Verisign Reports First Quarter 2024 Results

Rhea-AI Summary

• English
• French
• German
• Italian
• Korean
• Spanish

Verisign (VRSN) reported strong financial results for the first quarter of 2024, showcasing a 5.5% increase in revenue, with operating income up to $259 million and net income of $194 million. The company ended the quarter with $925 million in cash, cash equivalents, and marketable securities, while also repurchasing 1.3 million shares of its common stock for $260 million. Verisign saw a slight decrease in domain name registrations but processed 9.5 million new registrations for .com and .net domains. The renewal rate for the fourth quarter of 2023 stood at 73.2%. Overall, Verisign displayed consistent financial performance and strong business highlights for the quarter.

Positive

• Verisign reported revenue of $384 million for Q1 2024, up 5.5% from Q1 2023.
• Operating income for Q1 2024 was $259 million, compared to $241 million in Q1 2023.
• Net income for Q1 2024 was $194 million, with diluted EPS of $1.92.
• Cash, cash equivalents, and marketable securities totaled $925 million at the end of Q1 2024.
• Deferred revenues as of March 31, 2024, were $1.28 billion, up $39 million from 2023.
• Verisign repurchased 1.3 million shares of its common stock for $260 million in Q1 2024.
• The company had 172.5 million .com and .net domain name registrations at the end of Q1 2024.
• Verisign processed 9.5 million new domain name registrations in Q1 2024.
• The final .com and .net renewal rate for Q4 2023 was 73.2%.
• Verisign will host a conference call to review the Q1 2024 results.
• The conference call will be accessible via direct dial or live webcast on the company's investor website.

Negative

• None.

Financial Analyst

VeriSign's report indicating a 5.5 percent increase in revenue year-over-year highlights a positive trajectory in sales, reflecting potential market strength and effective demand capture for internet infrastructure services. A diluted EPS increase from $1.70 to $1.92 suggests improved profitability, reassuring for investors. However, a notable decline in domain registrations could be a red flag, signifying either increased competition or market saturation. The company's stock repurchase indicates confidence in its intrinsic value, yet this does not necessarily reflect broader market sentiment. From an investment perspective, the continued buybacks could be seen as a measure to enhance shareholder value and EPS, but requires scrutiny into whether this is at the cost of investment in innovation or expansion.

Market Research Analyst

Attention to the domain name registration decline is crucial, as it may signal shifting market dynamics or a need for product diversification. VeriSign's role as a key player in internet infrastructure typically affords it a stable customer base, but it does not make the company immune to fluctuations in the digital landscape. With a slight decrease in cash reserves and an increase in deferred revenues, there are implications regarding the company's liquidity and revenue recognition practices. Investors should also monitor the renewal rates, as even a small dip could have significant implications for long-term revenue stability, particularly given the decrease in new domain name registrations.

RESTON, Va.--(BUSINESS WIRE)-- VeriSign, Inc. (NASDAQ: VRSN), a global provider of critical internet infrastructure and domain name registry services, today reported financial results for the first quarter of 2024.

VeriSign, Inc. and its subsidiaries (“Verisign”) reported revenue of $384 million for the first quarter of 2024, up 5.5 percent from the same quarter in 2023. Operating income was $259 million for the first quarter of 2024, compared to $241 million for the same quarter of 2023. Verisign reported net income of $194 million and diluted earnings per share (diluted “EPS”) of $1.92 for the first quarter of 2024, compared to net income of $179 million and diluted EPS of $1.70 for the same quarter of 2023.

“These results mark another quarter of solid, consistent financial performance to start 2024,” said Jim Bidzos, Executive Chairman, President and Chief Executive Officer.

Financial Highlights

• Verisign ended the first quarter of 2024 with cash, cash equivalents and marketable securities of $925 million, a decrease of $2 million from year-end 2023.
• Cash flow from operations was $257 million for the first quarter of 2024, compared to $259 million for the same quarter of 2023.
• Deferred revenues as of March 31, 2024 totaled $1.28 billion, an increase of $39 million from year-end 2023.
• During the first quarter of 2024, Verisign repurchased 1.3 million shares of its common stock for an aggregate cost of $260 million. As of March 31, 2024, there was $860 million remaining for future share repurchases under the share repurchase program, which has no expiration.

