VRSN - Earnings call transcript Q4 2024

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Operator

Good day, everyone. Welcome to VeriSign's Fourth Quarter and Full Year 2024 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

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

me is within call, President Executive George on you Joining webcast from and Bidzos, release. replay and Relations being call About Jim At and website, Verisign of and Investor this earnings CEO; that which presentation Chairman, are the Kilguss, under CFO. also and President available Vice the the This be available our the few call find will Executive are will of verisign.com. will There, presentation hours, be a site, end the posted. on

done risks in the most unaudited, with Financial our Verisign are the forward-looking matters financial specifically public we remarks and performance results our the the used flow. GAAP during discussing financial update we guidance will SEC, on include and EBITDA disclosure. results or report it the does that uncertainties be quarter adjusted in non-GAAP free discuss today and through documents not in call by our in that release filed detail measures X The are cash XX-K. include Form a results and today's statements recent to and is Verisign, unless earnings subject

George questions. Investor and reconciliation call for section Jim of the appended to which available afterward, provide to the this we is found remarks. information And call. on Relations open GAAP can our non-GAAP the some your slide be will presentation, after prepared website will

to over the would that, like I With turn call to Jim.

D. Bidzos

increasingly and transactions than Verisign's to years on success mission strengthening improving protecting, continuing I'm and than now We and of .net afternoon an our during network pleased daily. unparalleled .com cyber to thank more XXX our in billion deliver network. more Thank environment with you for to our Good joining everyone, you, uninterrupted evolving threat record extended XXXX. on us. processes while XX of VeriSign's resolution David. average

worldwide Zone the Our and as to focus providing Root remains on depend on .net, users only .com the security, and not but DNS for well. resiliency have come Internet stability for

Financially, at X.X%. of XXXX. by X.X% shares total of end delivered of growth XXXX income outstanding X.X% Shares we in at while year-over-year the by the from operating decreased increasing XXXX, the revenue outstanding end

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

$X.X the returned we XXXX, billion X.X shareholders of million During to repurchase shares. capital through of

year-end, December, names has current At the authorized million no name totaled which a end X.X% or year-over-year. XXX names, available .com X.X base and million At $X share the billion remained .net repurchase under domain expiration. of program, of and the decrease domain in

the name by During base names. XXX,XXX the fourth decreased quarter, domain

shows and fourth XXXX, registrations improvement XX.X% registration the during last same be year-over-year, sequentially for million which both rate XXXX. saw new X.X the third renewal million compared and to approximately quarter a X with improvement year-over-year. of quarter fourth the expected year of X.X The we new sequentially quarter quarter perspective, million From with is names of for and

the full the and U.S. perspective the EMEA our decrease in both from name up base was China-based From volumes the expectations year. registrars. and line name domain domain during China XXXX. in start region a year sequentially full In the base in with we both geographic in the XXXX, decreases our for and at QX The saw of year was XXXX,

at to segment expect decline, For pace. XXXX, we registrar our China albeit slower to a continue

smaller now As will only of domain China our X% decrease a impact. that name segment represents the from base, have

the years over seen U.S. for rates marketing higher prior for and spend region. focus and to reduced new domain compared registrars XXXX registrations prioritize on impacted These we've new As renewal on customer our we customers through factors ARPU have with names. market levels, acquisition retail in secondary an U.S. reported, increased previously pricing

we trends, reengage .net of base new programs goal these to growth. returning support to to our to response marketing domain began .com registrars by working In for on and launching customer new name acquisition

seen we we engage As last response fully DNB the our trend the positive our It to in improve of will expect XXXX. that XXXX. in in and stated this optimistic early we to programs, registrars quarter, process, we have many to start efforts new more is growth but are

expecting trends be X.X% change year-over-year and the are conditions XXXX, Given to in negative base these X.X%. the to for negative we

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

George Kilguss

everyone. and Jim, afternoon, Thanks, good

For the year $XXX from X.X%. revenue ended X.X% resulting Operating year, $X.XXX million and up XXXX. billion, income previous X.X% billion, the up $X.XXX of December were operating totaled generated XX, XXXX, up from the in of company expenses

