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

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Verisign Reports Second Quarter 2020 Results

July 23, 2020

RESTON, Va.--(BUSINESS WIRE)--Jul. 23, 2020-- VeriSign, Inc. (NASDAQ: VRSN), a global provider of domain name registry services and internet infrastructure, today reported financial results for the second quarter of 2020.

VeriSign, Inc. and its subsidiaries (“Verisign”) reported revenue of $314 million for the second quarter of 2020, up 2.6 percent from the same quarter in 2019. Verisign reported net income of $152 million and diluted earnings per share (diluted “EPS”) of $1.32 for the second quarter of 2020, compared to net income of $148 million and diluted EPS of $1.24 for the same quarter in 2019. The operating margin was 65.8 percent for the second quarter of 2020 compared to 65.9 percent for the same quarter in 2019.

“For many people who are working from home and isolating at home, online services are critical. More businesses and individuals than ever depend on internet infrastructure for their livelihood. Commitment to our mission of maintaining our unparalleled record of uninterrupted .com and .net DNS is our priority,” said Jim Bidzos, Executive Chairman and Chief Executive Officer.

Financial Highlights

  • Verisign ended the second quarter of 2020 with cash, cash equivalents and marketable securities of $1.19 billion, a decrease of $23 million from the end of 2019.
  • Cash flow from operating activities was $215 million for the second quarter of 2020, compared to $165 million for the same quarter in 2019.
  • Deferred revenues as of June 30, 2020 totaled $1.06 billion, an increase of $30 million from the end of 2019.
  • During the second quarter of 2020, Verisign repurchased 0.7 million shares of its common stock for an aggregate cost of $150 million. As of June 30, 2020, there was $676 million remaining for future share repurchases under the share repurchase program which has no expiration date.

Business Highlights 

  • Verisign ended the second quarter of 2020 with 162.1 million .com and .net domain name registrations in the domain name base, a 3.8 percent increase from the end of the second quarter of 2019, and a net increase of 1.41 million during the second quarter of 2020.
  • During the second quarter of 2020, Verisign processed 11.1 million new domain name registrations for .com and .net, compared to 10.3 million for the same quarter in 2019.
  • The final .com and .net renewal rate for the first quarter of 2020 was 75.4 percent compared with 75.0 percent for the same quarter in 2019. Renewal rates are not fully measurable until 45 days after the end of the quarter.
  • Verisign announces that it will extend the freeze on registry prices for all of its Top-Level Domains, including .com and .net, through March 31, 2021. Additionally, Verisign announces the extension of the waiver of the wholesale restore fee for expired domains through the end of 2020.

Today’s Conference Call

Verisign will host a live conference call today at 4:30 p.m. (EDT) to review the second quarter 2020 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, risks arising from the effects of the COVID-19 pandemic; risks arising from the agreements governing our business; new or existing governmental laws and regulations in the U.S. or other applicable foreign jurisdictions; system interruptions, security breaches, attacks on the internet by hackers, viruses, or intentional acts of vandalism; the uncertainty of the impact of changes to the multi-stakeholder model of internet governance; risks arising from our operation of two root zone servers and our performance of the Root Zone Maintainer functions; changes in internet practices and behavior and the adoption of substitute technologies; the success or failure of the evolution of our markets; the highly competitive business environment in which we operate; whether we can maintain strong relationships with registrars and their resellers to maintain their marketing focus on our products and services; the possibility of system interruptions or failures; challenging global economic conditions; economic, legal and political risk associated with our international operations; our ability to protect and enforce our rights to our intellectual property and ensure that we do not infringe on others’ intellectual property; the outcome of legal or other challenges resulting from our activities or the activities of registrars or registrants, or litigation generally; the impact of our new strategic initiatives, including our IDN gTLDs; whether we can retain and motivate our senior management and key employees; and the impact of unfavorable tax rules and regulations. 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, 2019, 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.

©2020 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)

 

 

June 30,
2020

 

December 31,
2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

306,701

 

 

$

508,196

 

Marketable securities

887,872

 

 

709,863

 

Other current assets

55,075

 

 

60,530

 

Total current assets

1,249,648

 

 

1,278,589

 

Property and equipment, net

250,290

 

 

250,283

 

Goodwill

52,527

 

 

52,527

 

Deferred tax assets

82,048

 

 

87,798

 

Deposits to acquire intangible assets

145,000

 

 

145,000

 

Other long-term assets

40,613

 

 

39,812

 

Total long-term assets

570,478

 

 

575,420

 

Total assets

$

1,820,126

 

 

$

1,854,009

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

235,671

 

 

$

209,988

 

Deferred revenues

782,661

 

 

755,178

 

Total current liabilities

1,018,332

 

 

965,166

 

Long-term deferred revenues

281,649

 

