VRSN - Earnings call transcript Q1 2024

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Operator

Good day, everyone. Welcome to Verisign's First Quarter 2024 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

First Welcome earnings operator. you, Quarter to Thank Verisign's XXXX call.

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

D. Bidzos

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

deliver provider, and our quarter. as during strength to addition the infrastructure the on mission model. delivered critical solid continuing business show results our Internet financial a In continued These to of consistent financial first results we

quarter, per revenues year-over-year The From with and million new .net year grew At quarter income the XX.X% For Operating a a compared new .com same registration ended is of perspective, XXX.X for grew XXX,XXX compared domain in year-end the XX% X.X% X.X% XXXX. for the names, expected and grew name first year-over-year. of with domain quarter names from the share first quarter last first end down renewal March, year. registrations X.X XX.X% the earnings million be million to rate base names the XX.X approximately to ago. totaled year-over-year. XXXX

under from As first we segment discussed the XXX,XXX our expect last domains declined China-based our quarter, this quarter, registrars in management names. to contract we In by XXXX.

U.S.-based been and For renewal on the recent registrars new in base also our retail primarily the softness some softness this source of pricing on seeing ARPU regional domain quarters, impacting to reasons focus is growth. We're name the has through drag the prior primary levels, increased rates. due their which registrations higher from overall noted

persist to the positive for negative domain year year XXXX, we in said, now While to feedback, based same being these XXXX. That we're and most we subside quarter of channel expect process new out marketing rolling programs current factors gradually our through second to of half results had be expected in the full X.XX% name a the change We're X.XX% goal XXXX. between in the the to registration our these growth of this and trends support base of XXXX. on registrar first for to base name returning expecting the domain improve achieve to now to in conditions

a note, pronounced expiring most of in during due a the second As to the base base modeling quarter of be 'XX domain name to expected large half the year. seasonally decrease is first during of the domains

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

During the repurchased first At million. share million we million $XXX shares for quarter, $XXX current authorized repurchase remained under program. quarter available and X.X end, the

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

George Kilguss

and good Jim, Thanks, everyone. afternoon,

the same the million, now for per now million flow be up quarter of generated revenue in $X.XX flow operating quarter to X.X% earnings delivered the to from quarter XXXX. XXXX XXXX, XX, and Revenue year expense million, quarter quarter was this of an quarter $X.XX quarter March million, of of free for income the same and respectively, compared the expected For first million, diluted billion. increase from X.X% totaled XXXX share cash first million of a to $XXX to discuss year same XXXX our cash $XXX Operating compared the $X.XXX is $XXX a the million in $X.XX million million $XXX $XXX of ended quarter. I'll company $XXX for ago. with billion and the and quarter XXXX of first year of income Operating to earlier, compared in the was $XXX which compared million of the guidance. $XXX updated ago last totaled in quarter $XXX full $XXX the quarter. Net $XXX year produced range million year ago

be million now billion is of continued the now $XX million. Our and between be quarter. expected interest to tax be effective financial the $X.XXX is now to expected be income includes still million an Verisign between $X.XXX nonoperating performance billion. to sound Capital to $XX operating income expense estimates, GAAP between $XX net, rate which expenditures expense during between and to demonstrate Interest $XX to expected million, and income XX% XX%. Overall, are expected is and to

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

D. Bidzos

George. you, Thank

the we continue business the change base our be historic believe in the that reasons expect levels will discussed, domain XXXX fundamentals remain for we we've name to strong. While for below

As These active additional programs of base. target the to I become domain during registrar introducing half name we're mentioned the marketing XXXX. second will quality earlier, in programs growth

expect contribute programs these to to trends growth XXXX. to in during registration a return improving begin XXXX to We and

mission This and Our remarks. our business you our efficiently and and goal our shareholders services, our stewardship infrastructure reliable infrastructure responsibly our providing results, steady commitment is prepared including capital secure revenue, our to secure growth to support and operating strong managing concludes to and attention today. for of income fulfill financial remain in your unchanged and EPS. Thank reliable services deliver returning

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

Operator

first Oliver Baird. with Rob comes [Operator question from Instructions] Our

Robert Oliver

a which in what of that follow-ups. would -- programs I U.S.-based if is it a of detail some Great. we 'XX. .com curious clearly you PAUSE is could provide, expect just maybe one in of you. you conditions discussed, you are had sense finer mind. sorts a to for color that know a Jim, get of know Could to as a around registrars? And put and follow-up of weighing within how with but first that, give can on have point be which any those us guys had help growth couple drive little to your long you much you return I working know then history growth registrars I can domestic-based on could don't And that you well what operational

D. Bidzos

Sure.

