VeriSign (VRSN) Beats On Q2 Earnings, Ups '17 Revenue View
Zacks Investment Research | Jul 27, 2017 11:29PM ET
Leading domain name and internet security provider, VeriSign Inc. (NASDAQ:VRSN) reported better-than-expected second-quarter 2017 results, which also improved year over year.
The company reported adjusted earnings (excluding all one-time items but including stock-based compensation) of 99 cents a share, which beat the Zacks Consensus Estimate of 91 cents. Quarterly earnings also increased 13.8% from 87 cents reported in the year-ago quarter.
On a non-GAAP basis, the company posted earnings of $1.05 per share, up 15.4% from the year-ago quarter’s earnings of 91 cents. The increase was primarily driven by a benefit of 6 cents per share owing to a pre-tax gain from the divestiture of its iDefense business and lower share count.
Revenues marginally increased year over year to $288.6 million from $286.5 million and came ahead of the Zacks Consensus Estimate of $286.9 million as well. The year-over-year improvement was primarily driven by increase in domain name registrations in the U.S. as well as in international markets.
Shares of VeriSign have gained 34% year to date, slightly underperforming the 39.3% rally of the industry it belongs to.
Quarter Details
In the quarter, domain name registrations for .com and .net together grew 0.8% year over year to 144.3 million. In absolute terms, domain name registrations grew 0.68 million year over year. VeriSign processed 9.2 million new domain name registrations for .com and .net, an increase from 8.6 million processed in the year-ago quarter.
For the reported quarter, the exact renewal rate figures will be available after 45 days from Jun 30, 2017. The company estimates it to be 73.9% compared with 73.8% in the year-ago quarter. It provided renewal rate for the first quarter of 2017, which came in at 72.5% compared with 74.4% in the year-ago quarter.
Margins
VeriSign reported non-GAAP operating income of $188.3 million compared with $187.4 million in the prior-year quarter. The company’s non-GAAP operating margin was 65.3% in the quarter, down 10 basis points (bps) from the prior-year quarter.
Non-GAAP adjusted EBITDA was $203.5 million, up marginally from $202.8 million in the year-ago quarter.
VeriSign, Inc. Price, Consensus and EPS Surprise
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