So do you think that Dot GTLD is having an effect on Dot Com or Dot Net domain registrations?
According to VeriSign they still managed to increase Dot Com and Dot Net domain name registrations together they have increased 3.1% year over year in the reported quarter to 133.5 million domain names registered.
I think this is actually good news overall for both DOT TLD i.e Dot Com & Dot Net as well as Dot GTLDS – GTLD’s have grown massively from having Zero domain registrations to Over 1 Million between them and while they are still years behind Dot Com, It shows that both can compete and Dot Com will still grow.
I still don’t own any Dot GTLD – There are lots of great keyword or hacks available to register still and I think and know certain domain investors will do well in this field it just isn’t something I personally have invested in to date, I might in the future but not just now for me, I will happily continue to invest in dot com and DOT CCTLD mainly my .co.uk domain names which are paying me well in returns from my investments of development and rankings via SEO with there already established weight in google.
What do you think of this news?
Read this report from Zacks.com.
VeriSign Inc. (VRSN – Analyst Report), a global provider of domain name registry services, recently reported second-quarter 2015 results. The company reported non-GAAP net income of $99 million or 74 cents a share compared with $96 million or 68 cents reported in the year-ago quarter.
Revenues
Revenues increased 4.9% year over year to $263 million and beat the Zacks Consensus Estimate of $262 million.
In the quarter, VeriSign Registry Services added 0.52 million net new names. Domain names in the zone for .com and .net together increased 3.1% year over year in the reported quarter to 133.5 million.
VeriSign processed 8.7 million new domain name registrations for .com and .net, an increase from 8.5 million in the year-ago quarter.
VeriSign’s renewal rate for the second quarter was 73.4%, up 80 basis points (bps) year over year. Exact renewal rate figures will be available 45 days after the end of the quarter.
Margins
VeriSign reported non-GAAP operating income of $161 million, up from 5.6%. The company’s non-GAAP operating margin was 61.3% in the quarter, up from 60.9% in the prior-year quarter.
Adjusted EBITDA was $178.3 million, up 6% year over year.
Other Financial Details
Exiting the quarter, the company’s cash and cash equivalents (including marketable securities) were $1.9 billion compared with $1.4 billion at the end of 2014.
Operating cash flow in the last six months was $307 million, down from $262 million reported in the year-ago period. The company’s capital expenditures for the quarter were $9 million.
VeriSign repurchased approximately $156 million worth of shares in the quarter. The total amount remaining under the company’s share buyback program as of Jun 30, 2015 was $761 million.
Guidance
For 2015, VeriSign forecasts revenues in the range of $1.043 billion to $1.057 billion (previously projected range was $1.040 billion to $1.060 billion), which represents an annual growth rate of 3% to 5%.
Non-GAAP gross margin is expected to be at least 80%, while operating margin is forecast to be between 60% and 62%.
Interest expense and non-operating income, net is expected to be within the range of $104 million to $110 million (earlier forecast was $84 million and $90 million) for 2015.
Capital expenditure is expected in the range of $40 to $50 million for the year.
Our Take
We are particularly optimistic about VeriSign’s Network NIA services business. With the rapid adoption of cloud computing, cyber security has become a major concern for enterprises. Large enterprises are increasing their security budgets to efficiently address security concerns and renew confidence in cloud computing.
According to market research firm Gartner, the global market for cyber security will reach $86.0 billion by 2016. VeriSign’s partnership with Juniper will boost its growth in the fast growing Distributed Denial of Service (DDoS) security market. We believe that the company’s NIA business continues to gain traction and should boost results going forward.
However, a significant headwind for VeriSign is the sluggish growth in the active domain name business for .com and .net TLDs. While new domain name registration has witnessed an uptrend over the past year, the overall renewal rate for domains has been trending down. The company cited search algorithm changes by Google (GOOGL – Analyst Report) and macroeconomic headwinds in Europe as being primarily responsible for the declines. Google’s free public domain name service is also a major competitor, in our view. We believe lower first time renewal rates will hurt top-line growth going forward.
Further, significant competition from AT&T Inc. (T – Analyst Report), Verizon (VZ – Analyst Report) and Akamai Technologies, Inc. in the NIA segment remains a major concern.
Currently, VeriSign has a Zacks Rank #3 (Hold).