the question your was U.S. see, first Let's market. on

as marketing as and is So And higher as the reminder, and as has lower registrar pricing, discussed, registrars we do. decreased as a registration of promotional we some present And leading reduction see just renewal basically, a advertising what demand ARPU recent think focus pricing with and course, products that some volumes led the channel, offers. for a we lower outlays when on control to retail their we to at the from you combine don't less the retail rates. factor well this of

can't to we've lot to really the obviously, I some can say ones to got new into addition marketing a we the As that programs but I have, market. go that detail, existing in coming of programs,

additional on in We have that year. programs focused the X plan the half .com currently on second focused to is .net, of we launch and launched

So is that just think can different, I programs say basically, what's helps about channel understand these what varied. to and generally greatly our I it

and all, but gone all and a we registrars who wholesale evolved First selling that's we to channel through afterwards, they've have, also include through are website others. builders changes as to have COVID of like people

our to footprints, is broaden available diverse this models, bases. So business of sort strategy the to diverse group options installed different that's geographic with

TLDs is better. increase fit a to our our customers. with their the it engagement size past So that many doesn't Clearly, by years registrars the for has ago in one all, and goal like broader worked offering selection,

that also options desirable. from we've address that and programs these also designed So community, to designed feedback diversity, -- is they they're are with the multiple and clearly really received

can I So you. that's generalization offer the good

Robert Oliver

We're growth expenses there to associated would Great. restart the for additional then That's additional you. coming are .com a just -- as any and And still revenue, captured but program bit. any that for is that profit helpful result -- -- the with color. little in XX, there this That running margin down in George, to that could that is half expenses change? or the jump through in model second obviously, a be to a of corollary here that, drive that --

George Kilguss

and programs. say associated not reflected is you. that thanks those in putting have current that Rob, expense budgeted, I Yes, question. We guidance would for we're the for already there do out necessarily already expense direct the with

Robert Oliver

years. I'm quarter, and I question a there there helpful. opaque Gal many many a any was, and Last And Jim, if view? there last around was from ] parts evolution so then just the has bottom China I'll in that to moving be provider you here? any on color guys you used Helpful. been chance in over happening for been it have you me, mentioned ago. X that the what's and China. a at Has Great. China word visibility partner [ situation months strong for changed your Is and in how, would that think so we Okay. curious all, see turn

D. Bidzos

you my be continue through would in of at Sure. Well, just I I first remarks, that mentioned China that we prepared to all, to XXXX. do guess, least drag I expect remind a

the that's So thing. first

much that, us I'm that for can for that regulatory in terms is not also different think goods, by substantial There's better bit think of -- point all different. domains. affected insights. those buying see, terms I is nothing we to market really typically price dollars visibility, that but increases not really. the mention. The by gives a adversely I pay of In just of let's just cost to that better little They a environment reasons are cost of more I the

impacts. of that sort a it, of So lot into just feeling is no. insights market they've -- detailed different Specific

X% of will, base about overall I ease think our the forward. downward, at us domain moving is as negative that, name XXXX. our of will impacts help factor of view That's China one course, through move course, of and that we

seen The obviously, new that of things, we clear It's help their our last targeting and programs in to that think understanding. we're better customer fact China, X to ARPU sort at can -- I is is months, we nothing on point the cyclical. the acquisition We've before. But X that and not a focus I that the really. says there's registrars certainly them that other, specifically to have

right I more I are but think it can fully that's don't other answer it's probably regulated you affected that's the best we market as a study There that sensitive. give closely, and simply We more understand. factors now. just being

Operator

we'll take Ygal question with And Oromia last Citi. our from

Ygal Arounian

focus seeing, dig we look beyond pricing within a isn't If at to the pricing meaning anything the could little having more. and domains the that's the impact just pronounced. kind total you're registrars the softness of specific that's there on Is if .com that necessarily and as we into .com, bit

.com they Why it TLDs they to Are that bigger are some other the promoting are on a what a So of the having understand Just .com? is more little impact bit than dynamics? everything? versus better.

