VeriSign, Inc. ( NASDAQ : VRSN ), reported financial results for the third quarter ended Sept. 30, 2012 today after the market closed and the news disappointed the market as shares are down over 11% in after market trading, a huge move for a stock like Verisign.
VeriSign, Inc. (“Verisign”) reported revenue of $224 million for the third quarter of 2012, up 13% from the same quarter in 2011.
Verisign reported net income of $78 million and diluted earnings per shares (EPS) of $0.47 for the third quarter of 2012, compared to net income of $59 million and diluted EPS of $0.36 for the same quarter in 2011.
The operating margin was 51.9 percent for the third quarter of 2012 compared to 45.2 percent for the same quarter in 2011.
- Verisign ended the third quarter with Cash, Cash Equivalents, Marketable Securities and Restricted Cash of $1.50 billion, an increase of $147 million from year-end 2011.
- Cash flow from operations was $122 million for the third quarter compared with $108 million for the same quarter in 2011.
- Verisign Registry Services added 1.37 million net new names and ended the third quarter with approximately 119.9 million active domain names in the zone for .com and .net, representing a 7.1% increase year over year.
- In the third quarter, Verisign processed 7.8 million new domain name registrations for .com and .net, representing a 1.1% year over year.
Although ICANN approved the renewal of the .Com contract back in June the Contract to operate the .Com registry has not been signed off by the Dept Of Commerce
“We have concluded that the Commerce Department may not complete its review and approve the renewal of the .com Registry Agreement prior to its expiration on Nov. 30, 2012, and that the Commerce Department, together with the Department of Justice, is reviewing the .com Registry Agreement’s pricing terms. Pursuant to the terms of the Cooperative Agreement, if the .com Registry Agreement is not approved by the Commerce Department prior to its expiration, the Commerce Department is required to agree to the extension of the .com Registry Agreement for six months, or such other reasonable period of time as the Commerce Department and Verisign may mutually agree.”
“”We remain committed to providing unparalleled network and registry services performance as we work with the Commerce Department to renew the .com Registry Agreement. Additionally, an area of emphasis for us is further enhancing our infrastructure to strengthen security and stability for both our customers and our own operations, in the face of new and ever-increasing cyber threats,” said Bidzos.
According to Citibank “inputs from public zone trackers suggest the Naming business is likely to settle in around approximately 1.4M adds, which is well below the firm’s estimate of 1.7M, and short of the low end of management’s guidance. The shortfall suggests that the renewal rates in Q3 will come in below 72% for the first time since 4Q09”
Hate to tell you so but you guys should have listened to me when I wrote about this a month ago, the domain registrations are slowing to a crawl.