VRSN - Earnings call 4 2023

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Operator

Good day, everyone. Welcome to VeriSign's Fourth Quarter and Full Year 2023 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. of and President Treasurer. Vice Atchley, Investor Corporate Relations David Please sir. go ahead,

David Atchley

Fourth Welcome Full operator. you, Quarter to Thank Call. VeriSign's and Earnings Year XXXX

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

D. Bidzos

you for XX David. consistent Thank you, critical beyond Good solid another marked .com financial afternoon availability of record Internet delivering enhancing infrastructure our us. XXXX year joining DNS .net while years. and our results and thank everyone, and extending of to execution,

grew Shares year-over-year, at end the the XXXX, while operating by of by at XXXX. decreased income shares During of from increased XXXX X.X% the revenue outstanding X.X%. end X.X% outstanding of total

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

the shares. the available share Over under we returned through At million of X.X the shareholders $X.XX $XXX of million billion year-end, XXXX. no of the capital course program, which expiration. At end the repurchase end year, remained in repurchase totaled current to million domain of authorized .com million names domain XXX.X name at and the the names, of down December, and .net from X.X% has base XXX.X

million During million by year. the names. million with domain same compared From the X.X a registrations X domain with new the perspective, the fourth quarter, registration quarter X.X ended name fourth names last base quarter new for decreased

down XXX,XXX names, expected from approximately XX.X% be The a year names for to saw XXXX. XX.X% quarter year, For we names ago. fourth during million is the rate compared XXXX XX.X registrations new the full of the XX.X with were million renewal

-- and renewal year-over-year. were full preliminary of rate the XX.X% lower the of For below names rate rates Both previously XX.X% year lower renewed XXXX, were the time is XXXX. renewal first

domain on the demand many source overall of domain are factors name declining the there from names, While that remains growth. drag base for China demand primary drive

adjustments. including currency, been weak challenging of and regulatory as under more XXXX. local environment retail a the Our several China-based a demand from domains declined conditions, in of result impact pricing by factors, weaker registrars registrar economic China-based stringent X.X management million names a combined has with

based registrars name names China, grew or XXXX. in domain X.X base X.X% by our during million Excluding

yet any in revenue thus not it's the we quarter-to-date, base regulatory prudent continue have has negatively domain China far changes name domain-based we China. to to XXXX XXXX. to the material in expect and landscape growth current impact believe in grown during seen Therefore, While macroeconomic or

However, name with effect less business the we China-based China our our now the see portion after at our about of negative having X% of overall a overall in base XXXX. domain pronounced base, trend on

and For positive name remain flat a of negative base XXXX, domain to year-over-year expecting X%. the we're with range X%

from highly release, effective this As competitive price we be -- of annual of to announced TLD XXXX. remain raises believe with .com we $X.XX to will the increase, names, have choices. price which given earnings a X, the $XX.XX September other price domain notice in wholesale after .com $X.XX today's wholesale increase for Even will

As any price. our be reminder, terms years to for wholesale of up registered domains at current XX a may the

I'll Now George. remarks. to report I'd completed turn like financial to when call return with closing over the George his has

George Kilguss

Thanks, Jim, everyone. and good afternoon,

delivered company and up X.X% income operating $X generated XX% was and totaled $X.XXX up XXXX of expense flow the in was million from XXXX, Operating XX, and billion December XXXX $XXX from margin year. million. the ended previous billion, year year revenue full the operating XXXX. X.X% free $XXX X.X% of cash was For up The

of to per same quarter $X.XX revenue quarter XXXX $X.XX compared of quarter million, and a an the of compared income quarter from of compared for fourth $XXX share which million and the same ended to XX, of the million earlier. Net million same earlier, year last the year was the increase from it in million totaled expense quarter of operating of $XXX the For the up December diluted a $XXX for from XXXX, quarter year XXXX XXXX. $XXX in quarter, delivered income QX a to million, totaled ago. Operating generated X.X% fourth $XXX company X% $XXX flat produced earnings

