Featured Domains

TrueName by donuts. Make a name for yourself

Verisign stock jumps after earnings report

Stock investors still think .com is king.

Verisign reported earnings yesterday and shares in the company are up 12% in trading so far today.

Why the jump in share price after a dismal quarter for net domain name adds?

Well, Citigroup upgraded the company from sell to neutral today saying “fundamentals have likely bottomed”. Financials apparently exceeded most expectations.

Verisign had just 0.42 million net adds in .com and .net last quarter. It expects Q3 net adds to rebound to between 0.6 million and 1.1, which is definitely a move in the right direction. With slipping renewal rates, these targets would indeed be rather strong and require strong new registrations.

The company also announced a 10% price hike on .net. No knowledgeable analyst didn’t see that coming, though.

Of course, when the first credible report comes out suggesting that new TLDs are making a dent in .com…

DomainAgents. What should you sell your domain for? Read our Domain Market Report Now. Sponsored.

Get Our Newsletter

Stay up-to-date with the latest analysis and news about the domain name industry by joining our mailing list.


No spam, unsubscribe anytime.

Reader Interactions

Comments

    Leave a Comment

  1. Philip

    I wonder what they base their projections on & how the share price will react on missing those targets.

    With momentum building with the new TLDs, further launches & increasing awareness, a very risky strategy to bet on Verisign given the threath on its doorstep.

    Certainly not where my money would be…..

  2. M

    Interesting to see the growth from .com sales to the China, India and other markets once verisign will go live with they’re 11 IDN gTLD’s.

  3. Seb

    Don’t worry Philip.
    There is no momentum building with the new TLDs.
    They are essentially registered by domainers who are making no money from it.
    With hundreds new launches coming and renewals knocking on the door in a few months, the writing is on the wall for new tlds.

    Verisign will be just fine, you can buy shares, you’ll make money there that may offset your losses in new tlds.

    Are you a new TLDs registry ?
    You seem to have such high hopes…

    • Philip

      I doubt that Seb. Early days of the new TLD launch but as more go into GA, we’ll see a paradigm shift occur as awareness also increases with specific targeted uptake. Those in the wedding industry for example will link into a .Wedding domain along with a likely suitable Geo applicable to their operational locale. That’s not even taking into consideration couples purchasing specific domains for the big event.

      People will wonder what the fuss was all about with the much more general .Com!

      Add to that one of the biggest new TLD registries entering the registrar space and no doubt creating even greater awareness for those new TLDs. Google are doing their beta testing atm but look out for the major launch and its impact on wider awareness of the TLDs.

      We’re getting primarily domainers atm due to the shift that needs to occur in wider awareness – that will certainly happen.

      Verisign may not be unduly impacted in the very near term but I expect to see a major impact on their business within an 12-24 month timeframe, with further accelerated deterioration thereafter.

      Don’t underestimate the iceberg – the Verisign titanic WILL hit it!

  4. Blake

    Investors are predicting that Gtld’s will fail. Seems like a no brainer to me. Nothing positive to say about them. Total trash.

  5. Joseph Peterson

    Am I missing something?

    What data suggests that there was “a dismal quarter for net domain name adds”?

    8.5 million is dismal? Down from 8.7 million last year … ok. But 97.7% of last year’s GROWTH is dismal?

    During the last 6 months, all vanity extensions combined have totaled only about 1.7 million total. And they’re operating in circumstances that lend a false sense of ongoing growth, a situation wherein drops are impossible. So we’d be comparing gross adds for all nTLDs against net adds for .COM / .NET.

    In other words, net growth for .COM / .NET during 3 months was almost exactly 5 times faster than gross speculation (with no expirations until next year) for all nTLDs combined during twice that amount of time — 10 times faster if the time frames are matched.

    Growing 10 times faster than all of those new TLDs combined and down in terms of its growth rate only 2.3% from the last year … even with competition form dozens and dozens of new extensions?

    I wouldn’t call that “dismal”. Frankly, I don’t see how anybody can.

    So I must be missing something.

      • Joseph Peterson

        Do I have the correct numbers?

        2012 Q3 — 7.8 million New + 72.5% Renewed

        2012 Q4 — 8.0 million New + 72.9% Renewed

        2013 Q1 — 8.8 million New + 73.2% Renewed

        2013 Q2 — 8.7 million New + 72.7% Renewed

        2013 Q3 — 8.3 million + 72.7% Renewed

        2013 Q4 — 8.2 million New + 72.2% Renewed

        2014 Q1 — 8.6 million New + 72.6% Renewed

        2014 Q2 — 8.5 million New + [no data for renewals till Q3]

        If those numbers are correct, then new .COM / .NET domain registrations during this last quarter rank 4th out of the 8 most recent quarters. That’s above average.

        We don’t have renewal data for the second quarter yet. So we’d be looking at renewal data for .COM / .NET during the first quarter of 2014 when uncertainty and hype surrounding the new extensions were at their peak. Even so, a 72.6% renewal rate compares very well the mean renewal rate for the 7 quarters above: 72.686%.

        I still don’t see the “dismal”, to be honest. The last 2 quarters of 2013 were worse. Where I’m standing, it looks close to the median performance of .COM / .NET during the past 2 years. And that’s in spite of greater competition.

        • Andrew Allemann

          Verisign reports a “net adds” number that takes into consideration both the new registration numbers and the renewal rate.

          Looking back at the past nine quarters, here are the numbers:

          Q2 2014 8.5 new 0.42 net
          Q1 2014 8.6 new 1.28 net
          Q4 2013 8.2 new 1.29 net
          Q3 2013 8.3 new 1.55 net
          Q2 2013 8.7 new 1.22 net
          Q1 2013 8.8 new 1.99 net
          Q4 2012 8.0 new 1.25 net
          Q3 2012 7.8 new 1.37 net
          Q2 2012 8.4 new 1.81 net

          The reason this past quarter was dismal for net adds is that the renewal rate sank. We don’t know the final #, but Verisign estimates it will be approximately 71.7%.

          So gross registrations were fairly strong, but net adds — the amount the base grew by — was dismal compared to previous quarters.

          Verisign expects this to reverse a bit in Q3, with net adds between 0.6 million and 1.1 million names.

          Keep in mind this is across both .com and .net.

Domain Name Wire | Domain Name News
%d bloggers like this: