VRSN - Earnings call transcript Q2 2022

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Operator

Good day, everyone. Welcome to VeriSign’s Second Quarter 2022 Earnings Call. Today’s conference is being recorded. Recording of this call is not permitted, unless preauthorized. At this time, I would like to turn the conference over to Mr. of and President Treasurer. Vice Atchley, Investor Corporate Relations David Please sir. go ahead,

David Atchley

second Welcome earnings operator. you, quarter to Thank VeriSign’s XXXX call.

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

James Bidzos

Good Thank for afternoon you you, everyone to thank and us. David. joining

reliance significant so of online of uptime global the marking made name a accurate delivering week crossed milestone on a domain As for continues the the is to years century DNS to by quarter system. does investments testament resolution. uninterrupted we uninterrupted resolution XX our Reaching in .com/.net importance services Last and ongoing platforms, people. and mark increase, processes this

the by grew we year-over-year .com totaled and year-over-year. quarter and consisting by our .com for domain name of was with EPS XX.X% year-over-year domain XXXX growth our million first and At compared names and for second of the of .net XXX.X end During quarter XX% sequential million a renewal X.X% base June of X.X% quarter revenues the names of XXXX. XXX.X XXX,XXX for XX.X and domain for million .net the same a the names. rate rate The final to of decrease XX.X% names

XX.X%. approximately in ago registrations million first primarily in continued in ago days the time year quarter. renewing the for preliminary names. renewal related see rates quarter second which be believe Although in are preliminary quarter XX.X previously million last renewed rate XX.X second of strength rates. quarter until renewal to renewal in names rate to quarter. measurable quarter million to we processed new the of the do the quarter proportion In rate registered we The the China end the We from renewal and compared not year of quarter of renewal decline XX.X% on quarter, last XX.X weighed the renewal XX.X% compares second XXXX This of XX after that of second XXXX achieved the rates the and fully is the will

of seen lower the in few have factors many in driven These weakness that mention. this the macroeconomic pandemic name as in domain are result half of now from global registrations a and first China. XXXX XXXX While and I there has new demand that include year of names, registrations headwinds will relative units acceleration we factors subsided, drive domain XXXX, recent a for which

While we're in with early rates. signs we stabilizing do are see still some to renewal and see new we continue QX, registrations strong

roughly current expect name we're X.X% view with and growth However, we likely X.X%. adjusting the rate base guidance and which be beyond. from range QX of our saw seeing we Therefore, range rate pre-pandemic half for and will that similar levels. to we in levels registrations our agree expectations now prevail also the new to are XXXX the consensus possibly expectations QX a the that domain our first in economic renewal reflects rate are XXXX through are renewal similar to domain between This preliminary an the reflects QX. XXXX, conditions in and improving of This and

notice wholesale names, XXXX. $X.XX a annual increase from of the today's price of $XX.XX for Xst, to will announced the February release, given have effective .net price As price to raise earnings $X.X in domain which we

stable Our marketable end quarter. the the cash, $XXX financial of remained in at position with million securities and liquidity and cash equivalents

investing repurchases. authorized second our the cash, quarter, consider repurchase program, the and the evaluate no $XXX under business has needs expiration. the uses remained end for During $XXX continually million and of share repurchase At available we million. shares which current million X the liquidity including potential best quarter overall We and share for

Board their claims findings. .web parties written to call, noted ICANN’s summaries standing in tomorrow, with and decision Board responses submit by of independent our Turning August process the by its submit last committee to review then to one directed its the provide final The asked committees that's July XXth, we XXth. of panel's review then to as and the

will the review on committee findings then We Board. expect the and that provide will conduct its its to these ICANN submissions based

more about turn forward. George our including to remarks, I has areas George. going over like completed return of with I'd to report focus Now financial the closing will his call George? when

George Kilguss

afternoon Jim Thanks good and everyone.

