Verisign, Inc. (NASDAQ: VRSN) posted better than expected results for the third quarter of FY 20. The company has reported net income of $171 million for the third quarter of 2020, compared to net income of $154 million for the same quarter in 2019. The company ended the third quarter of 2020 with cash, cash equivalents and marketable securities of $1.15 billion, which represents a decrease of $68 million from the end of 2019. VRSN generated cash flows from operating activities of $140 million for the third quarter of 2020, compared to $208 million for the same quarter in 2019. VRSN generated free cash flow of 125 million compared to 197 million for the third quarter last year. Operating cash flow and free cash flow in the third quarter were both lower, mainly on the back of the permitted deferral of 52 million in U.S. federal tax payments until the third quarter.
Moreover, during the third quarter, the company had processed 10.9 million new registrations, and the domain name base increased by 1.65 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, the company believe that the renewal rate for the third quarter of 2020 to be approximately 73.4%.
VRSN in the third quarter of FY 20 has reported the adjusted earnings per share of $1.49, beating the analysts’ estimates for the adjusted earnings per share of $1.26, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 3.1 percent to $317.88 million in the third quarter of FY 20, beating the analysts’ estimates for revenue by 0.49%.
Additionally, during the third quarter of 2020, the company had repurchased 0.8 million shares of its common stock for an aggregate cost of $170 million. At the end of September, 2020, there was $506 million remaining for future share repurchases under the share repurchase program which has no expiration date.
For fiscal 2020, the company expects revenue to be in the range of 1.262 billion to 1.267 billion. This revenue range reflects the updated domain name base growth in the range of 3.5% and 4%. The operating margin, which includes stock based compensation, is now expected to be between 64.75% and 65.25%. For 2020, the company expects the domain name base growth rate of between 3.5% and 4%.