VeriSign (VRSN) 26 Oct 232023 Q3 Earnings call transcript

Good day, everyone. Welcome to Verisign's Third Quarter 2023 Earnings Call. Today's conference is being recorded. Recording of this conference 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,

Third Welcome Earnings operator. you, Quarter to Thank Verisign's XXXX Call.

this President the available George of Joining you with discuss our on subject me release Strubbe, Executive are include that detail and and in Todd SEC, in posted. the which site, being Relations There, remarks webcast available and within and documents that we Chairman be will end . This from most release. call, Vice the specifically earnings a the presentation earnings Financial to Kilguss, the on in our few are are the Jim verisign.com. the President under hours, recent are find our Bidzos, and About the will Executive be on our and of report also call statements CFO. replay unaudited, presentation risks At and call website, Investor filed Form and CEO; will forward-looking is that COO; results XX-K. Verisign uncertainties

does will GAAP or call the on the is call. after and we unless it Investor in by today discussing public used guidance through available X financial and update performance appended a found Verisign Verisign, quarter which Relations cash done measures website today's is disclosure. matters during non-GAAP results to The financial and include section our this adjusted free be the not reconciliation presentation, results GAAP be can information EBITDA of non-GAAP flow. to slide the

like questions. Jim. open provide With remarks. call over the your to for we to will afterward, the prepared will Jim George some turn and that, I would call And

critical for We everyone, infrastructure quarter Thank Internet and another to a operator. our on thank afternoon solid you, mission joining as David. us. you by focusing delivered Good

period. financial during with strength In during macroeconomic delivering third this business of our model addition show the quarter, I'm our continued on which uncertain results, the to pleased mission the

quarter, At in revenues up third September, XXXX. the EPS XX.X% while XXX.X year-over-year. name the base million from and slightly grew at million names, .com names grew totaled of end domain For end of the .net year-over-year, XXX.X X.X% the domain

million During name a last quarter the flat million quarter perspective, new From by registration new ended X.X third the with third names. the the with base domain decreased year. domain X.X quarter, registrations, same

We of XXXX be approximately believe the a quarter compared ago. that XX.X% to the rate renewal third for year XX.X% will

engagement for value While demand names domain remain there for from our factors broad-based core channel. proposition are many that strong, domain drive the registrar we're seeing names, and

the domain in registrations new year in domain demand the updated those reflects even intact, this the now trend, change low both on XXXX With growth, excluding through are and primary from we continued expect base be with base due current primarily year-over-year up However, full between China China, the drag seeing to China. weakness registrars from QX. X.X%. the negative range name to base uncertainty we're fundamentals our based domain This X.X% for remains name positive source overall of name and

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

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

and will read I'd on Regarding current statements past our believe to .web, interested anyone Today, I is I this informative, it complaint paragraph concluding the its in can I answer We help think urge it posted website. ICANN's understand from as like you read Altanovo's and to ICANN's ICANNs IRP answer to .web. issue document. and

process NDC policies Verisign's to fully and internal new as partner is here conclusion .web following NDC an it can judgment bylaws IRP follows: procedures thorough first I comply violate .co, that is just that the First, that the clarify the bylaws' is IRP, reads exhaustive its made which and "after evaluation when application. to .web with not I difference company or want determine under the to of in can reference a an articles, I resolution the The guidebook and entitled Board's rules. business enshrinement the auction that rule. the did determination, and extremely

Accordingly, Altanovo's be IRP request ICANN. denied. We with agree should

to We our its of this that also company continue market been and Altanovo has operated intention, IRP bring the followed .com and which will XX .net has for with purpose years. to is believe repeat nearly for and I by that this delay. backers to filed .web reliability confidence by

add and there will a namespace, our potential thousands domain. .web millions customers of for global registrations With level new channel newly top of its generic are more choice of registrars available of in