XX.X% generated quarter the ended June million company year compared and million XXXX million from income $XXX million quarter, the the quarter ago. second compared revenue flat a same same quarter ago. and X.X% totaled of For up million, last to $X of of $XXX year XXXX, $XXX expense down in up with XX, the Operating operating from a quarter $XXX delivered the

based to While slightly our we Net expected compensation run focus range year compared is accruals reflects rate with ongoing for the operating run expected interest $XX to increased remain $XXX expense half on our in income margin $XXX decrease $XX rate expected totaled compared focused driving quarter X.X% in the year XX.X% we growth operating XX.XX% XX.X% in benefit The quarter expenses, a XXXX. to are was primarily range expectation to operating quarter. sequential includes million the between be and lower to income million ago. of to base a be million of margin to and expecting and Interest that the is the same to expected now now timing result profitable billion expense that non-operating effective optimizing now of range expenses in performance recognizing an lower I'll and million XX.XX%. of be to free for of diluted the the guidance. share growth expense Operating are $XXX respectively second for to of million. XXXX, cash between X.X% expenditures for XXXX. the estimates million expenses was between second which This flow compared Capital net, the while the be and guidance the $X.XXX on the was $XXX operating our was of between compared of This earlier. discuss Jim $XX $XXX reflects XX% second updated GAAP with earlier, updated than The for and and produced billion. now per expense earnings second XXXX $X.XX quarter million. full and quarter name quarter same million $X.XX year The rate quarter is to is which our income domain now mentioned the between revenue $XXX of expected cash flow XXXX. second is Revenue $XX rate $X.XXX XX%. be million for quarter still million a tax

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

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

James Bidzos

in to factor macroeconomic guidance. uncertainty made many Thanks statements domain the if by economic disagreement any on the our the revised future. that they They company growth leaders see foreseeable over George. last expect the a conditions. There's This continue for was little, base tech few weeks influenced uncertainty today

on well focus the unconditional remarks or manage which for we remain first managing is evaluating to we’re and our the delivering today. much we to pace While will focus In prepared from work our forces prioritization value can fundamentals for strong. geopolitical economic the business. are of of the our for we'll efforts with contribute to continue the change pandemic and the efficiently company recovery downturn, retain our can't the question. our This call our This within the return responsible unchanged a evident service flexible and and such we and increase on success your long-term business macroeconomic remains transitioning .net and talent, of will our of shareholders. working pursuing business closing, .web, and events currently years, expense we're do that open will your environment attention ability, some for mission. what optimizing hybrid a questions. which results and growth ensure identifying the that to Operator, as that we QX registrations, This long-term price includes continually management, is careful VeriSign a of top now underway, exercising as ready confident we for is the earlier, and and five in which today, attract held our for can on reported new concludes described announcing to flat to have new our Thanks opportunities and to teams safely what

Operator

Instructions] from the [Operator Oliver. you, first Mr. Rob question Thank take sir. will We

ahead. open, Your go line is please

Rob Oliver

Great. guys. questions. Hi, taking good my afternoon Thanks for

cited. in for want that domains little here on decreasing you, talk about in dig the you bit Jim, to So medium first that well, a longer business some that in that view? the then one you impacted what with a And factors for can of I have term QX, as means to just

James Bidzos

respect saw sequential question. within infrequent, normalized. quarters name Good Well domain me have time registrations the an decrease let it few first year. time while sequential acceleration we've say years ago seen first in this in several isn't we with that the The the last base thanks. after registrations to a Okay, decrease of a prior a

XXXX quarter our growth the the that in acceleration subsided. base That and much that component confirmation one did see domain we eye What of The in in So on an subsided. attributable growth factors has XXXX situation we're This mentioned in are keeping name subsided. the the QX current rate earnings now demand had consider is during to I of that has mind. the that XXXX. is last is precedent demand of seeing an pandemic accelerated XXXX. acceleration is with pandemic we what now and that the to was of

seeing growth So as the rate year-over-year we're slow a result.