ago expected billion includes to Capital $XX forward our of is interest billion. to $XX are XX% continued expense demonstrate call benefits release, $X.XX. Operating between our of between net, billion. items to billion cash $XX tax per for in increased XXXX income by income of related Jim to tax estimates, recognition $XXX to XXXX $XXX release. VeriSign for for the $X.XX is the million respectively, income in $XXX share which totaled sound net million, quarter income XXXX million, full was income our to million expenditures be between Cumulatively, the $XXX on nonoperating his an be expected million As GAAP turn XXXX, diluted the $X.XX by remarks. net be Operating $XXX mission to of and Revenue is XXXX to and stated million. noted and cash the income million, increased $XXX today's year in and range flow benefits flow guidance. for financial fourth expense and million discuss compared fourth the performance was now building and coming full to the during to we effective earnings throughout in between is and our closing and to has of back and cash rate these to million, $XX.X year quarter. year earnings XX%. Overall, strengths included quarter cash free look flow $X.XX and $X.XX the the tax million Operating the income expected free Interest quarter the last flow in and respectively. I'll million expected with $XX now expected and be be year. I'll

D. Bidzos

Thank you, George.

us we our in in expected serve our our China business capital for unchanged manage our of firmly continue business to and operating to our prepared XXXX, support responsible and continue our results, our from us report steady fundamentals shareholders. These and in growth solid While goals demand remain view, remain income which return of and is We your in attention the to of remarks. which disciplined to in and registrars This our infrastructure business well, responsibly another one commitment reliable our to mission our to today. year, efficiently, strong revenue, remain strong. providing and soft and capital believe is fulfill deliver management allowing stewardship EPS. Thanks financial concludes secure including services,

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

Operator

question our Oliver from with will take We Baird. Instructions] [Operator Rob first

Robert Oliver

you Jim, that's mind. conversation. on Obviously, pointed everybody's China out

And China. has you if so to to I get what, just a in just anything, be curious start would changed sense from

You had alluded love on of to would that. environment, couple I stringent more from get a you And thought then but a regulatory to follow-ups. the

D. Bidzos

I Okay. had. China. my Thanks. a X.X that China Yes, definitely, registrars that had China saw we outside results mentioned is of the we in main and we of from X.X focus decline registrars unit the from million growth that remarks million

domain process, little an more It long of hard obviously, couple concentrated economic lot the process authentication as is difficult cetera, it's for the quarters, several variety that today selling having, a as Those now, mentioned issues climate definitely bit bit one names. of what a makes a is as of in China. it to The difficult. that for we've names et issue and how basically in more very confirmation, will have for lot to said predict factors of regulatory exchange process I goods, little us it's a a increases registering, the impact registrars domain quarters predict. more person more And in challenging, China. foreign are obtaining last. The So for a is identification, challenging environment cost there, are well. And which of

There's to really an hard going lot a of market on understand. all It's fluid. contributing. So are try It's those things very to to It's say. there. opaque

things will of opaque it of Some hard bouncing very things, stuff at shifts change? really on, migration When other Is Is are a it the the or Those going it bottom? difficult making are the see are bottom? it to really that the market. along to impact. and inside are assess

concerning abundance it careful just China where prudent an of we about guidance it to really in so find be go. and caution, might And

name here influence, are a predict. just it's to flattish certainly a the registrars China-based the difficult of domain represent as zone. DNB, X% mentioned, guiding are reaching result, But where those really we as base, about a our point to and So I

I -- it at So the impact I the rate, be pronounced, continues as mentioned. impact negative less if should whatever guess

Robert Oliver

it. Got

to Okay. we should X domain Jim. within of If we think moderate? to may, just predict. ballpark to of the that? Is But about might Very words, of is the predictions. guess some give X, how I us if moving just on that? this know it helpful. rightfully Or have guide China trying starting negative of plus I Thanks, other China how China to hard out you the that is beyond And George, Jim a impact base to I sense you In made said, forecast? numbers? comment

that. So could curious we ballpark how just

George Kilguss

Yes, Rob.

in you'll Q, our file see our down about $XX.X And from about Jim clearly China was perspective, units. mentioned, revenue from when in revenue XXXX, a million. a down we million -- X.X As was which drag our China

from And XXXX. both the that's our of the factoring revenue guidance here of domain revenue provided, As in domain of as we've similar perspective, impact we're we base. in have kind perspective that and base our a of midpoint that, going assuming into a to factoring the is the and we impact XXXX that a think name the to about guidance guidance that of also name a saw result of midpoint in

Robert Oliver

Got it.

