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Verisign is a global provider of domain name registry services and internet infrastructure.

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Verisign Reports First Quarter 2021 Results

April 22, 2021

RESTON, Va.--(BUSINESS WIRE)--Apr. 22, 2021-- VeriSign, Inc. (NASDAQ: VRSN), a global provider of domain name registry services and internet infrastructure, today reported financial results for the first quarter of 2021.

VeriSign, Inc. and its subsidiaries (“Verisign”) reported revenue of $324 million for the first quarter of 2021, up 3.6 percent from the same quarter in 2020. Verisign reported net income of $150 million and diluted earnings per share (diluted “EPS”) of $1.33 for the first quarter of 2021, compared to net income of $334 million and diluted EPS of $2.86 for the same quarter in 2020. The operating margin was 65.0 percent for the first quarter of 2021 compared to 66.0 percent for the same quarter in 2020.

Net income for the first quarter of last year included the recognition of $168 million of previously unrecognized income tax benefits. These benefits resulted from remeasurement of Verisign’s accrual for uncertain tax positions as previously noted in the first quarter 2020 earnings release. This income tax benefit increased diluted EPS by $1.44 for the first quarter of 2020.

“Our constant preparation for delivering our services in difficult situations has continued to serve the global internet community well, as we enter a second year of COVID. This preparation, along with our focus on mission and a strengthening economy, resulted in a strong first quarter,” said Jim Bidzos, Executive Chairman and Chief Executive Officer.

Financial Highlights

  • Verisign ended the first quarter of 2021 with cash, cash equivalents and marketable securities of $1.18 billion, an increase of $14 million from the end of 2020.
  • Cash flows from operating activities were $198 million for the first quarter of 2021, compared to $180 million for the same quarter in 2020.
  • Deferred revenues as of March 31, 2021 totaled $1.10 billion, an increase of $36 million from the end of 2020.
  • During the first quarter of 2021, Verisign repurchased 0.9 million shares of its common stock for an aggregate cost of $173 million. As of March 31, 2021, there was $910 million remaining for future share repurchases under the share repurchase program which has no expiration date.

Business Highlights

  • Verisign ended the first quarter of 2021 with 168.0 million .com and .net domain name registrations in the domain name base, a 4.6 percent increase from the end of the first quarter of 2020, and a net increase of 2.80 million during the first quarter of 2021.
  • During the first quarter of 2021, Verisign processed 11.6 million new domain name registrations for .com and .net, compared to 10.0 million for the same quarter in 2020.
  • The final .com and .net renewal rate for the fourth quarter of 2020 was 73.5 percent compared to 73.8 percent for the same quarter in 2019. 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 2021 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (786) 789-4776 (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, a global provider of domain name registry services and internet infrastructure, enables internet navigation for many of the world’s most recognized domain names. Verisign enables the security, stability, and resiliency of key internet infrastructure and services, including 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 about what it means to be Powered by Verisign, 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; vulnerabilities in the global routing system; system interruptions or system failures; damage to our data centers; risks arising from our operation of root servers and our performance of the Root Zone Maintainer functions; 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 foreign jurisdictions; economic, legal and political risks associated with our international operations; the impact of unfavorable tax rules and regulations; risks from the adoption of ICANN’s consensus and temporary policies, technical standards and other processes; the uncertainty of the impact of changes to the multi-stakeholder model of internet governance; the outcome of claims, lawsuits, audits or investigations; the effects of the COVID-19 pandemic; our ability to compete in the highly competitive business environment in which we operate; 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 our 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, 2020, 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.

©2021 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 thousands, except par value)

(Unaudited)

 

 

March 31,

2021

 

December 31,

2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

246,811

 

 

$

401,194

 

Marketable securities

934,365

 

 

765,713

 

Other current assets

54,374

 

 

51,033

 

Total current assets

1,235,550

 

 

1,217,940

 

Property and equipment, net

241,136

 

 

245,571

 

Goodwill

52,527

 

 

52,527

 

Deferred tax assets

67,577

 

 

67,914

 

Deposits to acquire intangible assets

145,000

 

 

145,000

 

Other long-term assets

41,108

 

 

37,958

 

Total long-term assets

547,348

 

 

548,970

 

Total assets

$

1,782,898

 

 

$

1,766,910

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

201,463

 

 

$

208,642

 

Deferred revenues

808,754

 

 

780,051

 

