VeriSign (VRSN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $391 million, up 3.8% year-over-year, with operating income at $269 million and EPS rising to $2.07, a 13.1% increase.

• Net income was $201 million, up from $188 million in Q3 2023.

• Domain name base for .com and .net declined 2.5% year-over-year to 169.6 million, with a net decrease of 1.1 million names in Q3.

• Maintained 27 years of 100% uninterrupted availability for .com and .net domain name resolution.

• 1.7 million shares repurchased for $301 million in Q3; $1.28 billion remains authorized for buybacks.

Financial highlights

• Q3 2024 operating cash flow was $253 million and free cash flow $248 million; cash, cash equivalents, and marketable securities totaled $645 million at quarter end.

• Gross margin for Q3 2024 was 88%; operating margin was 69%; net margin was 51%.

• Deferred revenues as of September 30, 2024, were $1.30 billion, up $53 million from year-end 2023.

• Net cash used in financing activities for the nine months was $951 million, mainly due to share repurchases.

• Free cash flow for the trailing 12 months was $852 million.

Outlook and guidance

• 2024 revenue expected between $1.554 billion and $1.559 billion; operating income guidance narrowed to $1.054 billion–$1.059 billion.

• Domain name base expected to decline between -2.9% and -2.3% for full year 2024.

• Full-year capital expenditures forecasted at $25–$35 million; effective tax rate 21–24%.

• Management expects existing cash, marketable securities, and operating cash flow, along with borrowing capacity, to be sufficient for at least the next 12 months.

• Guidance for 2025 to be provided in February.