Okay. And last and Very the one then me, for I'll helpful. then pass baton.

any if that Just .web. we guys have be about was there Jim, just wanted should heard that to aware see of you update

of we think on stood, late a we call should that if just in refresh but you up? around just aware or things where see I had anything get communication last guys to August, be the that you wanted could if and about coming there's commented

D. Bidzos

Yes, that too. thanks for question,

I not the issues. last latest described handled It IRP which in that a it, are update there's is properly no that hasn't of there their that can't which determining reiterate and in .web. dismissive the they what publish detail, was .web. said on they So I'll response in just again, process changed, their time, new very to were I employed

without vote were meticulous the what we've just and to the again, is communications anything And going I can, that's to .web in And that seen going Board an application. Those process to basically don't of with to in last and that end, community that delays. confident staff change staff. to to -- far the writing the will concluding run proceed so instruct out objection we official with what eventually. the so is processing Board we're to think I process the procedure come seeing are those

we're of So the up. these things clear watching We're for website. process to some waiting

be from So time. strong customers. our in market outcome I'll what and reiterate and bringing extended will anticipation millions just exciting desire to .web last nothing the to our of new to confidence our reiterate their the channel of and

Operator

Arounian Ygal Citi. last from with We question will take our

Ygal Arounian

lot or a comment if but first. Maybe to upcoming ask start, there's probably any just chance say not is renewal, figured assuming you I'd can on, there could something you you I'm just .com something comment to that want on the about there's

D. Bidzos

on .net of I'll just and smoothly say based similar is renewal on the presumptive executed right year that .com. last .com to a renewal was renewal. The

Ygal Arounian

Okay. what figured. That's Great. I

levels, if or some helpful. be there's of the maybe What and you that Is For of not the little domains point still you would China. globally understanding in time? could that that it on trends typical? in global in seeing And frame talked million that trends, you understanding about Can call growth the China, bit more? what's going there's particular what confidence over you the are fluctuations give a kind kind would outside anything U.S. or X Europe, it you're Is not? you normal U.S. on historical of

George Kilguss

is Yes. This Sure, Ygal. George.

did of The articulated, global When both at up. and reminder, of our we X.X little primarily million were are grow So reach. many yes, both you that in registrars U.S. base as their It domain as in those China. that about segment, other XXX,XXX look came EMEA domain was units our the just names all But by outside we of in down from growth, year-over-year. a flat. names about a U.S. was our

all So have do that U.S. year here registrants. But ARPU notice necessarily more we that attribute registrants of U.S. I on XXXX. in been wouldn't to this focused weakness

other that segment. good EMEA as our factor we in think all well we did can in other So as a well. see But growth as be

Ygal Arounian

year then outlook for guess, in this spend than I margin expectation Got Can at buybacks the less looking following costs, and least start it. dig down here margin just want maybe into year. tie year? what around for expectations investments for to with then next to saw I maybe line. year And the and next well? that next as talk on just, to the And next where year you we about you're expansion,

George Kilguss

a away Yes, bit impacted the that will million a end government Tuvalu. here first, help grew I transitioned point that, our reduction of paid in of you I by That XXXX, can fees expenses mean, as in But I contract by favorably was went that. at with little out the X.X%. $X XXXX. in to that XXXX

to by still, we in XXXX, the a managing So on basis, been expense have if a job rate adjust good X.X% that, normalized would you teams a growth to were think, here that the closer in is they're I for which expenses responsible for.

