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VeriSign (VRSN) Q4 Earnings Beat Estimates, Revenues Up Y/Y
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VeriSign (VRSN - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.48 per share, beating the Zacks Consensus Estimate by 7.3% and increasing 16.5% year over year.
On a GAAP basis, the company reported earnings of $2.97 per share compared with $1.38 per share reported in the year ago quarter. GAAP earnings for fourth quarter of 2021 included a recognition of a deferred income tax benefit related to the transfer of certain non-US intellectual property between subsidiaries which increased earnings per share by $1.49.
Revenues jumped 6.3% year over year to $340.3 million and came in line with the Zacks Consensus Estimate.
VeriSign ended the reported quarter with 173.4 million .com and .net domain name registrations, up 5% year over year.
The company processed 10.6 million new domain name registrations for .com and .net compared with 10.5 million in the year-ago quarter.
Renewal rates are not fully measurable until 45 days after the end of the quarter. The final .com and .net renewal rate for third-quarter 2021 stood at 75% as against 73.7% in the year-ago quarter.
The company expects the renewal rate for fourth-quarter 2021 to be around 74.8% compared with 73.5% in the year-ago quarter.
The company also added 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, with effect taking place from Sep 1, 2022.
VeriSign’s research and development (R&D) expenses increased 7.4% from the year-ago quarter’s level to $20.8 million. As a percentage of revenues, R&D expenses were unchanged at 6.1%.
General and administrative (G&A) expenses decreased 3.4% year over year to $36.2 million. As a percentage of revenues, G&A expenses declined 110 bps on a year-over-year basis to 10.6%.
Sales and marketing expenses (S&M) decreased 8.9% year over year to $11.8 million. As a percentage of revenues, S&M expenses declined 50 bps year over year to 3.5%.
Operating income was $222.1 million, up 8.6% year over year. The operating margin expanded 140 bps to 65.3%.
Balance Sheet & Cash Flow
As of Dec 31, 2021, the company’s cash and cash equivalents (including marketable securities) were approximately $1.21 billion compared with $1.19 billion in Sep 30, 2021.
Cash flow from operating activities was $206 million in the fourth quarter compared with $260 million in the previous quarter. Free cash flow was $193 million in the reported quarter compared with $245 million in the previous quarter.
For 2021, cash flow from operating activities was $807.2 million compared with $730.2 million in the previous year. Free cash flow was $754 million for 2021.
For the fourth quarter, Verisign repurchased 0.8 million shares for $182 million. For 2021, VeriSign repurchased 3.3 million shares for $700 million. The company authorized an additional $705 million to a total repurchase authorization of $1 billion. The share repurchase has no expiration date.
2022 Guidance
VeriSign’s domain name base is expected to increase between 2.5% and 4.5%.
VeriSign expects full-year revenues between $1.42 billion and $1.44 billion. GAAP operating margin is expected in the 64.5-65.5% range.
Capital expenditures are anticipated in the range of $40-$50 million.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.03 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 25.2% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 27.9% in the past year.
The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have returned 2.2% in the past year.
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VeriSign (VRSN) Q4 Earnings Beat Estimates, Revenues Up Y/Y
VeriSign (VRSN - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.48 per share, beating the Zacks Consensus Estimate by 7.3% and increasing 16.5% year over year.
On a GAAP basis, the company reported earnings of $2.97 per share compared with $1.38 per share reported in the year ago quarter. GAAP earnings for fourth quarter of 2021 included a recognition of a deferred income tax benefit related to the transfer of certain non-US intellectual property between subsidiaries which increased earnings per share by $1.49.
Revenues jumped 6.3% year over year to $340.3 million and came in line with the Zacks Consensus Estimate.
VeriSign, Inc. Price, Consensus and EPS Surprise
VeriSign, Inc. price-consensus-eps-surprise-chart | VeriSign, Inc. Quote
Quarter Details
VeriSign ended the reported quarter with 173.4 million .com and .net domain name registrations, up 5% year over year.
The company processed 10.6 million new domain name registrations for .com and .net compared with 10.5 million in the year-ago quarter.
Renewal rates are not fully measurable until 45 days after the end of the quarter. The final .com and .net renewal rate for third-quarter 2021 stood at 75% as against 73.7% in the year-ago quarter.
The company expects the renewal rate for fourth-quarter 2021 to be around 74.8% compared with 73.5% in the year-ago quarter.
The company also added 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, with effect taking place from Sep 1, 2022.
VeriSign’s research and development (R&D) expenses increased 7.4% from the year-ago quarter’s level to $20.8 million. As a percentage of revenues, R&D expenses were unchanged at 6.1%.
General and administrative (G&A) expenses decreased 3.4% year over year to $36.2 million. As a percentage of revenues, G&A expenses declined 110 bps on a year-over-year basis to 10.6%.
Sales and marketing expenses (S&M) decreased 8.9% year over year to $11.8 million. As a percentage of revenues, S&M expenses declined 50 bps year over year to 3.5%.
Operating income was $222.1 million, up 8.6% year over year. The operating margin expanded 140 bps to 65.3%.
Balance Sheet & Cash Flow
As of Dec 31, 2021, the company’s cash and cash equivalents (including marketable securities) were approximately $1.21 billion compared with $1.19 billion in Sep 30, 2021.
Cash flow from operating activities was $206 million in the fourth quarter compared with $260 million in the previous quarter. Free cash flow was $193 million in the reported quarter compared with $245 million in the previous quarter.
For 2021, cash flow from operating activities was $807.2 million compared with $730.2 million in the previous year. Free cash flow was $754 million for 2021.
For the fourth quarter, Verisign repurchased 0.8 million shares for $182 million. For 2021, VeriSign repurchased 3.3 million shares for $700 million. The company authorized an additional $705 million to a total repurchase authorization of $1 billion. The share repurchase has no expiration date.
2022 Guidance
VeriSign’s domain name base is expected to increase between 2.5% and 4.5%.
VeriSign expects full-year revenues between $1.42 billion and $1.44 billion. GAAP operating margin is expected in the 64.5-65.5% range.
Capital expenditures are anticipated in the range of $40-$50 million.
Zacks Rank & Stocks to Consider
VeriSign currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering from the broader technology sector include Broadcom (AVGO - Free Report) , Apple (AAPL - Free Report) and Cadence Design Systems (CDNS - Free Report) . While Apple sports a Zacks Rank #1 (Strong Buy), Broadcom and Cadence carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.03 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 25.2% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 27.9% in the past year.
The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have returned 2.2% in the past year.