“Tax Savings Should Drive Long Term Bottom Line Growth for VeriSign”

Trefis.com did an article today about the VeriSign shares after the VeriSign Q2 2014 report.

Shares of VeriSign (NASDAQ:VRSN) rose over 10% on July 25, 2014 after the company reported strong profit figures in the second quarter of 2014. The company reported revenues of $250.4 million, marginally missing consensus estimates by about $1.3 million. However, net income per share for the quarter increased to 68 cents and was 4 cents higher than consensus estimates, fueled by a $300 million share buyback program. In year-on-year growth terms, revenues increased 4.6% this quarter while net income expanded 15.3% over Q2FY13.

It seems that .com and .net growth has slowed down but this bound to happen someday.

Revenue growth continued to remain soft, with the company making 0.42 million net additions to the domain name base after processing 8.5 million registrations. Comparatively, VeriSign added 1.22 million net new names out of 8.7 million registrations in Q2FY13, and 1.28 million names out of 8.6 million registrations in Q1FY14.

This has nothing to do with:

During the first quarter conference call, VeriSign guided to some weakness in net additions for Q2FY14, primarily driven by a greater focus on increasing  bundled product offerings compared to domain name sales from domestic and international domain registrars.

Verisign has some high expectations for Q3 and they are probably going to fail to meet these. But they will try and compensate their loses by increasing the .net domain registration and renewal fee as ofter as they are allowed to do so.

For the upcoming Q3FY14, the company expects net additions to range between 0.6-1.1 million names.However, net additions for Q3FY14 would certainly remain lower than the 1.55 million names added in Q3FY13. This trend of slowing net additions is expected to continue as the .com and .net domain name bases continue to saturate.

On the flipside, the hike in .net domain fee from $6.18 to $6.79 beginning February 2015 could partially temper the growing pressure on its overall domain name base.On the whole, VeriSign’s .com and .net market share is expected to continue declining as new additions migrate towards less saturated domain bases.

Most registrants including myself don’t appreciate these constant price hikes and will probably drop 10% of their domains just to keep up with the price hikes. Click here to head the complete article.


About Konstantinos Zournas

I studied Computer Engineering and Computer Science in London, UK and I am now living in Athens, Greece. I went online in 1995, started coding in 1996 and began buying domain names and creating websites in 2000. I started the OnlineDomain.com blog in 2012.

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