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

Thanks, Jim, good everyone. and afternoon,

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

same ago. produced the XXXX, and of for for million $XXX quarter were XXXX for the million free of and a and third period which in million cash million, the $XXX $XXX per quarter. $XXX $XXX million Operating million third diluted earnings and last of $XXX the earlier. $XXX year year a totaled million quarter share and totaled totaled flow $XXX cash expense Operating quarter million Operating of compared flow XX, free in same earlier, year flow respectively, was Net the compared September flow XXXX. compared cash to from $XXX to and period was XXXX respectively, for X-month $XXX a million and for $XXX compared to income X-month year third million $XXX million the ago quarter ended million, million, $XXX $X.XX $X.XX the with the up quarter cash

income interest full is nonoperating and includes in $X $XXX Operating our Interest billion. now now net, is income the to Revenue And million expected be expenditures income and expense between between I'll $XX of range the and is to be $XX XX% billion. $XX to to which guidance. rate GAAP XX%. year to now billion $X.XXX million. be million expected discuss expense be XXXX now million. $X.XXX expected of to is updated tax million be effective are between between estimates, to still expected an $XX expected now Capital to

year. summary, our forward In and quarter and deliver performance demonstrate on to look third Verisign continuing continued our finish sound during financial we to the to of mission XXXX the objectives to

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

secure you, services, responsibly managed allowing another we our deliver and shareholders. and us We return reliable our focus us strategic well, value Thank to solid our and efficiently serve infrastructure believe business George. to in strongly which provided continue disciplined management and to quarter

control continues there concludes and income deliver Operator, our and on to prepared your now steady to is from for we'll be fundamentals open growth remarks, we're operating managing fundamentals question. in and for there ongoing results, attention call including strong within today. demand of macroeconomic the strong in business remain the our low financial turbulence This for revenue, Thanks our items first and While your China, EPS. our ready questions. economy and geopolitical due the to business strong. focus the continues issues These

Rob from [Operator will Instructions] come W. And our with Baird. Oliver question first Robert

the comments of China. China the been Jim, that demand certainly had relative the noted and I'd for would not rest business like front to the up have to start it on been

and clear loud on So that.

on things should now, going market the we what Just your there your when there's that as curious China hear to And follow-up. a on that right else partners you're I be or in stabilize from market the on take if maybe ground hearing to might of. then aware anything had

Rob. Thanks, Okay.

we as quarters, registrars several China, for China-based a in our name to past the mentioned result respect has remarks, prepared demand factors. with So as our weak domain from of been several

driven more which these of conditions, down domain offset been a a economic and local stringent challenging gains We weaker other environment combined combined impact adjustments. with demand include in China, factors in geographies. by believe retail regulatory has and They currency pricing the have

that our of see the ago million about you million table revenue X% the or and million in we about quarter. down $XX remaining revenue was outside X%. million revenue The from China-based was this $XX the registrars in $X generated quarter registrars As in afternoon, China revenue about the of quarter from or year $XXX in up of XX-Q from can filed geographic

operating of say for not is our factors. set able we're top even growth that when the drive question will To adjust and that changed influence One, specific only our to within both would are certainty and as the normalize we line income your of future registrars, things our So I things. X their control. change specific China to developments registrars think China-based

chances the as feels two, change your feel not is guess I as good like overused, . at that I that here. least would the ours. as is be think be storm will perfect term it And So bit a but as helpful likely that

ICANN on .web. a color. here guess, Okay. labor forgive just Great. very that .web. And post it's been should for and but been -- the I know My their me I journey pretty this, -- view, Jim, was clear there's but if so helpful on follow-up around

happen iCANN opinion do next? think And what Or should next? expect that so where from has what we hit. will now that, -- does leave you that And What us?

Okay. Thanks couple for say that let's of things. question. a

is NBC will that it's the document, a terms that company mentioned the acquisition see new with be. of and obviously we domain urge agreement, really partnered those I think .co, document, to everybody all, indicative be of to throughout. called clarified in in the which response I DAA, ICANNs the the term read used First I actually what you'll something I

here this change. not is to what to that thing proceeding And party the next? are the -- -- we that I might a is a important think so legal expect currently that

and I filed that form and they're ICANN's documents complaint then is public to working be what today, from became and see a panel you're Altanovo answer. is to going that So to the next the are going IRP think

that to don't the those beyond that. and watching urge think gives read now, proceedings what the out begin. be on when table we'll what's of So there We some would I developments. issues be you know expectation We the you anything

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

little into domain in a growth I the China. the want to dig understood of pressures and bit, pace

maybe around China. a few of So just things outside

well. growth disclosed to speak growth the if to the you're different as growth geography. There's maybe within by some just And the and revenue revenue You by geography you little a domain geography could brands. pricing seeing bit

