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

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Verisign Reports Fourth Quarter and Full Year 2021 Results

February 10, 2022

RESTON, Va.--(BUSINESS WIRE)--Feb. 10, 2022-- VeriSign, Inc. (NASDAQ: VRSN), a global provider of domain name registry services and internet infrastructure, today reported financial results for the fourth quarter and full year 2021.

Fourth Quarter Financial Results

VeriSign, Inc. and subsidiaries (“Verisign”) reported revenue of $340 million for the fourth quarter of 2021, up 6.3 percent from the same quarter in 2020. Verisign reported net income of $330 million and diluted earnings per share (diluted “EPS”) of $2.97 for the fourth quarter of 2021, compared to net income of $157 million and diluted EPS of $1.38 for the same quarter in 2020. The operating margin was 65.3 percent for the fourth quarter of 2021 compared to 63.9 percent for the same quarter of 2020.

Net income for the fourth quarter of 2021 included recognition of a deferred income tax benefit related to the transfer of certain non-US intellectual property between subsidiaries which increased net income by $165.5 million and increased diluted EPS by $1.49. Net income for the fourth quarter of last year included the recognition of $12.4 million of previously unrecognized income tax benefits, which increased diluted EPS by $0.11, as noted in the fourth quarter 2020 earnings release.

2021 Financial Results

Verisign reported revenue of $1.33 billion for 2021, up 4.9 percent from 2020. Verisign reported net income of $785 million and diluted EPS of $7.00 for 2021, compared to net income of $815 million and diluted EPS of $7.07 in 2020. The operating margin for 2021 was 65.3 percent compared to 65.2 percent in 2020.

Net income for 2021 included the recognition of a deferred income tax benefit related to the transfer of certain non-US intellectual property between subsidiaries which increased net income by $165.5 and increased diluted EPS by $1.48. Net income for the full year of 2020 included the recognition of $204.2 million of previously unrecognized income tax benefits, which increased diluted EPS by $1.77, as noted in the fourth quarter 2020 earnings release.

“2021 was our second year operating in our pandemic work posture. Throughout, we continued to deliver on our mission, operating our critical internet infrastructure with full accuracy and availability for users worldwide. This focus also allowed us to deliver another year of solid financial results,” said Jim Bidzos, Executive Chairman and Chief Executive Officer.

Financial Highlights

  • Verisign ended 2021 with cash, cash equivalents, and marketable securities of $1.21 billion, an increase of $39 million from year-end 2020.
  • Cash flow from operations was $206 million for the fourth quarter of 2021 and $807 million for the full year of 2021 compared with $195 million for the same quarter in 2020 and $730 million for the full year 2020.
  • Deferred revenues as of Dec. 31, 2021, totaled $1.15 billion, an increase of $90 million from year-end 2020.
  • During the fourth quarter of 2021, Verisign repurchased 0.8 million shares of its common stock for $182 million. During the full year of 2021, Verisign repurchased 3.3 million shares of its common stock for $700 million.
  • Effective Feb. 10, 2022 the Board of Directors approved an additional authorization for share repurchases of approximately $705 million of common stock, which brings the total amount to $1.0 billion authorized and available under Verisign’s share repurchase program, which has no expiration.

Business Highlights

  • Verisign ended the fourth quarter of 2021 with 173.4 million .com and .net domain name registrations in the domain name base, a 5.0 percent increase from the end of the fourth quarter of 2020, and a net increase of 1.37 million registrations during the fourth quarter of 2021.
  • In the fourth quarter of 2021, Verisign processed 10.6 million new domain name registrations for .com and .net, as compared to 10.5 million for the same quarter in 2020.
  • The final .com and .net renewal rate for the third quarter of 2021 was 75.0 percent compared to 73.7 percent for the same quarter in 2020. Renewal rates are not fully measurable until 45 days after the end of the quarter.
  • Verisign announces that it will increase the annual registry-level wholesale fee for each new and renewal .com domain name registration from $8.39 to $8.97, effective Sept. 1, 2022.

Today’s Conference Call

Verisign will host a live conference call today at 4:30 p.m. (EST) to review the fourth quarter and full year 2021 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (786) 789-4772 (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.

©2022 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.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

 

ASSETS

December 31,

December 31,

2021

2020

Current assets:

 

Cash and cash equivalents

$

223,487

 

$

401,194

 

Marketable securities

 

982,318

 

 

765,713

 

Other current assets

 

62,930

 

 

51,033

 

Total current assets

 

1,268,735

 

 

1,217,940

 

Property and equipment, net

 

251,223

 

 

245,571

 

Goodwill

 

52,527

 

 

52,527

 

Deferred tax assets

 

230,719

 

 

67,914

 

Deposits to acquire intangible assets

 

145,000

 

 

145,000

 

Other long-term assets

 

35,560

 

 

37,958

 

Total long-term assets

 

715,029

 

 

548,970

 

Total assets

$

1,983,764

 

$

1,766,910

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

Current liabilities:

Accounts payable and accrued liabilities

$

226,580

 

$

208,642

 

Deferred revenues

 

