VRSN - Earnings call transcript Q2 2021

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Operator

Good day, everyone, and welcome to VeriSign Second Quarter 2021 Earnings Conference 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 second operator. call. XXXX to you, quarter VeriSign 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 and operational of afternoon performance VeriSign. quarter financial solid pleased to I'm everyone. for

quarter, our year-over-year second we registrations growth our geographies. the During continued names, demand from domain some in foreign including saw of new for

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

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

domain full at base reflects base strength of year look of balance to growth expect year. the now our the we to we As This rate range X.X% between the the name observe the we new XXXX, for additions and in outlook and continue X%.

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

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

name availability Just years and resolution of our of uninterrupted last week marked we domain .com system. XX .net

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

directed panel the filed of Regarding amend Board application determination .web, affiliates' to decision, decision The to turn determination final and to or the final make requested, as a we including and .web. And a related as objections, affiliates' does on we delegation the not delegation the in had IRP. on rule awarded be revenue, nullify the .web. requesting of was objections we we affiliates' believe the Review make petition updated the is to ICANN’s its Process application on Board -- the or issued like that decision issued, are on request quarter May will now without final and to proceed to to the it After and .web. also panel over the final The however, auction of was the rejected it providing expenses We in thereafter, of rejected and decision interpret ICANN’s .web Directors Independent affiliates' final to expect fourth consistent .web, will panel decision include the the expect the George. a I'd to conduct IRP XXth, merit today review affiliate’s decision. results final of expects to XXXX, guidance with call an

George Kilguss

Jim, Thanks, and afternoon everyone. good

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

quarter, $XXX notes, new June the million, the due $XXX XXXX million, mature company senior in favorably and in notes refinanced During issuance XXXX. X.XXX% X.X% redeemed of the its through senior which

this expense We are savings interest pleased million for the $XX annually result of of over will refinancing, which company. result with the in

respectively $X.XXX between to tax primarily wrote-off tax personnel reflects expected free operating now taxes as is expected to with difference net million quarter is for the part debt costs until cash investment updated and notes. lower expenditures This to quarter of the following rate refinancing, Capital and second XX.XX% infrastructure unamortized due of range $XX in Revenue reflects of refinancing non-operating of this Jim completed be operating and was benefiting from an between name quarter. was quarter permitted $XX XXXX and and earlier. flow expense flow billion cash to As expectation that year, tax on $XXX expected from in our second million. XXXX. will to the last payments income lower $X.X GAAP expected $XXX deferral we domain is rate year's cash and second This discuss and range million be and expense be The the now approximately issuance XXXX. effective of revenue of expense cash still well X.X% This are relates XXXX. Interest XX%. million, margin the quarter in that and flow, $XX forecast, flow between range reflects guidance. million cash of continued increased The combination mentioned to second between the $XXX was $XXX to of higher XXXX X% million expectation guidance $XX Operating operating million year-over-year million, still XX% for the US operational base, taxes to growth compared our our now of now The full-year cash cash flow payments third million narrowed expected and be XX%. I the as of interest of million. in the is updated $XX a federal $X.XXX be to during the billion. incremental between

We performance to in quarter and our cash continuing the forward to XXXX. same be rate In continued summary, the also VeriSign for expect during execution tax range. to look we second financial guidance sound focused the XXXX within demonstrate

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

Jim Bidzos

George. you, Thank

on We focus value continued continuing our to our work shareholders. while providing protect grow our long-term manage the and business to

on COVID kept and under justice on worse by ones. we partners our earlier careers food corporate call hardship help and work have existing our also our took of program. pandemic expanded number other new and the economic of both industry. by by affected area Cares months, and a focus have a and the relief commitment medical caused jobs India, In we've this pivot the retrain and for the those like with our help our calls other in responsible areas the a have those been touch we VeriSign. ongoing new tech efforts We've where to on Before VeriSign at COVID-related COVID-XX ways year some or where in footprint, affected including; on alleviating open to recent in for significant careers growing providing turn in and pandemic your to to equity to the security working adding to doing things particular questions, earnings previous you in citizenship updated I'd I we're

initiatives question. in website section the call we're You first And the we'll can investor all our the quarter ready open read your these we now new our this more of to on questions. ESG Operator, work. about for added to

Operator

from [Operator Instructions] Oliver go R.W. ahead. We'll from Please take first Rob Baird. question our

Rob Oliver

guide the Great. strong guys And would for Hi, guys with just very renewal good growth again. raising my you afternoon. Jim, you start domain obviously, Thank rates. question. you, I taking on

foreign renewal out trends. called saw strong You I believe some geographies, which

get it's strength pockets some surprised kind that wondering seeing just or any you're recovery-related bit foreign color a globally comment? the of of was can of COVID of you, whether color if So around geography we where little on whether

Jim Bidzos

I'll Todd Sure. on or George that. comment let

George Kilguss

this Yes. is Jim. Rob, Thanks, George.

