VeriSign (VRSN) 25 Apr 192019 Q1 Earnings call transcript

Good day, everyone. Welcome to VeriSign's First Quarter 2019 Earnings Call. Today's conference is being recorded. Unauthorized recording of this call is not permitted. 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,

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

pleased report Thanks, David. for Good quarter everyone. solid afternoon another to I'm VeriSign.

.net X.X%. March, million, XXX.X offering long-term were customers, security name base results growth of while our our of of for a and XXX and quarter and year-over-year XX.X with the shareholders. in profitable end growth First million in and domain rate with objectives of million stability our generating the to names providing line value to totaled names .net for .com consisting .com At

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

approximately be in Although rate will we renewal XX This quarter end first the measurable to days renewal quarter, of the rate the not XX.X% of the preliminary compares the quarter XX%. of until rates believe first XXXX. after achieved for fully are that XXXX

take Cooperative that For of Amendment growth between features Last to of some to the incorporate XXXX are the base be X.X% now to name we expect ICANN no this including number into at and we to to domain Agreement. with that full-year, be may rate quarter, we this engaged X.XX%. Registry share continue but we the process There .com months said in process XX terms updates the Agreement complete. the began pricing time, to

made or in under enhance of and Internet. that in good .com the Registry agreed .com the the flow-through Agreement, with also Agreement, security not those extended the remind this negotiate the and to changes stability preserve pricing we of to terms the familiar and process Cooperative term the to amendment XXXX faith including Just the

We now, are you negotiating these items and we'll as update appropriate.

During repurchasing million stock million. common of we by repurchase X.X first our $XXX for program share shares quarter, the continued

equivalents over with Our of strong including continually financial And our the the now, $X.XX We to needs billion evaluate the overall position in remains uses cash, like securities marketable cash, business and and and I'd investing repurchases. share consider potential to the best George. cash cash turn quarter. the call the for at end of

good everyone. and afternoon Jim, Thanks

in a last GAAP million expense revenue results year-over-year. $XXX $XXX of and first to up produced quarter Operating quarter ago. million quarter year million, X.X% First compared $XXX the $XXX totaled million,

a to quarter of were with quarter million, million quarter this the last of totaled timing in Net seasonal Operating our Within Security program compared diluted in to $X.XX $XXX income $X a came in the $XXX income last earlier, and compared XX% approximately million $X.XX XX.X%, sale quarter to to the XXXX. the lower year compared Services million, per year associated marketing the due year of which sequentially, quarter produced for to quarter totaled $XXX the earnings first the million quarter, elimination of $XXX ago. of operating year. spend. same in primarily share margin compared the with same costs The

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

held and Assets marketable billion $XXX equivalents securities which remainder cash were million of included the with domestically abroad. cash, of $X.XX held

free which then of taxes. first we full the review to from I our international additional operating now net margin, withholding share, some updates $XXX metrics, flow. repatriated non-GAAP I'll financial guidance. flow earnings year XXXX During per quarter, provide non-GAAP operating million quarter will entities include our and cash cash

respectively metrics, $X.XX the of based million per to million, million a a was quarter totaled $XX on compared quarter margin for Non-GAAP and non-GAAP first in stock-based diluted last first average the $XXX first income relates shares. ago. This and which quarter of a to quarter and Services weighted same to non-GAAP share quarter Operating $XX contracts. earnings of $XXX XX.X% and million first repatriation included as $X.XX activities to higher benefit excludes withholding XXX.X quarter -- they XX.X% cash of retired. operating international Last compensation $XXX year to were per $XX diluted last well it non-GAAP and Last customer Security last the year. in free the million quarter to share earnings quarter to in last expense, the XXXX. net first XXXX resulting compared year's first As quarter million was XX.X% the associated gain $X.XX debentures first to for flow share included in compared compares Operating related count quarter the sale million $X.XX XXXX. for diluted with as cash last due million of was our $XXX with cash quarter's related our interest year's convertible $XXX taxes $XX the million higher quarter flow was non-GAAP related million the quarter cash of to for first before taxes flow cash

billion provided call. full like now to Now $X.XXX billion $X.XXX XXXX of I'd our the be to on now is Revenue updates in provide expected guidance. year billion our from $X.XXX to to last range range to $X.XXX the billion

of year our growth Security of the revenue sale X.X% X.XX% based between range associated partially full with customer of of and offset for our domain XXXX revenue the expectation is XXXX base Services being name the of our Our continued contracts. on loss for by

to is operating nonmaterial still be providing we'll non-GAAP operating for services margin to XX.X% to costs customers. the continue with Our between security include and expected XX.X%, associated certain transition service

expense, are to of provided XXXX. offset and between partially summary, an taxes are million the income to lowered of and expense million and quarter agreement. expenditures XXXX $XX net to $XX $XXX recognized be still Capital our on million million expected is the expense sound call. expected $XX be transition million primarily non-operating cash the continued $XX income $XX from be and financial to interest last $XX performance as Our net expected demonstrate in consists of the range between $XXX to company during million first between aforementioned In to million interest part now and still of million services by

the to his remarks. to like would Jim back I call Now turn closing for

Thanks George.

