VeriSign, Inc. (NASDAQ: VRSN) today reported financial results for the fourth quarter and full year 2020.
Fourth Quarter Financial Results
VeriSign, Inc. and subsidiaries (“Verisign”) reported revenue of $320 million for the fourth quarter of 2020, up 3.1 percent from the same quarter in 2019. Verisign reported net income of $157 million and diluted earnings per share (diluted “EPS”) of $1.38 for the fourth quarter of 2020, compared to net income of $148 million and diluted EPS of $1.26 for the same quarter in 2019. The operating margin was 63.9 percent for the fourth quarters of 2020 and 2019.
Net income for the fourth quarter of 2020 included recognition of $12.4 million of previously unrecognized income tax benefits as a result of the lapse of certain statutes of limitations. This income tax benefit increased diluted EPS by $0.11.
2020 Financial Results
Verisign reported revenue of $1.27 billion for 2020, up 2.7 percent from $1.23 billion in 2019. Verisign reported net income of $815 million and diluted EPS of $7.07 for 2020, compared to net income of $612 million and diluted EPS of $5.15 in 2019. The operating margin for 2020 was 65.2 percent compared to 65.5 percent in 2019.
Net income for the full year of 2020 included the recognition of $204.2 million of previously unrecognized income tax benefits. These benefits resulted from remeasurements of Verisign’s accrual for uncertain tax positions as previously noted in the first and third quarter 2020 earnings releases and also due to the lapse of certain statutes of limitations noted above. Cumulatively, these income tax benefits increased diluted EPS by $1.77 for 2020.
“Reliance on internet services increased significantly due to the global events of 2020. Our resilient network design and preparedness over decades for challenging scenarios, and our agility and preparation for working remotely, enabled us to reliably and securely meet increased global dependence on the internet,” said Jim Bidzos, Executive Chairman and Chief Executive Officer.
- Verisign ended 2020 with cash, cash equivalents, and marketable securities of $1.17 billion, a decrease of $51 million from year-end 2019.
- Cash flow from operations was $195 million for the fourth quarter of 2020 and $730 million for the full year of 2020 compared with $194 million for the same quarter in 2019 and $754 million for the full year 2019.
- Deferred revenues as of Dec. 31, 2020, totaled $1.06 billion, an increase of $29 million from year-end 2019.
- During the fourth quarter of 2020, Verisign repurchased 0.8 million shares of its common stock for $170 million. During the full year of 2020, Verisign repurchased 3.7 million shares of its common stock for $735 million.
- Effective Feb. 11, 2021 the Board of Directors approved an additional authorization for share repurchases of approximately $747 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.
- Verisign ended the fourth quarter of 2020 with 165.2 million .com and .netdomain name registrations in the domain name base, a 4.0 percent increase from the end of the fourth quarter of 2019, and a net increase of 1.46 million registrations during the fourth quarter of 2020.
- In the fourth quarter of 2020, Verisign processed 10.5 million new domain name registrations for .com and .net, as compared to 10.3 million for the same quarter in 2019.
- The final .com and .net renewal rate was 73.7 percent for the third quarters of 2020 and 2019. Renewal rates are not fully measurable until 45 days after the end of the quarter.
- Verisign announces that it will increase the annual registry-level wholesale fee for each new and renewal .com domain name registration from $7.85 to $8.39, effective Sept. 1, 2021.