Total current liabilities

1,010,217

 

 

988,693

 

Long-term deferred revenues

290,288

 

 

282,838

 

Senior notes

1,790,712

 

 

1,790,083

 

Long-term tax and other liabilities

95,441

 

 

95,494

 

Total long-term liabilities

2,176,441

 

 

2,168,415

 

Total liabilities

3,186,658

 

 

3,157,108

 

Commitments and contingencies

 

 

 

Stockholders’ deficit:

 

 

 

Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and outstanding shares: none

 

 

 

Common stock and additional paid-in capital—par value $.001 per share; Authorized shares: 1,000,000; Issued shares: 354,025 at March 31, 2021 and 353,789 at December 31, 2020; Outstanding shares: 112,766 at March 31, 2021 and 113,470 at December 31, 2020

14,111,235

 

 

14,275,160

 

Accumulated deficit

(15,512,248)

 

 

(15,662,602)

 

Accumulated other comprehensive loss

(2,747)

 

 

(2,756)

 

Total stockholders’ deficit

(1,403,760)

 

 

(1,390,198)

 

Total liabilities and stockholders’ deficit

$

1,782,898

 

 

$

1,766,910

 

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended March 31,

 

2021

 

2020

Revenues

$

323,621

 

 

$

312,524

 

Costs and expenses:

 

 

 

Cost of revenues

46,968

 

 

45,573

 

Sales and marketing

8,484

 

 

6,604

 

Research and development

20,311

 

 

17,358

 

General and administrative

37,451

 

 

36,725

 

Total costs and expenses

113,214

 

 

106,260

 

Operating income

210,407

 

 

206,264

 

Interest expense

(22,534)

 

 

(22,535)

 

Non-operating income, net

444

 

 

7,084

 

Income before income taxes

188,317

 

 

190,813

 

Income tax (expense) benefit

(37,963)

 

 

143,303

 

Net income

150,354

 

 

334,116

 

Other comprehensive income

9

 

 

2,263

 

Comprehensive income

$

150,363

 

 

$

336,379

 

 

 

 

 

Earnings per share:

 

 

 

Basic

$

1.33

 

 

$

2.87

 

Diluted

$

1.33

 

 

$

2.86

 

Shares used to compute earnings per share

 

 

 

Basic

113,131

 

 

116,375

 

Diluted

113,296

 

 

116,730

 

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net income

$

150,354

 

 

$

334,116

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation of property and equipment

11,574

 

 

11,232

 

Stock-based compensation

12,974

 

 

11,441

 

Other, net

1,155

 

 

(1,311)

 

Changes in operating assets and liabilities:

 

 

 

Other assets

(6,758)

 

 

28

 

Accounts payable and accrued liabilities

(7,613)

 

 

(27,409)

 

Deferred revenues

36,153

 

 

22,807

 

Net deferred income taxes and other long-term tax liabilities

497

 

 

(170,844)

 

Net cash provided by operating activities

198,336

 

 

180,060

 

Cash flows from investing activities:

 

 

 

Proceeds from maturities and sales of marketable securities

793,857

 

 

805,748

 

Purchases of marketable securities

(962,340)

 

 

(730,507)

 

Purchases of property and equipment

(6,721)

 

 

(11,013)

 

Proceeds received related to sale of business

 

 

14,856

 

Net cash (used in) provided by investing activities

(175,204)

 

 

79,084

 

Cash flows from financing activities:

 

 

 

Repurchases of common stock

(185,414)

 

 

(275,623)

 

Proceeds from employee stock purchase plan

8,101

 

 

8,296

 

Net cash used in financing activities

(177,313)

 

 

(267,327)

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(202)

 

 

(1,316)

 

Net decrease in cash, cash equivalents, and restricted cash

(154,383)

 

 

(9,499)

 

Cash, cash equivalents, and restricted cash at beginning of period

410,601

 

 

517,601

 

Cash, cash equivalents, and restricted cash at end of period

$

256,218

 

 

$

508,102

 

Supplemental cash flow disclosures:

 

 

 

Cash paid for interest

$

13,156

 

 

$

13,151

 

Cash paid for income taxes, net of refunds received

$

17,286

 

 

$

15,914

 

 

Investor Relations: David Atchley, datchley@verisign.com, 703-948-4643
Media Relations: James Barbour, jbarbour@verisign.com, 703-948-3800

Source: VeriSign, Inc.