Business Highlights

• Verisign ended the first quarter of 2024 with 172.5 million .com and .net domain name registrations in the domain name base, a 1.3 percent decrease from the end of the first quarter of 2023, and a net decrease of 0.27 million domain names during the first quarter of 2024.
• During the first quarter of 2024, Verisign processed 9.5 million new domain name registrations for .com and .net, compared with 10.3 million for the first quarter of 2023.
• The final .com and .net renewal rate for the fourth quarter of 2023 was 73.2 percent compared to 73.3 percent for the same quarter of 2022. Renewal rates are not fully measurable until 45 days after the end of the quarter.

Today’s Conference Call

Verisign will host a live conference call today at 4:30 p.m. (EDT) to review the first quarter 2024 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (786) 789-4783 (international), conference ID: Verisign. A listen-only live web cast of the conference call and accompanying slide presentation will also be available at https://investor.verisign.com. An audio archive of the call will be available at https://investor.verisign.com/events.cfm. This news release and the financial information discussed on today’s conference call are available at https://investor.verisign.com.

About Verisign

Verisign (NASDAQ: VRSN), a global provider of critical internet infrastructure and domain name registry services, enables internet navigation for many of the world’s most recognized domain names. Verisign helps enable the security, stability, and resiliency of the Domain Name System and the internet by providing root zone maintainer services, operating two of the 13 global internet root servers, and providing registration services and authoritative resolution for the .com and .net top-level domains, which support the majority of global e-commerce. To learn more please visit verisign.com.

VRSNF

Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These statements involve risks and uncertainties that could cause our actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, attempted security breaches, cyber-attacks, and DDoS attacks against our systems and services; the introduction of undetected or unknown defects in our systems or services; vulnerabilities in the global routing system; system interruptions or system failures; damage or interruptions to our data centers, data center systems or resolution systems; risks arising from our operation of root servers and our performance of the Root Zone Maintainer functions; deterioration of economic conditions, particularly in China; our ability to compete in the highly competitive business environment in which we operate; any loss or modification of our right to operate the .com and .net gTLDs; changes or challenges to the pricing provisions of the .com Registry Agreement; new or existing governmental laws and regulations in the U.S. or other applicable non-U.S. jurisdictions; new laws, regulations, directives or ICANN policies that require us to obtain and maintain personal information of registrants; economic, legal, regulatory, and political risks associated with our international operations; unfavorable changes in, or interpretations of, tax rules and regulations; risks from the adoption of ICANN’s consensus and temporary policies, technical standards and other processes; the weakening of, changes to, the multi-stakeholder model of internet governance; the outcome of claims, lawsuits, audits or investigations; changes in internet practices and behavior and the adoption of substitute technologies, or the negative impact of wholesale price increases; our ability to expand our services into developing and emerging economies; our ability to maintain strong relationships with registrars and their resellers; our ability to attract, retain and motivate highly skilled employees; and our ability to protect and enforce our intellectual property rights. More information about potential factors that could affect our business and financial results is included in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended Dec. 31, 2023, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Verisign undertakes no obligation to update any of the forward-looking statements after the date of this announcement.

©2024 VeriSign, Inc. All rights reserved. VERISIGN, the VERISIGN logo, and other trademarks, service marks, and designs are registered or unregistered trademarks of VeriSign, Inc. and its subsidiaries in the United States and in foreign countries. All other trademarks are property of their respective owners.

