Verisign .com monopoly reports an operating margin of 65.4%

The Verisign .com monopoly reported a huge operating margin that was 65.4 percent for the first quarter of 2019. Instead of being grateful for this gift that it is being given they are asking for .com price increases. It is time that the .com contract is put up for grabs for a more competitive price. The .com extension can be operated for maybe $2 or $3 per domain and companies would pay millions to have the privilege to operate the extension at this level.

Companies would easily pay a couple of billion to operate the .com at $5 per domain for the next 6 years. Or they could easily pay 500 million to operate the .com registry at $3 per domain for the next 6 years. Yet ICANN strangely allows this Verisign greed and arrogance. It makes you think what “organization” ICANN has become over the past few years…

Verisign is operating .com at a huge $7.85 price yet they complain. It is time that these demands backfire to those that are making it.

You can start from opposing the removal of price caps on .org, .info, .biz and .asia that is just the beginning of what could soon happen to .com and .net:

Open for Public Comment

Here are the Verisign results from Q1 2019:

First Quarter GAAP Financial Results

VeriSign, Inc. and its subsidiaries (“Verisign”) reported revenue of $306 million for the first quarter of 2019, up 2.4 percent from the same quarter in 2018. Verisign reported net income of $163 million and diluted earnings per share (diluted “EPS”) of $1.35 for the first quarter of 2019, compared to net income of $134 million and diluted EPS of $1.09 for the same quarter in 2018. The operating margin was 65.4 percent for the first quarter of 2019 compared to 62.0 percent for the same quarter in 2018.

First Quarter Non-GAAP Financial Results

Verisign reported, on a non-GAAP basis, net income of $158 million and diluted EPS of $1.31 for the first quarter of 2019, compared to net income of $132 million and diluted EPS of $1.07 for the same quarter in 2018. The non-GAAP operating margin was 69.4 percent for the first quarter of 2019 compared to 66.3 percent for the same quarter in 2018. A table reconciling the GAAP to the non-GAAP results (which excludes the items described under “Non-GAAP Financial Measures and Adjusted EBITDA” below) is appended to this news release.

“We’re pleased to deliver another solid quarter,” said Jim Bidzos, Executive Chairman, President and Chief Executive Officer.

Financial Highlights

• Verisign ended the first quarter of 2019 with cash, cash equivalents and marketable securities of $1.25 billion, a decrease of $17 million from the end of 2018.
• During the first quarter of 2019, Verisign repatriated $249 million of cash held by foreign subsidiaries, net of foreign withholding taxes.
• Cash flow from operating activities was $187 million for the first quarter of 2019, compared with $90 million for the same quarter in 2018.
• Deferred revenues as of March 31, 2019 totaled $1.05 billion, an increase of $29 million from the end of 2018.
• During the first quarter of 2019, Verisign repurchased 1.0 million shares of its common stock for an aggregate cost of $175 million. As of March 31, 2019, there was $891 million remaining for future share repurchases under the share repurchase program which has no expiration date.

Business Highlights

• Verisign ended the first quarter of 2019 with 154.8 million .com and .netdomain name registrations in the domain name base, a 4.4 percent increase from the end of the first quarter of 2018, and a net increase of 1.82 million during the first quarter of 2019.
• During the first quarter of 2019, Verisign processed 9.8 million new domain name registrations for .com and .net, compared to 9.6 million for the same quarter in 2018.
• The final .com and .net renewal rate for the fourth quarter of 2018 was 74.3 percent compared with 72.2 percent for the same quarter in 2017. Renewal rates are not fully measurable until 45 days after the end of the quarter.

Non-GAAP Financial Measures and Adjusted EBITDA

Verisign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, management typically discloses and discusses certain non-GAAP financial measures in quarterly earnings news releases, on investor conference calls and during investor conferences and related events. These non-GAAP financial measures do not include the following items that are included in the comparable GAAP financial measures: stock-based compensation, non-cash interest expense through June 30, 2018, and loss on debt extinguishment. Non-GAAP net income is adjusted for an income tax rate of 22 percent which differs from the GAAP income tax rate.

On a quarterly basis, Verisign also provides Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure and is calculated in accordance with the terms of the indentures governing Verisign’s senior notes. Adjusted EBITDA refers to net income before interest, taxes, depreciation and amortization, stock-based compensation, unrealized gain / loss on hedging agreements, gain on the sale of a business, and loss on debt extinguishment.

Management believes that these non-GAAP financial measures supplement the GAAP financial measures by providing investors with additional information that allows them to have a clearer picture of Verisign’s operations and financial performance and the comparability of Verisign’s operating results from period to period. The presentation of these non-GAAP financial measures is not meant to be considered in isolation nor as a substitute for financial measures prepared in accordance with GAAP.

The tables appended to this release include a reconciliation of the non-GAAP financial measures to the comparable financial measures reported in accordance with GAAP for the given periods.