VRSN - Earnings call transcript Q3 2021

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Operator

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

David Atchley

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

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

Jim Bidzos

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

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

Our accurately enables which critical service, the world name people depend navigation infrastructure reliably on connection. around the us education, commerce, to and provide for and system person-to-person healthcare domain

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

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

X.X%. and now of XXXX, rate year. to X.X% current the of additions year reflects pace expect we and new base a base name of narrower outlook This full growth the domain between remainder the our range for For the the

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

requesting that Afilias' September. the completed on it the quarter, taken without this final VeriSign And its issued without May decision to panel which an on IRP was briefing and IRP after filed IRP is in now advisement last we stated expect in in merit, the of was application Afilias' and has interpret application relates The .web, the fourth application believes panel to As final in and amend as to the we matter decision. to oral just under the rule panel argument, respond. quarter waiting means for XXXX. continue the we're panel it June

we for registry said the it operator we turn forward before, As to to becoming option individual .web as users I'd an like worldwide. end the and over to And businesses look have George. establishing to and continue now additional call

George Kilguss

everyone. afternoon, good And Jim. Thanks,

in quarter of last income earlier, ago. X.X% $X.XX generated million Net million the the in revenue For in company last million million compared XX.X% to totaled totaled up earnings ended third $XXX same $XXX and same a of the from income the XX, in a year. the a ago. $XXX quarter last Operating million, quarter million $X.XX quarter and quarter quarter And quarter XX% delivered X.X% $XXX the million, quarter for of quarter the expense same operating $XXX XX.X% year same produced diluted Operating $XXX compared share in $XXX September last per year year to margin from the the third to million year. quarter compared compared the XXXX was year up which $XXX to XXXX. in this

deferred year. this pulling $X.XX. The from before which into to domain name of for an Cash million, increase of early unrecognized of the and third million the from income $XXX quarter As flow of renewals noted by the renewal these flow third free year million release, in compared cash was third the cash benefited early revenue, is flow was million future increase $XX quarters price of quarter third diluted activity $XX and related main the share went primarily forward increased of impact flow quarter for .com into XXXX. for effect. per included this previously quarter our $XXX benefits of last respectively $XXX the Operating which tax cash was $XXX of quarter million earnings net earnings million, with

year third approximately reflects billion. Capital of base full U.S. XX.X%. of and income margin fourth Additionally, personnel operating cash billion is to Revenue expected in operational last guidance. of still comparing range This federal expected our narrowed due of incremental spend infrastructure rate and permitted the third investment now from Interest be between cash expectation net revenue range is expense range XX.X% between our growth discuss marketing and tax expected still quarter This I'll name be $XX flow, and $X.XXX is payments flow earlier. quarter million XX% million expenditures and now year's to now programs the lower third $X.XXX quarter. was domain to and during be our rate $XX the expected mentioned the expectation to quarter be deferral XXXX the between be continued to X.X% to Jim $XX XX%. on quarter non-operating XXXX. between $XX GAAP are million second to in between $XX updated the an million. expected to to reflects The tax of year-over-year million. X.X%, as is And and expense of now effective updated the of

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

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

Jim Bidzos

you, Thank George.

program. some things at principally questions, I we do to calls I've your for would VeriSign. other like on call Cares touch in the to open that we responsible our updated previous VeriSign continue our through commitment citizenship Before you to on earnings here corporate

program both we X options quarter, District states our partners our third greatly Virginia we increases organizations plans the the have During can to delighted retraining established workforce the economic note scholars partnerships own, individuals milestone in new And VeriSign number Columbia remote now is have with launch objective in dollars passed our help partner who their social coverage. of and as We're expansion And pressing which the Cares Cares address and of which this initiative. to a X,XXX the throughout reminder, reach we're and communities Ready in provide accessible live adversely pandemic graduated access of the pivot the other geographical into U.S. This under for been our to XX with the workforce of work. that the XXXX we support. them We help from to needs recently technology plus of sector. VeriSign pleased their employment initiative, to instituted Combined, whose this and the partner assistance retraining by COVID-XX has the individuals training to program. affected in initiative

these your Operator, questions. can ready efforts call the for first question. more now for about learn on open we'll And the You we're blog.verisign.com.

