VeriSign, the trusted provider of Internet infrastructure services for the networked world, today reported financial results for the third quarter ended September 30, 2010.
Third Quarter GAAP Financial Results
VeriSign, Inc. and subsidiaries ("VeriSign") reported revenue of $173 million from continuing operations for the third quarter of 2010, up 2% from the prior quarter and up 10% from the same quarter in 2009. Continuing operations consist primarily of the results of the Naming Services business which is comprised of Registry Services and Network Intelligence and Availability (NIA) Services. NIA Services include the Managed Domain Name System (Managed DNS), iDefense and Distributed Denial of Service (DDoS) mitigation businesses. VeriSign reported net income attributable to VeriSign, Inc. stockholders of $785 million and earnings per share attributable to VeriSign, Inc. stockholders of $4.48 on a diluted basis for the third quarter of 2010, reflecting a net gain of $737 million, net of tax of $244 million, on the sale of the Authentication Services business. This compared to net income attributable to VeriSign, Inc. stockholders of $54 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.28 on a diluted basis in the same quarter in 2009. The operating margin was 34.4% for the third quarter of 2010 compared to 21.7% for the same quarter in 2009.
VeriSign reported segment revenue for Naming Services of $172 million for the third quarter of 2010, up 3% from the prior quarter and up 11% from the same quarter in 2009.
Third Quarter Non-GAAP Financial Results
VeriSign reported net income attributable to VeriSign, Inc. stockholders of $48 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.27 on a diluted basis for the third quarter of 2010, compared to net income attributable to VeriSign, Inc. stockholders of $32 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.16 on a diluted basis in the same quarter in 2009. The operating margin was 43.1% for the third quarter of 2010 compared to 33.7% for the same quarter in 2009. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.
"We are pleased with the third quarter results and the continued rebounding of Internet trends that impact our business," said Mark McLaughlin, president and chief executive officer of VeriSign. "Our focus as we look forward is to continue to provide an essential and unparalleled service and to leverage our expertise in running a highly complex network to create new opportunities."
"The transition following the close of the sale of our Authentication Services business is on track," said Brian Robins, chief financial officer of VeriSign. "Our continued operating discipline allows us to optimize our cost structure while supporting topline growth opportunities for the company."
Non-GAAP financial results exclude the following items that are included under GAAP: discontinued operations, results of Other Services, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. A table reconciling the GAAP to non-GAAP net income is appended to this release. All non-GAAP figures for each period presented herein have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.
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