Verisign reports $1.23 billion revenue for 2019 (up 1.4%)

VeriSign, Inc. (NASDAQ: VRSN) reported financial results for the fourth quarter and full year 2019.

2019 GAAP Financial Results
Verisign reported revenue of $1.23 billion for 2019, up 1.4 percent from $1.21 billion in 2018. Verisign reported net income of $612 million and diluted EPS of $5.15 for 2019, compared to net income of $582 million and diluted EPS of $4.75 in 2018. The operating margin for 2019 was 65.5 percent compared to 63.2 percent in 2018.

2019 Non-GAAP Financial Results
Verisign reported, on a non-GAAP basis, net income of $631 million and diluted EPS of $5.31 for 2019, compared to net income of $620 million and diluted EPS of $5.05 in 2018. The non-GAAP operating margin for 2019 was 69.6 percent compared to 67.5 percent in 2018.

Fourth Quarter GAAP Financial Results
VeriSign, Inc. and subsidiaries (“Verisign”) reported revenue of $311 million for the fourth quarter of 2019, up 1.0 percent from the same quarter in 2018. Verisign reported net income of $148 million and diluted earnings per share (diluted “EPS”) of $1.26 for the fourth quarter of 2019, compared to net income of $182 million and diluted EPS of $1.50 for the same quarter in 2018. The operating margin was 63.9 percent for the fourth quarter of 2019 compared to 63.1 percent for the same quarter in 2018.

Fourth Quarter Non-GAAP Financial Results
Verisign reported, on a non-GAAP basis, net income of $154 million and diluted EPS of $1.31 for the fourth quarter of 2019, compared to net income of $191 million and diluted EPS of $1.58 for the same quarter in 2018. The non-GAAP operating margin was 67.9 percent for the fourth quarter of 2019 compared to 66.7 percent for the same quarter in 2018. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

Fourth quarter and full year 2018 GAAP net income and non-GAAP net income included $52.0 million and $42.8 million, respectively, related to the gain on the sale of the customer contracts of the security services business. The gain increased GAAP diluted EPS and non-GAAP diluted EPS by $0.43 and $0.36 in the fourth quarter of 2018 and by $0.43 and $0.35 for full year 2018.

“Focused execution yielded another solid quarter that caps off not only a solid year but a strong decade in which we’ve focused on our core business, expanded the domain name base and returned value to our shareholders. In 2019 we marked more than 22 years of uninterrupted availability of the Verisign DNS for .com and .net,” said Jim Bidzos, Executive Chairman, President and Chief Executive Officer.

Financial Highlights

• Verisign ended 2019 with cash, cash equivalents, and marketable securities of $1.22 billion, a decrease of $52 million from year-end 2018.
• Cash flow from operations was $194 million for the fourth quarter of 2019 and $754 million for the full year 2019 compared with $219 million for the same quarter in 2018 and $698 million for the full year 2018.
• Deferred revenues on Dec. 31, 2019, totaled $1.03 billion, an increase of $16 million from year-end 2018.
• During the fourth quarter, Verisign repurchased 1.0 million shares of its common stock for $195 million. During the full year 2019, Verisign repurchased 3.9 million shares of its common stock for $738 million.
• Effective Feb. 6, 2020 the Board of Directors approved an additional authorization for share repurchases of approximately $743 million of common stock, which brings the total amount to $1.0 billion authorized and available under Verisign’s share repurchase program, which has no expiration.

Business Highlights

• Verisign ended the fourth quarter with 158.8 million .com and .net domain name registrations in the domain name base, a 3.9 percent increase from the end of the fourth quarter of 2018, and a net increase of 1.46 million registrations during the fourth quarter of 2019.
• In the fourth quarter, Verisign processed 10.3 million new domain name registrations for .com and .net, as compared to 9.5 million for the same quarter in 2018.
• The final .com and .net renewal rate for the third quarter of 2019 was 73.7 percent compared with 74.8 percent for the same quarter in 2018. Renewal rates are not fully measurable until 45 days after the end of the quarter.