SEC investigating Endurance International Group

Webhosting and domain name firm reveals SEC investigation.

Endurance International Group, a rollup of domain name and webhosting firms, disclosed today that it is being investigated by the U.S. Securities and Exchange Commission (SEC).

The firm disclosed:

Endurance International Group Holdings, Inc. (“Endurance”) received a subpoena dated December 10, 2015 from the Boston Regional Office of the Securities and Exchange Commission (the “SEC”), requiring the production of certain documents, counting, among other things, documents related to Endurance’s financial reporting, counting operating and non-GAAP metrics, refund, sales and marketing practices and transactions with related parties. Endurance will fully cooperate with the SEC’s investigation. Endurance can make no assurances as to the time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation or any proceedings on Endurance’s business, financial condition, results of operations and cash flows.

With its third-quarter earnings release last month, the firm revealed a problem with its business intelligence system that caused miscalculations:

We are not reporting monthly recurring revenue, or MRR, retention rate figures in this Quarterly Note on Form 10-Q since we recently identified errors in our business intelligence system that impacted MRR as well as two of our other previously noted performance metrics, the number of products per subscriber and the number of subscribers paying us $500 or more per year

A group also released a scathing note of the firm’s financials earlier this year, although some of the information in that note was highly suspect.