VRSN - Earnings call transcript Q3 2020

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Operator

Good day, everyone. Welcome to VeriSign's Third Quarter 2020 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized.

Now at this time, I like to turn the conference over to Mr. of and President Treasurer. Vice Atchley, Investor Corporate Relations David Please sir. go ahead,

David Atchley

and third Welcome for earnings today, of operator. healthy. you, safe quarter are joining hope staying you to call everyone Thank to VeriSign's XXXX and each you call. our we Thank

include end Joining our include Executive forward-looking locations site Jim website, will XX-Q. Vice presentation your detail provide prepared unaudited CFO. afterward, this With turn In the the the call that, over of the Investor in would George to Chairman our their the and recent which and available presentation, remarks website President Bidzos, a call be the for to our performance SEC and a call earnings and reconciliation on COO; filed matters does uncertainties reports moment, the posted. are respective I Strubbe, cash our under we most XXXX Jim. the About There available unless second questions. are that results verisign.com. results in the flow. also Relations non-GAAP replay and today's from found is and VeriSign, available the on Jim information risks Relations to CEO; will free and we our is call which Todd slide XX-K through Financial two President from financial the being specifically and GAAP in adjusted results of today and and and to At release me open used on Executive by GAAP guidance and call and some public that be release. forms with this be remotely on are we appended update done the be are in quarter financial that during few section and like is George to not VeriSign subject non-GAAP remarks Investor call, presentation earnings or will will statements it call. within hours, documents a webcast Kilguss, This EBITDA VeriSign of quarter discuss the after you disclosure. will measures discussing The will will find

Jim Bidzos

Thanks, how VeriSign XXX within X.X% David, in up to quarter VeriSign. bit for quarter, from our it a I wanted good and a year the into afternoon, we're same everyone. addressing before But reports Today speak million ago. dive just COVID-XX and the deeper results, about we revenue

internet more demand the for COVID-XX reliance infrastructure With has our securing and operation important. become on increased pandemic, even services reliable during the of

our remains focus benefit is Our internet our infrastructure availability users. the the critical internet which to ensure on mission, of of for

and at for our employees ICANN, agreements .net registry our .com to rigorous to availability of work We and performance services the with our continue while remotely. of our operations, root continue standards operate and governed by most

our address I'll quarterly Now, results.

solid The on the consistent financial name base in results. core of our was third quarter delivered VeriSign, XXXX business, expanded for focused and which quarter domain another we

year-over-year domain and XX.X and Regarding for at names third consisting .net base September, .net .com million highlights, of quarter for operational names .com XXX.X of X%. the end with the million and rate XXX.X million, totaled a of name growth

by registrations, During XX.X name X.XX and names. the million new the third we quarter, increased domain million processed base

quarter. and XX.X%. be of until compares XX.X% of third believe the of the are for days quarter, XX quarter to Although XX.X% This rate in end the will the that approximately after third XXXX measurable achieved rate preliminary fully renewal the not rates quarter we XXXX last renewal

domain new of ongoing by name name registrations base base have range updated reflects expectations for This we presented now the between XXXX, expect X.X% in the remainder the for COVID-XX. with of strength X%. the balanced domain year, we growth growth seen uncertainty For rate and the and our

share we repurchase resulted expiration million quarter, share which authorized million. under program, continued XXX,XXX remained in third XXX date. the quarter-end, program available During the stock shares that and At current XXX our repurchase has repurchase of for no common

financial repurchases. I'd stable X.XX and overall the equivalents, securities turn and continually billion cash call the cash, for best the potential and in business Our our the needs cash, uses liquidity over marketable like the to evaluate remain position to of consider And the at We now, of including and end share liquidity with quarter. George. investing

