VeriSign Reports Q2 Losses

• By theWHIR.com , August 07, 2008

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By David Hamilton, theWHIR.com

August 7, 2008 -- (WEB HOST INDUSTRY REVIEW) -- Internet infrastructure services provider VeriSign (verisign.com) has reported a net loss of $68 million or $0.35 per share for the second quarter, despite ending the quarter with approximately 87.3 million active domain names, a 3 percent increase over Q1 and a 20 percent increase year over year.

For the period ending June 30, 2008, VeriSign reported revenue of $303 million for the second quarter of 2008. These GAAP results, that reflect the standard accounting practices, are subject to a $92 million non-cash impairment charge on certain long-lived assets and assets held for sale. Also recorded were restructuring charges of $98 million in continuing and discontinued operations.

VeriSign reported its core business segment revenue of $233 million for internet infrastructure and identity services, including naming, SSL and IAS, up 4 percent from Q1 2008 and up 21 percent year over year.

Non-GAAP results (meaning non-standard accounting practices) show a positive net income of $50 million, but they exclude income or loss from discontinued operations, loss from non-core businesses, stock-based compensation, amortization of intangible assets, restructuring costs, non-recurring costs, and gains and losses on investments and derivatives. Also, Non-GAAP results are also adjusted for a 30 percent tax rate, which differs from the GAAP tax rate.

"Our revenue performance and non-GAAP earnings validate our strategy to focus on our core businesses, a strategy to which we are firmly committed," VeriSign interim president and chief executive officer Jim Bidzos said in a statement. "As we look toward the future, we will work to identify opportunities that align with our core competencies and extend what we believe to be our leading position as the trusted third party of the Internet."

VeriSign chief financial officer Brian Robins said the company is pleased by its second quarter performance. "Company-wide disciplined expense management contributed to non-GAAP operating margin improvement for the core services of nearly 400 basis points since last quarter, and the solid performance of our core services coupled with other positive working capital contributions resulted in strong cash flow of $169 million in the quarter," Robins said in a statement.

VeriSign added Buy.com (buy.com), online jewelry retailer Blue Nile (bluenile.com) and water sports store Overtons (overtons.com) as extended validation SSL customers in Q2.

In June, VeriSign announced two more "Regional Internet Resolutions Sites" deployments in Europe with new sites in France and Belgium to fortify its Internet infrastructure as part of the $100 million "Project Titan," intended to increase the its global internet infrastructure capacity 10 times by 2010 by deploying 100 RIRS facilities worldwide.

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