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VeriSign Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 27, 2012 01:19PM

VeriSign Inc. (VRSN) filed Quarterly Report for the period ended 2012-06-30. Verisign, Inc. has a market cap of $6.82 billion; its shares were traded at around $45.63 with a P/E ratio of 29.8 and P/S ratio of 8.8. Verisign, Inc. had an annual average earning growth of 9.5% over the past 10 years.



Highlight of Business Operations:

We recorded revenues of $214.1 million and $419.9 million during the three and six months ended June 30, 2012, respectively. This represents an increase of 13% in both the three and six months ended June 30, 2012, as compared to the same periods in 2011. The increase was primarily due to an 8% year-over-year increase in active domain names ending in .com and .net and increases in our .com and .net registry fees in July 2010 and January 2012.

We recorded operating income of $107.0 million and $205.9 million during the three and six months ended June 30, 2012, respectively, an increase of 30% and 40%, respectively, as compared to the same periods last year. The increase was primarily due to an increase in our revenues as well as a reduction in restructuring expenses and general and administrative expenses as we realize the effect of post-divestiture cost savings.

We generated cash flows from operating activities of $245.2 million during the six months ended June 30, 2012, an increase of 138% as compared to the same period last year. The increase was primarily due to the payment of $100.0 million of contingent interest to the holders of our Convertible Debentures during 2011 and an increase in cash received from customers resulting from revenue growth in 2012, partially offset by an increase in income taxes paid.

Our revenues increased by $24.3 million and $48.5 million during the three and six months ended June 30, 2012, as compared to the same periods last year, primarily due to an 8% year-over-year increase in the number of domain names ending in .com and .net and increases in our .com and .net registry fees in July 2010 and January 2012 as per our agreements with ICANN.

Sales and marketing expenses increased during the six months ended June 30, 2012, as compared to the same period last year, due to increases in salary and employee benefits expenses, advertising expenses, fees paid to ICANN for gTLD applications and allocated overhead expenses. Salary and employee benefits expenses increased by $3.4 million due to an increase in the average headcount related to growth in the NIA Services sales and marketing teams and the expansion of the international marketing team for our Registry Services business partially offset by a decrease in stock-based compensation due to additional vested RSUs granted to option holders during the six months ended June 30, 2011 as they did not participate in the May 2011 and December 2010 special cash dividends. Advertising expenses increased by $3.0 million due to increases in product marketing initiatives promoting our Registry Services business. During the six months ended June 30, 2012, we incurred fees of $2.6 million related to applications for new gTLDs. Allocated overhead expenses increased by $1.5 million due to an increase in the relative headcount of the sales and marketing function compared to other functions.

Read the The complete Report



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