• Home
  • About Us
  • Contact
  • Advertise
  • Awards
  • Privacy Policy
  • Twitter
  • Facebook
  • RSS
TheDomains.com

VeriSign Report Earnings: Revenue Up 13%; Net Income Up 50%: Q Ends With 110 Million Domains Registered up 8%

July 28, 2011 by Michael Berkens

After the market closed today  VeriSign, Inc. (NASDAQ: VRSN), reported financial results for the second quarter ended June 30, 2011.

VeriSign, Inc.  reported revenue of $190 million for the second quarter of 2011, up 5% from the prior quarter and up 13% from the same quarter in 2010.

Of course in January 2011 Verisign is raising the fees on .net and .com registrations by 7% which should add to their bottom line for 2011, but 2010 is off to a great start for them.

Verisign reported net loss of $(11) million and diluted net loss per share of $(0.06) for the second quarter of 2011, however that’s from a $100 million payment of contingent interest to holders of the 3.25% Junior Subordinated Convertible Debentures due 2037 (“Convertible Debentures”) in connection with a special dividend in May 2011, and a corresponding offsetting discrete income tax benefit of $40 million, which on a net basis reduced diluted earnings per share by $0.35.

This is compared to net income attributable to Verisign stockholders of $35 million and earnings per share attributable to Verisign stockholders of $0.19 on a diluted basis in the same quarter in 2010.

The operating margin was 43.2% for the second quarter of 2011 compared to 30.3% for the same quarter in 2010.

Operating margin and diluted earnings per share for the second quarter of 2011 include a $6 million accrued expense reversal offset by a $4 million stock compensation charge, both of which are non-recurring in nature, which on a net basis, increased operating margin by 1% and increased diluted earnings per share by $0.02.

Verisign reported net income of $65 million and diluted earnings per share of $0.38 for the second quarter of 2011, compared to net income of $42 million and diluted earnings per share of $0.23 in the same quarter in 2010.

The operating margin was 51.7% for the second quarter of 2011 compared to 40.5% for the same quarter in 2010.

“We are pleased with our performance in the second quarter,” said Mark McLaughlin, president and chief executive officer of Verisign. “We are proud of our track record of maintaining 100 percent operational uptime for .com and .net and that we have been entrusted with the operation of .net for an additional 6 years.”

“We remain committed to delivering value to our shareholders through continued strategic focus, execution, and operating discipline,” said Brian Robins, chief financial officer of Verisign. “In addition to paying out the special dividend during the second quarter, we utilized $100 million to repurchase shares of our common stock.”

In addition, Verisign announced that Mark McLaughlin submitted his resignation to become the CEO of a private company.

His last day with the company will be August 25, 2011.

“We can’t thank Mark enough for his contributions as CEO over the last two years, as well as during his tenure with Verisign going back to 2000,” said Jim Bidzos, founder and chairman of Verisign. “We all wish him the very best in his new opportunity. I am especially appreciative that Mark will stay until August 25th to assist with the transition.”

Financial Highlights

 

  • On April 28, Verisign announced a special cash dividend of $2.75 per share of its common stock or $463 million that was paid on May 18, 2011 to shareholders of record at the close of business on May 9, 2011. In addition, contingent interest totaling $100 million was paid on May 18, 2011 to holders of record of Convertible Debentures at the close of business on May 9, 2011.
  • During the second quarter of 2011, Verisign repurchased approximately 2.8 million shares of our common stock for a cost of $100 million.
  • Verisign ended the second quarter of 2011 with Cash, Cash Equivalents, Marketable Securities and Restricted Cash of $1.399 billion, a decrease of $552 million from the prior quarter and an increase of $60 million from the same quarter in 2010.
  • Cash flow from operations was $13 million for the second quarter of 2011, reflecting a $100 million payment of contingent interest to holders of Convertible Debentures. A decrease in excess tax benefits of $(3) million for the second quarter of 2011 that are associated with stock-based compensation were classified as financing cash flows.
  • Deferred revenues ended the second quarter of 2011 totaling $714 million, an increase of $15 million from the prior quarter and $73 million from the same quarter in 2010.
  • Capital expenditures were $14 million in the second quarter of 2011.