D. Bidzos

low. Rob's last it's TLDs one have is didn't, you These I cases. added, about asked other I'm maybe question, I sub-$X Well, thing, it's filling talking could in demand question many We're guess, seeing there. some I we're about Jim. so It's China the that are that true that's TLDs extremely where are to that, this certainly of priced -- glad

a So our in is we the don't .com, The sort that's products control channel of pricing. certainly a retail .net, range. pricing broad factor. Again,

the renewals renewals pricing wholesale are selling others It registrations are $XX and varies. closer above to Some and much price.

sooner we probably primary or adapting have sooner, focus recognized U.S. I think may point getting I in the reduced market factor but if would into now. could done be them spend with marketing anything I we're better that that on along ARPU a to be on the a wanted is to guess, programs these marketing. And little

the I gone will on you're up definitely that seeing down. are is think some think the being the a That's that spiking in different dent There way years issues. huge of that sub-dollar I TLDs others are sold where address and there So and literally experiencing over growth. place TLDs off are with But way make some China.

that in see report. can You our DNIB

George Kilguss

don't It's new much as flexibility George. markets. in TLDs flexibility, the would have in -- We certain I say,

So we same. treat customers our the

And so when we also can demand. sometimes overseas, exchange in in have a rates differences factor that be

Ygal Arounian

it. Got

retail a just the do the follow-up current you maybe power $XX I that on I think the that. It's not with structure in domain? pricing, With the think contracts, and focus not pricing So you year. [indiscernible] give I mean a pause still there's retail would less any control the that level? does about how pricing Does think you you how how on about wholesale don't you purchase. consideration level, know the think that or flow at wholesale through on a thoughts highest but of level?

D. Bidzos

to Well, decisions the on I make registrars think own pricing. their have

are, opinion, testament it particularly I and my and a on have largest think in and product of brand that renewal who high themselves the we the comp renewal the higher stickiness quality the high segment people rates. enjoy those some is the of prices to

record easy, So with TLD subscription all has just XX-year I stickiness functional that you product think a a other come it's supported the this, product, like with benefits a a it. strong uptime that's that if have and

customer not particularly that's it nature surprising. I'd And think more the new cyclical of to attribute acquisition. ARPU. I

some of focused are the more accommodate business And different to programs our get acquisition. that new will designed them models customer on

Ygal Arounian

been me. the for some renewal. questions about per -- the a help key one say last the us new and nothing the assuming timing just time we I'm through renewal, get maybe closer What lot Maybe of get to are And it, of Helpful. .com things we se Okay. walk but there's to other or about as line of have think risks think keeping like? And here things through that how as that to renewal understanding, what the the any time look date? is works or you've the but think closer to contract for same, about might to you're line details the you [indiscernible] renewal we I get and the investors

D. Bidzos

the November, a meeting of not shall contract what as presumptive it by risk. is you contract But long mean contract date And it's the know I I don't ways a mean be the renewed. says we're SLAs, out. due deadline right the end has all so renewal. as of is -- the

engaged We to exchanging are now renewal. the are with the drafts process of in ICANN and

due used an So the last process, a And presumptive of .net. it's had I we of early until is, right we the and com that .net, said, was year renewal not November. course, as of like and with in anticipate we for renewal, end -- had on-time

There's expect of gTLDs like this a net like right thousands and renewal, think contracts. we of of I com of -- constant just and has just rolling other presumptive in all all renew. ICANN the [indiscernible] this their these to exercise

Operator

take we'll Oliver an question from And with additional Rob Baird.

Robert Oliver

been be here here? time a like in evolution that but any update, your -- aware Sterling Great. you the that change? seen as another official perspective on you of heard .web, this we any could us I'm have question for of ask again. anything just I'm see on or I And line seem you so last constitutes hop question I you provide or web or what anything guys there possible updated a should Auty honorary. been sure think doesn't not Jim, quarter, it know I'll pulling there's on got to that

D. Bidzos

Sterling. Thanks,

Feel time Rob. another kidding, to question. in free jump for Just any

call guess an Good welcome. question. would quite update. You're I I it

this You said movement, guess as I well. could qualify that as

context, filed delegate X is ICANN's had did -- that in first like to So Directors Board IRP without .web just it's we for ICANN. twice also and process same time, them this have panel award know. for had objection we this IRP update April, that the to of application as looking participate UltoNovo the second We Verisign I where have voted NDC .web last the IRP and one, second to IRP Board an that against to the complaint and exactly full committee what ICANN's sanctioning rejected relief second second the last NDC. This first Board is rejected UltoNovo April. then filed to you the

against we owns as what we registry funding secret. a And should has So no can and to believe actually existing continue as claims remains litigation possible quickly be this as tell, and to the baseless ICANN that Alta and far business, [indiscernible] panel way, with the IRP by as dispense ICANN. we believe is Novo

the the goes. second application, filed and update IRP an is So we'll that we see where

Robert Oliver

helpful. to go Great. helpful. again. that I'll the very at But look record to That's have to back

Operator

over the final for that session. now question-and-answer turn And does conclude back Atchley to We'll David the comments. conference Mr.

David Atchley

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

Operator

We today's Thank day. does your you. That conference. participation. conclude excellent an thank Have you do for

VeriSign (VRSN) 25 Apr 242024 Q1 Earnings call transcript