George Kilguss

you, Thank Jim everyone. and afternoon good

and of same a cyber million, for operating compared September compared revenue same totaled year third XXX year. third XX, earlier, million, quarter personnel company earnings same XX%, expense million, million Net year factors. with XXXX expenses mentioned, quarter. in initiatives security in operating and the which year-over-year, from among the the diluted income ended quarter $X.XX XXX X.X% delivered year in investments share XXX per ago. million income last a quarter The XX.X% million this from quarter ago, totaled infrastructure our As the up operating generated The last and XXX year quarter to in in compared ago, produced XXX the year, throughout to a the quarter in XXX for the up the of $X.XX and XXX of million the to a in million, XX.X% quarter continued support reflects up other XXX margin to last came Operating our year compared to increase quarter.

our of which our guidance. the from income U.S. $X.XX until re-measurement and the to payments for for of Verizon’s continued were Interest expected is execution investments in the range incremental This in are quarter a by third benefits full-year lower, capabilities, reflects includes security during infrastructure resulted unrecognized earnings net be million. tax diluted and and be $XX to the between reflects our cash still full-year third which income fourth free expectation uncertain tax income between demonstrate of of of billion respectively. million, million XX release, forward net third mainly In share Cash our $XX in range The we domain for of which guidance noted be continue XXX to XXXX per benefit to we to quarter of margin, earnings tax of quarter’s in Operating for VeriSign operational of million call. the for the performance quarter in Revenue expected look quarter, last previously accrual of taxes now pre-tax in a the as reflects expected third flow and cash summary, an and compensation, discuss XX well and now be XXX be to and in now quarter net between and based quarter effective our now the flow quarter, sales and was with X% XXXX and million, rate quarter mentioned and and tax $XX XX% both XX.XX% the expense growth which non-operating increased of XXXX. This was continuing year. XXX flow expenses flow revenue are free and cash due expect XXX XX.XX%. included to mentioned compared XX% Operating federal benefit last expense income. the will million updated the million $XX of marketing deferral I X.XXX third income between still range operating million, expenditures the the now focused to expected to As billion. third X% updated XXXX. earlier. unrecognized our financial in X.XXX X.X% and third between be during the and first divisions. tax that for million million. the sound cash expected name range to base and is remainder recorded X%, stock previously XXX of quarter, We Jim million Capital respectively XX to permitted million the as is

call the Jim, for back remarks. turn closing to I'll his Now,

Jim Bidzos

priorities I'd more our and and critical people. of George. mission availability has that again safety infrastructure services to even of like on the the of Internet you, to pandemic the be during Thank say online ensuring our increased so. our reliance usage continue our

are open on team for here the VeriSign to who internet like are individuals and maintaining businesses online work at and ever your the our through home, walk we we critical, infrastructure, believe critical more to services working their which pandemic. internet and the home infrastructure your depend for hard for people additional acknowledge many call like before For isolating even at mind their We'd questions are than and from on I'd two questions. livelihood. during

quarter. have TLDs limited .com increase through our We for are updates XXXX. regarding your any effectuate to XX, there to the we flexibility said expect what for October last prices are updates question, XX, wholesale pricing XXXX No of from March all you .com? use First and still price before frozen the the plans

Second in or issued place may hearing submitted any this from year then a As early The on question, their last briefs. scheduled .web? took hearing final A of are quarter, August. the panel including we hearing next final there noted early August. participants, status later in VeriSign the be The updates decision was post year.

followed IRP the a of certain granted reminder, was Also, purpose under is own bylaws policies in as ICANN these limited ensuring right in decisions. party a not to aspects. IRP when its for procedures VeriSign in but participate reminder, As is making that the proceedings, a and ICANN

we’ll Our questions. ICANN first IRP, And the will now, we're the of final make delegation call for Operator, .web open Board ready expectation your a the the that for following the at the is on question. the resolution TLD. decision

Operator

with Thank first Oliver you. question ahead, our We'll go Instructions] Rob sir. Please [Operator from take Baird.

