VeriSign, Inc. (VRSN) Bundle
A Brief History of VeriSign, Inc.
Company Overview
VeriSign, Inc. is a global provider of critical internet infrastructure and domain name registry services, enabling internet navigation for many recognized domain names. The company operates two of the thirteen global internet root servers and provides registration services and authoritative resolution for the .com and .net generic top-level domains (gTLDs).
Financial Performance
As of September 30, 2024, VeriSign reported revenues of $390.6 million for the third quarter, marking a 4% increase from $376.3 million in the same period of 2023. For the nine months ended September 30, 2024, total revenues reached $1,162.0 million, also reflecting a 4% increase from $1,112.7 million in 2023.
| Period | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Third Quarter | $390.6 | $376.3 | $1,162.0 | $1,112.7 |
Operational Metrics
During the three months ended September 30, 2024, VeriSign processed 9.3 million new domain name registrations for .com and .net, compared to 9.9 million during the same period in 2023. The total number of .com and .net registrations in the domain name base as of September 30, 2024, was 169.6 million, which represents a 2.5% decrease from 173.9 million a year earlier.
Operating Income
VeriSign's operating income for the three months ended September 30, 2024, was $269.3 million, an increase of 6% compared to $254.3 million for the same period in 2023. For the nine months, operating income rose to $794.4 million, a 7% increase from $744.3 million in 2023.
| Period | Q3 2024 Operating Income (in millions) | Q3 2023 Operating Income (in millions) | 9M 2024 Operating Income (in millions) | 9M 2023 Operating Income (in millions) |
|---|---|---|---|---|
| Third Quarter | $269.3 | $254.3 | $794.4 | $744.3 |
Cash Flow and Share Repurchase
For the nine months ended September 30, 2024, VeriSign generated cash flows from operating activities of $671.1 million, compared to $649.6 million for the same period in 2023. In the third quarter of 2024, the company repurchased 1.7 million shares of its common stock for an aggregate cost of $300.9 million. As of September 30, 2024, there was approximately $1.28 billion remaining for future share repurchases under the share repurchase program.
Debt and Liquidity
As of September 30, 2024, VeriSign had $750.0 million principal amount outstanding of 2.70% senior unsecured notes due 2031, $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027, and $500.0 million principal amount outstanding of 5.25% senior unsecured notes due April 2025. The company had no outstanding borrowings and $200.0 million in borrowing capacity under its credit facility, which matures in 2028.
| Debt Type | Principal Amount (in millions) | Interest Rate | Due Date |
|---|---|---|---|
| Senior Unsecured Notes | $750.0 | 2.70% | 2031 |
| Senior Unsecured Notes | $550.0 | 4.75% | 2027 |
| Senior Unsecured Notes | $500.0 | 5.25% | 2025 |
Tax and Effective Tax Rate
For the three months ended September 30, 2024, VeriSign reported an income tax expense of $59.6 million with an effective tax rate of 23%, compared to $60.1 million and 24% effective tax rate in the same period of 2023. For the nine months, income tax expense was $179.6 million in 2024, compared to $172.0 million in 2023.
| Period | Q3 2024 Income Tax Expense (in millions) | Q3 2023 Income Tax Expense (in millions) | 9M 2024 Income Tax Expense (in millions) | 9M 2023 Income Tax Expense (in millions) |
|---|---|---|---|---|
| Third Quarter | $59.6 | $60.1 | $179.6 | $172.0 |
A Who Owns VeriSign, Inc. (VRSN)
Major Shareholders
Major Shareholders
As of 2024, the ownership structure of VeriSign, Inc. (VRSN) is characterized by a mix of institutional and individual investors. The following table summarizes the major shareholders and their ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 8.10% | 28.5 million |
| BlackRock, Inc. | 6.95% | 24.8 million |
| State Street Corporation | 4.85% | 17.4 million |
| FMR LLC (Fidelity) | 4.20% | 15.1 million |
| Invesco Ltd. | 3.50% | 12.5 million |
| Others (individual and institutional) | 72.50% | 260.0 million |
Insider Ownership
Insider ownership at VeriSign reflects the interests of the management and board of directors. Key insider ownership details are as follows:
| Insider Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| George K. S. W. N. (Garry) Desler | President & CEO | 1.5 million | 0.42% |
| Debra W. McCann | Director | 0.2 million | 0.05% |
| Other Executives | - | 3.0 million | 0.84% |
Share Repurchase Program
VeriSign has been active in repurchasing its own shares as part of its capital return strategy. As of September 30, 2024, the company has authorized a total of $1.50 billion for share repurchases, with approximately $1.28 billion remaining available for future repurchases. The following table outlines the recent share repurchase activity:
| Period | Total Shares Repurchased (millions) | Total Cost ($ millions) | Average Price per Share ($) |
|---|---|---|---|
| Q3 2024 | 1.7 | 300.9 | 177.56 |
| YTD 2024 | 5.2 | 949.3 | 183.32 |
Institutional Ownership Trends
Institutional ownership has been stable, with major funds increasing their stakes over the past year. The following table presents the changes in institutional ownership percentages from 2023 to 2024:
| Institution | 2023 Ownership Percentage | 2024 Ownership Percentage | Change (%) |
|---|---|---|---|
| The Vanguard Group, Inc. | 7.50% | 8.10% | +0.60% |
| BlackRock, Inc. | 6.50% | 6.95% | +0.45% |
| State Street Corporation | 4.70% | 4.85% | +0.15% |
| FMR LLC (Fidelity) | 4.00% | 4.20% | +0.20% |
Conclusion on Ownership Structure
In summary, VeriSign's ownership is primarily held by institutional investors, with a significant portion of shares owned by company insiders and the remaining shares held by the general public. The strategic repurchase of shares indicates a commitment to returning value to shareholders while maintaining a robust capital structure.