X.X% the If a in our imply we rate guidance, back had midpoint you look of which at that would would growth rate, similar growth XXXX. expense very be the about to

some growing in always the We mind, obviously with hopefully, sure we're So on making managing -- obviously you framework and investing unconditionally, that gives protecting front. expense our responsibly strategic we're idea continuously.

continue we'll years. has past well so that on that several And to the over framework focus served us

But we've excess of for As to think to returning the years in buybacks, far expect capital continue about. talked we in to for I as as many as to don't really variety done a can buybacks responsible us here have be we shareholders guide many, reasons, past. you

Ygal Arounian

maybe last GoDaddy then And an announcement partnership or Name had Great. ENS. week, picture. interesting Ethereum one earlier this a Okay. Service with bigger

and of some just of broader was thinking some DNS And there. you because on to the the with commentary of and how about blockchain some stuff head, the goes and thoughts views but impact. that, crypto a your domains some there integration future have little maybe the of And over wanted get on just particularly side kind challenges can there my the about still

D. Bidzos

really Well, DNS. question. Good Ygal. for is development a positive the Yes. this Thanks,

of for But I GoDaddy. did ENS, they either all, or course, to it to of to speak make is what domain name don't a easier link a address. First want blockchain

unique, unique it utility very a what in regulated So about stable stable to And way part best up behave, addresses, have That's the requirement play. of obtain of of domain a the the underlying identifier they global the a serve XX/X that's how domain name right reason for the name we it's the well-governed, strong -- that registries the registrars think to the we IP part domain such reliability, for operate, all positive and -- as that domain and names value That's spoken that the the maturity the perform DNS identifier, proposition years determines the well-regulated can is contract. of a global without development they role a how fail. they part a a are do. is well because identifier and already like of of name. We've it our space our reinforces to infrastructure here

name uses So they And identifiers to -- benefits There crypto its I a and think, from able benefits I being really names crypto identifier, stable with ENS of domain linked to there the typically move and domain currency security And to the all the are linkage ENS cryptographic the and be with of to and other the -- name more tapping DNSSEC, more names. using globally easily are a characters. but of string the basically significantly one. smart strength space good. It usually basically linked and unique spaces, system link They're that's it, is linking currencies. adds like a DNS itself identifiers. security think, holding the as blockchain the utility domain associated can this identifiers, extensions. domain unintelligible are DNS name value wallets domain wallets that difficult is announced very it ENS your common to so

based to protection the So the provenance, domain strong DNSSEC all a public name, resolution the ownership of of infrastructure key cryptographic underlying things. the from benefit

work basically think company, my invented cryptography infrastructure, of out build probably public of many that I see key X.X. of And this a previous a do. that RSA, VeriSign don't form you lot know was You that and we

why along And the reliable with DNS, the reliable. underlying with people secure, are so it's well space is navigating this infrastructure governed

get also ability going well regulated. You're it name, to and to and is register where to resolved have it activated And have you the go. get a want domain it

active, having Internet password, the single connected, for users? In world. for So of gives that global as get a magical Wouldn't tremendous dream strong, in way, that. global the can benefit. lot that it's basically applications use all you use like that true everywhere mean we a a and almost a a be identifier more coming more services come unique, stable you unique of I can identifier you a is

And is a so link there's WebX secure they already the those base a let new advantages actually of use realizing stable that there this to all and and type that you and application have. of it out get identifiers people can

think is this So news. we really good

Ygal Arounian

Super. than be more interesting very A the thoughtful honest, that. expected I all answer much to future and but of

D. Bidzos

don't Ygal, be applications maintaining that to operating some critical going when that alternate reason kinds the weaving people identifier things global talk high-value the plumbing that about of the do. innovation, but all a infrastructure add, is publicize we for believe spaces is name that mean, we into that responsible a rather of folks just reason call the the you don't years, we we've that the we see recreate XX very we for years we well-regulated than for with is can't lot of point, of DNS of DNS -- better part to DNS. This basis do, I the and a and building, working at what been that underlying that the for for integration that on secure,

great quietly we've opportunity on a now think, adding because I So I been value. it's to a real your jumped that's, for question something working to while, point on

Ygal Arounian

some maybe the under-appreciation of space. For the sure. innovation in And

very So helpful.

Operator

to any back session. now today's will or the for remarks. closing conference I concludes question-and-answer turn This additional David Atchley over

David Atchley

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

Operator

may you disconnect. again, participation, for now and your you today's Thank Once concludes this call.

VeriSign (VRSN) 8 Feb 242023 Q4 Earnings call transcript