Operator

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

Rob Oliver

guys. for evening, Great. me. questions couple A Thank of Good you.

one you, Jim. First, for

now right starts, seeing there's some this data the Just mean that you're on macro quarter. business I with been

rolling of work indicators A University a sentiment small, think I expressing concern. we've seen over some little of bit. medium-sized survey Michigan business lot

think in mix what I QX. shortages is name here as the of really heading well function that into the year. guys I what hearing have seeing can going seeing? and demand for the But of and you're you market to talk mean of seems the it's high domain next little It bit growth a of concerns of activity relative you prospects a the a timing just forward reduction you're about as the had end labor strong kind a into year.

Jim Bidzos

can things bit. up I the few with wrong it. Then you economic from COVID and I a things specificity has I map seen a the Sure, where variant certainly name factor. we tell can activity course, through been of the Rob. a things COVID in went I activity. domain and with improved We've saw direction. early any with say space, know if can in don't any on Delta quarterly specifically XXXX downs about that

they're certainly, you exactly know tell some can't how does to Now But have that the I timing maps effect. that. And improving yet. we again. don't

you it that might sufficiently studied haven't We do. to exactly tell what

acquiring is not things long-term Business a is are factor. I map certainly, branding you right essentially, for their are with I we line influence preferred They're the There's starts in all COM seasonality. performance way doubt only consistent COVID of names. a to that but you factored. precision any see now. and can't the with yearly have trend a are just think right themselves. So that those identity brand. generally our strong direction, People People the no are think And domain online. But

Rob Oliver

Got it. Got it.

Okay. That's And one Thank for fair. then, you. you. George

curious you a and the benefit? you. series ones as Thank provisioning I'm more quarter. past timely the on infrastructure sort And made margin the margin of strong as well that in of is people. security durability a both plus have over Or performance just year investments of I this Just the expansion and know of guys onetime about it as that? we of as saw kind well

George Kilguss

Thanks, Rob.

the in our right them operating continue that expenses, we're small slight and to But year-end we to at spending operational the operating is primarily business what for mentioned, I XX.X you quarter. money our at business. margin But full mix not, we decrease we activity on is. the downs And G&A year a we look increase of that we continue have up in to investment are additional and we're clearly the and our the of some into we're are our sure guidance make And you do give on And as the as call infrastructure can. best a we're as we personnel. think quarter. you to we'll provided marketing from sequential we would redirecting in when the So have decrease for due spending XX.X. feel to total appropriate business. the if year-over-year the each And our areas. we continued say next year in We expenses the spending and making of managing look investments where Again, some guidance

Rob Oliver

Okay, great. you. Thank

Operator

question Instructions] Citi. [Operator from go Please take Jones ahead. with next our We'll Nick

Nick Jones

that is can Thanks question. assuming taking registering on to from us What .web. the Is I of I to remind quarters you, turnaround? guess when able you the we for the a could of kind consumers buy? showing couple it. Great. start guess, on you maybe timeframe to TLD could to once one delegated Or register able quick is looking up? start at can a relatively you're you're when like .web when actually are

Jim Bidzos

the with IRP. I in question asking we're Okay. about Nick, not correctly, if understand now your the you're process

to the saying You're as and that point. ICANN domain question asking application panel to what to actually some handed delegated should your this in correctly? start names. is before ruled if registering Do process is fails resolved, I you're be understand .web us, the

Nick Jones

Correct.

Jim Bidzos

Okay.

quarters because mandated process. assumption your think are by part couple some of So periods are are it's you're activity there more the like that there. latter I the of There of

sunrise We have period. a run to

do some things. security to have We

people theirs who to first. have get in come and let trademarks have We

early So to to a some to But when. to domain it's and that's quarters. getting closer just to respect It's is from delegation There's bit safety, couple a security the exactly for speculate answer names. required process beginning work of register actually for trademarks. do

Nick Jones

And trademarks, proxy and at whether I maybe their there or ones? it which how guess TLDs? any into rate? the like Or do visibility common trademarks that follow-up TLDs think when you their kind about all Got then other are it. buying have to you to to brands just or protect protect as .shops by people brands Is buying Any for certain of behave? trying people to have is are you a color

Jim Bidzos

you mark. think that their marks. registrations buy net Lots It's them other in variants com, lot. Yeah, that Many are them buy them. their order I of are can rule of buy multiple it protect varies people similar make. called what single even to things there's defensive any and true general in protect certainly registrations to to a of don't TLDs

you not to land, the our landscape other lay refer at I think all to domain name industry just It can sense looking in occurs that And just TLDs them. varies. So so the briefs. some the of you get speak, of TLDs. of would I

and give some I you think you that understand that. would insights help

Nick Jones

Great. questions. it. Thanks Got taking for

Jim Bidzos

Sure.