longer at trend, However, pre-pandemic new the current look to the levels. seeing term if registrations that of pace more we similar we're look

rates strong are strong. addition, renewal and In remained

uncertainty, long-term are that there any be change there's continues drivers don't in to demand while So see fundamental names. and our positive for underlying business broad the macroeconomic for think we domain we

Rob Oliver

guys is what strong? the be rates seeing will renewal it something that else the on confidence geographic, you're you anything that it rates gives remain helpful? the would there that, Is on renewal And

James Bidzos

Yes, sure.

a slight names renewing proportion So from first we seen the in higher renewal quarter, in rates have decline that's the but China of quarter. this to due time a

at see actually what it's for range additionally, continued has stayed previously improved time. larger XX% strong in renewed though, strong the that names to the trend we to for names that The business. helps So the also names those the I becomes related the renewed do during accelerated And over seeing is base rate the rates. of demand positive renewal been are Those as cohort renewal a have additional the a mid renewed, names. rate pandemic, referred overall rate. renewing previously previously of We're portion and

underlines our in that a strength core that's particular. the point strong business renewal in forward the of going rates confidence So

Rob Oliver

from other that is time about, got And the domains it. cohort, cohort that emerging for got talking it, in a that the are you're renewing? American Got Jim, north words, those first pandemic now that

James Bidzos

a to broad renewal I use from lower Well, tend think modular those names that time rate. year first are ago renew the at a term math modular to we Chinese quarter, that which the had

No America. north to limited geographic not are real specificity remaining the So there.

I rates renewal think broad very those yes. are and strong, geographically those are

So those are quality names.

Rob Oliver

it. Got

time. And behind timing. increase, .net It to on of your timing a reasoning curious comes Okay, bit price the hear just I at the love of helpful. would very the a

there, you that? could understanding On the why for other on you not mentioned guys it have help and strong hand, the particularly years wondering better five if been as get hasn't one walk of raised and to prices now sense us through just a you

James Bidzos

of We is of you we our on. make specific the nothing stages increases those TLDs, pandemic, value. years. without studying we market. study as and conditions lot just that market result back our the five to that level still a decision all level, unchanged There's early of the we've know, that current decisions. pricing Well, the represents the .net based .net’s of It's XXXX in including back price froze .net. current of does go in

The competitive in of takes it's effect slightly market. as next TLDs price legacy year. noted, priced are .net, very And the so-called other February all a you so above increase Xst

Rob Oliver

labyrinthine Got seemingly on that now another it. that but can there's And Got more not this unending say, and you touched .web, is I'm okay. process it on phase. sure and in it, you you,

or .web all both new we timing your I be any filed Was quarter their guys parties resubmit that and comment you other asked you was requested terms of helpful? having I guys like there by to anything will comments, around on that then infer potential everything in by of could, the material. was guess, would in So here be tomorrow guess of that filing have

James Bidzos

Okay.

me little that bit. a Let parse

the filing So yes, on doubt that. our tomorrow, of yes, make process. this certainly And time we about you're is a right, will different no you slightly part

the which the made of arbitration. fair and process characterize it had Review back of to took process, basically ICANN on filings, ICANN for follow so which the that's decide gone in will of of for sort was meeting a to resolving step committee sent year it the board Independent direct the Process this a IRP form in gone ICANN front issue course of issue make the to That address held Their to the ruling that panel, ours. these think and committee existing that decision. close panel be a is panel, panel, task of these and a earlier is this I until to everything to might up, close, make ICANN that's this assigned instructions asked issues. now, arbitration, its

now in about the of direction are panel years we the So at are, a to stage and where these ICANN this then given procedures, tied manner. they're is all it policies responsibility resolve ICANN has of these and going this litigation, after to the issues, in

are we're in timeframes that with we're hopeful we're some we'll certainly assigned here, that a phase there different comply them. So and optimistic

we've is as operator new any that. choice. look forward see a said But more always .web. filing As to being won't introduce registry an to on is any that this we for That process, we and so obviously the We our make unchanged. to of of our details it nature, opportunity pending customers a TLD or offer comments that anything legal that

in I this think and and a them. we point from at to look have hearing forward hands ICANN’s they very process much it's