further we was revenue first year-over-year shareholders. name returned and to value quarter VeriSign. expansion for the The And efficiently solid There was an of base another generated growth. domain quarter

continuing your questions. take We continue protect And the while we're grow. business now providing manage operator to on focus long-term We'll for our our work to And the work, shareholders. our question. ready to value first

our question Thank Instructions] comes you. first from JPMorgan. [Operator with And Auty Sterling

an I we Thanks. start update on wondered I Yeah. Hi there? with can that hear us didn't anything share .web, you guys. with -- could if

.web process There point. this are no at continues from updates The

and negotiation? active that say Okay. terms the there of can And that through? at a discussions' you Or in discussion going just not no is update mentioned on? there’s you Registry whether Is Agreement. the is or process there you're going then, formal least And yet

it we negotiate good XXXX engaged Well, from we Agreement agreed the but get the pricing in described extended com of when the items faith is I that to as to to are The and Cooperative want under course. terms into the the those the preserve includes, flow-through amendment .com appropriate, We've We're negotiation the process. the of don't stability and that in come agreement. the term Updates and particulars changes the that also now. security of any enhance and of Internet. process renegotiating

milestones available that bases. the information covering was in just should our we just be update I other to no. just looking make that to there is new I terms sure No, of, than Yeah. didn't agreement. a publicly there as here know full wanted for if we're if particularly,

Yeah, I as understand. update We'll you appropriate.

Okay.

Two good. more. Sounds

geographic see in you in within color registrations. saw of the any commentary out terms domestic/international? when and of international, various specifically And What any regions? the one Just the you did the in of provide base can of terms gross that terms you geographically what name

continue Sterling, of well with we us. Chinese say continue markets see for quarters and the I Yes. registrars couple be quite they quarters both perform is they've good U.S. been George. the lot past and driver to a of the to market this and would recent the consistent for the

back today more them driven like that speculative healthier that names? are And you growth stickier being we within will Chinese make Do feel they're the names obviously by added reasons being the meaning portion going have that nature. fundamental

rates data the we Chinese can see tell a just any renewal rate that registrars. the from historically I look from that in perspective. in normal haven't change I seen you renewal I at

So in numbers. don't at obviously lag, was I but see any least deviation it a XX-days those year-to-date

how then of the contracts, sale And magnitude question TSA is income, around bit there TSA? that TSA? post of last in the little color And Okay. terms of those long is of a that the other within

million $X December It to the Yeah, year. -- of to have recognized the do parties sure. our of the our extend It's do in this XX-month that they income agreement. It's so. other in non expires We said a about desire ability should in Having income. that quarter.

so And the month contract. it's about with million income associated a is $X.X that

All right. Perfect. you. Thank

Jim. it's Sterling, Yeah.

.web update. of filed Just ICANN in they I but one .web an -- there and trying that one we the of just auction probably continue I parties you yet in that But process. arbitration, feel remind said to is competitors, bidders to me against participate Afilias We're everyone that no I about our losing are should arbitration delay to you the it. as the to know not seeking actively asked

Great. Thank you.

Sure.

And with Nick our from next comes Citi. question Jones

taking in call out broader TLDs impacting is questions. you that of maybe trends or for could any demand country Is that .com my Thanks kind internationally? there code Hi. nTLDs

both TLD the look provide with new markets. market from legacy and in also But to TLDs. we'll that, primarily .net ccTLDs those competition. continue gTLD think receive is market TLDs international compete a competitive effectively compensation and I .com But

this You can zone quarter. X.X% see the grow about they

year-over-year. up X.X% were registrations New about

still competing in we're but So market out it a is markets effectively we're the there. in, competitive that

look one to long VeriSign follow-up – get or involved? arbitration. kind that join And process of would like the arbitration guess the and I Thanks. What .web what on for how

and is. it's any I right hate you participate. arbitration but but – ICANN between Well, seeking stock I on of pending make and an any we a aspects out to like it's Afilias now to pointed mean, comment we're sound line this as litigation, detailed it don't

any don't provide. soon just let to have do, we update as I as we'll you that, know. Beyond But

Thank Okay. taking for the you question.

with And Baird. from we'll take Rob Oliver our last question

color longer indicated could Great. process that filed the a guys think in my taking Jim, no your Hey. that not that any I take experience Is now since few arbitration? had to call had it's guys just now months and there's back few to kind months. that a Just Thanks. that but a Or question. there. sorry way Thanks .web helpful Afilias us been to is would be you there process? for take know for on of since something might last go

you latter. number turn I well, predict think turn. of will it's been rate a at they of involved the in But can't are I arbitrations, what justice mean, having wheels the Well, may turning. they obviously

updates soon as we we'll as So certainly have them. share

And it's some side registrar the of on come I vertically pump as quickly. as idea on up Thanks. on thoughts your registry calls clients again. a for bit see, can about well to here wanted Great. integrating guys kind of you and of lately of just kind if with I the that your

there's Yeah. at we've nothing say Nothing just to to what add point, already specific to said. this it's

for much. it very Thank That's Okay. me. you guys

Thank you.

over turn to comments. conference the now David I'll back And final Mr. for Atchley

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

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