Updated, read below: Verisign has a lemon on its hands, and it either needs to get rid of it, or whip it up in shape through its recent acquisition of mQube. It announced its Q1 earnings, and on the mobile content side (its content group within Verisign Communications Services division) posted revenues of $78 million, which includes $77 million for Jamba!/Jamster B2C services and $1 million from acquisitions of 3united and Kontiki, which closed during the quarter. This compared to Q4 revenues of $114 million, which in itself was a 13% decrease over Q3 revenues.
The full earnings release here
Updated: Some more color on the earnings in mobile content, gleaned from the earnings conference call: Verisign, starting this year, moved out is SMS & MMS revenues out of its content segement and into its communications and commerce group…that messaging chunk amount for $15 million in revenues. So if you wanted to do apples-to-apples comparison, total revenues this quarter, assuming messaging was in content segment, would be $93 million. Now compare that to $114 million in the prior quarter, and that’s still a $21 million revenues decrease.
The company said its $77 million revenues were ahead of the forecasted $70-75 million. It expects continued erosion in revenues in this segment, and expects Q2 to come in at mid $60-million range. But it said it will stabilize after Q2, because of various new initiatives such as full track download service it is rolling out with partners, and opening up of operators like Verizon. It says it has won a new Brew-based MVNO client in U.S. and hopes to power and manage its content service, though it didn’t name the MVNO.
In terms of profitability, it said that is relatively steady a mid-to-high-teens million, and it will let the marketing spend decrease to keep that in line. The biggest content revenues decline this quarter were in UK, on a smaller base, and Germany was the lowest, though on a big base.
On Mqube acquisition: Lots of question form analysts on Mqube acquisition and how it would integrate into Verisign’s business…in terms of price, it paid about 4-5X of exepected 2006 net revenues, the company said, so mQube would probably hit $50 million in net revenues this year.
Update 2: The conference call transcript is here, by SeekingAlpha: On the B2B side of its content business: “We will be seeing the B2B side of it grow with the ramp up of the two B2B customers we have, as well as the inclusion of the 3united and eventually, after the regulatory approval, the m-Qube revenue stream. So I think the B2B side is going to very quickly grow to have a balancing effect on those B2C revenues. In addition, on the B2C side, we do expect a couple more carrier wins here. We’ve been told recently that we’ve won another BREW-based client business at another MVNO here in the US, and we are fairly confident that we are going to see Verizon turn on services for both our B2B and B2C sides some time here in the next few months. There are a few events that we can point to occurring in the next few months that give us some confidence in that stabilization.”
Related: Analyst: Verisign’s Mobile Content Forays A Disaster; Needs To Sell Out
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