Verisign Reports Third Quarter 2020 Results
Net income for the third quarter of 2020 included the recognition of
“Our third quarter results reflect our ongoing discipline in execution of our mission. We are acutely aware of the extent to which people rely on our critical internet infrastructure as the COVID-19 pandemic continues, and we remain focused on our mission to help keep the world connected online, reliably and securely,” said
Financial Highlights
Verisign ended the third quarter of 2020 with cash, cash equivalents and marketable securities of$1.15 billion , a decrease of$68 million from the end of 2019.- Cash flows from operating activities were
$140 million for the third quarter of 2020, compared to$208 million for the same quarter in 2019. - Deferred revenues as of
Sept. 30, 2020 totaled$1.06 billion , an increase of$28 million from the end of 2019. - During the third quarter of 2020,
Verisign repurchased 0.8 million shares of its common stock for an aggregate cost of$170 million . As ofSept. 30, 2020 , there was$506 million remaining for future share repurchases under the share repurchase program which has no expiration date.
Business Highlights
Verisign ended the third quarter of 2020 with 163.7 million .com and .net domain name registrations in the domain name base, a 4.0 percent increase from the end of the third quarter of 2019, and a net increase of 1.65 million during the third quarter of 2020.- During the third quarter of 2020,
Verisign processed 10.9 million new domain name registrations for .com and .net, compared to 9.9 million for the same quarter in 2019. - The final .com and .net renewal rate for the second quarter of 2020 was 72.8 percent compared to 74.2 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
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, 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
©2020
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) (Unaudited) |
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ASSETS |
|
|
|
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Current assets: |
|
|
|
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Cash and cash equivalents |
$ |
145,701 |
|
|
|
$ |
508,196 |
|
|
Marketable securities |
1,004,658 |
|
|
|
709,863 |
|
|
||
Other current assets |
55,767 |
|
|
|
60,530 |
|
|
||
Total current assets |
1,206,126 |
|
|
|
1,278,589 |
|
|
||
Property and equipment, net |
248,587 |
|
|
|
250,283 |
|
|
||
|
52,527 |
|
|
|
52,527 |
|
|
||
Deferred tax assets |
76,903 |
|
|
|
87,798 |
|
|
||
Deposits to acquire intangible assets |
145,000 |
|
|
|
145,000 |
|
|
||
Other long-term assets |
35,163 |
|
|
|
39,812 |
|
|
||
Total long-term assets |
558,180 |
|
|
|
575,420 |
|
|
||
Total assets |
$ |
1,764,306 |
|
|
|
$ |
1,854,009 |
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
|
|
|
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Accounts payable and accrued liabilities |
$ |
198,342 |
|
|
|
$ |
209,988 |
|
|
Deferred revenues |
779,666 |
|
|
|
755,178 |
|
|
||
Total current liabilities |
978,008 |
|
|
|
965,166 |
|
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||
Long-term deferred revenues |
281,887 |
|
|
|
278,702 |
|
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||
Senior notes |
1,789,453 |
|
|
|
1,787,565 |
|
|
||
Long-term tax and other liabilities |
101,206 |
|
|
|
312,676 |
|
|
||
Total long-term liabilities |
2,172,546 |
|
|
|
2,378,943 |
|
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||
Total liabilities |
3,150,554 |
|
|
|
3,344,109 |
|
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||
Commitments and contingencies |
|
|
|
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Stockholders’ deficit: |
|
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|
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Preferred stock—par value |
— |
|
|
|
— |
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||
Common stock and additional paid-in capital—par value |
14,436,409 |
|
|
|
14,990,011 |
|
|
||
Accumulated deficit |
(15,819,916 |
) |
|
|
(16,477,490 |
) |
|
||
Accumulated other comprehensive loss |
(2,741 |
) |
|
|
(2,621 |
) |
|
||
Total stockholders’ deficit |
(1,386,248 |
) |
|
|
(1,490,100 |
) |
|
||
Total liabilities and stockholders’ deficit |
$ |
1,764,306 |
|
|
|
$ |
1,854,009 |
|
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except per share data) (Unaudited) |
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Three Months Ended |
|
Nine Months Ended |
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|
2020 |
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2019 |
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2020 |
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|
2019 |
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Revenues |
$ |
317,879 |
|
|
|
$ |
308,421 |
|
|
|
$ |
944,768 |
|
|
|
$ |
921,118 |
|
|
Costs and expenses: |
|
|
|
|
|
