VeriSign (VRSN) 29 Apr 222022 Q1 Earnings call transcript

Please stand by. Good day, everyone. Welcome to VeriSign’s First Quarter 2022 Earnings Call. Today’s conference is being recorded. Recording of this call is not permitted, unless preauthorized. like the I’d Mr. over time, this to conference turn to At Atchley, Relations Investor President Corporate David of and Vice Treasurer. Please go ahead, sir.

Welcome Thank call. operator. to quarter first you, XXXX VeriSign’s earnings

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

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

reliance As so delivering increase, online does resolution. uninterrupted services the of accurate and to DNS global importance on continues

of operating, I all critical enhancing remains of for VeriSign. continuously of base while our rate end .net a and March, totaled our EPS who .com protecting thank pleased another .com of and X.X% complex XXX.X XX.X million million and execute names year-over-year. mission. consisting infrastructure. name for operational and And grew solid for on X.X% At XXX.X financial X%. and year-over-year the employees internet domain year-over-year, focus performance names domain Our to report Revenues of growth grew names, the quarter I’m with million our .net

name and domain base XXXX XX.X% the new During by processed renewal The million the million compared XX.X quarter, registrations, for the names. XX.X% we increased XXXX. same quarter quarter final of was the of to for X.XX rate first fourth

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

demand to domain for in continue base names. the name We growth and – see our domain

subsided, to result factors. of units domain as in which a we the of are combination a attributable appears growth recent global These as names, of first While well pandemic for quarter have have lower there macroeconomic to factors the the component include seen factors. as drive demand that many new

base between various our growth. for and updated business domain X.XX% currently the range continued and For growth calendar expectation base XXXX, the This we reflects our see now name domain we name of trends expect in X.X%. rate

in shares. evaluate and million the no remained cash, quarter for billion for Our repurchases XXX,XXX liquidity the available continually marketable end with million quarter has of the at overall first financial the business securities during cash, $XXX investing and and liquidity cash At of Share totaled position our repurchases. $XXX and authorized equivalents end, $X.X needs stable consider the quarter. under potential the the repurchase and program, current We share best share expiration. uses including remains which

to Turning .web.

its this one call, ICANN’s understand any process time. ongoing have independent that decision on provide noted panel’s we Board final findings. review to As standing its our we review is the and of provide last Board don’t additional at the to directed with and committees We information

to .com and continue businesses before, .web additional establishing worldwide. we as option an the registry becoming As users and operator have end and we individual .net look forward to alongside said it for

Now, I’d over to to George. like the call turn

Thanks, Jim everyone. afternoon, and good

includes Operating $X.XX same of million, discuss was personnel million, of XXXX of and for expected to between for X.X% billion. earlier, expectation This compared investments Capital was Net of $XXX The share XXXX, be income of million income For XXXX. million, mentioned was interest now operating ago. XX.X% $XXX million, primarily rate earnings quarter operating $XXX X.XX% between expected income and of delivered quarter quarter compared X.X% expected the margin compared XXXX, is be million, $X.XXX that in billion to cash net, to first $XX with compared still now name narrowed to ended of a expense the be million. quarter, the million is be first is expense in the year-over-year million quarter quarter base guidance $X.XXX Revenue revenue I’ll income million, up effective for company $XX Operating now reflects between totaled the $XXX the $XXX million million. are estimates respectively the expense the $XX last million the and continued XX.X%. quarter Jim between ago. generated the and March is a result for XX% $XXX XX.X%, XXXX. a cash range for year growth of quarter from first year Interest in compared X.X% an XX% $X.XX in flow infrastructure. guidance. $XXX up in to earlier. free same revenue XXst, $XXX a of expected and to which same of $XXX domain $XX expenditures our margin to same and the first expense the to from operating $XXX of updated year year to XXXX a which GAAP million for The and range totaled expected $XXX and between year per operating produced The be the quarter to diluted tax million million, And rate $XXX full and flow to updated to is now now quarter non-operating increase the XX%. quarter ago.

within range. We to during also financial In to continue summary, same look XXXX. first expect continuing execution the the performance guidance in our XXXX for VeriSign demonstrate quarter cash be the to forward focused tax rate sound we and

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

Thank you, George.

the in operating shareholders. employees During providing conditions. the at and the throughout particular, in the group to our team facing I to even work again, focus want first the In critical want we’ll while to quarter, question. to have we open to we’re while who the internet for here value acknowledge under manage working first of continued for functions. call on on-site and infrastructure pandemic our our challenges order continually pandemic your questions. acknowledge the And worked their infrastructure, work closing, maintaining our I of In business, protect, VeriSign for hard long-term Operator, our now, the continuing continue grow ready

[Operator with and you. take we’ll Instructions] Rob from Thank Baird. question go And ahead the Oliver

gentlemen. afternoon, Good taking my Great. Thanks for questions.

macro which make just changes the made have caused in with to the domain. that here the start today I’ll adjustments environment to you know Jim, So relative you’ve obvious you guys

just a me lot just Obviously of So, around a more time. happened bit QX. you has first a for, period color ask short let in know

So your the would to was love take hear decision saw that range? and to down in you manifest what how

the Thanks, Rob. for Sure. Thanks question.

we’re there changes First are seeing. of lot influenced the have that all, factors here of that a

we of drivers domain that them. business. analyzing the believe We’re still demand name do for many our But remain positive of underlying

base, continue that for demand, while domain lower demand stated earlier, drive new in see I As growth name domain these units there factors seen And have we many to names. we the our quarter. see in we first the

factors and we’re as well, I in As as of a mentioned, attributable of combination – recent which macroeconomic still to the include this have global component a growth pandemic, that obviously to of factors there are those result particular, that is analyzing. appears subsided,

in do these subsiding. they’re to also registrations of meaning that other some for pandemic will be and expect that have appears year predict demand trends name with impact in in our be seeing our incremental grew of to registrations second the during the the thing heard We Hopefully difficult registrars changes new helps. demand last are, domain the from we how It’s that will registrations we that that new second half and the growth saw same for new we year. half base, levels during of the the similar

helpful. that’s Yeah,

know here the played little was was in you you well. you say and there it be in on war, you of know of you helpful. And of the the I any Europe that investors said I meaning still those acute you an quarter saw to marketing as just be follow-up My of know know over comment makeup this US. quarter was a that sort analyzing more war touched factors, bit. You geographic it to did that sort know exposure around you I color makeup the to going but geographic what noticeably element, would than this you’re was the know

Sure.

