VeriSign Growing Revenues and Domain Name Base
As renewal of the .com registry nears, VeriSign posts strong 2011 results
2011 was the best year ever at VeriSign for new domain registrations. VeriSign (NASDAQ:VRSN) reported fourth quarter fiscal 2011 and full year results on Thursday. The results come during a period of pending transition in the Internet domain business, as the new gTLD process begins and as VeriSign's agreement with ICANN to operate the .com registry comes up for renewal.
For the quarter, VeriSign reported revenues of $204 million, which is a 14 percent year-over-year gain. Net Income came in at $54 million or $0.34 per share. For the full year, VeriSign's revenues were reported at $772 million up by 13 percent from 2010. Full year Net Income came in at $143 million or $0.86 per share.
Moving forward, VeriSign provided full year 2012 guidance for revenues to be in the range of $865 million to $890 million, representing growth of 12 percent to 15 percent.
"As stewards of critical elements of Internet infrastructure, both what we do and how we do it are important for the secure and reliable operation of the global Internet, upon which billions of people worldwide depend," Jim Bidzos, Executive Chairman, President and CEO of VeriSign said during the company's earnings call.
VeriSign manages multiple top level domain registries including .com, .net and .gov as well as operating a number of the root DNS servers that power the Internet.
On the domain registry business, VeriSign reported that the base of registered names in .com and .net totaled approximately 113.8 million at the end of December, which is an 8 percent year-over-year gain.
"The fourth quarter was our strongest Q4 for new registrations on record," Bidzos said. "In fact, that's true for each of the quarters in 2011, thus making it our strongest year for new registrations with over 32 million new registrations processed."
The Internet under ICANN's guidance is now moving to implement a new system of generic Top Level Domains (gTLDs) as well, which could have an impact on VeriSign. With the new gTLD program, as many as 1,000 new TLDs could be added to the Internet in the next year.
"We see it as an opportunity to be a service provider," Bidzos said in regards to the launch of the gTLDs. "We don't expect the revenue to be material. We don't expect it before 2013, but we expect the market to grow and we expect our business to grow as a result."
A key focus for VeriSign in 2012 is getting their agreement with ICANN and the U.S. Department of Commerce renewed. VeriSign last renewed its deal with ICANN to operate the .com registry in 2006. VeriSign has administered the .com domain name space on behalf of ICANN since 2001.
Bidzos explained that there's a new ICANN policy that became effective January 1, 2012, in which their public comment periods have changed from a single 30-day comment period to 2 comment periods of 21 days each. In terms of the process the next event in the renewal is a presentation of that agreement for comment, then after that follows a formal approval by ICANN's Board of Directors. After that, the .com TLD renewal also needs to be approved by the U.S. Department of Commerce.
"All of that should conclude no later than the termination date of the existing agreement, the expiration date, which is November 30, 2012," Bidzos said.