Rob Oliver

just very to guys Appreciate Great, taking Thank my questions. you you. for with thank it. you much. start Jim,

for You know, about know, business, that you have the time on concerns small of of up have, down know, thoughts and coming domain just you pretty impressive. took out guide growth you quarter, kind clearly your And domain consistently in] you love to ratcheted the when guys COVID environment, of business back a get [came small failure. lot overall, it on this I'd from

could wondering you and you're little if step the maybe what a was environment. back in just bit I about seeing talk So,

weighing they're websites. of it of macro some quick know, a And up. concerns that you maybe kind Thanks. that hear be holding then your small would offsetting of follow may to they businesses, lot to a And or new You We'd the there. business I be would thoughts their that on love starts. know, on have that seem

Jim Bidzos

I'll And livelihood. then as of may make I starting for new domain say clearly as comment usage. people numbers clearly And Well, additional see mentioned quarter. the greater crisis. Todd for a our quite thanks Overall, a of that. and of invite to or sort they where variety like. internet the there as as that making to just if George domain that, register, and solid reasons I'll well, And over a in in the the growth. use of you that Todd keep, additional are was livelihood the or comment as results, resulted name for space increased wide the a question. and reasons developed two for clear names. as [indiscernible] there's remarks, their that and market additional faring There's my Okay, internet it's having growth that people to And are of a others in a the you be businesses, There's comment lot leads you'd see like result in and observed. a complex obviously, it delete complex not pursuit of analysis of growth the George, themselves quarter speak in I'd

George Kilguss

Kilguss. George is This Sure.

XX.X to last Jim And trends American million, mentioned, new strength XXX,XXX were about that up that seeing a In last North APAC we in and quarter. we here registrations in good but very from quarter, are quarter. which a had and the year So, similar registrar's new to ago, similar names QX media registrars. as from we're saw very was registrations registrars,

at continuing during and think QX to the objectives. that value a see support quarter, as people and trends I their said, they and been had based level a utility I here down the those good that similar and overall, China having seeing demand solid year-over-year. to a helping was customers trends, in the secular third to e-commerce domain we're in But to small better quarter in However, businesses far this doing Jim very for those their website registrar's so are we're good us. getting of service seeing maximize – were just from units the And that those quarter New think name year least with

Rob Oliver

you. for is George up follow My helpful. That's thanks. Great,

I your just mentioned .com on comment practice much. color ordinary the kind can to in just in and relative very there of and that anything in to investing you relative prepared the around, sales would think marketing wanted channel you Thanks to your out ask you QX and standard any remarks, be a on growth of add know great. expenses

George Kilguss

Yeah Rob, ordinary. would the I say out nothing of

pandemic we to kind them on activities efforts full and you we've more the on had going swing, if look couple spend in be area the marketing of the fourth have quarter the timing tended the with and in some little year, we those repositioned bit just in of a the that the years, we’re think quarter. This in fourth year, some early I in we here past pivoted based of in but to of events. sales

just marketing management there, throughout the So, unusual I there's activities anything normal year. the our don't of think

Rob Oliver

Thanks Great. again.

Operator

next with Nick We'll you. take Thank Citigroup. our Jones question from

Nick Jones

taking a you my guess, or on decision year, decision a the to guess on early about any, that hear? more we're to year terms on how I matter the a or guess, later matter I little to of potentially what timing questions. decision is I more for of that's, definitive of coming of the first next think to kind it thanks either this expand extend this just to in .web, color bit I one, Great, is this longer, can puts guess, guess, waiting the I rest

Jim Bidzos

I the is this policies as reminder, when procedures whether the hear this and affiliates, that essentially plaintiff two form involves this makes it ICANN And as parties, who's the here arbitration Well defendant. I the as] and ICANN used follows of answered, that's actually that's IRP, [view its IRP. in we're And about just decisions. the asked resolution question mentioned ICANN and to a this of waiting community in primarily final own

