VRSN - Earnings call transcript Q1 2021

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Operator

Good day, everyone, and welcome to VeriSign's First Quarter 2021 Earnings Call. Today's conference is being recording. Recording of this call is not permitted unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. sir. ahead, go Please

David Atchley

Welcome First operator. Call. XXXX to you, Quarter VeriSign's Earnings Thank

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

Jim Bidzos

report another and Thanks, David, good for performance of afternoon, quarter VeriSign. solid pleased to I'm everyone.

increased first During online continue the our demand to across most for as quarter, we domain businesses expand their saw presence. regions names

During the of X.X%. name totaled a XXX.X At the .com base the .net first million domain and increased of new domain growth names. million base million .net, million in processed the with .com registrations for by X.X consisting we for names rate March, $XXX quarter, XX.X end names of and XX.X name million, year-over-year and

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

base a name growth in additions we now As of fiscal updated X.X%. we the of X.X% to XXXX, forward expect and domain and base for rate year. balance outlook we've the for This witnessed new our the the reflects between range look strength

operational solid During investing evolving standards critical complying required results our and maintaining, quarter, to high and our in continued infrastructure deliver with we the agreements. by ICANN financial while

and care health enables commerce, for and on person-to-person DNS navigation around us accurately world reliably rely people Our critical infrastructure service to education, provide connection. the the

the expiration. potential needs share the the $X.XX authorized available program, financial and under shares. for our million business continually and has which of the of billion investing marketable cash million including uses evaluate liquidity repurchase Share overall $XXX XXX,XXX for consider end quarter and position end, the We stable remained share quarter. current repurchases. and quarter the best no $XXX cash, remained liquidity with first securities and the At Our during at in equivalents totaled cash, repurchases

X, April that declared final formally that days we issue IRP been from closed have applicable within now XXXX. decision rules, Under arbitration the the a the independent review panel .web, process date. IRP XX informed panel on Regarding the hearing should

ICANN's a policies under making an As procedures reminder, ensuring decisions. that for followed and Ican bylaws, IRP, when is the of its own purpose

following Board decision will I'd to to ICANN updated over or resolution today to And Our guidance call that the the of related any delegation include the The expectation the like the IRP, the George. on we're TLD. not turn is does the final expenses .web .web. providing of make now revenue

George Kilguss

Jim, everyone. Thanks, afternoon, and good

year million, X% company quarter delivered year result $XXX primarily $XXX generated the and quarter from in same first For and personnel the X.X% $XXX same share to investments $XXX in the increase the ago. in ended ago. a $XXX a March year-over-year same million, XX% income earnings income operating million quarter XX, operating which quarter expense margin XX% million is quarter The up to earlier, the $XXX $XXX a totaled infrastructure. to the from up million in revenue Operating compared same of The in the XXXX continued this a XXXX, of for and over year the operational year million $XXX million operating quarter per $X.XX year. million in quarter quarter diluted compared $X.XX compared incremental expense ago. Net the totaled last to a in year and of last of compared quarter first was produced

X% to our between personnel diluted recognition for in expense full to As also growth the XXXX. continued the cash domain our increased and still expectation be guidance. last $XX be year Interest the is first income partially first XX% of free tax for expected driven flow last XX expense operating XXXX compared The offset also fiscal expect operating expected in rate our year-over-year million guidance $XXX be first was range share This The and increase and The income year higher and for which still $XXX is to XX%, incremental $XXX the the noncash be was between the in XX% rate was base updated by between cash are rate of within guidance payments This XXXX $XX our operational million to with net benefits, Operating revenue and demonstrate to summary, and between million focused reflects $X.XX. the billion quarter in performance $X.XXX included reflects mentioned our respectively, $X.XXX registrations in our during name throughout discuss billion. quarter XXXX. increased sound Revenue I'll narrowed and an same net of to the the execution of million, investment earlier. year $ forecast flow to $XXX Jim VeriSign million expenditures cash nonoperating infrastructure expected In and of noted year. now the renewals, of and range. GAAP income still quarter, XX%. between and range still to tax look cash increased margin quarter million, continued and million be for expected updated $XXX forward is for first $XX of X.X% earnings expected new unrecognized that per effective release, expectation operating volume flow tax million. be by we Capital primarily earnings is by to and million. in now cash to continuing expenses. financial we previously

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

Jim Bidzos

critical their want and at the VeriSign during the infrastructure, our working acknowledge of hard work remotely during here closing, the I Thank you, to pandemic. maintaining in operating In for even Internet challenges George. team

for we Now your ready call we're the will the Operator, for open questions. first question.

