Fri, Jul. 24, 7:09 PM
- Verisign (NASDAQ:VRSN) rallied today after slightly beating Q2 revenue estimates (and slightly missing on EPS). Shares made a fresh high of $70.99 before paring their gains amid a market selloff.
- On its earnings call (transcript), the domain name/Web security service provider guided for 2015 revenue of $1.045B-$1.055B (+3.5%-4.5% Y/Y), in-line with a $1.05B consensus. Full-year gross margin is still expected to be at least 80%.
- Key metrics: 520K net new domain names were added in Q2, leading the total base to rise to 133.5M. 8.7M new .com and .net registrations were processed, flat Q/Q and up 200K Y/Y. The .com/.net renewal rate was 73.4%, up from 72.5% in Q1 and 72.6% a year ago, and the deferred revenue balance rose by $7M Q/Q to $932M.
- Financials: GAAP costs/expenses rose 6% Y/Y to $113.6M (compares with 5% rev. growth). $156M was spent to buy back 2.5M shares. Verisign ended Q2 with $1.9B in cash/investments, and a similar amount of debt.
- Q2 results, PR
Thu, Jul. 23, 4:17 PM
Fri, Apr. 24, 5:37 PM
Fri, Apr. 24, 12:00 PM
- With shares having gone into earnings just $0.52 away from a high of $68.25 (reached on Thursday), Verisign's (NASDAQ:VRSN) slight Q1 miss isn't going over well. On its CC (transcript), the domain name/authentication services firm narrowed its 2015 revenue guidance to $1.043B-$1.057B from $1.04B-$1.06B. Op. margin guidance of 60%-62%, gross margin guidance of "at least 80%," and domain name growth of 2%-3.5% was reiterated.
- Verisign has also announced the hiring of Todd Strubbe, formerly an exec at CRM outsourcing firm West Corporation, to be its COO.
- 1.5M net new domain names were added in Q1, +3.1% Y/Y and bringing the total .com/.net base to 133M. 8.7M new .com/.net domain name registrations were processed vs. 8.6M a year ago; the renewal rate rose 30 bps to 72.5%.
- The deferred revenue balance rose $35M Q/Q to $925M. $160M was spent to buy back 2.7M shares.
- Q1 results, PR
Thu, Apr. 23, 4:13 PM
Wed, Apr. 15, 12:40 PM
- Scott Crenshaw, until now domain name/authentication service provider VeriSign's (VRSN +0.1%) SVP of products (responsible for developing new products/services), has been hired by Rackspace (RAX +0.1%) to be its SVP of strategy and product.
- In his new job, Crenshaw will oversee Rackspace's "corporate strategy, business development and product and engineering portfolio." He'll report to CEO Taylor Rhodes, who landed the top job only 7 months ago.
- VeriSign's Q1 report arrives on April 23. Rackspace hasn't set an earnings date yet.
Tue, Mar. 24, 3:54 PM
- Buyback-happy U.S. firms are prohibited from repurchasing shares from about five weeks prior to releasing quarterly earnings to about 48 hours after those reports. These blackout periods, says Goldman, may offer an especially tasty time for investors to pick up shares of their favorites.
- "High valuations in the absence of corporate demand may weigh on stock prices," says Goldman's Amanda Sneider, and particular areas of focus are tech, consumer discretionary, and financials - they've accounted for more than 50% of buyback activity.
- Goldman's buyback blackout theme buys: SanDisk (NASDAQ:SNDK), Yahoo (NASDAQ:YHOO), Travelers (NYSE:TRV), Apple (NASDAQ:AAPL), Juniper Networks (NYSE:JNPR), Xerox (NYSE:XRX), Torchmark (NYSE:TMK), F5 Networks (NASDAQ:FFIV), Citrix Systems (NASDAQ:CTXS), Aon (NYSE:AON), Moody's (NYSE:MCO), VeriSign (NASDAQ:VRSN), Hartford Financial (NYSE:HIG), Ameriprise (NYSE:AMP), Corning (NYSE:GLW), Time Warner (NYSE:TWX), Seagate Technology (NASDAQ:STX), Viacom (NASDAQ:VIAB), Legg Mason (NYSE:LM), XL Group (NYSE:XL), DirecTV (NASDAQ:DTV), Allstate (NYSE:ALL), Nvidia (NASDAQ:NVDA), CBS (NYSE:CBS), Macy's (NYSE:M), Kohl's (NYSE:KSS).
Fri, Feb. 6, 12:54 PM
- Verisign (NASDAQ:VRSN) guided on its Q4 CC (transcript) for 2015 revenue of $1.04B-$1.06B (3%-5% growth), slightly unfavorable to a $1.06B consensus. However, that's better than feared given concerns about weakening .com domain name registration revenue.
