VeriSign (VRSN) 26 Jul 182018 Q2 Earnings call transcript

kOperator: Good day, everyone. Welcome to VeriSign's Second Quarter 2018 Earnings Call. Today's conference is being recorded and unauthorized recording of this call is not permitted. At this time, I'd like to turn the conference over to Mr. David Ashley, Vice President of Investor Relations and Corporate Treasurer. sir. ahead, go Please

quarter President of CFO. and Forms earnings President matters a everyone. Jim call. which on factors earnings call could call our Investor and Executive the the measures Relations are XXXX and Jim in as the a materially not are the to available There site Investor reconciliation we financial most identify questions. call Chairman, the of subject actual uncertainties performance and for to posted. your operator, found like non-GAAP and that be which George (XX:XX:XX) to earnings disclosure. release. to will open The our specifically that second in call reports the Bidzos, public afterwards of presentation it appended At a detail to you that through on results or quarter Jim. in prepared second verisign.com. is and available statements. quarter will to will Kilguss, to remarks differ financial earnings being today's and done XX-K within President release Vice will in from Strubbe, call provide our results of from the Todd I find the are on webcast the that XXXX which and and With end and turn VeriSign. CEO; COO; risks Executive each good website. you, discuss unaudited This would and over this Vice results George Welcome its afternoon, few guidance and VeriSign With we some Relations and our during replay also Financial documents we discussing VeriSign's be risk our remarks moment, presentation will is the to Executive the our SEC, in section and filed website, Thank can the me slide our be hours call with and will presentation that statements unless under are About the include non-GAAP contained In longstanding be policy recent our today cause used by on applicable, release those is GAAP forward-looking on information retains XX-Q, VeriSign comment forward-looking

I VeriSign. am Thanks, quarter David, report for pleased another everyone. and good solid afternoon, to

and to were EPS and value year-over-year, Second of shareholders. financial profitable stability quarter with growth million, $XXX generating line $X.XX, performance including year-over-year. results solid and delivered while our revenue objectives providing customers in We X.X% security offering long-term XX% up of our our of up reported non-GAAP to

X our second for million million. repurchasing program quarter $XXX the we by repurchase During share continued shares

.com strong position .net and billion the financial the repurchases. uses of for XXX.X name the .net. XXX.X million cash cash, of At totaled $X.X including end in names quarter. the of consisting .com the million our and and base We and names investing remains overall best June, cash share at million, Our cash potential XX.X and consider domain for for evaluate business needs end of in equivalents the with marketable the continually securities

X.X million names. processed registrations we domain X.X quarter name the second the base by During increased million new and

increase name second We X.X% quarter Cooperative of believe days renewal our on the X.X be the quarter rate full base million what domain the to anything X.XX% between look XX.X%. XXXX NTIA renewal after name compares XXXX the call else George. quarter, Although of the XXXX. update don't achieved quarter like. now to of of domain for discussions expect about fully VeriSign and year between rate base an for over would growth to time. in XX.X% are to of that are with turn not XX have But the the This that the we say engaged Agreement, I'd XXXX end rates the will preliminary second measurable and amending we dialogue million X.X beyond that And amendment in now registrations. Cooperative to about of Agreement like the third and you at net and To this until

for of totaled was same of in year. period second afternoon, income quarter year-over-year the of and improving primarily earnings new the the a with $XXX good the for to domain million X.X% improved income compared over prior compared Net and operating million quarter million, in year. earlier, name in compared came the The rates X.X% everyone. margin a Operating quarter and million a $XXX which $XXX Revenue $X.XX the renewal XX.X% to up for Jim, last XX.X% million diluted sequentially. quarter up totaled to $XXX XXXX. of compared result The second $XXX by $X.XX per quarter ago. registrations year this quarter the same Thanks, totaled year increase the produced share of year to second in

of June $X.X assets billion. liabilities XXXX, $X.X of XX, and As total of total the billion company maintained

non-GAAP on the included I held will of flow, now review and margin, include which second XXXX Assets additional operating equivalents earnings quarter billion cash $X.X securities, and domestically guidance. metrics of per our cash cash full-year updates which abroad. $XXX were cash, with some million remainder share, operating then provide free held non-GAAP marketable financial I'll flow.

quarter and second in and which to quarter As compensation, the year of XX.X% net second quarter $X.XX Non-GAAP was million last million earnings $XXX second the ago. second to $XXX non-GAAP $XXX with $XXX flow expense, quarter $XXX to XX.X% per non-GAAP $XX to XXXX. year. compares on the count XX.X%, a $XX flow compared last was and second million in and the totaled income the quarter based million free the margin the million second for was cash million it $XXX last of weighted in relates of same $X.XX $XXX was respectively quarter last shares. million compared compared cash stock-based for diluted for operating and quarter $X.XX million, same quarter share Operating of million in resulting XXXX. diluted metrics, share This a operating excludes for quarter XXX.X of million quarter average Non-GAAP quarter

