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VeriSign reported net sales of $323 million in Q1 '21, up from $313 million in Q1 '20. Expenses grew in proportion to the growth in revenue, which saw operating margins come in stagnant at around 65%. An income tax expense of $38 million, compared to a tax benefit of $143 million in Q1 2020, led to net income dropping to $150 million, down significantly from $334 million for the same period in 2020. This led to EPS dropping to $1.33 from $2.87.
Below are key drivers of VeriSign's value that present opportunities for upside or downside to the current Trefis price estimate for VeriSign:
For additional details, select a driver above or select a division from the interactive Trefis split for VeriSign at the top of the page.
Historically, VeriSign had two main businesses - Domain Names & SSL and Authentication Services. The company sold its SSL and Authentication Services business to Symantec in May 2010 for $1.28 billion.
Within this business, VeriSign controls the rights to the exclusive registry of .com and .net Internet domain names. VeriSign collects a fixed fee each time individuals or businesses register a new .com or .net domain name, or renew the registration of an existing domain name.
The source of value for the Domain Name division comes from the following:
The total domain name base for .com and .net stood at 165 million at the end of 2020. For 2021, we expect a total of around 172 million .com and .net domain names. VeriSign charges $7.70 for .com and .net currently.
Icann (The Internet Corporation for Assigned Names and Numbers) recently approved a 7% increase in pricing, this should reflect in the company's pricing policies in the coming quarters.
There were 252 million domain name registrations across all top level domains by the end of 2012. By the end of 2019, the number grew to just over 360 million domain names.
At the end of 2020, the total stood at 390 million.
Current internet penetration stands at about 50% of the total population. This figure is only going to grow with time.