- Meanwhile, the company expects 2015 op. margin to be in a 60%-62% range vs. 60.2% in 2014, and gross margin to be at least 80%. Domain name revenue is expected to rise 2%-3.5%.
- Also: Verisign has added $453M to its buyback authorization, bringing its total size back up to $1B. $209M was spent on buybacks in Q4, and $867M over the whole of 2014.
- Verisign saw only 590K net new domain name adds in Q4 (gross registrations totaled 8.2M), below guidance of 700K-1.2M and contributing to the Q4 miss. However, net adds are expected to rise to 1M-1.5M in Q1. The renewal rate (though fluctuating a bit) remains around 72%.
- 2014 free cash flow was $568M, well above net income of $383M.The deferred revenue balance rose 3% during the year to $890M.
- Q4 results, PR, earnings slides (.pdf)
Thu, Feb. 5, 4:20 PM
Mon, Jan. 26, 11:40 AM
- Four days after JPMorgan downgraded Verisign (NASDAQ:VRSN), Credit Suisse has cut the site authentication/doman name service provider to Underperform. Its target is $47.50.
- Like JPMorgan, CS sites the potential for slowing domain name revenue growth. It's also critical of Verisign's relative valuation. Q4 results arrive on Feb. 5.
Thu, Jan. 22, 11:25 AM
- Arguing new top-level domains are cannibalizing the company's .com registration revenue, JPMorgan has downgraded Verisign (VRSN -1.5%) to Underweight ahead of its Feb. 5 Q4 report. The firm's target remains at $57.50.
- Shares have largely tread water since Verisign's Oct. 23 Q3 beat. They trade for 18x 2015E EPS.
Oct. 23, 2014, 4:19 PM
Sep. 6, 2014, 8:43 AM
- The "total" yield of a company combines the dividend yield and the buyback yield - that is the yield boost from reducing the total amount of shares outstanding. Together with S&P's Howard Silverblatt, Barron's puts together a list of the top 20 companies in the S&P 500 based on "total" yield.
- While buybacks don't guarantee a strong stock - witness consistent buyback champs like IBM and Kohl's (NYSE:KSS) - Warren Buffett goes to bed at night praying for IBM's share price to go down so the company can buy back more stock for a given dollar amount (though The Oracle has said he doesn't expect this logic to win many fans).
- The flip-side are those companies - financials and energy come to mind - who tend to buy back stock at high prices only to find themselves forced to reissue it at lower prices when times get tough. A consistent plan helps, and Travelers (NYSE:TRV), under CEO Jay Fishman, has been maybe the best example of this - halving the share count since the end of 2006.
- ETFs? The Powershares Buyback Achievers Portfolio (NYSEARCA:PKW) gained 45.6% in 2013, 1,300 basis points better than the S&P 500. Since inception in 2006, it's up an annualized 9%, more than 200 basis points better than the S&P. A newcomer - the Cambria Shareholder Yield ETF (NYSEARCA:SYLD) - has beaten the S&P by about 250 basis points since its May 2013 inception.
- The list (ranked in order of "total" yield): ADT, CAM, CF, MOS, MPC, VIAB, GLW, ITW, STX, IBM, NOC, CTL, TRV, VRSN, IR, CCE, KSS, NTAP, HES, DO.
Jul. 25, 2014, 12:45 PM
Jul. 25, 2014, 11:30 AM
- Though Verisign (NASDAQ:VRSN) missed Q2 revenue estimates (while beating on EPS), it guided on its CC (transcript) for full-year revenue of $1.003B-$1.012B, in-line with a $1.01B consensus. In addition, full-year op. margin guidance was hiked by 100 bps to 59%-61%.
- $300M was spent on buybacks in Q2, fueling the EPS beat. Verisign is adding $491M to its buyback authorization, raising its size to $1B. The company has $1.5B in cash to finance buybacks with.
- Q2 domain name net adds totaled 420K, towards the low end of a 300K-800K guidance range. But Verisign expects net adds to grow to 600K-1.1M in Q3.
- Total active .com/.net domain names amounted to 128.9M at the end of Q2, +3.7% Y/Y. However, processed domain names slipped by 200K Y/Y to 8.5M, and the company discloses renewal rate fell 60 bps in Q1 to 72.6%. The deferred revenue balance is up $35M YTD to $890M.
- Q2 results, PR
Jul. 24, 2014, 4:13 PM
VRSN vs. ETF Alternatives
VeriSign Incis a provider of domain name registry services and internet security, enabling internet navigation for many of the world's recognized domain names and providing protection for websites and enterprises around the world.
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