We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
VeriSign (VRSN) Earnings & Revenues Increase Y/Y in Q2
Read MoreHide Full Article
VeriSign Inc. (VRSN - Free Report) , a global provider of domain name registry services, recently reported second-quarter 2016 adjusted earnings of 87 cents a share, up from 69 cents reported in the year-ago quarter.
The company reported non-GAAP earnings of 91 cents per share compared with 74 cents in the year-ago quarter.
Revenues increased 9.1% year over year to $286.5 million, easily surpassing the Zacks Consensus Estimate of $283.9 million.
As per the ICANN agreement, VeriSign increased annual fee for a .net domain name registration from $7.46 to $8.20, which will be in effect from Feb. 1, 2017.
In the quarter, VeriSign Registry Services added 0.78 million net new names. Domain names in the zone for .com and .net together grew 7.3% year over year in the reported quarter to 143.2 million. VeriSign processed 8.6 million new domain name registrations for .com and .net, a slight decrease from 8.7 million processed in the year-ago quarter.
VeriSign’s renewal rate for the last quarter was 74.4%, up 100 basis points (bps) year over year. For the reported quarter, the exact renewal rate figures will be available after 45 days from Jun 30, 2016. However, the company estimates it to be 73.7% compared with 72.7% in the year-ago quarter.
VeriSign reported non-GAAP operating income of $187.4 million, up from $161 million in the prior-year quarter. The company’s non-GAAP operating margin was 65.4% in the quarter, up from 61.3% in the prior-year quarter.
Non-GAAP adjusted EBITDA was $202.8 million compared with $178.3 million in the year-ago quarter.
Other Financial Details
Exiting the quarter, the company’s cash and cash equivalents (including marketable securities) were nearly 1.906 billion compared with $1.915 billion at the end of 2015.
Operating cash flow in the first half of the year was approximately $304.3 million, down 1.1% year over year.
VeriSign repurchased approximately $150 million worth of shares in the quarter. As of Jun 30, 2016, the company had $766 million available under its current share repurchase program.
Our Take
VeriSign is a name to reckon with in the highly regulated .com and .net domain industry. The renewal of the .com contract and price hikes for the .com and .net domain names will continue to drive VeriSign’s topline. Also, we believe that gTLD prospects, international expansion through IDNs and investments in intellectual properties will boost results over the long run. Additionally, VeriSign has significant growth opportunities in the Distributed Denial of Service (DDoS) security market.
VeriSign also has significant growth opportunities in the network security products space. Plus, VeriSign and ICANN have reportedly finalized the proposed new root zone maintainer agreement and the extension of the .com Registry agreement and reportedly could submit it to the DoC for approval in August.
However, the negative impact of search engine adjustments on domain monetization and increasing operating expenses related to marketing remain primary near-term headwinds.
Currently, VeriSign has a Zacks Rank #3 (Hold). Better-ranked stocks in the tech space include Facebook Inc , pdvWireless, Inc. and Ellie Mae, Inc . Facebook sports a Zacsk Rank #1 (Strong Buy) while the other two carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
VeriSign (VRSN) Earnings & Revenues Increase Y/Y in Q2
VeriSign Inc. (VRSN - Free Report) , a global provider of domain name registry services, recently reported second-quarter 2016 adjusted earnings of 87 cents a share, up from 69 cents reported in the year-ago quarter.
The company reported non-GAAP earnings of 91 cents per share compared with 74 cents in the year-ago quarter.
Revenues increased 9.1% year over year to $286.5 million, easily surpassing the Zacks Consensus Estimate of $283.9 million.
As per the ICANN agreement, VeriSign increased annual fee for a .net domain name registration from $7.46 to $8.20, which will be in effect from Feb. 1, 2017.
In the quarter, VeriSign Registry Services added 0.78 million net new names. Domain names in the zone for .com and .net together grew 7.3% year over year in the reported quarter to 143.2 million. VeriSign processed 8.6 million new domain name registrations for .com and .net, a slight decrease from 8.7 million processed in the year-ago quarter.
VeriSign’s renewal rate for the last quarter was 74.4%, up 100 basis points (bps) year over year. For the reported quarter, the exact renewal rate figures will be available after 45 days from Jun 30, 2016. However, the company estimates it to be 73.7% compared with 72.7% in the year-ago quarter.
VERISIGN INC Price, Consensus and EPS Surprise
VERISIGN INC Price, Consensus and EPS Surprise | VERISIGN INC Quote
Margins
VeriSign reported non-GAAP operating income of $187.4 million, up from $161 million in the prior-year quarter. The company’s non-GAAP operating margin was 65.4% in the quarter, up from 61.3% in the prior-year quarter.
Non-GAAP adjusted EBITDA was $202.8 million compared with $178.3 million in the year-ago quarter.
Other Financial Details
Exiting the quarter, the company’s cash and cash equivalents (including marketable securities) were nearly 1.906 billion compared with $1.915 billion at the end of 2015.
Operating cash flow in the first half of the year was approximately $304.3 million, down 1.1% year over year.
VeriSign repurchased approximately $150 million worth of shares in the quarter. As of Jun 30, 2016, the company had $766 million available under its current share repurchase program.
Our Take
VeriSign is a name to reckon with in the highly regulated .com and .net domain industry. The renewal of the .com contract and price hikes for the .com and .net domain names will continue to drive VeriSign’s topline. Also, we believe that gTLD prospects, international expansion through IDNs and investments in intellectual properties will boost results over the long run. Additionally, VeriSign has significant growth opportunities in the Distributed Denial of Service (DDoS) security market.
VeriSign also has significant growth opportunities in the network security products space. Plus, VeriSign and ICANN have reportedly finalized the proposed new root zone maintainer agreement and the extension of the .com Registry agreement and reportedly could submit it to the DoC for approval in August.
However, the negative impact of search engine adjustments on domain monetization and increasing operating expenses related to marketing remain primary near-term headwinds.
Currently, VeriSign has a Zacks Rank #3 (Hold). Better-ranked stocks in the tech space include Facebook Inc , pdvWireless, Inc. and Ellie Mae, Inc . Facebook sports a Zacsk Rank #1 (Strong Buy) while the other two carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>