Financial Performance - VeriSign reported Q4 2024 revenue of $395 million, a 3.9% increase from Q4 2023[3] - Operating income for Q4 2024 was $264 million, compared to $256 million in Q4 2023[3] - Net income for Q4 2024 was $191 million, with diluted EPS of $2.00, down from $265 million and $2.60 in Q4 2023[3] - Full year 2024 revenue reached $1.56 billion, up 4.3% from 2023[4] - Full year 2024 net income was $786 million, with diluted EPS of $8.00, compared to $818 million and $7.90 in 2023[4] Cash Flow and Investments - Cash flow from operations for Q4 2024 was $232 million, compared to $204 million in Q4 2023[6] - Net cash provided by operating activities increased to $902.6 million, up 5.7% from $853.8 million in the previous year[18] - Net cash provided by investing activities was $286.3 million, a significant improvement compared to a net cash used of $(97.4) million in 2023[18] - Total cash, cash equivalents, and restricted cash at the end of the period was $212.1 million, down from $245.5 million at the beginning of the period[18] - Proceeds from maturities and sales of marketable securities were $1,195.1 million, down from $1,278.9 million in 2023[18] - Cash paid for interest remained stable at $72.8 million for both years[18] Shareholder Returns - VeriSign repurchased 1.4 million shares for $260 million in Q4 2024, totaling 6.6 million shares for $1.21 billion for the full year[6] - Repurchases of common stock amounted to $1,225.6 million, an increase of 36% compared to $901.4 million in 2023[18] Deferred Revenues and Registrations - Deferred revenues as of December 31, 2024, totaled $1.30 billion, an increase of $58 million from year-end 2023[6] - VeriSign ended Q4 2024 with 169.0 million .com and .net domain name registrations, a 2.1% decrease from Q4 2023[10] - In Q4 2024, VeriSign processed 9.5 million new domain name registrations for .com and .net, up from 9.0 million in Q4 2023[10] Expenses - Cash paid for income taxes was $230.5 million, slightly down from $239.7 million in the previous year[18] - Depreciation of property and equipment decreased to $36.9 million from $44.1 million in 2023[18] - Stock-based compensation expense increased to $61.1 million, up from $59.7 million in the previous year[18]

Core Viewpoint - Verisign has become an attractive investment opportunity due to its strong market position and steady growth in revenue and earnings, despite regulatory concerns and a stagnant stock price over the past five years [9][10]. Company Overview - Verisign holds exclusive rights to register .com and .net domain names, creating a monopoly in the domain registration market [4]. - The company can increase prices by 7% for .com and 10% for .net domains annually, which is built into its contracts with ICANN [4]. Financial Performance - Over the last decade, Verisign's revenues have increased by more than 50%, while net earnings have grown by 146%, showcasing significant operating leverage [6]. - The total number of .com and .net domains increased by 7.8% over the five-year period ending in September, indicating sustained demand [7]. Shareholder Returns - Verisign has been returning capital to shareholders through share repurchases, leading to a substantial increase in earnings per share compared to net income [8]. - The stock trades at approximately 24 times analysts' 2025 earnings expectations, which is considered a fair valuation for a company with strong growth prospects [10]. Investment Considerations - Despite steady business growth, Verisign's stock price has remained relatively flat, potentially due to regulatory concerns [9]. - Berkshire Hathaway currently owns 13.8% of Verisign, and its market capitalization of $20.3 billion limits the ability to invest significantly more [11].

Group 1: Company Overview - VeriSign is recognized as a key player in the digital economy, providing domain registration and security services essential for online businesses [3][6][12] - The company has a current stock price of $211.67, with a 52-week range between $167.04 and $213.68, and a P/E ratio of 24.61 [2][10] - VeriSign's management has announced a stock buyback of $1.1 billion, indicating confidence in the stock's undervaluation [13] Group 2: Market Position and Analyst Sentiment - Warren Buffett's investment in VeriSign highlights its potential as a value stock in the context of the digital economy [3][7] - Wall Street analysts have recently upgraded VeriSign's rating from neutral to outperform, with a 12-month price forecast of $244.00, representing a 15.27% upside [9][10] - The stock is currently trading at a discount compared to the average valuation of the computer sector, which is significantly higher [12] Group 3: Financial Performance - VeriSign reported a free cash flow of $852 million for the year, a strong indicator of its financial health and future growth potential [14] - The stock's valuation has been adjusted upward, with analysts previously valuing it at $200, now targeting closer to $250 per share [10]

Core Insights - The market experienced strong selling in December 2024, deviating from the typical Santa Claus rally [1] - Berkshire Hathaway, led by Warren Buffett, made significant investments in Verisign, a classic internet stock that has appreciated over 3,000% since its IPO in 1998 [2] Company Strategy - Berkshire Hathaway has maintained a disciplined investment approach, focusing on value rather than high-multiple AI stocks, and has accumulated over $300 billion in cash, indicating a view of the market as overvalued [3] - Despite a quiet year for acquisitions, Berkshire outperformed the S&P 500 slightly and increased its stake in Verisign during market declines [4] Investment Details - Between December 17 and December 30, Berkshire purchased over 454,000 shares of Verisign at an average price of $198.88, totaling over $90 million, resulting in a 13.8% stake in the company [5] - Verisign's stock has increased approximately 3,150% since its public offering, yet it remains under the radar with only two analysts covering it [6] Company Attributes - Verisign is the largest domain operator globally, managing nearly 170 million dot-com and dot-net domains, which provides a competitive advantage [7] - The company has a profit margin exceeding 55%, indicating strong pricing power [7] Market Concerns - Verisign's stock rose only about 3% in 2024, underperforming the broader market, with concerns about a decline in active and registered domain names, which fell by approximately 2.5% year-over-year in Q3 [8] - Regulatory concerns regarding Verisign's contract to run the dot-com registry were alleviated with the contract renewal, although pricing tactics remain under scrutiny [9][10]

