(PR NEWSWIRE) VeriSign Reports Third Quarter Results
VeriSign Reports Third Quarter Results
First Quarter of Operating Profitability Marks Major Milestone
MOUNTAIN VIEW, Calif., Oct. 21 /PRNewswire/ -- VeriSign, Inc.
(Nasdaq: VRSN) today announced revenue of $22.8 million for the third quarter
ended September 30, 1999, a 117% increase over revenue of $10.5 million
reported in the quarter ended September 30, 1998. Third quarter revenue
increased 22% over the $18.7 million of revenue reported in the previous
quarter ended June 30, 1999. In addition, deferred revenue, which consists
predominantly of unamortized subscriber fees, increased to $25.3 million as of
September 30, 1999, a 142% increase over the prior fiscal year period and a
25% increase from the quarter ended June 30, 1999.
VeriSign achieved a major milestone in the third quarter, reporting its
first profitable quarter on both an operating and a net income basis. Net
income for the quarter ended September 30, 1999 was $1.6 million, or $0.03 per
share compared to a net loss, excluding special charges, in the quarter ended
September 30, 1998 of $4.2 million, or $0.09 per share. Net loss for the
prior quarter ended June 30, 1999 was $152 thousand, or breakeven on a
per share basis.
"We are very pleased with our third quarter performance as we saw strong
results across all of our lines of business and as we achieved our first
quarter of operating profitability, a major milestone for the company," said
Stratton Sclavos, president and CEO of Verisign. "We believe the rapid growth
of business-to-consumer and business-to-business e-commerce will continue to
drive demand for our trust services as we head into the year 2000."
In the website services business, VeriSign continued to benefit from an
aggressive demand generation program as both lead volume and conversion rates
for website certificates continued to increase. VeriSign sold over
31,500 certificates in the quarter, representing over an 85% increase in unit
volumes from the year ago period and a 17% increase over the prior quarter.
Over 180,000 website certificates have now been sold since the inception of
the service in July 1995, with more than 100,000 of these in just the last
4 calendar quarters. VeriSign website certificates currently protect the
websites of a predominant number of leading online merchants, global financial
institutions, Fortune 500 companies and government agencies.
In the enterprise line of business, VeriSign continued to see strong
demand for its VeriSign OnSite(SM) managed service, adding over 100 new
customers for the fourth quarter in a row. Well over 600 businesses,
government agencies and educational institutions now use the Company's managed
digital certificate and public key infrastructure (PKI) services to conduct
secure online commerce and communications for a variety of applications
including retail e-commerce, supply chain management, online customer support,
and virtual private networking.
VeriSign also continued to extend its global reach, adding four new
international service providers in Brazil, Korea, Ireland and Canada to the
VeriSign Trust Network(TM). With the addition of these four partners,
VeriSign now has 18 international service providers in its Affiliate Program.
Each Affiliate offers a co-branded set of trust services for a specific
geographic region or vertical market.
Other Highlights in Q3
VeriSign enhanced its website offerings through the addition of a one-time
web server security audit bundled with its premium offerings. Now, any website
customer that purchases one of VeriSign's premium Secure Site or Global Site
services will also receive a diagnostic check of its web server
vulnerabilities. The service is being offered as part of an arrangement with
Netcraft, a web server security consultancy.
In addition, VeriSign continued the expansion of its Secure Site Reseller
Program adding over 500 ISPs, ASPs and Web Hosts in the third quarter. During
the quarter, Mindspring, a leading Web hosting company, announced that it is
integrating VeriSign's Secure Site services with its e-commerce offerings,
enabling accelerated deployment across its base of more than 55,000 website
customers. VeriSign's Secure Site Program now numbers over 2,900 members,
including all of the top 15 ISPs and Web hosting companies.
In the enterprise business, momentum continued to build with the
announcement of several key relationships in the third quarter. These
included a joint sales and marketing agreement with RSA Security under which
RSA will resell VeriSign's OnSite managed service with its Keon(TM) family of
products. VeriSign also announced that it has joined forces with Ideal
Technology Solutions to offer a secure business-to-business extranet for the
auto industry and further solidified its foothold in this space by providing
security framework for the mySAP.com(TM) Marketplace. By interfacing
VeriSign's Onsite service with the mySAP.com portal, customers are given the
same high level of trust they would find when conducting business transactions
in the physical world.
In addition to the momentum in the business-to-business space in the third
quarter, VeriSign also made inroads into the business-to-consumer arena,
announcing a relationship with Novell to enhance Novell's new digitalme(TM)
initiative. Together, the two companies will offer consumers a co-branded
digitalme(TM) membercard linked to a VeriSign digital certificate, enabling
authenticated online communities and secure email.
Additionally, VeriSign expanded its line of application enablement
services in the third quarter, announcing and shipping Go Secure!(SM) for Web
Applications -- a fast-track approach for enterprises to replace
username/password schemes with digital certificates, enabling greater security
and access control for large-scale intranet and extranet applications.