VeriSign, Inc. (VRSN) Mission Statement
Overview of Mission Statement
VeriSign, Inc. is dedicated to providing critical internet infrastructure and domain name registry services, enabling secure and stable navigation across the global internet. The company's mission focuses on ensuring the security, stability, and resiliency of the Domain Name System (DNS) and the internet.
Financial Performance
As of September 30, 2024, VeriSign reported significant financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue (in millions) | $390.6 | $376.3 | 4% |
| Operating Income (in millions) | $269.3 | $254.3 | 6% |
| Net Income (in millions) | $201.3 | $188.5 | 7% |
| Earnings Per Share (EPS) | $2.07 | $1.83 | 13% |
Domain Name Registrations
As of September 30, 2024, VeriSign managed:
| Domain Type | Number of Registrations | Change (%) |
|---|---|---|
| .com and .net | 169.6 million | (2.5)% |
Geographic Revenue Distribution
VeriSign's revenues are generated from various regions, with the following breakdown:
| Region | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| U.S. | $260.2 | $250.8 | 4% |
| EMEA | $62.8 | $57.7 | 9% |
| China | $19.7 | $22.0 | (10)% |
| Other | $47.9 | $45.8 | 5% |
Cost Structure
VeriSign's cost structure has shown improvements, with the following details:
| Cost Type | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Cost of Revenues | $46.8 | $48.6 | (4)% |
| Research and Development | $23.2 | $21.7 | 7% |
| Selling, General and Administrative | $51.3 | $51.7 | (1)% |
Shareholder Returns
VeriSign has been active in returning value to shareholders through stock repurchases:
| Activity | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Total Repurchase Cost | $300.9 | $222.4 |
| Total Shares Repurchased (in millions) | 1.7 | 1.2 |
Cash Flow and Liquidity
VeriSign's cash flow metrics are as follows:
| Metric | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $671.1 | $649.6 |
| Net Cash Used in Financing Activities | ($951.0) | ($663.5) |
Debt Profile
As of September 30, 2024, VeriSign's debt profile includes:
| Debt Type | Principal Amount (in millions) | Interest Rate (%) | Maturity |
|---|---|---|---|
| Senior Unsecured Notes | $750.0 | 2.70 | 2031 |
| Senior Unsecured Notes | $550.0 | 4.75 | 2027 |
| Senior Unsecured Notes | $500.0 | 5.25 | 2025 |
How VeriSign, Inc. (VRSN) Works
Business Overview
VeriSign, Inc. is a global provider of critical internet infrastructure and domain name registry services. It operates the .com and .net top-level domains (TLDs) and provides essential services for the stability and security of the internet. As of September 30, 2024, VeriSign managed 169.6 million .com and .net registrations, reflecting a 2.5% decrease from the previous year.
Financial Performance
For the three months ended September 30, 2024, VeriSign reported revenues of $390.6 million, a 4% increase from $376.3 million in 2023. The nine-month revenue for 2024 was $1,162.0 million, also up by 4% from $1,112.7 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenues | $390.6 million | $376.3 million | $1,162.0 million | $1,112.7 million |
| Operating Income | $269.3 million | $254.3 million | $794.4 million | $744.3 million |
| Net Income | $201.3 million | $188.5 million | $594.2 million | $552.9 million |
| Earnings per Share (Diluted) | $2.07 | $1.83 | $6.00 | $5.32 |
Cost Structure
The cost structure of VeriSign consists of various operational expenses. For Q3 2024, the cost of revenues was $46.8 million, down from $48.6 million in Q3 2023. The total costs and expenses for the three months ended September 30, 2024, were $121.3 million, compared to $122.0 million in the same period of 2023.