Jim Bidzos

We Rob of go Baird. Oliver first [Operator to will Instructions]

Rob Oliver

Great.

you. one, for First Jim,

a as you a some pockets strength to wondering are a with I geographic could believe better see little guys appear increased And if I you the know was from the context And range of trends to both board. macro sort the remarks you strength are domain had clearly, that you you driving on was Just that any more follow-up. about prepared there are up taking add in guys maybe that, driving I maybe dynamics on of then what well to mentioned your domains if that activity. perspective as that, revenue side. or across of seeing particular the talk

Jim Bidzos

Common the Net and they comes are ads are recovering get activity broad-based that quarter it increased part brands strength by think, name Thanks. But online, across from our additional benefit were this very was Well, visibility think all, virtually recall first contributing geographic economy the certainly, the U.S., all driven, in ads primarily includes of came regions, trusted use, economic from economy continue through did it the the going Good channel. that domain recall broad-based our is quarter. certainly also regions. to and We have to Internet certainly all but Okay. it. to limited this people as with used. of I I and But recovering and do that

Rob Oliver

Got it.

going need for I Okay. I guys, one of you operational are the a feel back follow-up and and couple talked that. guess things And have know for you then How quarters, just security about of infrastructure George, couple a your like bit to guide And on a to more. trajectory? wanted your and the about just the I do you. bit you questions. and for get R&D that spend increased looking implied in maintaining little guys spending margin you're things how this And year the that spend guess, thinking sense you by probably for year. for a revenue increased for you same are

George Kilguss

indicate, continued to invest software you year, continuing for this on the both investments continue is Similar our areas. for personnel -- And areas see XX% and We're as year. year spend, those tools. as the And of range operating XX% of and guidance can Yes. you quarter in to XXX for in well that headcount continue And as Thanks, infrastructure execute ended hence, Rob. we plans to last well cybersecurity margin as in appropriate. as year to still are people. at our this the those make areas. new to We'll

Operator

our and Citi. from We will Nick Jones be next to go that with now will question,

Nick Jones

I a potentially is additional two. about of context decision seventh, then time to delegated Great. guess .web first one, and expand be be when line we guess I .web can the I the the from days XX-day there being you little should will thinking when how be for just to on and bit the issued time like start line after consumers? sounds XX in made, of can the a that. kind then time needs it .web? have

Jim Bidzos

was clock so hearing announcement -- the to. IRP that and the that their had started all, the of you're on April panel from they X, first the that Well, referring concluded XX-day

in concluded hearing. assume that time have issued. they report So frame, the their final We that be will

part that on a again talking we're the, to next that being this we pending of the their quite have that litigation I'll the we say process, quarter, just litigation. hopefully, time more step So according simply in don't by final comment to announcement, bit say. should

it's happens, that early to discuss launched exactly about be delegated. And simply until and consumers. exactly how play that out. of think I when we premature get it hands speculate then then So will will It's too .web how the into to just

As I the to timing proceed report determine expect delegation at mentioned, our of we that a own Board to efforts. ICANN premature. be we we'll But it we do here conclusion do then when then, When until point, able be that see get think, .web. the to the will say IRP the about of would the I that more

say we to now know next the you hopefully, have, to a more at least talk next we that time quarter. lot So we'll

Nick Jones

then brief. TLD I declined. TLDs look at the domain name Great. industry I -- Great. guess, And

Can less a declining? grow. sequentially, gaming I Any terms why guess, others what's are talk $X.X what gains maybe .com and about you be thoughts continues in kind share think it's little on would and to like trends? .com of I TLDs of or those underpinning, million

Jim Bidzos

we're first that and see and into growth. it's their this growth having to and simply that and is success insights with say, all, of that understand I'll as don't Common brands, small did have we we registries, businesses broad-based. competitive we them, businesses of from just quarter. are Net are in numbers. trusted me The the quarter. are let exact so registrars growth reporting, bit with The The we particular growth had this registrars in that that broad-based Well, ads this people online, pleased their just and that continue are say getting individuals,

Operator

question from JPMorgan. last And will our take of Auty Sterling we

Sterling Auty

nicely the So along gross line what of in the million year. versus was questioning, registration that saw just you up $XX.X last new quarter following

of terms might new business and this from both you much that wondering I'm registrars be be might to to elevated data in hearing we small pointed domains? mix. types what tied consumers, for How cases business back versus You other the consumer use application but see the the of maybe continued of

Jim Bidzos

to want you do comment there? George, Yes.