Business and Corporate Highlights

 

  • Verisign Registry Services ended the quarter with 110 million active domain names in the adjusted zone for .com and .net, representing an 8% increase year-over-year.
  • In the second quarter of 2011, Verisign processed 8.1 million new domain name registrations, representing a 2% increase year-over-year.
  • On May 11, 2011, Verisign announced that it had entered into a Settlement Agreement and Mutual Release with the Coalition for ICANN Transparency, Inc. (CFIT), CFIT’s members and specified related parties that resolved the over five year long CFIT litigation.
  • On June 28, 2011, Verisign announced that the Internet Corporation for Assigned Names and Numbers (ICANN) and Verisign have renewed Verisign’s contract to serve as the authoritative registry operator for the .net registry for another six years.
  • On July 14, 2011, Verisign announced that as of January 15, 2012, the registry fee for .com domain names will increase from $7.34 to $7.85 and that the registry fee for .net domain names will increase from $4.65 to $5.11.
  • Verisign ended the second quarter of 2011 with approximately 1,040 employees, unchanged from the end of the prior quarter.

Shares of Verisign are up fractionally  in after hours trading

Filed Under: Publicly Traded Domain Co

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

« Facebook Files Suit Against 25 Domain Holders & 119 John Doe’s
Justin Rachwalski, Strategy Lead at Google: How To Improve Landing Page Conversions »

Comments

  1. theo says

    July 28, 2011 at 4:49 pm

    in my opion companies like Verisign should not by directed by share holder value.

    An extremly wrong business model… That is the only reason to make price increase to please share holder value who demand better results each year. A vicious circle.

  2. BullS says

    July 28, 2011 at 5:15 pm

    this Domain registration is a monopolistic scam and should be looked by the Dept of Justice.

  3. MHB says

    July 28, 2011 at 10:16 pm

    Bull

    DOJ already looked at it and passed

    Lawsuit was filed and domainers didn’t support it financially and was dropped

    game over

    Verisign wins you lose

  4. BullS says

    July 29, 2011 at 1:16 am

    Domainers do not have the lobbyists and money.

    Domainers only know BS domains and all talk.

  5. BrianWick says

    July 29, 2011 at 10:24 am

    Verisign is no different than the utility company whose frequency of price increases is regulated by “the government”.

    This is why I am continually pushing my domain expiration dates further and further out – this is how business reacts to “the government” – this also helps a portfolio to eat – rather than be eaten – all of this just playing into the fundamentals of business 101.

  6. JNet says

    July 29, 2011 at 3:50 pm

    @MHB

    Anybody got links or case number/venue info handy as to the dropped court filing on the attempted lawsuit on Verisign’s Monopolistic Pricing practices ?

    Would be a good read to see the initial arguments.

  7. MHB says

    July 29, 2011 at 4:09 pm

    JNet

    You can search the blog using Cfit as the search term

    The case was CFIT vs VeriSign.

    The was not dismissed on its merits.

    The case was abandoned by the plaintiff basically for lack of financial support by the domain industry.

    Its quite a shame.

    On the other hand I didn’t contribute to the case either except for $5K very early on, so I’m as guilty as anyone, except the few that kept this case going for years.

  8. JNet says

    July 29, 2011 at 5:44 pm

    @ MHB Thanks for the info and pinter to the prior post

    The merits are still there…and then some

    Also, too bad the kabash was put on GoDaddy’s enteavors several years ago to bid on the registry contract that proposed much lower wholesale/base prices on .COM and .NET domains somewhere in the $2.00 range

    I think this quote from Bob Parson’s in 2006 is still very relevant and spot on today.

    QUOTE: “Under no circumstances should VeriSign be allowed to raise .com prices without cost-based justification,” said Bob Parsons, CEO and Founder of GoDaddy.com. “If VeriSign does request an increase, it needs to result in competitive bidding for the registry contract. This would certainly create lower prices, not higher, just as it did for the .net registry.”

    http://www.webhostingtalk.com/archive/index.php/t-487328.html

    Also another good point:

    QUOTE: ” Go Daddy says that industry research verifies that costs involved in the technology critical to the domain name registration infrastructure are continually decreasing. Additionally, server, bandwidth and storage costs have declined and these downward trends do not appear to be slowing.”

  9. MHB says

    July 29, 2011 at 6:05 pm

    J

    I think on the merits CFIT had a great case.

    Back in the real world to go against a Verisign you need millions of dollars of cash.

    If you have a 99% winner you still need to come up with the cash.

    That’s the real world & sometimes it sucks


Recent Articles

  • ChatGPT.net sells for $8,900 at DAN.com
  • What is a fair sales commission rate?
  • TXT.com sells for $300K

Recent Comments

  • James on What is a fair sales commission rate?
  • Richard on What is a fair sales commission rate?
  • Brad Mugford on What is a fair sales commission rate?
  • Dan on What is a fair sales commission rate?
  • Raymond Hackney on What is a fair sales commission rate?

Categories

Archives

Copyright ©2022 TheDomains.com — Published by Worldwide Media, Inc. — Site by Nuts and Bolts Media