeriSign Security
Services, more than 1,000 companies have registered for the new Extended
Validation (EV) SSL Certificates, which help protect users against online
fraudulent activity by providing third party verification of a Web site’s
authenticity. The certificates provide consumers with a visual cue,
a “green” address bar in the Windows Internet Explorer 7 (IE7) Web browser,
on Web pages where EV certificates are deployed.
- • In VeriSign Communications
Services, VeriSign announced the launch of its Three-Screen Solution
and Global Consulting Services for Media and Entertainment Companies.
VeriSign has combined its proven expertise in digital infrastructure
solutions and professional services to help media and entertainment
companies accelerate time to market and drive new revenue streams while
offering their customers an enhanced digital experience across multiple
screens.
Additional Financial Information
- • Professional Services
revenue, which includes inCode Wireless results, was $20 million in
Q1.
- • Deferred revenue
for the quarter was $662 million, up 8% from Q4 2006 and 23% year over
year.
- • Net days sales
outstanding (Net DSO), which takes into account the removal of Jamba
accounts receivable from our Balance Sheet, was 45 days for Q1, down
from the 48 days recorded in Q4.
- • During the quarter,
VeriSign received approximately $188 million from the sale of a controlling
interest in Jamba and paid off an outstanding balance of $199 million
under its $500 million credit facility.
- • Capital expenditures
for the first quarter of 2007 were approximately $17 million.
Internet Services Group
- • The Internet Services Group (ISG) – which includes VeriSign Security
Services (VSS) and VeriSign Information Services (VIS) – delivered $212
million of revenue in the first quarter of 2007.
- • The VeriSign Web
site certificate business issued approximately 202,000 new and renewal
certificates in Q1, bringing the total base to 850,000, up 5% from Q4
2006. The installed base excluding the GeoTrust certificates grew 12%
year over year.
- • The VeriSign Information
Services business ended the quarter with approximately 69 million active
domain names in .com and .net, a net increase of approximately 4 million
names, up 6% over Q4 2006 and 28% year over year.
Communications Services Group
- • VeriSign Communications
Services (VCS) Group – which provides intelligent communications, commerce
and content services to telecommunications carriers and next generation
service providers – delivered revenues of $167 million in the first
quarter of 2007.
- • The Communications
and Commerce group generated revenues of $90 million.
- • The Content group
generated revenues of $63 million, which includes $38 million from B2B
services and $25 million for one month of Jamba/Jamster B2C services
prior to the closing of the joint venture with News Corporation.
- • VeriSign Communications
Services Group ended Q1 with a base of 11.4 million wireless billing
customer subscribers, an increase of approximately 10% sequentially.
Today’s Conference Call
VeriSign will host a live teleconference call today
at 2:00 pm (PDT) to review the quarter’s results. The call will be accessible
by direct dial at (877) 502-9272 (US) or (913) 981-5581 (international).
A listen-only live web cast of the earnings conference call will also
be available at http://investor.verisign.com.
A replay of this call will be available at (888) 203-1112 or (719) 457-0820
(passcode: 6843620) beginning at 5:00 pm (PDT) on May 2 and will run
through May 9. This press release and the financial information discussed
on today's conference call are available on the Investor Relations section
of the VeriSign website at http://investor.verisign.com.
About VeriSign VeriSign, Inc. (Nasdaq: VRSN) operates intelligent
infrastructure services that enable and protect billions of interactions
every day across the world’s voice and data networks. Additional news
and information about the company is available at http://www.verisign.com/.
VRSNF
Contacts
Investor Relations: Nancy Fazioli, ir@verisign.com,
650-426-5146
Media Relations: Lisa Malloy, emalloy@verisign.com,
202-270-7600
###
Statements in this announcement other than historical
data and information constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements involve risks
and uncertainties that could cause VeriSign's actual results to differ
materially from those stated or implied by such forward-looking statements.
The potential risks and uncertainties include, among others, the uncertainty
of future revenue and profitability and potential fluctuations in quarterly
operating results due to such factors as increasing competition and
pricing pressure from competing services offered at prices below our
prices and market acceptance of our existing services, the inability
of VeriSign to successfully develop and market new services, and implement
price increases, and the uncertainty of whether new services as provided
by VeriSign will achieve market acceptance or result in any revenues;
the uncertainty of whether Project Titan will achieve its stated objectives,
and the risk acquired businesses will not be integrated successfully
and unanticipated costs of such integration. In addition, the risks
include the risk that VeriSign may be unable to complete its restatement
of financial results for the affected periods, the risk that proper
accounting of the adjustments to the Company’s financial statements
as finally determined by the Board, KPMG LLP and/or the SEC may differ
from the accounting treatment upon which the assumptions and forward
looking statements in this announcement are based; uncertainty regarding
the tax treatment of any adjustments to the Company’s financial statements;
uncertainty that the Nasdaq Listing Qualifications Panel will grant
a favorable decision regarding a possible delisting of the Company’s
common stock, and, if an unfavorable decision is rendered, VeriSign’s
common stock will no longer continue to remain listed on the Nasdaq
Global Market; the risk that the matters described in this press release
could divert management’s attention from operations; and the fact that
expenses arising from the independent review and SEC inquiry, the restatement,
related litigation and other associated activities are expected to be
significant. On January 19, 2007, the Company received written notification
from the staff of The Nasdaq Stock Market stating that the Nasdaq Listing
Qualifications Panel (“Panel”) had granted the Company’s request for
continued listing on The Nasdaq Stock Market, subject to the conditions
that the Company file its Form 10-Q for the quarter ended June 30, 2006,
Form 10-Q for the quarter ended September 30, 2006 and any required
restatements, by February 12, 2007. On February 7, 2007, the Nasdaq
Listing and Hearings Review Council (“Listing Council”) notified the
Company that, at the Company’s request, it had called the Panel’s January
19, 2007 decision for review and has stayed any future determinations
to suspend the Company’s securities from trading until the review process
has been completed. The Listing Council’s decision to stay any future
determinations to suspend the Company’s securities from trading until
the review process has been completed also applies to the Company’s
failure to timely file its 2006 10-K. If the Listing Council determines
it is appropriate, it may grant the Company additional time to regain
compliance with Nasdaq’s filing requirement, until the earlier of 60
days from the date of its decision or 180 days from the date of the
Panel’s decision. The Listing Council has not issued a decision in this
matter as of the date of this disclosure. More information about potential
factors that could affect the company's business and financial results
is included in VeriSign's filings with the Securities and Exchange Commission,
including in the company's Annual Report on Form 10-K for the year ended
December 31, 2005 and quarterly reports on Form 10-Q. VeriSign undertakes
no obligation to update any of the forward-looking statements after
the date of this press release.
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