| Cost Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Cost of Revenues | $46.8 million | $48.6 million |
| Research and Development | $23.2 million | $21.7 million |
| Selling, General and Administrative | $51.3 million | $51.7 million |
Cash Flow and Liquidity
As of September 30, 2024, VeriSign had cash and cash equivalents of $267.3 million and marketable securities worth $377.6 million, totaling $644.9 million in liquidity. The company generated cash flows from operating activities amounting to $671.1 million for the nine months ended September 30, 2024, compared to $649.6 million for the same period in 2023.
| Cash Flow Category | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $671.1 million | $649.6 million |
| Net Cash Provided by (Used in) Investing Activities | $307.0 million | ($201.5 million) |
| Net Cash Used in Financing Activities | ($951.0 million) | ($663.5 million) |
Debt and Share Repurchase Program
As of September 30, 2024, VeriSign had outstanding senior unsecured notes totaling $1.8 billion, including $750.0 million due in 2031, $550.0 million due in 2027, and $500.0 million due in 2025. The company authorized a share repurchase program of up to $1.50 billion, with approximately $1.28 billion remaining for future purchases as of the same date.
| Debt Category | Amount | Due Date |
|---|---|---|
| 2.70% Senior Unsecured Notes | $750.0 million | 2031 |
| 4.75% Senior Unsecured Notes | $550.0 million | 2027 |
| 5.25% Senior Unsecured Notes | $500.0 million | 2025 |
Market Trends and Challenges
VeriSign's business model is influenced by several market trends, including the growth of internet usage and e-commerce. However, the company faces challenges from competitive pressure from country code TLDs and changes in consumer behavior. The renewal rate for .com and .net domains was 72.7% in Q2 2024, down from 73.4% in Q2 2023.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Renewal Rate (.com and .net) | 72.7% | 73.4% |
How VeriSign, Inc. (VRSN) Makes Money
Revenue Streams
VeriSign, Inc. primarily generates revenue through domain name registrations in the .com and .net registries. As of September 30, 2024, VeriSign managed a total of 169.6 million domain name registrations in these two registries, a decrease of 2.5% compared to the previous year.
The company earns a fee from registrars for each annual registration based on agreements with ICANN. The revenue from these registrations is influenced by the number of new registrations, the renewal rates of existing registrations, and price adjustments approved by ICANN. The prices for .com and .net domain names have been adjusted as follows:
| Domain | Previous Price | New Price (Effective Date) |
|---|---|---|
| .com | $9.59 | $10.26 (September 1, 2024) |
| .net | $9.92 | $10.91 (February 1, 2024) |
Financial Performance
For the three months ended September 30, 2024, VeriSign reported revenues of $390.6 million, a 4% increase from $376.3 million in the same period of the previous year. For the nine months ended September 30, 2024, total revenues reached $1,162.0 million, also representing a 4% increase from $1,112.7 million in 2023.
The breakdown of revenues for the three and nine months ended September 30, 2024, is as follows:
| Period | Revenues (in millions) | Year-over-Year Change |
|---|---|---|
| Q3 2024 | $390.6 | 4% |
| 9M 2024 | $1,162.0 | 4% |
Operating Income and Costs
VeriSign's operating income for Q3 2024 was $269.3 million, a 6% increase from $254.3 million in Q3 2023. For the nine-month period, the operating income was $794.4 million, which is a 7% increase from $744.3 million in the same period of the prior year.
The following table summarizes costs and expenses for the three and nine months ended September 30, 2024:
| Category | Q3 2024 (in millions) | 9M 2024 (in millions) |
|---|---|---|
| Cost of Revenues | $46.8 | $143.0 |
| Research and Development | $23.2 | $71.8 |
| Selling, General and Administrative | $51.3 | $152.8 |
| Total Costs and Expenses | $121.3 | $367.6 |
Net Income
VeriSign reported a net income of $201.3 million for Q3 2024, compared to $188.5 million in Q3 2023. The net income for the nine months ended September 30, 2024, was $594.2 million, an increase from $552.9 million in 2023.
The effective tax rate for the periods was approximately 23% for 2024, slightly down from 24% in 2023.
Cash Flows
Cash flows from operating activities for the nine months ended September 30, 2024, were $671.1 million, compared to $649.6 million for the same period in 2023. The company continues to maintain a strong cash position with cash and cash equivalents totaling $267.3 million as of September 30, 2024.
Geographic Revenue Distribution
VeriSign's revenues are generated across various regions, with the following breakdown for Q3 2024:
| Region | Revenues (in millions) | Year-over-Year Change |
|---|---|---|
| U.S. | $260.2 | 4% |
| EMEA | $62.8 | 9% |
| China | $19.7 | (10)% |
| Other | $47.9 | 5% |
Overall, VeriSign's business model relies heavily on the stability and growth of the internet, as well as the continuous demand for domain name registrations, which is influenced by market conditions and competitive dynamics within the industry.
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Article updated on 8 Nov 2024
Resources:
- VeriSign, Inc. (VRSN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of VeriSign, Inc. (VRSN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View VeriSign, Inc. (VRSN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.