Verisign Reports First Quarter 2022 Results
“As global reliance on online services continues to increase, so does the importance of delivering uninterrupted and accurate DNS resolution. Our focus remains on operating, protecting, and enhancing our critical internet infrastructure, and I thank all our employees who continuously execute our complex mission,” said
Financial Highlights
-
Verisign ended the first quarter of 2022 with cash, cash equivalents and marketable securities of$1.21 billion , an increase of$4 million from year-end 2021. -
Cash flow from operations was
$207 million for the first quarter of 2022, compared to$198 million for the same quarter of 2021. -
Deferred revenues as of
March 31, 2022 totaled$1.18 billion , an increase of$28 million from year-end 2021. -
During the first quarter of 2022,
Verisign repurchased 0.9 million shares of its common stock for an aggregate cost of$196 million . As ofMarch 31, 2022 , there was$893 million remaining for future share repurchases under the share repurchase program which has no expiration date.
Business Highlights
-
Verisign ended the first quarter of 2022 with 174.7 million .com and .net domain name registrations in the domain name base, a 4.0 percent increase from the end of the first quarter of 2021, and a net increase of 1.23 million during the first quarter of 2022. -
During the first quarter of 2022,
Verisign processed 10.2 million new domain name registrations for .com and .net, as compared to 11.6 million for the same quarter of 2021. - The final .com and .net renewal rate for the fourth quarter of 2021 was 74.8 percent compared to 73.5 percent for the same quarter of 2020. Renewal rates are not fully measurable until 45 days after the end of the quarter.
Today’s Conference Call
About
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
©2022
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CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except par value) (Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
758.5 |
|
|
$ |
223.5 |
|
|
Marketable securities |
|
451.1 |
|
|
|
982.3 |
|
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Other current assets |
|
58.1 |
|
|
|
62.9 |
|
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Total current assets |
|
1,267.7 |
|
|
|
1,268.7 |
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Property and equipment, net |
|
244.9 |
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251.2 |
|
|
|
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52.5 |
|
|
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52.5 |
|
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Deferred tax assets |
|
230.8 |
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230.7 |
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Deposits to acquire intangible assets |
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145.0 |
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|
145.0 |
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Other long-term assets |
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32.3 |
|
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35.7 |
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Total long-term assets |
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705.5 |
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|
715.1 |
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Total assets |
$ |
1,973.2 |
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$ |
1,983.8 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ |
211.1 |
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$ |
226.6 |
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Deferred revenues |
|
877.4 |
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|
847.4 |
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Total current liabilities |
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1,088.5 |
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1,074.0 |
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Long-term deferred revenues |
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304.2 |
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306.0 |
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Senior notes |
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1,786.3 |
|
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1,785.7 |
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Long-term tax and other liabilities |
|
79.3 |
|
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|
78.6 |
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Total long-term liabilities |
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2,169.8 |
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|
2,170.3 |
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Total liabilities |
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3,258.3 |
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3,244.3 |
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Commitments and contingencies |
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Stockholders’ deficit: |
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Preferred stock—par value |
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— |
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— |
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Common stock and additional paid-in capital—par value |
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13,438.2 |
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13,620.1 |
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Accumulated deficit |
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(14,720.3 |
) |
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(14,877.8 |
) |
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Accumulated other comprehensive loss |
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(3.0 |
) |
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|
(2.8 |
) |
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Total stockholders’ deficit |
|
(1,285.1 |
) |
|
|
(1,260.5 |
) |
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Total liabilities and stockholders’ deficit |
$ |
1,973.2 |
|
|
$ |
1,983.8 |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions, except per share data) (Unaudited) |
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Three Months Ended |
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2022 |
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2021 |
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Revenues |
$ |
346.9 |
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$ |
323.6 |
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Costs and expenses: |
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Cost of revenues |
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50.7 |
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47.0 |
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Research and development |
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22.9 |
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20.3 |
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Selling, general and administrative |
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48.5 |
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45.9 |
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Total costs and expenses |
|
122.1 |
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|
113.2 |
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Operating income |
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224.8 |
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|
|
210.4 |
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Interest expense |
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(18.8 |
) |
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(22.5 |
) |
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Non-operating income, net |
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0.3 |
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|
0.4 |
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Income before income taxes |
|
206.3 |
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|
188.3 |
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Income tax expense |
|
(48.8 |
) |
|
|
(37.9 |
) |
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Net income |
|
157.5 |
|
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|
150.4 |
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Other comprehensive loss |
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(0.2 |
) |
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— |
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Comprehensive income |
$ |
157.3 |
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$ |
150.4 |
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Earnings per share: |
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Basic |
$ |
1.43 |
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$ |
1.33 |
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Diluted |
$ |
1.43 |
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$ |
1.33 |
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Shares used to compute earnings per share |
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Basic |
|
110.2 |
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|
113.1 |
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Diluted |
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110.3 |
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113.3 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
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Three Months Ended |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income |
$ |
157.5 |
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$ |
150.4 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation of property and equipment |
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11.9 |
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11.6 |
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Stock-based compensation expense |
|
14.2 |
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13.0 |
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Other, net |
|
0.6 |
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1.1 |
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Changes in operating assets and liabilities: |
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Other assets |
|
8.3 |
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|
(6.9 |
) |
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Accounts payable and accrued liabilities |
|
(14.9 |
) |
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|
(7.6 |
) |
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Deferred revenues |
|
28.3 |
|
|
|
36.2 |
|
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Net deferred income taxes and other long-term tax liabilities |
|
1.2 |
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|
0.5 |
|
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Net cash provided by operating activities |
|
207.1 |
|
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|
198.3 |
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Cash flows from investing activities: |
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Proceeds from maturities and sales of marketable securities |
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696.0 |
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793.8 |
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Purchases of marketable securities |
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(164.9 |
) |
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(962.3 |
) |
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Purchases of property and equipment |
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(6.6 |
) |
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(6.7 |
) |
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Net cash provided by (used in) investing activities |
|
524.5 |
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(175.2 |
) |
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Cash flows from financing activities: |
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Repurchases of common stock |
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(204.6 |
) |
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(185.4 |
) |
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Proceeds from employee stock purchase plan |
|
8.2 |
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|
8.1 |
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Net cash used in financing activities |
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(196.4 |
) |
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(177.3 |
) |
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Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
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(0.1 |
) |
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(0.2 |
) |
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Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
535.1 |
|
|
|
(154.4 |
) |
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Cash, cash equivalents, and restricted cash at beginning of period |
|
228.8 |
|
|
|
410.6 |
|
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Cash, cash equivalents, and restricted cash at end of period |
$ |
763.9 |
|
|
$ |
256.2 |
|
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Supplemental cash flow disclosures: |
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Cash paid for interest |
$ |
13.1 |
|
|
$ |
13.2 |
|
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Cash paid for income taxes, net of refunds received |
$ |
2.2 |
|
|
$ |
17.3 |
|
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