Rob Oliver

George, Okay, you. great. one That's, helpful, for I Jim. had that's

more to timing talk due if lower certain the You was you or what help the run were expenses normal back and that a that suggested expenses I know could about and the the that of into us varied a of in return half but normal did understand about little quarter, rate just that any the variability? little mention expenses expenses. the went in operating said if or Is bit that back you bit course to you of timing year, would what, can

George Kilguss

minor larger try benefit Rob. compensation performance to year to We based do in those of and a and those have bit. more sure Yes, related case. were in some say accruals I a little lower slip we quarter. The that programs really a were the execute components sometimes would

of As our for related the of you maybe and expenses know, our in came you healthcare in don't quarter. to number know, expenses we're a lower benefits self-insured we're or some

Rob Oliver

Okay.

I'll I you. I career certainly remarks cycles Last aside that, numbers, you a is was cautious think and Jim, helpful. you play you're macro. been of what of prepared cited just that’s through just about that your you've cautious but it And, of sets some in this your lot that bit some Okay, how love question, and different back might and watching. actual out? hear bent you mean gives what you data to of relatively the tech your a gives come at least in kind from little of the more about seeing, commentary to commentary what other the know more companies would you're

James Bidzos

that as the I I long-term going That's other way made Yes, simply business. build economically. really at just to can't pandemic we right. just our another last that that point separate that do to really impact we're I on. the intent there's I don't situation things lot a a that, here tech well, mean, trivialize say effort I of I obviously to an quarter things and are is no there's bump to you're again out referred to wanted unprecedented this to sort want directly what do to the control. we from the in absolutely that comments can't leaders we that what about. have look in to see guess this road efforts it but said in

question factored guidance it or we that have first eye certainly three We the all in. uncertainty we have things it's But long-term the months well, have said, other and more of on There's the data. we we your to confidence and about some our or unchanged.

a zone, that We We And factors, ecommerce. mean, of those a are impact have amount tremendous track I obviously factors the data, amount slowdown like of some other those online just but about and bit domain other of substantial certainly advertising macroeconomic a data. of a But things. in not things there's names.

there's do we consideration we that certainly when wanted point. them on control on. in the again, There about in the renewal have we're undeterred some a everything comments that's We're the by are we're So going that things and recognize own a strong, assessments those them. we our huge lot focusing zone, in But really is control that and being to we're and We can them. but we just given reiterate things we of normalize but control, to expect That's confidence some going is what will maybe focus to of just about final can't to that see data, The make factors for I terms of run my absolutely plays be, that will together. long-term. rates in putting cautious going we We're strong. what guidance see, role prepared and at our our the and business this, that's to our I'll business that are do. and on forecasts focus. strong. And we we focus business we're And, what here fundamentals on

you was clear there think So just from us. what intent can make expect I the it to

Rob Oliver

really appreciate that's it. guys Thank helpful. much. you Great, very I

James Bidzos

Thank you.

Operator

or the closing remarks. conference like the for to Speaker, there to any at I'd additional appears Mr. time. question is turn back no further It this that you

James Bidzos

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

Operator

call. Thank today’s your for participation. you This concludes

You may disconnect. now

David Atchley	Vice President, Investor Relations and Corporate Treasurer
James Bidzos	Chairman and Chief Executive Officer
George Kilguss	Executive Vice President and Chief Financial Officer
Todd Strubbe	President and Chief Operating Officer
Rob Oliver	Baird Equity Research

VeriSign (VRSN) 28 Jul 222022 Q2 Earnings call transcript