I resolution, what which is that of is process, is will Board ICANN decision said decide. make TLD. following the – And will that So, panel the that the expectation, its ICANN matter our .web to returned then the as on to be the final delegation a for

was in those pending, here, to litigation, outcomes, do decision the is on not it's when that's So as the expectation, what's it not we and really which were pending scheduled speculate And as obviously, know, was We – the they the a have to course panel. final by the hearing there so proper but a at speak. process, any in something but litigant held table. and a of is participant,

So, will it on what we handed to resolution And expectation. see. what That's know the that's year against we're the by plaintiff waiting allegations be the of this ICANN for year, and answer Board will hopefully matter by the or certainly then .web the ICANN then issue. early the from next we hear They with to should hope the end you we know affiliates when panel. we'll our beyond share And that. we

Nick Jones

just Great. share. on follow guess I market one And then up a just follow .com up,

around data some being do know, their .com more, TLDs, or TLDs? out indicates think that Thanks. saying? you share despite popular seeing that new know, third maybe know, kind is that Why to you Can great. more kind there making that kind You thoughts would party versus know there of, color you're of So, is? You as is you of what guess I there's speak any you're guess regaining any new you I be trends there? .com

Jim Bidzos

to. say Well, mean, don't what referring data know just I I you're I'll that,

.DE thriving for though of alternate new been and a to like specifically. on. consist .Co I the .CO for .CN of or chosen of large organizations from many, like gTLDs a Many have market can't that and many TLD those China, Colombia, commercialized not code TLDs. really then the tell There's market I that of country TLDs large Germany. brand have you there those. are And is commercialized number only that can So, themselves individuals and .com does address

the I But registrants found. I without brand, really get that. performance So, name .com it Com market, referring I that, brand, is than that, because and them beyond market like and good the is our what often you is refer you're its broader seeing that far the to, helps on a talk strong, when also comment how is. just people brief. it. they large would domain caution about very haven't really can't think to would considered I market

of if get you slightly think think I at look that, there's a might survey of I there. TLDs And the a picture. different good all you

So, I hope that's helpful.

Nick Jones

is. my questions. you That Thank for taking

Jim Bidzos

Certainly.

Operator

you. last with Thank Auty now our Sterling take JPMorgan. question from We’ll

Sterling Auty

Yeah, thanks. Hi, guys.

guidance growth, the to the embedded for to back seem a year-over-year the of the would you’ve name context indicate that. domain in in going slowdown new So, in given it that full-year, registrations the

guess for of was do So, COVID know into or you my for that that from the you you're here full-year? how one-time kind what benefits quarter some influencing not there kind think I question factoring is, of is else you guided guidance the fourth

George Kilguss

you is so in Typically, less I just know, quarter. the quarter Yeah. George. Sterling, selling as there days, are Sterling, registrations see this fourth new we Yeah, put the fourth dip it seasonally. would simply

how regard an some we're may I Also, So, pick think on still keeping here, that. globally. COVID, up uncertainty that eye with that to disease and there's

guidance of caution also is And so, providing. that the that in some we're

Sterling Auty

registry, have? board breakdown Understood. domains any granular of you might have this what on participants, And know to at but interactions sense with based attached of or them and I that e-commerce on are type point, percentage to any thin is as .com that a registrar's industry your other coming

George Kilguss

small registrar's that I'm business, Yeah, is hear for of a have I quite But you. websites that portion good they sorry. and for business. our mentioned, We registry], don't are as do as the stand up the detail, granular [thin far that that have their Sterling as more I think seeing we don't businesses, which grow as from you detail. that

Sterling Auty

delayed on you know guys Census be it, And business that there applications. but based the significant seeing the Bureau there late know, come the know, if from comment, business fall. that kind seen has if have summer spike or in potential don't And And of brings, I new number You was there in wonder it formation? looks of into a you I a those that coming a might is you're of maybe some tailwind? like

Jim Bidzos

don't I net name I that myself, place haven't there zone, data know the common in of our indication registrations to first we've any that that think data. for speaking like are Well, I seen correlated some that. domain that would registrars be probably

think there would that starts clearly the I U.S. registrations up] them have indication business are that name [are with some for increased that. domains that and new in associated

or So, to in think answer the there's any But can general, saying. is we detail I nothing would I you're but data yes, don't in I the that with think correlation, in of have any. what think disagree question your