Company Analysis - VeriSign (NASDAQ: VRSN) trades at a slight premium with a P/E ratio of around 23x, slightly above the current S&P 500 P/E ratio of 28 7% [1] - The P/E ratio of VeriSign is expected to stabilize at around 22x [1] Analyst Background - The analyst has a strong foundation in financial modeling, valuation, and data analysis [1] - The analyst holds FMVA (Financial Modeling & Valuation Analyst) and BIDA (Business Intelligence & Data Analyst) certifications from the Corporate Finance Institute (CFI) in Canada [1] - The analyst has a bachelor's degree in petroleum and gas engineering [1] Analyst Focus - The analyst is particularly interested in the technology, infrastructure, and internet services sectors [1] - The analyst focuses on companies with great fundamentals and growth potential [1] - The analyst aims to provide value to readers and investors who share a passion for long-term investing [1]

Core Viewpoint - Senator Elizabeth Warren is advocating for an antitrust investigation into the web domain registration business, specifically targeting Verisign's control over the top-level domain (TLD) market [1][4]. Group 1: Market Control and Pricing - The TLD market is currently dominated by Verisign, which manages the .com domain used by 150 million websites, charging over $10 annually for each registration [2][3]. - Verisign's pricing strategy has reportedly generated over $1 billion in revenue, which critics argue is a result of predatory pricing that benefits shareholders rather than improving service [3]. - During President Trump's administration, the NTIA relaxed restrictions on Verisign, allowing the company to increase its annual registration fees by more than 30% [3]. Group 2: Allegations and Responses - Advocacy groups, including The American Economic Liberties Project, have accused Verisign of holding a monopoly in the TLD sector and have urged the NTIA and Justice Department not to renew its no-bid contract [4]. - Verisign has responded to these allegations by claiming that criticisms are based on factual inaccuracies and misunderstandings of the domain name industry, asserting that the technical nature of TLD registries necessitates a single operator [5]. - The company argues that there is a diverse array of choices in the marketplace, with other TLDs like .org, .shop, .ai, and .uk not being monopolies [5].

Q3 2024 Earnings Conference Call October 24, 2024 Safe Harbor Disclosure Statements in this presentation other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding (i) Q3 2024 renewal rate expectations, (ii) Domain Name Base change expectations, and (iii) our full year 2024 financial guidance f ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Trading Symbol(s) VRSN For the transition period from to Commission File Number: 000-23593 VERISIGN, INC. (Exact name of regi ...

Financial Performance - VeriSign reported revenue of $391 million for Q3 2024, a 3.8% increase from Q3 2023[1] - Operating income for Q3 2024 was $269 million, compared to $254 million in Q3 2023[1] - Net income for Q3 2024 was $201 million, with diluted EPS of $2.07, up from net income of $188 million and diluted EPS of $1.83 in Q3 2023[1] - Net income for the nine months ended September 30, 2024, increased to $594.2 million, up from $552.9 million in the same period last year, representing a growth of approximately 7.3%[11] - Net cash provided by operating activities rose to $671.1 million, compared to $649.6 million in the prior year, reflecting an increase of about 3.8%[11] - Cash paid for income taxes, net of refunds received, was $187.1 million, compared to $178.8 million in the prior year, reflecting an increase of about 4.6%[11] Cash Flow and Investments - Cash flow from operations was $253 million in Q3 2024, compared to $245 million in Q3 2023[2] - Proceeds from maturities and sales of marketable securities reached $1,009.6 million, significantly higher than $750.8 million in the previous year, indicating a growth of approximately 34.4%[11] - Cash, cash equivalents, and restricted cash at the end of the period totaled $272.7 million, up from $163.0 million at the end of the previous year, marking an increase of approximately 67.3%[11] - The company experienced a net increase in cash of $27.2 million, contrasting with a decrease of $(216.0) million in the same period last year[11] Shareholder Actions - VeriSign repurchased 1.7 million shares of common stock for an aggregate cost of $301 million during Q3 2024[2] - As of September 30, 2024, there was $1.28 billion remaining for future share repurchases under the share repurchase program[2] Domain Registrations - VeriSign ended Q3 2024 with 169.6 million .com and .net domain name registrations, a 2.5% decrease from Q3 2023[3] - During Q3 2024, VeriSign processed 9.3 million new domain name registrations for .com and .net, down from 9.9 million in Q3 2023[3] - The renewal rate for .com and .net domains for Q2 2024 was 72.7%, compared to 73.4% in Q2 2023[3] Deferred Revenues - Deferred revenues as of September 30, 2024, totaled $1.30 billion, an increase of $53 million from year-end 2023[2] - Deferred revenues increased to $52.9 million, compared to $43.0 million in the previous year, representing a growth of about 23.3%[11] Expenses and Depreciation - The company reported a decrease in depreciation of property and equipment to $28.1 million from $33.7 million, a reduction of approximately 16.6%[11] - Stock-based compensation expense remained relatively stable at $45.2 million, slightly up from $45.0 million year-over-year[11] Financing Activities - Net cash used in financing activities was $(951.0) million, compared to $(663.5) million in the same period last year, showing an increase in cash outflow of about 43.4%[11]

UKRAINE - 2021/04/26: In this photo illustration, the Verisign logo is seen on a smartphone and a pc ... [+] screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty Images Given its better prospects, we believe VeriSign stock (NASDAQ: VRSN), which provides domain name registry services and internet infrastructure, is a better pick than its industry peer, Gen Digital stock (NASDAQ: GEN), best known for its cyber safety products, including Norto ...