 

278,702

 

Senior notes

1,788,824

 

 

1,787,565

 

Long-term tax and other liabilities

131,645

 

 

312,676

 

Total long-term liabilities

2,202,118

 

 

2,378,943

 

Total liabilities

3,220,450

 

 

3,344,109

 

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: 353,637 at June 30, 2020 and 353,157 at December 31, 2019; Outstanding shares: 115,011 at June 30, 2020 and 116,715 at December 31, 2019

14,592,929

 

 

14,990,011

 

Accumulated deficit

(15,990,895)

 

 

(16,477,490)

 

Accumulated other comprehensive loss

(2,358)

 

 

(2,621)

 

Total stockholders’ deficit

(1,400,324)

 

 

(1,490,100)

 

Total liabilities and stockholders’ deficit

$

1,820,126

 

 

$

1,854,009

 

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2020

 

2019

 

2020

 

2019

Revenues

$

314,365

 

 

$

306,289

 

 

$

626,889

 

 

$

612,697

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenues

43,608

 

 

44,066

 

 

89,181

 

 

89,570

 

Sales and marketing

8,890

 

 

12,399

 

 

15,494

 

 

22,918

 

Research and development

18,202

 

 

14,953

 

 

35,560

 

 

31,085

 

General and administrative

36,885

 

 

33,178

 

 

73,610

 

 

67,179

 

Total costs and expenses

107,585

 

 

104,596

 

 

213,845

 

 

210,752

 

Operating income

206,780

 

 

201,693

 

 

413,044

 

 

401,945

 

Interest expense

(22,535)

 

 

(22,635)

 

 

(45,070)

 

 

(45,266)

 

Non-operating income, net

7,403

 

 

11,436

 

 

14,487

 

 

23,639

 

Income before income taxes

191,648

 

 

190,494

 

 

382,461

 

 

380,318

 

Income tax (expense) benefit

(39,169)

 

 

(42,960)

 

 

104,134

 

 

(70,257)

 

Net income

152,479

 

 

147,534

 

 

486,595

 

 

310,061

 

Other comprehensive (loss) income

(2,000)

 

 

35

 

 

263

 

 

84

 

Comprehensive income

$

150,479

 

 

$

147,569

 

 

$

486,858

 

 

$

310,145

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

1.32

 

 

$

1.24

 

 

$

4.20

 

 

$

2.60

 

Diluted

$

1.32

 

 

$

1.24

 

 

$

4.19

 

 

$

2.59

 

Shares used to compute earnings per share

 

 

 

 

 

 

 

Basic

115,347

 

 

118,965

 

 

115,861

 

 

119,359

 

Diluted

115,544

 

 

119,361

 

 

116,137

 

 

119,837

 

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Six Months Ended
June 30,

 

 

 

2020

 

2019

 

 

Cash flows from operating activities:

 

 

 

 

 

Net income

$

486,595

 

 

$

310,061

 

 

 

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

 

 

 

 

 

Depreciation of property and equipment

22,841

 

 

22,884

 

 

 

Stock-based compensation

23,428

 

 

25,617

 

 

 

Amortization of discount on investments in debt securities

(5,095)

 

 

(5,679)

 

 

 

Other, net

(3,006)

 

 

894

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Other assets

(10,146)

 

 

(10,254)

 

 

 

Accounts payable and accrued liabilities

25,796

 

 

(39,351)

 

 

 

Deferred revenues

30,430

 

 

31,857

 

 

 

Net deferred income taxes and other long-term tax liabilities

(175,471)

 

 

16,146

 

 

 

Net cash provided by operating activities

395,372

 

 

352,175

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Proceeds from maturities and sales of marketable securities

995,194

 

 

1,466,303

 

 

 

Purchases of marketable securities

(1,167,680)

 

 

(1,021,741)

 

 

 

Purchases of property and equipment

(21,891)

 

 

(20,189)

 

 

 

Proceeds received (payments made) related to sale of business

20,009

 

 

(6,311)

 

 

 

Net cash (used in) provided by investing activities

(174,368)

 

 

418,062

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Repurchases of common stock

(429,826)

 

 

(384,532)

 

 

 

Proceeds from employee stock purchase plan

8,296

 

 

8,253

 

 

 

Net cash used in financing activities

(421,530)

 

 

(376,279)

 

 

 

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

(965)

 

 

243

 

 

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

(201,491)

 

 

394,201

 

 

 

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

517,601

 

 

366,753

 

 

 

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

$

316,110

 

 

$

760,954

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

Cash paid for interest

$

43,708

 

 

$

43,708

 

 

 

Cash paid for income taxes, net of refunds received

$

26,472

 

 

$

62,214

 

 

 

 

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

Source: VeriSign, Inc.