Operator

final our Please from ahead. take Sterling JPMorgan. We'll Auty question with go

Sterling Auty

guys. Hi, Thanks.

softness? in processed Can give perhaps were quarter. you new we to the XX.X of was color geographic maybe what a million were on with the And that saw us you some basis? the So growth? as Where names start could strongest there where areas

George Kilguss

George. Sterling, this is

the had as similar So ago. million pretty mentioned, registrations in to of year a new third we the did what XX.X quarter that we in And was third you quarter.

for company. registrations still of So a healthy the level

areas we China quarter regional far saw as as quarter such during the as the APAC lower American As North year performance quarter. third in new EMEA, a were strength registration ago registrations and year-over-year to the registrars goes, and new from registrars during bit compared

Sterling Auty

in that of the for then base was of of total compared you And that as other to time the at look as names were the how a you mix for year? the for when the is renewal, Okay. percentage first up quarters the up renewal experienced what

George Kilguss

that you're of a were talk about had Again, the third about the similar when XX.X%. to we you renewal the rate to ago was our rates and range. XX% in total I was quarter. renewal first And quarter. is a think mid-XX% rate alluding year second renewal They both in What

in demand mix had if you the about like And from XXXX. coming out quarter EMEA out lot up coming as we talked rates renewal at U.S. more a come when lower percentage coming for markets we had XXXX, the that higher renewal. have time of that year-over-year back had of the of registrars look I last And We mature and names so rates. the of and you improvement lot of at higher look a does think China which typically renewal of other first areas from more names

last those are that so names, renewing And the this year. are obviously, year ones

mix. And so slightly renewal rates are you're because And quarter and the of the and quarter this consistent year. both of first previous the first seeing second been to trend last increasing a year. the compared year this time in renewed Because rate the higher that's

Sterling Auty

at time lower kind in which changed renewal other means And for those Has rates? than rates. kind when of first of China, renewing you rate first typically renewal look the has the for time, anything

George Kilguss

vary by they country. Again,

renewed and XX%-XX% our previous rates Our around mid-XXs, still is rate range. the renewal are first around still XX% time

Sterling Auty

were we under programs post should go would about right. then incremental .web All type How or talked the when that about investment live hypothetically scenario? timing actually process, if And Great. finally, effect you marketing any go we or revenue. either technology of when into to with any infrastructure that think to

Jim Bidzos

it's will have The don't TLDs, first TLDs.web early a .web .com we that, I there controlled But we we is really about I we have bit say what that multiple and different since you sense just that price know what would just too that guess, is all, can look it to another market you TLD. think would of that revenue. point, have with and certainly specifically. marketing available. in will available. this sense is Sterling, like a don't of sorts hadn't be are other TLD. it's flexibility to with and it's would would flexibility roll that and speculate a launch too course, net asked early expense is, speculate not But like. operate really at do from Other how some early that be. options we to we certainly and it's in think look revenue impact premiums of or So we occur, with specifically And it - infrastructure sort to the what have I I But what will it in a of to are but .web. promote about talk I But have intend

I'll successful desire, again, make a as more stated Our .web our to to say choice plan, TLD. and very - offer customers is our and we've

Sterling Auty

you, Make sense. guys. Thank

Jim Bidzos

Sure.

Operator

At back any to Ladies this and the time, David gentlemen, this remarks. turn today's or closing concludes like for I Atchley to additional session. question-and-answer would conference

David Atchley

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

Operator

does this appreciate and gentlemen, today's your Ladies participation. We conference. conclude

may disconnect. now You

VeriSign (VRSN) 29 Oct 212021 Q3 Earnings call transcript