Sterling Auty

in what's housekeeping, number And it? Got one up the names of George, QX? for renewal

George Kilguss

QX, In million. XX.X

Sterling Auty

incremental wasn't before? great. look a down way what into the bringing it? would very little to wanted I guidance to point, that you so operating commented that say Alright, a there maybe of the full-year, you Or just is given know, the the now to bit, put high-end going at that fine that And you're the you factoring one, last spend is wrong for margin

George Kilguss

about mentioned say on is the XX the lot going our show have head functions, network year-over-year and you increased I I cybersecurity the heads those We've headcount. and Well, focused software, engineering our know, of up remarks, XX would in and And think of functions]. our we that increase people expense additional [G&A those my really year. R&D counts or added are since it in beginning prepared as I to a

was of the at quarter, about headcount XXX the employees. so And our end

So the that at was year. up end XXX, the of from

been a similar employees XXX look So, high in is, we've, a X,XXX We we as business. as headcount. the the only level about thing know, out came I'll say you people. XXXX of had of We've with

we here the XXX got about at years, of, of reorganizing million clearly we're and in you pieces security been XXX sold XXXX, around out If as quarter, some and for at we gap operating million, here. the we had VSS million range you were know, prior in step right know, a gap XXX business, look operating expense we now, of moving company, a expense the the quarter you back as but XXXX in we've

years, needs for of business over time, we've So, long security added question, we've And always in it's business. But the – been expenses the and the that past continue we're the we to really that. this headcount think a I reasonably doing are, eight do additional well answer as our going this the of been of initiative. or the and to to in range we're we're we've period stability that managing seven to your meet been

Sterling Auty

Understood. Thank you.

Jim Bidzos

just I Sterling, generally we constantly just to a huge environment and funding And The there's you is very available difficult we this that, to is cybersecurity, Jim. a evolving. because what which It's threat always know, make always is baseline that simply intensifying increase is increasing. would of add do and aspect predict.

there constant ongoing. technology, and new education, we so, people, resiliency make are its are in our training, that hardening And hires, proving infrastructure investments

In seeing response, our precise things. routine nature, What and the experience the therefore doing best estimates history aspect price is addition, of based to difficult long response responses – of the time, the all but to the you're make the These a anticipated. new precise just threats of that kinds budgetary to predict. precise and are there have on of happen is we these that are are

behavior the that sorts we to was collisions. do that that help good for we In manage And [indiscernible] out, domains into lot highlight cyber research point were a eliminate work We queries and and net. performance and identified and coming hitting massive rectify, were browser source research were instrumentation and the identified, was across of that amount servers. that do volume actually we've queries of agencies. a of those servers, number huge with addition, helps share government root literally quite security unintentional spike with that we example, and that the of we There's activities, done of result a able of huge that that in are other a [botnets], We the companies, recently of different root name a fund We research publish, and attacks. a improve this bit and evolves.

are are that but always many on teams growing working That's that hiring it the evolving, training, mission. address our our it's folks. So top Broadway's, primary additional We priority.

So, surprise. in. our that's it. be times, it a It's our spending increased mission. of are to that's shouldn't There see the going nature just And on you're we're the business And that expertise.

Sterling Auty

you, Make sense. Thank I that. really Jim. appreciate

Jim Bidzos

Sure.

Operator

that Thank now concludes session. the remarks. you. any for or Mr. conference to like question-and-answer back would And I closing additional our to turn Atchley over

David Atchley

the department This investor Thank you, Have questions this from call. call for Please concludes call. participation. good our a your operator. follow-up Thank with you evening. any relations

Operator

does Thank participation. you conference. you. conclude that for And your today's all Thank

You may now disconnect.

VeriSign (VRSN) 22 Oct 202020 Q3 Earnings call transcript