$XXX For same million the from up the million, year an from ago. X.X% of $XXX fourth of XX, the generated XXXX, of X.X% income increase quarter quarter XXXX operating same ended company of revenue and delivered December a the quarter

expense a $XXX $XXX earlier. Operating quarter QX $XXX million, million year the and XXXX which in to third during compares totaled million

same the on last operating the to expenses quarter. increase pushed call, quarter due were discussed fourth earnings our QX prior we fourth quarter's spending delays into in As an we income XXXX Net that expected in million diluted year for $X compared $XXX to per of produced a $X.XX of earlier, the of which fourth for quarter earnings totaled compared quarter the to XXXX. quarter share million $XXX

for discussed, million free $XXX cash cash year $XX.X XXXX recognition million As the which free flow million quarter year with ago and share benefits, of last $XXX respectively, quarter. the million in by million, for net year and tax the $X.XX and the totaled included diluted of earnings the $XXX $XXX was quarter respectively. fourth full Operating quarter. previously XXXX fourth increased a million per in compared in cash the flow was income million, Operating of flow of income flow $XXX and cash of year-ago $XXX

to expected is Revenue $X.XXX XXXX is to billion. Interest expected between be guidance. $X.XXX interest net, year expected $X.XXX and expense be million includes which expected to to and Verisign $XX And is an full $X.XX billion is to our be expense Operating XXXX. discuss billion throughout Overall, nonoperating income Capital income rate and income and tax of between now I'll estimates, $XX during between be and between expected effective XX% $XX million quarter be to the and sound financial $XX expenditures and XX%. GAAP demonstrate million. continued fourth million. between are the discipline billion.

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

D. Bidzos

for successfully agreement delivered unparalleled the the cooperative XX-year financial Verisign we extended and sound and .net Thank We our the you, year the ICANN operational availability record of with and summary, George. .com and with NTIA. track In by concluded renewing registry results. agreement .com resolution

As to and mission. and be focus look driven beyond, XXXX we to our we'll by continue on

base for XXXX, growth shape. trends X As it the relates name taking we positive to rate see domain

the from China-based is First, expected decrease be registrars to muted. more

adopted XXXX starting rolled are trends. continue in for being and Second, the are we offer marketing to our to impact and programs XXXX by registrars out

to on are XXXX. marketing Finally, to while acquisition it's early some starting hear in an and expect registers expectation from the start cyclical in efforts do refocusing increased trend, customer registrars we for

in the improve in Although expect we saw domain slight what trends from XXXX, name do we XXXX. expect we decline to base a to

prepared ready our call questions. for This for you the concludes we're we'll first Thank your for attention and open remarks, Operator, today. your now question. the

Operator

[Operator take Oliver we'll question Instructions] Baird. And a Rob with from

Robert Oliver

big remarks the you points with And cooperative agreement X certainly and base there, Jim, the now you as on for in your last focus finished of mentioned towards NTIA. couple at -- a you investor a closing pivoted for year you're as renewal the had is optimistic why you, certainly, first as year was well questions. you an ICANN more it I domain guys with the that. to

I to registrars us some might X follow-ups. the if would some that domains, that you looking guess, towards What pivoting X, comfort? more of color could also I around very you couple give macro, from you then be new that at well generally, the have be macro in know your which perspective, addition a suspected you more but just mentioned points, maybe gives I the the encouraging. And those as of on

D. Bidzos

see to negative our in the do as you We expect name as impact continuing the nature, we we those from today, name what cyclical XXXX, saw during return base know, trend last we of have guided to base decrease suggests growth do improving this Okay. Rob. midpoint domain range Thanks, trends. year, although the trends Well, through to that year. once domain and the work we an

adopted. is seeing We're earlier, of As our being impact I China marketing X% It's from Also, represents business. new lessening early. and them. are programs said positive now only our

expect throughout year. We the more

trend, for I efforts. to expect it's do and on said, to marketing hear while refocusing we in expectation starting early customer a start Finally, increased acquisition from registrars, like cyclical are an registrars

Bowl Super running viewers. In point reach fact, registrars XXX will are out around million X that which I'd ads,

seem called X where and look So out, programs, be were the China and and on we signs also as the ARPU you influence encouraging improved. both easing there we rates impacting to renewal marketing growth could through back, have are and trends main DNB

So we see. picture that's the

Robert Oliver

and know early Jim, regions and color are are conversely, you've still would marketing are perhaps hold? or where those where marketing I starting had there particular color But that you're we it's and if on little programs tweak if seeing be for just could perhaps areas immediate, you Any them is traction? George. early that said programs, the on you have feel And great. comfortable results take be now formula a more provide won't that signs particular seeing any this early the the bit guys where there to you've get you Or to right?

