VeriSign (ticker: VRSN) beat consensus estimates for Q2 but guided revenue below consensus for Q3. The stock traded down 16% in reaction. Details:
(all comparisons are year over year unless stated otherwise)
- Revenue of $445 million was up 74% and ahead of consensus estimate of $441 million.
- GAAP net income was $41 million and EPS $0.15, up from $22 million and $.09.
- Pro forma net income was $105 million and EPS $0.27, ahead of consensus of $0.26.
- Non-GAAP results exclude amortization of intangible assets related to acquisitions, in-process R&D, net gain on sale of investments, restructuring charges, stock-based compensation.
- Balance sheet: cash and equivalents were $933 million, up $61 million sequentially.
- Cash flow from operations was $136 million. 1.6 million shares were repurchased for $43 million.
- Deferred revenue of $477 million at end quarter was up 6% sequentially.
- Net days sales outstanding (Net DSO), which takes into account the change in deferred revenue balance, was 52 days, up from 49 days in Q1.
- Capex was $29 million, up from $17 million in Q1.
- Currency impact on revenue was negative $7 million, or 1.6%.
Segment info 1: Internet Services Group (ISG)
(includes security, payments, and naming & directory services)
- Revenue was $168 million.
- "...included sequential growth in both VeriSign’s Security Services (VSS) and VeriSign’s Naming & Directory Services (VNDS) businesses".
- Web site certificate business issued 124,000 new and renewed certificates, ending the quarter with a base of 471,000 certificates, up from 462,000.
- Payments business ended the quarter with 144,000 merchants under management, an increase of 8,000 merchants.
- Payments business processed 127 million individual transactions with an aggregate value of $11.4 billion during the quarter.
- Naming & Directory Services business ended the quarter with 44 million active domain names in .com and .net, up 2.8 million names or 7%.
Segment info 2: Communications Services (VCS) Group
(intelligent communications, commerce and content services for
telecommunications carriers and next generation service providers)
- Revenues of $277 million were up 14%.
- Communications and Commerce revenue was $102 million, up 5% sequentially.
- Content group revenue was$175 million.
- Communications Services Group ended Q2 with a base of 7.2 million wireless billing customer subscribers, up slightly from 7.1 million in Q1.
- The VCS business supported 14.4 billion database queries in Q2 2005, up 13%.
- Q3 revenue of $435-440 million, below consensus of $460.
- Q3 EPS of $0.27, in line with consensus.
Full press release here.
VRSN chart below.
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