George Kilguss

demand Yes. online. tell consumer we registrars. of that mix from quite businesses here, seeing good I -- get would say, -- Sterling, you we can they're a mean, do the the what don't wanting get detailed I I all to for

couple consumers. to build get have the online over utility in money, last lot been And money a As to result, of increasing spending making and them invested you name know, much we're bring the the I And registrar easier think for helpful these domain of to a registrars a a a that more small as industry. years, for name online. website and seeing marketing it advertising has and lot domain of businesses

is good the as have we far trend. that economy, the registrars is believe insight this a there As that just pretty this only is -- trend

to it the that's is reply continue I that, supporting some And of for that back and optimism up year. just on feel they their of they query we think opening the part. rest economy it'll that the when

Sterling Auty

just you in have when heard point? of, being look And total hits regain and .com peak comment, is of just number behind been you And steady they of a How marketing failed your you in, back Jim, dollars much kind of feeling just kind there put marketing at that programs? it's if back and trusted is domains, .net say, the new that .net then to to registrars more this starting September XXXX. it of from at decline are of the share? like TLDs, kind And .com you're the are from let's

Jim Bidzos

comment to well. let this me this George me of question and ask next But to that. let first, goes I'll add on just -- earlier Well, sort as

TLDs we're competitive country not example, is Many that TLDs. .tv. think the legacy what code a these gTLDs, marketplace, of this code especially the I new not mentioning been is, mentioned here are commercialized, very ones country we and TLDs, .co, have haven't that not for

that make market picture little that we bigger have than normally is visibility and of that there talk we a bigger there's to the sure that. about I understood So bit all just wanted been Sterling, was so question further? limited a half want about have your George, them be you of I in. they factored to the many commercialized, marketing. But need other comment into. and of to certainly do think, don't

George Kilguss

Sure.

based few is come I And insight think as have decline what to don't growth strong here specific -- any renewal, for So are what I or new in gTLDs, rapid the them at if really any renewing I the think gTLDs maybe a records, data in unless is of very public see the I rise data, and But that really a they're not the centered few had or have had you years. ICANN in just that I they X into look go don't on into in the decline of marketing ICANN's new some but activities a think, really which you that new TLDs for I insight see gTLDs. specific a well. that year to ago. prior very I up as some TLDs

Sterling Auty

spend And given here XXXX, own give of about us within your .web? the potential plans light favorable be the on of .web, in the the the marketing behind a and muscle what thinking ruling you programs for margins? for think How then the context you. around should guidance launch the marketing marketing about sense, can a you've should we to of Got put we

George Kilguss

is George, this Sterling. So

then be any just got doesn't it's The year we'll plans far as TLD we marketing expense Once as that. and have with revenue both as So we revenue or delegated, expense, I include at in we've this that and think able associated mentioned, place, .web that communicate to muscle, Jim the provided our guidance point. for early .web. too

saw marketing result in execute rolled programs in coming year. working other the quarter -- our first a as well. people this programs spend the of as pandemic as last year, as This working marketing about direct home. the far sales we're can quarter little more the more the plans sales first bit you And own As as of and here well a in XXXX programs, in We curtailed us we think, the that's home I as as the I and that to some we of business had really far and marketing toward beginning as -- it's on continuing for year year. on at from usual out us our compared tell, to

Sterling Auty

but know in All it want right. kind you're I Great. of answer, last a going public probably bit. forum to anyway. question And .net get because ask I to in pricing. a quite I how

bit a But might in decision XXXX? been are -- a made pricing on What be little what since on your announced. with .com, it's it's or here took .net. action you around for XXXX you price So doing a here .net last thoughts price been you

Jim Bidzos

it Sterling, question. Yes, same future at we give you've September. this just you to of a answer. to below is the out, price asked decisions. out be is, same of have pointed competitively give .com I'll We -- we do guide you .com that point, and a increase in I'll priced. the the for I as but pricing, have to course, that .net don't course. don't point you effective will And pricing guide the

Operator

or things question-and-answer David does conclude I'd that closing Atchley turn comments. to today's session. like that, any back with And to additional for

David Atchley

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

Operator

call. We'd for to And like you thank again again, everyone, conclude that does today's participation. your

disconnect. You may now

VeriSign (VRSN) 22 Apr 212021 Q1 Earnings call transcript