Verisign Q2 Earnings: Company Beats Expectations, Shares Big News From China

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VRSN: Verisign CA logo
VRSN
Verisign CA

VeriSign (NASDAQ:VRSN) performed solidly this quarter beating the consensus earnings estimate of $0.86 by a penny. Revenues came in at $286 million versus the consensus estimate of $284 million and were driven primarily by 8.6 million .com and .net domain name adds this quarter. The company narrowed their guidance and now expects $1.131-$1.140 billion in revenues this year.

In a big win for the company, earlier this month, it was given permission to provide registrations for .com and .net domain names in the People’s Republic of China. The .com and .net domain registries will be the first non-Chinese registry to be allowed in China. This marks a huge opportunity for Verisign. The company now has the potential to increase sales from the region at a dramatic pace given the popularity of the TLDs in question globally. To put things into perspective, revenues in the region grew at a rate of 71% this quarter.

Additionally, this quarter marks 19 straight quarters in which the company maintained a 100% .com and .net availability. As more and more companies begin to rely on digitally growing their business, maintaining availability is going to be of utmost priority. Given the track record so far, it could be many quarters before we see this number slip.

Furthermore, Verisign announced an increase in the annual registration fee for its .net domain name from $7.46 to $8.20 effective 1 Feb, 2017 as per the agreement with ICANN. This could help increase per registration revenue beginning next year.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete coverage of VeriSign
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