D. Bidzos

comment. get things there's it to adoption that George integrated. I'll There's actual just say to integration, takes invite I'll Okay. and time these performance.

see be you but a comment? signs. do of early to you we do picture where we it may clear are, to George, give want So

George Kilguss

Rob. programs our that their community to a for to particular of options in mean, mentioned, variety programs go-to-market we've them of registered our are I more sure, with as offer aligned new the is engage really focus more help strategies. Yes, really

So opportunities for a again, win-win. for looking

a in programs. piloting As lot of lot a XXXX, these developing spent talked about we time and of we

these We well. January programs in and we that a XXXX rolled have gotten had few We recently early here. feedback. refined as We've in relaunched out late also actually here programs

and these marketing feedback Again, that programs lot of are from use with gotten strategy employing, programs feel own within to a that they're they little color, when our can talk programs. from registrars, we their positive registrars we've the they aligning a

So that's for good news us.

say adoption, As early early now. little a far right as it's I'd

out programs starting gearing and launched and late here year, Most these there. registrars really we've XXXX. of Even are feedback modified they're out to good up last some roll them we've gotten though in them, had just to roll we've

great I than Some feedback. a programs think to are little gotten we've us engage it's out, about comment on that, registrars for but earlier do the early others, and a we but little rolled we've optimistic

Robert Oliver

And helpful. the That's me. you. back one for Great. to then last Jim,

a one, we've of of changes new Just kind One leadership administration in happening. D.C. got couple obvious a have we

So think what, or I expect number might would we you that one. relative you if to be about hear curious to how VeriSign's anything, should business, from

with but you Number not discussions the two, NTIA obviously guys the with sit had ongoing? ultimately changes, are down I them. did any to NTIA request know agreed

would I be whether know I ICANN in are a we have those that then hear to And curious So December. of ongoing. discussions came Head in, new

any I a be realize So there thoughts would helpful. lot. that's

D. Bidzos

is the different Well, across of Thanks, whole very many point just today, policy of many decades where Verisign, process this stripes. result I Rob. administrations agreement, political first would ICANN cooperative of we out of Okay. all, successful are that a

not to main a stability just security tend as you impacting sort and driver. folks that mentioned, in the long we December. as a as policy there And new of are So with directly consistent see supported factor

at new believe. a we shortly, have NTIA new CEO we administrator course, a ICANN be and getting Of we'll

security abuse. with working the leadership DNS CEO, and Lindqvist And his We've with team, forward particularly stability look with look and many the in, organizations, new continuing areas great we mostly, for always and Kurtis” which have we DNS maintained good we to ICANN working we decades, and engage look and in them. we to is a the both relationships forward relationship of

the our new the with second NTIA, look relationship. About working your with typical forward meeting We to her confirmation question, and of discussions Secretary look to the upon that's NTIA, forward for Assistant her. ongoing part

add me bit I might think be a let there. little background until But that then, I won't speculate. helpful some

neutral. the most a know, reliance the and listeners long any the TLD I contained, requirements XX and to common of remain on retained explicit Verisign First, of .com infrastructure strict rights Amendment there XXXX, regulation, as the meet there most performance agreement will content for cooperative registry net. think registrant that guaranteeing availability specifications was that these And provisions. In by was services reduced first while here amendment rigorous is protection also of due

and in have the literally to XXXX policy These economy be infrastructure security of the years and stability and in critical critical of digital first to last the the stability importance the X amendment policies security successful the other to dot-com of and the proven in U.S. and continuing resilience of that's the

And dot-com process. to money recent finally, One, was we that simply for some misinformation which renewals the government, is I'll just enabled mention clear receive that from us up spread during that that isn't true. the example,

cooperative daily of transactions Google mentioned, day, now years. XXx which, as agreement Our And the every without day XXx. to an for and that contract not Verisign I XXX service interruption a searches, XX secure the over the way, is number fund Internet helps processing doesn't for billion the preserve by government and procurement is reliable and U.S. average every Verisign has of average

misinformation well. And pricing a there lot was of as our about

our is and flexibility It's the up pricing hasn't As simple capped years. global last it's that transparent. fact with over our pricing know, the X wholesale you kept limited level at a CPI

same we've increases. the unregulated at wholesale increases exceed time, our While retail price seen price the

We look forward is and new look to it. engaging bid that hopefully, with helpful. to our So we forward regulators,

Operator

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

Ygal Arounian

accomplish like were start more that kind the trends me guys broader of cycle? of acquisition. the but help the focused are programs, move the be things. funnel, the to coming Let you trying to of if on sounds Does of that of moving you're to of like that programs that distinct on as on also you're registrars and a the it about talking amplify from top expecting with X back Is bit just marketing little go we're the customer the comments back the sounds in And what up that those both true? cycle, it marketing kind And points important? back back cyclical why part part cyclical

D. Bidzos

a I coming, -- cyclical that it's an question, the programs? if why -- if I not understood that's Is hope think the summary. turn is I unfair

Ygal Arounian

they are distinct if Yes. X why? And guess I points? yes, then

D. Bidzos

Yes.

say the So in that we would past. okay. I things up X brought

the our pointed First have more to were business models. got as have a them, of being There response all, that evolving programs designed of large, some different of builders and We that become actually out a are some of we channel. nature They website the small. lot structure registrars. are are

to and was that of all programs and them generalize motivator. designing used in The their So gave -- as primary bit I'll here. that past, opposed met size a needs flexibility that was one fits a a kind that the we