VERISIGN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
(Unaudited)
	March 31, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	731.8			$	240.1
Marketable securities		192.9				686.3
Other current assets		63.6				61.9
Total current assets		988.3				988.3
Property and equipment, net		227.2				233.2
Goodwill		52.5				52.5
Deferred tax assets		283.2				301.0
Deposits to acquire intangible assets		145.0				145.0
Other long-term assets		31.6				29.0
Total long-term assets		739.5				760.7
Total assets	$	1,727.8			$	1,749.0
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	249.9			$	257.4
Deferred revenues		964.0				931.1
Total current liabilities		1,213.9				1,188.5
Long-term deferred revenues		320.8				315.0
Senior notes		1,790.7				1,790.2
Long-term tax and other liabilities		38.1				36.3
Total long-term liabilities		2,149.6				2,141.5
Total liabilities		3,363.5				3,330.0
Commitments and contingencies
Stockholders’ deficit:
Preferred stock—par value $.001 per share; Authorized shares: 5.0; Issued and outstanding shares: none		—				—
Common stock and additional paid-in capital—par value $.001 per share; Authorized shares: 1,000; Issued shares: 355.1 at March 31, 2024 and 354.9 at December 31, 2023; Outstanding shares: 100.1 at March 31, 2024 and 101.3 at December 31, 2023		11,559.4				11,808.0
Accumulated deficit		(13,192.3	)			(13,386.4	)
Accumulated other comprehensive loss		(2.8	)			(2.6	)
Total stockholders’ deficit		(1,635.7	)			(1,581.0	)
Total liabilities and stockholders’ deficit	$	1,727.8			$	1,749.0

VERISIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions, except per share data)
(Unaudited)
	Three Months Ended March 31,
		2024				2023
Revenues	$	384.3			$	364.4
Costs and expenses:
Cost of revenues		49.1				49.9
Research and development		24.8				24.2
Selling, general and administrative		51.5				49.0
Total costs and expenses		125.4				123.1
Operating income		258.9				241.3
Interest expense		(18.8	)			(18.8	)
Non-operating income, net		13.9				11.3
Income before income taxes		254.0				233.8
Income tax expense		(59.9	)			(55.1	)
Net income		194.1				178.7
Other comprehensive loss		(0.2	)			—
Comprehensive income	$	193.9			$	178.7
Earnings per share:
Basic	$	1.93			$	1.70
Diluted	$	1.92			$	1.70
Shares used to compute earnings per share
Basic		100.8				104.9
Diluted		100.9				105.0

VERISIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
	Three Months Ended March 31,
		2024				2023
Cash flows from operating activities:
Net income	$	194.1			$	178.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		9.8				11.6
Stock-based compensation expense		15.1				13.8
Amortization of discount on investments in debt securities		(7.0	)			(4.0	)
Other, net		1.0				1.1
Changes in operating assets and liabilities:
Other assets		(4.1	)			1.9
Other liabilities		(8.0	)			12.1
Deferred revenues		38.6				41.8
Net deferred income taxes		17.8				2.0
Net cash provided by operating activities		257.3				259.0
Cash flows from investing activities:
Proceeds from maturities and sales of marketable securities		658.0				562.0
Purchases of marketable securities		(157.8	)			(146.5	)
Purchases of property and equipment		(3.8	)			(5.7	)
Net cash provided by investing activities		496.4				409.8
Cash flows from financing activities:
Repurchases of common stock		(269.9	)			(230.5	)
Proceeds from employee stock purchase plan		8.3				8.0
Net cash used in financing activities		(261.6	)			(222.5	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(0.4	)			(0.2	)
Net increase in cash, cash equivalents, and restricted cash		491.7				446.1
Cash, cash equivalents, and restricted cash at beginning of period		245.5				379.0
Cash, cash equivalents, and restricted cash at end of period	$	737.2			$	825.1
Supplemental cash flow disclosures:
Cash paid for interest	$	13.1			$	13.1
Cash paid for income taxes, net of refunds received	$	16.1			$	18.3

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240425424862/en/

Investor Relations: David Atchley, datchley@verisign.com, 703-948-3447

Media Relations: David McGuire, davmcguire@verisign.com, 703-948-3800

Source: VeriSign, Inc.

FAQ

What was Verisign's revenue for the first quarter of 2024?

Verisign reported revenue of $384 million for the first quarter of 2024, representing a 5.5% increase from the same quarter in 2023.

How many new domain name registrations did Verisign process in the first quarter of 2024?

Verisign processed 9.5 million new domain name registrations for .com and .net in the first quarter of 2024.

What was the final renewal rate for .com and .net domains in the fourth quarter of 2023?

The final .com and .net renewal rate for the fourth quarter of 2023 was 73.2%.

What was Verisign's net income for the first quarter of 2024?

Verisign reported net income of $194 million for the first quarter of 2024.

How much cash did Verisign have at the end of the first quarter of 2024?

Verisign ended the first quarter of 2024 with cash, cash equivalents, and marketable securities totaling $925 million.