I on material in one ask registrars of specific countries the it Ukraine combined financials. the not address me is Let and those mean Russia, to Belarus. accredited part directly let there comment based But But are revenue your company’s first. me from question. three George to ICANN

add that, I’ll invite with comments to George color. or any So

Jim thanks, – Yes,

[Technical so you. difficulty] thank

Yeah.

XX.X regions. and in Jim gains a primarily year quarter X% regions that’s million the to we generated conditions macroeconomic global new here in And first has and new From mentioned, were the result appears compared in XX.X fourth Jim of a quarter year-over-year. of a the the million rates to perspective, demand we really EMEA in. Again, you have as impacted as in believe from And Asia saw in participate base So, million know Rob slowing you also in first units quarter, as quarter. in pandemic that additionally his other saw XX.X unit first subsided US, growth the we regions, the also Pacific that US saw grow above that you know And continue first we in slowing our remarks, in to from quarter, the more continued ago. a name we growth. growth base and mentioned the the broad-based domain in Asia When Year-over-year, Pacific with of sequentially, most growth here. we look mentioned, XXXX. the Jim incremental of we we our

Got it.

Okay. that George, Yeah – helpful. that’s

in did environment? Or rest you went – that you war just is it into year? of – you the are know the for kind guys you status in make state relative know that or is assumed terms quo state forecast the to the guys of of know So estimate of assumptions the then the of geopolitical you the assumptions to any the

too early to it’s say. think I kind of Rob,

we you be any are extent the which them with is know, things do at global, for granular level of business We’re that in geopolitical to know every a are when but point, the of and – you is that events plan these doing certain you think manner, I those can’t able of we to uncertainty, guidance it’s and to control. we’ll that things obviously we’ll obvious we specificity, gave sort this if These that in I share does think difficult that early predict studying we to, do, factor days. macroeconomic all amount

are make that So, all to today. the analysis know that, in we’re tell information factored is you I big you best and can able on those based

it. Got got it,

Okay. appreciate a And guys. for more couple it. I me just

and on you mean, much at I you security you guys what war, know, and looks us but everybody’s significant could security that the can of the of the know of lot a of know about know, you while of fact do. anything that just deal cyber press. in just to-date be you that the have of the would refresh the just you ahead with the made now around And ago Jim topic assertions those next prepared you of impression, guys you couple guys large years chatter if on if know investments with those And how number just federal reporting know curious security is it very You war. in supportive and some additional – have I of while a hack investments which you you are cyber they round you of seen made DNA the for kind guys be you know you war

one obviously I make varies cyber tough for on higher talk can obviously in say that We general, to for continue that’s it’s in on certain one. and We state of XXXX, assumptions But nothing have threat a XXXX the of precaution. made We environment. couple the generally general, recent has these err job infrastructure things. about investments about any cybersecurity we and a think our it in very been side it very, That’s and generally past. some we specificity. comment granted. in make think take We the in to with than me the in we caution those don’t particular, monitor it closely. years and We we in and in greatly

Hope we made for investments We and probably helpful. just working let’s – say that one just assumptions And want home. say to company. infrastructure and providing make that’s is resilience takes that backseat the that. protection that’s can don’t prepared We’ve So I constantly to continuing evolve go about at are and we’re that a and job in make on, on foremost to to equipment reliability. nothing detail investments. our I at strengthen again, into first That’s investments I’m this that all and our protect, its teams are that

Yep, quick that on here I is other appreciate. be Yeah ones appreciate the helpful. And hold two limited you’d the One opportunity that. and to or floor.

know is or Jim I no your and in update remarks mentioned, that update formal on .web. Just you official there

the call know would you know that you I You in said you guys be know process. last the also monitoring

maybe picked nuanced the I you any question of bit a guys of you there the official that in a up know know from more better reported guess to anything leave that either you absence that a So more in that or not update, was some or your there. or either you know But process know of you sense sources optimistic would you be of concerned was timing? have

its website. public ICANN’s We what when I you can believe from we website. we’re information other we get have monitor, than no – monitoring ICANN’s statements on

said do So committees what that you as task we soon seen. something and we’ve them the assigned IRP know to seen as that of ongoing everything as they know I you’ve one And have do. to seems to the their and be on of executing you’ll assigned

Last Great, one that’s me. for helpful.

caught there wanted this George what little little a know bit that? Just, for sense can some you you about was you remind quarter, the on just get was us SG&A the a for and components of just and driving up just bit a to

sure, Yeah, Rob.

that quarter in as And investments through million of tend So some in have of total. increased primarily Also in quarter. in a labor cybersecurity and factors, employee really that well up that our flow infrastructure the made Jim our saw we compensation as to the were the expenses sequentially was taxes costs performance-based to from plans really payroll $X.X as combination about you due higher last first first are stock-based measured and and the awarded mentioned. quarter,

thank you it. Well, I Great. it. much. Got guys appreciate very

Thank you, Rob.

Mr. Atchley, to now any And I’d that conclude conference remarks. the back does question-and-answer session. for additional you over the turn

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

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