And below are what you what you what by that? contributing historical overall China, we're than it's factors still geography kind seeing norms, we're around seeing domains? and in though think -- the there even So better are and of

so in Just some on some high a mean interest high factors there. still macroeconomic world on Obviously, the there's factors, still going I a obviously rates, geopolitical today. couple going lot inflation. there's of there's we points. have Obviously,

we for are those from the I Again, are So point ex-China's you don't impacting the are the I which base registrations I business. think break you well we growth. new would point registrars as companies, some mentioned, to, domain out competitive growth gives seeing in to our would of But geographic other things both as purposes. revenue there. really those sense base -- Jim really groups, our name But of those as domain a like disclosure, name

We don't we do -- price same markets. charge We price. the the charge same across all

to that offer everybody. we So

think a comparison look you that. to be I base a for at So it's name domain resilient. But to fair continues the take

that we're I of the have domain China, the able of name segment, in but But the smaller think offset seeing remains base growth, is proposition which name impacting better. strong. we're a performed to total domain value other is geographies the ours geographical as the declines

it. Got

Okay. the the softness revenue side. side. in cost relative there. ahead to expectations Also, you maybe come guys And continue the despite on on That's helpful of

this you're and we So investments of year not of XXXX, how through just needed, and what's us what's how as and into approaching about looking you're that? maybe get the cost kind start walk end and to thinking

call on guidance earnings for XXXX. year full provide We'll Yes. next our

that did the expenses will our some and in year. that we down business Our us. this guidance from was regard our midpoint $X mind, X%, suggests with to million migrated .tv year, not .tv of expenses of out be up picked is costs of paid have prior the fees about from away that we that's to this around Keep come lower or years. That

similar year, grew X% a year. you if this at year than so. last as growth last were that probably recall, or rate But to normalize about we're expenses out, And you expense

So to be responsible. expenses and we'll continue manage

quarters several said, Jim As a row. in

protect our being investments to of do company control During efficiencies, responsible, and time mission the what to sure and making execute where framework investments we SLAs. the control we're we'll all can we're that uncertainty, can areas means assure this we're need our so. can trying right strategic I and you, to making the our make we some and making But necessary we meet

Yes. we for is infrastructure next us round right. make the those, and expense to The services guidance. term of We provide first means exactly you responsible Ygal, provide mandatory. is our that, manage said, of as investment will George XXXX simply but responsibly infrastructure do give this that Jim. in foremost, George control we full can. where all is we And earnings critical

Rob Baird. And we Robert to W. back with Oliver go will

Great.

Just squeezing with my question in Jim, here more. you. is one for

that mentioned, I You characterized are China, But part know earlier China my in is clearly, that response some question of you macro, I and a the you generally. of around outside ongoing to think, turbulence outside just that. which growing of guys

characterization your sort Middle sentiment. when the incremental curious But earlier you entered current out headlines take and to East quarter, or as certainly, now the anything in was it terms the feels was whether and just same hear of there your of be if on macro

I just a on things softer, to think what partners. it sense are your a feels hearing wanted bit from like seeing but and get you're

Yes. are some part we're the and of all East, those, around the that we the economy macroeconomic geopolitical affect of the indirectly it's Ukraine That impacting or trends are of all world, the issues Middle and headwinds events seeing. whether believe, that of the is

are you're the recent. the those is it's us And the companies, broad are how to they relatively relatively seeing events, and to -- tough assess board. That effect for think going companies It's I I across in think, impact future. that tech one

across challenges as don't that Chinese that space be market, point. think I at we the and seeing anything from certainly have tech to that's this identify I any biggest insight real seems at I and least I'm broadly can we into tell well. in So know impact, you, can obviously felt what there the publicly, the are

or now. People observe are rise, to second Nothing we sorts this really effects trend to point. But have at do order share these. we things some report transcends monitor occur don't impact. appreciate any from have them. question. all data cautious, third these just your and right negative I rates more I they of interest Certainly, even

when put things talk of no about rates, what of alluding we mentioned. They that's we business. we were on And particular pressure to particular -- in Interest the them. some do the sort all And order make then a can in we do result services we we're with is contracts. focus absolutely delivering we what that and certain what That's said, our accordance our George as as on foremost. control. We first

we constantly model And responsible the secondly, in do, can business quarters better expense we . to things control. engage for frequently wait climate. we us economic our are while solid allows and Those deliver

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

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

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