Neustar Reports Q2

STERLING, Va. -- NeuStar, Inc. (NYSE:NSR), a provider of essential clearinghouse services to the communications industry, today announced results for its second quarter ended June 30, 2006 and raised its guidance for full year 2006.

Summary of Second Quarter Results

Revenue for the second quarter of 2006, net of $2.1 million in contractual volume-based credits, totaled $82.3 million, compared to $62.3 million in the second quarter of 2005; there were no volume credits in the second quarter of 2005. The acquisition of UltraDNS Corporation in April 2006 contributed revenue in the amount of $3.9 million for the second quarter of 2006.

Net income for the second quarter of 2006 totaled $20.0 million, or $0.26 per diluted share, compared to $13.9 million, or $0.18 per diluted share, in the second quarter of 2005. Diluted per-share calculations are based on diluted weighted average common shares outstanding of 78.2 million for the second quarter of 2006 compared to 78.0 million for the second quarter of 2005. The second quarter of 2006 results included $3.0 million of pre-tax, non-cash, stock-based compensation expense recognized in accordance with FASB Statement No. 123(R).

Discussion of Second Quarter Results

NeuStar's year-over-year quarterly revenue growth of 32% was driven primarily by 38% growth in transactions on contracts to provide telephone number portability services in the United States, which totaled 58.6 million transactions for the second quarter of 2006 compared to 42.6 million transactions for the second quarter of 2005. In prior guidance provided on May 5, 2006, year-over-year transaction growth for the second quarter of 2006 was projected to grow in excess of 29%.