very our as domain a had domain to with remarks mentioned So alluded perspective. we quarter prepared demand, from as you regard we to, and in a solid

were was up million $XX.X period. from ago units about the that XXX,XXX and New year

ago regional a US increase to a in coming far performance various I -- international that goes, preferences slight As as quarter, would performed registrars year with say from regions. demand similar

year-over-year EMEA in example, for the Jim registrations. and were up As mentioned, new China regions both

mixture with renewed little As as that's of would far base our part to mix. as geographic rates, of and the mentioned, ago. a the names, year of time ages, the combination renewed Jim up getting the preliminary rate is and relates improvement a renewal from as name a there as well as XX% renewal say, I cohorts XX% larger previously first the previously

which region, back US recall, growth. coming that units to in and a XXXX, we contributed came may out XXXX. like lower for a new contribute renewal larger had renewal you up of and slightly mature of regions in had As EMEA a in to average out We China, the our XXXX new of first-time portion unit proportion rate higher more of

renewal year. So this those helped have a historically higher rate bit our rate renewing regions little first-time

of but range. combination they those are are and renewal the rates but our up, in a mid factors, XX% previous slightly So still two range XX% first-time our are rates renewal the in

Rob Oliver

Got it.

then, Okay. that's And .web. helpful. want the potential just I just one I George, that sure follow-up. timeline to Jim, on understand make really

I ICANN. upon board, happens ruling So filed motion, to with then that affiliates be guess, ruled final now that has by now the the before the by having

that motion affiliates. So XXXX newer think the said I was filed by you QX on

the then what it? were guys you for maybe, be assuming business anymore, right, assuming motion since, filing the then in you that's aren’t if your the the So timing win what guys folks win, .web if to even would be of timing, would expectation

Jim Bidzos

delegated. will do, on that dependent for up get what them it IRP and which be the is complete instructed their .web ICANN’s Well, to on to picking timeframe panel process

but So to ruling process, that's essentially would latest ICANN. motion. a following do that panel remanded instructed. what I the can't speak occur for what back that then on basically ICANN would ICANN was It

of and process current motion, they but it back So the and this to TLDs. delegation go there ICANN the would delay conduct this will determine with their then is

but So, take I that can't for speak too hopefully, long, won't ICANN.

Rob Oliver

Great.

Okay, very you it. Appreciate guys, thank much.

Jim Bidzos

Thank you.

Operator

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

Nick Jones

that regions does those I kind VeriSign in come more geographic America of to on any a in .com Western has for Great. sense think, online? Thanks the have as APAC people question. I one North And tailwind there of penetration low internet still and for a another relative -- I taking the questions. as, or is Europe, popularity time? guess, and kind Maybe is region that And over .com’s then second of pretty trends

Jim Bidzos

Todd. or George right. All

George Kilguss

All right. Yes.

this we is to I world. a be brand try just to at Nick, to And market our high-quality very So, reliable comments George. global obviously mean, that, say brand continue look of the would I across brand.

last quieter a As far demand on. we've as mentioned going I while and seen is China And are was our pandemic some China of well. increased the had doing concerned some year, as was little registrars bit there

is So picking different China think bit I is China market little a though. of a up. a do of

is much and mobile-driven market. China a think I platform more of

here. names quite While in are driven they're still active performed better these relevant and they I see platforms. we'll perform, the very over are there And to how But mentioned important they second has more as still domain quarter in year-over-year continue China but there.

Nick Jones

availability the Internet maybe over has in have you got at velocity thinking XXX% maybe the usage the got the impact and system, quite Then the what's line for of weighing more for last You how about it the and years XX bit the guess years? and from I XX kind guess more kind of a guess or I back Thanks. and people future? overall here step time of just about the a here, on you does using and I increases as evolved what's that impact availability Great. more from cryptominers what versus just looking are Internet taking things. more

Jim Bidzos

part meeting our just a I'll obligations design that's always is still besides Internet formula. and obligations. etcetera. as that from natural given capacity the And good been the specific resiliency and of the element response sort all our also people additional that there's and so including home during it's with overcapacity design network volume of designed say particularly of COVID time the question many use of a anticipated of of performance just of we're traffic Well the resiliency load I'll working etcetera, and expanded say

been difficulty It's get. It beginning. we meeting with part always the from those have We of all demand. has no that planning essentially the the

a not planned sense. it's that new We've consideration it. in So, for

Nick Jones

Great. question. Thanks taking for the

Jim Bidzos

you. Thank

Operator

our JPMorgan. We'll Sterling take Auty from last question from

Unidentified Analyst

Drew as in in year is I half on we XXXX? could the what businesses This provide if renewal color from Sterling. more for the Hi. on surge lap some you're second you for of expecting new was wondering rates the

George Kilguss

Yes.

name So increased quarter we X% Drew is that base. X.X% We rates, quarter. George. but Obviously obviously do to our guide is the don't X.X%. And from we renewal up to guidance guide guiding this to to we've last to Last guide domain now were X%.

don't in still So, to we're expecting growth domain name base specific we guide but quarters.

Unidentified Analyst

it. got Okay, you. Thank

Operator

does turn That or conclude session. question-and-answer Mr. like additional you. back I'd Thank closing remarks. for Atchley any conference today's the to to over

David Atchley

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

Operator

We Thank you. your conference. thank today's That for you conclude does participation. all

You may now disconnect.

VeriSign (VRSN) 22 Jul 212021 Q2 Earnings call transcript