VeriSign also continues to take advantage of opportunities in the federal
and state government arena, and now has over 40 federal agencies using the
OnSite service to secure a broad range of applications. These include the
Internal Revenue Service, the Social Security Administration, the Federal
Bureau of Investigation, and the Federal Trade Commission. VeriSign was also
recently selected by the General Services Administration (GSA) as part of a
teaming agreement with AT&T to provide digital certificate and real-time
validation services to enable secure citizen-to-government transactions under
the ACES program. Additionally, at a state level, VeriSign was recently named
the State of California's first licensed Certification Authority, enabling
legally valid electronic communication between citizens and public entities
within California.
VeriSign, Inc.
VeriSign, Inc. is the leading provider of the Internet trust services and
digital certificate solutions needed by websites, enterprises and individuals
in order to conduct trusted and secure electronic commerce and communications
over IP networks. VeriSign's Digital Certificate services for websites and
consumers are available through the Company's website and a growing number of
ISPs and web hosting companies. The Company's Digital Certificate services for
enterprises and electronic commerce service providers are available through
regional account representatives, resellers, and global affiliates.
This press release contains forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially. These
statements include statements as to the growth rate for the electronic
commerce market and the demand for the Company's trust services. Factors that
could cause or contribute to such differences include, but are not limited to,
the extent of any continued growth in the use of electronic commerce by
businesses, consumers and government entities; market acceptance of digital
certificates and the Company's products and services in particular;
competition; interruptions or security breaches in the Company's systems; the
ability of the Company's current, as well as any future, international
affiliates to increase brand awareness and revenues; and the Company's ability
to develop and introduce new services which achieve market acceptance. More
information about potential factors which could affect the Company's financial
results is included in the Company's Annual Report on Form 10-K as originally
filed with the SEC on February 22, 1999, as well as other reports that the
Company files with the SEC. VeriSign assumes no obligation to update the
forward-looking information contained in this press release.
VERISIGN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30, December 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents $69,458 $22,786
Short-term investments 90,634 18,959
Accounts receivable, net 20,033 9,769
Prepaid expenses and other current assets 4,807 2,174
Total current assets 184,932 53,688
Property and equipment, net 9,810 9,234
Long-term investments 45,576 436
Other assets, net 2,703 937
$243,021 $64,295
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $6,369 $5,472
Accrued liabilities 4,379 4,035
Deferred revenue 25,273 13,096
Total current liabilities 36,021 22,603
Minority interest in subsidiary 242 964
Commitments
Stockholders' equity:
Preferred stock, $.001 par value;
5,000,000 shares authorized; none issued -- --
Common stock, $.001 par value;
Authorized: 200,000,000 shares;
Issued and outstanding: 51,210,758
shares in 1999 and 46,173,384
shares in 1998 51 46
Additional paid-in capital 223,870 92,774
Notes receivable from stockholders -- (409)
Deferred compensation (199) (276)
Accumulated other comprehensive income 35,021 --
Accumulated deficit (51,985) (51,407)
Total stockholders' equity 206,758 40,728
$243,021 $64,295
VERISIGN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues $22,782 $10,505 $57,100 $25,719
Costs and expenses:
Cost of revenues 8,405 5,190 22,379 13,467
Sales and marketing 8,829 6,117 24,492 16,449
Research and development 3,405 2,552 9,478 6,242
General and administrative 2,142 1,673 6,122 5,842
Special charges -- 3,555 -- 3,555
Total costs and expenses 22,781 19,087 62,471 45,555
Operating income (loss) 1 (8,582) (5,371) (19,836)
Other income 1,272 628 4,071 1,677
Income (loss)
before minority interest 1,273 (7,954) (1,300) (18,159)
Minority interest in net loss
of subsidiary 294 237 722 950
Net income (loss) $1,567 $(7,717) $(578) $(17,209)
Diluted net income (loss)
per share $0.03 $(0.17) $(0.01) $(0.41)
Shares used in diluted
net income (loss) per
share computation 57,599 45,232 49,861 42,084
Basic net income (loss)
per share $0.03 $(0.17) $(0.01) $(0.41)
Shares used in basic
net income (loss) per
share computation 50,757 45,232 49,861 42,084
NOTE: VeriSign is a registered trademark exclusively licensed to
VeriSign, Inc. OnSite, VeriSign Trust Network and Go Secure! are service marks
of VeriSign, Inc. All other trademarks are properties of their respective
owners.
SOURCE VeriSign, Inc.
-0- 10/21/1999
/CONTACT: Kathleen Ochsner, Manager of Investor Relations of VeriSign,
Inc., 650-429-3512, or kochsner@verisign.com/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 129373/
/Web site: verisign.com
(VRSN)
CO: VeriSign, Inc.
ST: California
IN: CPR
SU: ERN
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