XX.X% Now narrowed we would billion, to last Revenue full-year XXXX like last operating our on call. provided guidance. the expected in and provided our on expected be billion now is increased to $X.XXX be between to XX%, Non-GAAP margin $X.X is XX.X% $X.XXX to to call. from range billion the the XX% range to provide to updates of $X.XXX now billion from the

million Cash In between $XX quarter. our during are continued $XX provided non-operating $XX interest to be be be between expected million million non-GAAP expected and the summary, provided $XX to non-GAAP million net million taxes million $XX narrowed on decreased now call. Capital and now the demonstrate million, income last range and $XX of and last the from Our between $XX second $XX is from million, expected to the expense million. an $XX our sound range performance expenditures expense are to on company call. $XX and still million to financial

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

you, Thank George.

to the was and Second a for shareholders. name quarter base domain VeriSign. of expansion generated were There one further returned revenues and was solid value efficiently

people continuing our our work We result protect, long-term the business grow the continuous to the providing Last expertise record and XX on value specialized infrastructure. our surpassed XXX% week of while the and manage of shareholders. net DNS. the years availability focus to This continue of in to company common is our

question. We your questions. will ready for first now take Operator, the we're

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

guys. But you Thank a I you comment you shot thought I much CA. Hey, question. that on said the I'd give taking know, for anyway. very won't And my Jim, it

the kind expiration? follow-up. some call? is that November line actual unlikely the a On is about get And just to it would of earnings quick something next would then this we I expiration had you. resolution Or hear likely time our Thank a before we be until on it's it so

Nice try. Yeah, Rob.

really on can't time speculate dialogue Sorry, we're line. the in It's NTIA engaged process. their a with and

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in so we process process thanks. is on we're updates when can't to when another ICANN's .web engaged Sure, move but will say ICANN's this Well, conclude. they're Operator, exactly one? it give the forward you delegation available. certainly We'll

Thank Sterling with next question you. Auty JPMorgan. take We'll now our from

Ugam actually is for this guys, Kamat on Sterling. Hi Hey.

and the on possibility amending taking the or are on hit the ICANN? you possibility that are Jim, one amending moving to Just of renewing we that it are ruled that the that agreement throwing just out Cooperative about the contract one, away is of you the mentioned forward? so So with clear is about third Agreement, you

statement Well, certainly precisely that that that anything engaged VeriSign. a is the I NTIA they dialogue a just both about I made I and would can agreement amendments range is between earlier, sit in and is facts the possible. by Agreement NTIA speaking today VeriSign that as the Cooperative guess that the And possibility. add in is mutual and amendment certainly what which statement were made. I others that we of say I Those for But suppose we would like. are look amending are possible that

we're and currently. in engaged process So again we're that's the

Great.

possible what's statement the is Since of ongoing the at that's providing it. can't on end speculate I'm that still today. But process I

midpoint. rates that's net that far. Great. at the something exclude customers for the the the we in that renewal rates that are is best domain XXXX. additions in are guiding the driving that net the that I like the you Is that have I additions total like And the you on is that's seeing additions seen cross existing if driving mean, China the to from so mean, up? or increase What domain? you Like out helpful. one X% names, high particular

is Sure. George. This

second renewal in ago a from As were gross that the and really those year second XX.X%, you name quarter, the to adds the And performance a for our we year primarily from continue base. second domain Jim that preliminary quarter $X.X in had here trends And are good adds. And in we renewal those into came mentioned, net factors versus second in million rates the of which improved basis were, Gross slightly two rate saw adds improved expect guidance. $X.X quarter the million ago. quarter. is the from – really the third up as quarter XX%

quarter could operating level? expenses back mean that half June the Any of margins. you XX% of XX%, squeeze really the All right. down XXXX. in particular from But for margins to I if the been the the on guiding the should drag XX.X% one year in you are has peak And more expect margins, I that the

QX we look was some lower put you $X $X $X – have it the But if can year-over-year. we spend going are of in the differences margin. they expenses, were still see down fall I non-GAAP mentioned when forward. million million The was year expect bit where little have the into our And that some the quarter, that quarterly is you expense with for between timing given guide business. $X or Well, But our remainder don't year. we $XXX million. expenses we've as was we we at by about to subsequent before, around Roughly go second in in – and out a marketing million really see And what be do guidance expense quarters. of G&A. And we that we'll million to quarter-to-quarter we'll marketing that expect in full expense probably more think about

Thank helpful. you, Really guys. perfect. That's

you. Wells now with Thank question Citi. take Matthew from We'll our last

with seeing Thanks geographically? talk file taking in into you Matt Hey. are just zone where and Citi. Wells net can is And to you questions. This the adds, digging my for growth just strength

to similar quarter, year U.S. see well, in last to registrars for China. this say registrars we as year-to-date. But Matt, U.S. as continue have registrars I'd Yes. well the us do well performed

around the breakout U.S. net to directionally add? China, you speak Are and able between just

China we again balanced of between registrars Well, areas. well. it's U.S. year mean, do doing as fairly I'd first the pretty continues good are half the (XX:XX:XX) but I'd a is well say to -- that well. our two for say know the job the I performing

That's great. Thanks.

Okay, Jim here. it's

theirs. statement. a The But accurate I status answer an I to NTIA. That on I I is is Agreement, is Just just wanted for that. be statement gave our an Cooperative don't on clarification the from clear made statement guess on speak statement there. VeriSign. accurate I one the process

any back conference turn and I'd Atchley conclude you additional question-and-answer Mr. Thank for does David the that or final session. over remarks. like today's to to closing

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

Thank Thank participation. conference. you. That your for does you conclude today's all