847,411

 

 

780,051

 

Total current liabilities

 

1,073,991

 

 

988,693

 

Long-term deferred revenues

 

305,950

 

 

282,838

 

Senior notes

 

1,785,709

 

 

1,790,083

 

Long-term tax and other liabilities

 

78,633

 

 

95,494

 

Total long-term liabilities

 

2,170,292

 

 

2,168,415

 

Total liabilities

 

3,244,283

 

 

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: 354,199 at December 31, 2021 and 353,789 at December 31, 2020; Outstanding shares: 110,519 at December 31, 2021 and 113,470 at December 31, 2020

 

 

 

 

 

13,620,038

 

 

 

 

 

 

 

 

14,275,160

 

 

 

Accumulated deficit

 

(14,877,772

)

 

(15,662,602

)

Accumulated other comprehensive loss

 

(2,785

)

 

(2,756

)

Total stockholders’ deficit

 

(1,260,519

)

 

(1,390,198

)

Total liabilities and stockholders’ deficit

$

1,983,764

 

$

1,766,910

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

 

Three Months Ended December 31,

Year Ended December 31,

 

2021

2020

2021

2020

Revenues

$

340,308

 

$

320,284

 

$

1,327,576

 

$

1,265,052

 

Costs and expenses:

 

 

 

 

Cost of revenues

 

49,368

 

 

45,972

 

 

191,933

 

 

180,177

 

Sales and marketing

 

11,762

 

 

12,907

 

 

39,877

 

 

36,790

 

Research and development

 

20,844

 

 

19,403

 

 

80,529

 

 

74,671

 

General and administrative

 

36,222

 

 

37,494

 

 

148,434

 

 

149,213

 

Total costs and expenses

 

118,196

 

 

115,776

 

 

460,773

 

 

440,851

 

Operating income

 

222,112

 

 

204,508

 

 

866,803

 

 

824,201

 

Interest expense

 

(18,828

)

 

(22,537

)

 

(83,255

)

 

(90,144

)

Non-operating income (loss), net

 

104

 

 

925

 

 

(1,329

)

 

16,187

 

Income before income taxes

 

203,388

 

 

182,896

 

 

782,219

 

 

750,244

 

Income tax benefit (expense)

 

126,694

 

 

(25,582

)

 

2,611

 

 

64,644

 

Net income

 

330,082

 

 

157,314

 

 

784,830

 

 

814,888

 

Other comprehensive loss

 

(12

)

 

(15

)

 

(29

)

 

(135

)

Comprehensive income

$

330,070

 

$

157,299

 

$

784,801

 

$

814,753

 

 

Earnings per share:

 

 

 

 

Basic

$

2.98

 

$

1.38

 

$

7.01

 

$

7.08

 

Diluted

$

2.97

 

$

1.38

 

$

7.00

 

$

7.07

 

Shares used to compute earnings per share

 

 

 

 

Basic

 

110,908

 

 

113,872

 

 

112,015

 

 

115,058

 

Diluted

 

111,087

 

 

114,107

 

 

112,166

 

 

115,298

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Year Ended December 31,

 

2021

2020

Cash flows from operating activities:

 

 

Net income

$

784,830

 

$

814,888

 

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

Depreciation of property and equipment

 

47,940

 

 

46,352

 

Stock-based compensation expense

 

53,439

 

 

48,243

 

Other, net

 

6,027

 

 

(9,108

)

Changes in operating assets and liabilities:

Other assets

 

(14,058

)

 

(9,214

)

Accounts payable and accrued liabilities

 

15,495

 

 

2,227

 

Deferred revenues

 

90,471

 

 

29,009

 

Net deferred income taxes and other long-term tax liabilities

 

(176,992

)

 

(192,214

)

Net cash provided by operating activities

 

807,152

 

 

730,183

 

Cash flows from investing activities:

 

 

Proceeds from maturities and sales of marketable securities

 

2,654,457

 

 

2,305,732

 

Purchases of marketable securities

 

(2,870,670

)

 

(2,355,405

)

Purchases of property and equipment

 

(53,033

)

 

(43,395

)

Proceeds from sale of business

 

 

 

20,810

 

Net cash used in investing activities

 

(269,246

)

 

(72,258

)

Cash flows from financing activities:

 

 

Repayment of borrowings

 

(750,000

)

 

 

Proceeds from borrowings, net of issuance costs

 

741,053

 

 

 

Repurchases of common stock

 

(722,587

)

 

(777,454

)

Proceeds from employee stock purchase plan

 

12,404

 

 

12,577

 

Net cash used in financing activities

 

(719,130

)

 

(764,877

)

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

 

(561

)

 

(48

)

Net decrease in cash, cash equivalents and restricted cash

 

(181,785

)

 

(107,000

)

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

 

410,601

 

 

517,601

 

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

$

228,816

 

$

410,601

 

Supplemental cash flow disclosures:

 

 

Cash paid for interest

$

85,578

 

$

87,354

 

Cash paid for income taxes, net of refunds received

$

178,351

 

$

132,683

 

 

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

Source: VeriSign, Inc.