Verisign Inc. (VRSN, Financial) has updated its financial outlook for fiscal year 2025, enhancing previous forecasts based on recent performance insights. The company now anticipates its domain base growth to range between a decrease of 0.7% and an increase of 0.9%, an improvement from the previous estimate of a contraction between 2.3% and 0.3%.
Moreover, Verisign has adjusted its operating income expectations, projecting a range of $1.11 billion to $1.125 billion. This represents an increase from the prior projection of $1.095 billion to $1.115 billion. The company continues to maintain its forecast for an effective tax rate, which is expected to be between 21% and 24% for fiscal year 2025.
Additionally, Verisign has reaffirmed its capital expenditure projection for the same period, remaining between $30 million and $40 million. These revised figures were part of the presentation during the company's first-quarter earnings call, reflecting Verisign's strategic adjustments in response to market dynamics.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for VeriSign Inc (VRSN, Financial) is $243.70 with a high estimate of $275.00 and a low estimate of $196.11. The average target implies an downside of 3.52% from the current price of $252.59. More detailed estimate data can be found on the VeriSign Inc (VRSN) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, VeriSign Inc's (VRSN, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for VeriSign Inc (VRSN, Financial) in one year is $248.28, suggesting a downside of 1.71% from the current price of $252.59. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the VeriSign Inc (VRSN) Summary page.
VRSN Key Business Developments
Release Date: February 06, 2025
- Revenue: $1.557 billion for 2024, up 4.3% year over year.
- Operating Income: $1.58 billion for 2024, up 5.7% from 2023.
- Net Income: $191 million for Q4 2024, compared to $265 million in Q4 2023.
- Diluted Earnings Per Share: $2 for Q4 2024, compared to $2.60 for Q4 2023.
- Operating Cash Flow: $903 million for 2024.
- Free Cash Flow: $875 million for 2024.
- Cash and Marketable Securities: $600 million at the end of 2024.
- Share Repurchase: $1.2 billion returned to shareholders in 2024 through repurchase of 6.6 million shares.
- Domain Name Base: 169 million domain names in .com and .net at year-end 2024, a decrease of 2.1% year over year.
- New Registrations: 9.5 million in Q4 2024, compared to 9 million in Q4 2023.
- Renewal Rate: Approximately 73.9% for Q4 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- VeriSign Inc (VRSN, Financial) achieved a 4.3% year-over-year revenue growth in 2024, demonstrating strong financial performance.
- The company increased its operating income by 5.7% in 2024, showcasing effective cost management and operational efficiency.
- VeriSign Inc (VRSN) returned $1.2 billion of capital to shareholders through the repurchase of 6.6 million shares, indicating a strong commitment to shareholder value.
- The renewal rate for the fourth quarter of 2024 improved to approximately 73.9%, reflecting positive trends in customer retention.
- The company successfully renewed the .com registry agreement with ICANN and the cooperative agreement with the NTIA, ensuring continued operational stability and regulatory compliance.
Negative Points
- The domain name base in .com and .net decreased by 2.1% or 3.7 million names year-over-year, indicating challenges in maintaining domain growth.
- Net income in the fourth quarter of 2024 was $191 million, down from $265 million a year earlier, reflecting a decline in profitability.
- The domain name base decreased by 500,000 names in the fourth quarter, highlighting ongoing challenges in domain retention.
- VeriSign Inc (VRSN) expects a negative year-over-year change in the domain name base for 2025, projecting a decline between 2.3% and 0.3%.
- The company faces continued declines in domain volumes from China-based registrars, which could impact future growth prospects.
