STERLING, Va. -- NeuStar, Inc. (NYSE: NSR), a provider of essential clearinghouse services to the communications and Internet industry, today announced consolidated results for the quarter ended March 31, 2008 and updated guidance for 2008. The company also announced that Mark Foster, a Co-Founder of NeuStar, will transition into a senior advisory role from his position as Chief Technology Officer.

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Summary of First Quarter Results

Revenue totaled $117.4 million, an increase of 20% from $97.4 million in the first quarter of 2007. The company recorded a net loss for the first quarter of $4.5 million, or $0.06 per diluted share, compared to net income of $18.0 million, or $0.23 per diluted share, in the first quarter of 2007. The net loss in the first quarter of 2008 resulted from a non-cash goodwill impairment charge totaling $29.0 million, which relates to the Next Generation Messaging (NGM) business, acquired for $139 million in cash on November 27, 2006. This charge was driven by changes in market conditions and customer- related events in the first quarter, which are expected to delay our penetration of the nascent mobile instant messaging market in Europe. This caused NeuStar to reduce its NGM forecast triggering an impairment review of NGM goodwill. Absent the goodwill impairment charge of $29.0 million, NeuStar would have recorded net income for the first quarter of $24.6 million, or $0.31 per diluted share.

Discussion of First Quarter Results

NeuStar's year-over-year quarterly revenue growth of 20% was driven primarily by increases in infrastructure transactions under its contracts to provide telephone number portability services in the United States. The company also saw year-over-year increases in revenue from its Next Generation Messaging services, Ultra Services and Common Short Codes.

Transactions under NeuStar's contracts to provide telephone number portability services in the United States totaled 87.0 million for the first quarter of 2008, 22% higher than the 71.2 million transactions for the first quarter of 2007, and 4% above the transaction guidance provided in February.

EBITDA for the quarter totaled $21.1 million, or $0.27 per diluted share, compared to $38.4 million, or $0.49 per diluted share, in the corresponding quarter of 2007. EBITDA for the quarter includes a dollar-for-dollar reduction for the previously discussed goodwill impairment charge of $29.0 million. Absent the goodwill impairment of $29.0 million, EBITDA for the first quarter would have been $50.2 million, or $0.63 per diluted share.

Total operating expense increased to $106.4 million in the first quarter of 2008, compared to $68.1 million in the first quarter of 2007. Operating expense in the first quarter included the previously mentioned $29.0 million goodwill impairment charge.

As of March 31, 2008, NeuStar had $86.5 million in cash, cash equivalents and short-term investments, compared to $198.7 million at December 31, 2007. During the first quarter, the company repurchased $103.8 million of its Class A common stock under its share repurchase program announced on February 19, 2008, with an additional $21.2 million of share repurchases through April 8, 2008. Overall, NeuStar concluded $125 million of repurchases in 2008 with the acquisition of approximately 4.8 million shares.

Neustar Inc. (NYSE: NSR)