And trend saying I programs on when X hope a acquisition, I to remember or the we to a quarter return get cyclical from to we that ago from that customer back talked a focus would and ARPU acquisition. tailwind we about customer think

other. different We those So really -- or I do they're the because both one for think sort don't certainly it's reasons. not of can

shift the a don't that any that George, to same effect think comment? channel choice from as registrars has of the diverse can giving programs ARPU, maybe that the going nature require. you is incentivize do our have of away I the Some but

George Kilguss

Ygal, I good would just for we that the look, we better The have off make channel. clearly say, stronger channel, it can us. is a

have And support to because so different they trying that are They evolving. needs. we're channel

of needs taking all feedback. previous fit And helping programs that them. We're registrars. have sometimes, not the our of may some We're

target rate to high good them would for to good trying them registrations help and We're for us. also which registrations, be cohorts, renewal new

need same the do evolve, evolve. The support to channel the said continue so the continues And believe as to and we continues market we that to channel. to Jim to

D. Bidzos

we here that in one that is thing think mentioned I remarks -- seeing said his George guess might I the add channel. we're in last take-up I And

for when think result that feedback didn't fairly and I offered the work all, some. are these and is work in for programs this and some to choice it had is for program more our a choices that them. of we past, programs. And flexibility offering the straightforward great a worked we're In finding that simple getting they're we saw

it see We'll That's where goes. the initial take-up.

work a But are in a seeing And benefit something cyclical would signs there, can There's sense. a can we support well. and we'll to say put But return. I get and into influence from we tailwind course, less as hard we hopefully is some energy can shift them. Of that's that, that we occurring it. ARPU is

Ygal Arounian

Maybe you guidance Okay. just the if Very that's Or embedded strategy? on on in follow-up programs? are helpful. the in income spending shift could marketing A quick for operating about talk it that. Is you the a just year. more how

George Kilguss

said a primarily, shift programs our Having a that, say, would it's success-based. of strategy. in are I lot

extremely to and is But it in spend more, trying but us will if changing support the their to channel shift really over a different to accretive we So be recognizing successful, those they're them should strategy, time. strategies.

D. Bidzos

all And the -- add. should guidance, our into I of those expense would programs I baked just is

Ygal Arounian

Yes. Right.

my Okay. All talk the the sorry. is X largest since mind. right, you registrations -- gross a already where number a don't quarter. ones there? that's more, new Can But that, of renewal the bit looks numbers right. 'XX numbers, if growth, about know coming like are was, rates it in And are Helpful. if look if I year-over-year gross at One the you you're what on they back seeing you still are the in number the impressive below little here cyclicality normally. is XQ? the some pretty XQ

George Kilguss

quarter in some up up did to I supported that successes quarter. point Ygal, launched some the new credit you Again, also was sequentially fourth we of would programs out, X.X early the Yes, in registrations of year-over-year. That as million the and that. we

get from these programs, but only once get we in think it's channel partial partners saw into engaging we we'll a early people. year. programs. good it's some some Again, the year, successes those further And more we engagement So

you of base huge the down ago domain mentioned, $X.X $X.X million quarter and not numbers, -- fourth contraction was And name -- So third as are year we but the it trends. positive the was That's seeing Jim saw as million the in in down $X.X and million. quarter.

we saw move So we here, into improvement us some XXXX. here optimism gives some and that as

Ygal Arounian

Yes.

bigger TLDs maybe auctions bit little of Okay. some generic then last, Helpful. There's And new a coming question. for later year. this a up picture

taken on over for TLDs strategy changed been domains in the to bidding to you in interested want be share new How think an TLD. your amount you that, the way they've total last also of the update Are should kind thoughts we get new wanted kind that? Has have And decade you registry and of particularly Just domains us since domains? just could of of introduced. with a NG within that, about the that's for? on .web, sorry, give a maybe the

D. Bidzos

some you acquire years .web glad to We answer. expand in I'm obviously, because TLD include I portfolio there. our moved ago, mentioned that of and did going was sort the to another

So me reverse first all, of in let order. answer them

.web, registry for So still operator the are being .web. very in we interested

process customers. taken our web to offer want process. we process The able domains Although IRP to years, to a or with to translates has roughly quite be few it's ICANN and still this is still their arbitration

of to be and is to understand that continuing this in to -- abuse drag process for understand the out we've planned in we intention more think competing ICANN's the party. what hearing hearings final that with currently slated rules merits actually later there we is XXXX And a briefings XXXX. And will come recently

point. nothing at As far we passing we're have for the at applications, but round, looking new ideas the considering it, this potential looking around share to as at

Operator

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

David Atchley

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

Operator

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

VeriSign (VRSN) 6 Feb 252024 Q4 Earnings call transcript