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Cost of revenues |
45,024 |
|
|
|
44,443 |
|
|
|
134,205 |
|
|
|
134,013 |
|
|
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Sales and marketing |
8,389 |
|
|
|
9,857 |
|
|
|
23,883 |
|
|
|
32,775 |
|
|
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Research and development |
19,708 |
|
|
|
14,619 |
|
|
|
55,268 |
|
|
|
45,704 |
|
|
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General and administrative |
38,109 |
|
|
|
33,886 |
|
|
|
111,719 |
|
|
|
101,065 |
|
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Total costs and expenses |
111,230 |
|
|
|
102,805 |
|
|
|
325,075 |
|
|
|
313,557 |
|
|
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Operating income |
206,649 |
|
|
|
205,616 |
|
|
|
619,693 |
|
|
|
607,561 |
|
|
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Interest expense |
(22,537 |
) |
|
|
(22,633 |
) |
|
|
(67,607 |
) |
|
|
(67,899 |
) |
|
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Non-operating income, net |
775 |
|
|
|
10,498 |
|
|
|
15,262 |
|
|
|
34,137 |
|
|
||||
Income before income taxes |
184,887 |
|
|
|
193,481 |
|
|
|
567,348 |
|
|
|
573,799 |
|
|
||||
Income tax (expense) benefit |
(13,908 |
) |
|
|
(39,568 |
) |
|
|
90,226 |
|
|
|
(109,825 |
) |
|
||||
Net income |
170,979 |
|
|
|
153,913 |
|
|
|
657,574 |
|
|
|
463,974 |
|
|
||||
Other comprehensive (loss) income |
(383 |
) |
|
|
308 |
|
|
|
(120 |
) |
|
|
392 |
|
|
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Comprehensive income |
$ |
170,596 |
|
|
|
$ |
154,221 |
|
|
|
$ |
657,454 |
|
|
|
$ |
464,366 |
|
|
|
|
|
|
|
|
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Earnings per share: |
|
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|
|
|
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|
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Basic |
$ |
1.49 |
|
|
|
$ |
1.30 |
|
|
|
$ |
5.70 |
|
|
|
$ |
3.90 |
|
|
Diluted |
$ |
1.49 |
|
|
|
$ |
1.30 |
|
|
|
$ |
5.68 |
|
|
|
$ |
3.89 |
|
|
Shares used to compute earnings per share |
|
|
|
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|
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|
||||||||||||
Basic |
114,655 |
|
|
|
118,194 |
|
|
|
115,456 |
|
|
|
118,966 |
|
|
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Diluted |
114,831 |
|
|
|
118,569 |
|
|
|
115,699 |
|
|
|
119,410 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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Nine Months Ended |
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|
2020 |
|
2019 |
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Cash flows from operating activities: |
|
|
|
||||||
Net income |
$ |
657,574 |
|
|
|
$ |
463,974 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||||
Depreciation of property and equipment |
34,463 |
|
|
|
34,327 |
|
|
||
Stock-based compensation |
36,106 |
|
|
|
38,237 |
|
|
||
Amortization of discount on investments in debt securities |
(5,844 |
) |
|
|
(10,271 |
) |
|
||
Other, net |
(2,638 |
) |
|
|
2,126 |
|
|
||
Changes in operating assets and liabilities: |
|
|
|
||||||
Other assets |
(11,107 |
) |
|
|
(12,123 |
) |
|
||
Accounts payable and accrued liabilities |
(5,912 |
) |
|
|
(7,110 |
) |
|
||
Deferred revenues |
27,673 |
|
|
|
24,563 |
|
|
||
Net deferred income taxes and other long-term tax liabilities |
(195,353 |
) |
|
|
26,571 |
|
|
||
Net cash provided by operating activities |
534,962 |
|
|
|
560,294 |
|
|
||
Cash flows from investing activities: |
|
|
|
||||||
Proceeds from maturities and sales of marketable securities |
1,804,541 |
|
|
|
1,523,862 |
|
|
||
Purchases of marketable securities |
(2,093,437 |
) |
|
|
(1,721,661 |
) |
|
||
Purchases of property and equipment |
(36,933 |
) |
|
|
(31,498 |
) |
|
||
Proceeds received (payments made) related to sale of business |
20,009 |
|
|
|
(8,530 |
) |
|
||
Net cash used in investing activities |
(305,820 |
) |
|
|
(237,827 |
) |
|
||
Cash flows from financing activities: |
|
|
|
||||||
Repurchases of common stock |
(603,705 |
) |
|
|
(583,485 |
) |
|
||
Proceeds from employee stock purchase plan |
12,577 |
|
|
|
13,152 |
|
|
||
Net cash used in financing activities |
(591,128 |
) |
|
|
(570,333 |
) |
|
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
(506 |
) |
|
|
(208 |
) |
|
||
Net decrease in cash, cash equivalents, and restricted cash |
(362,492 |
) |
|
|
(248,074 |
) |
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
517,601 |
|
|
|
366,753 |
|
|
||
Cash, cash equivalents, and restricted cash at end of period |
$ |
155,109 |
|
|
|
$ |
118,679 |
|
|
Supplemental cash flow disclosures: |
|
|
|
||||||
Cash paid for interest |
$ |
56,860 |
|
|
|
$ |
57,074 |
|
|
Cash paid for income taxes, net of refunds received |
$ |
105,258 |
|
|
|
$ |
75,197 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005950/en/
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