VeriSign (VRSN) Q2 2024 earnings summary

Executive summary

• Achieved 27 years of uninterrupted .com/.net DNS availability, supporting secure, stable, and reliable internet infrastructure and global commerce.

• Q2 2024 revenue was $387 million, up 4.1% year-over-year; net income reached $199 million, with diluted EPS of $2.01, both increasing from Q2 2023.

• Operating income grew 7.1% year-over-year to $266 million.

• .com and .net domain registrations declined 2.2% year-over-year to 170.6 million, with a net decrease of 1.8 million domains in Q2 2024.

• 2.2 million shares repurchased in Q2 2024 for $388 million; board increased repurchase authorization by $1.11 billion, totaling $1.5 billion.

Financial highlights

• Gross margin for Q2 2024 was 87.8%, up from 86.5% in Q2 2023; operating margin was 68.8%, up from 66.8%.

• Operating cash flow for Q2 2024 was $160 million; free cash flow for the trailing 12 months totaled $821 million.

• Cash, cash equivalents, and marketable securities stood at $690 million at quarter end.

• Deferred revenues as of June 30, 2024, were $1.29 billion, up $43 million from year-end 2023.

• Effective tax rate remained at 23% for Q2 and the first half of 2024.

Outlook and guidance

• 2024 revenue expected between $1,553 million and $1,563 million; operating income guidance is $1,048 million to $1,058 million.

• Domain name base expected to decline by 2% to 3% for full year 2024.

• Capital expenditures forecasted at $30 million to $40 million; effective tax rate 21% to 24%.

• .com wholesale fee to increase from $9.59 to $10.26 effective September 1, 2024; .net fee increased to $10.91 effective February 1, 2024.

• Management expects existing cash, marketable securities, and operating cash flow to be sufficient for working capital, capex, and debt service for the next 12 months and beyond.