Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- VeriSign Inc (VRSN, Financial) achieved a 4.3% year-over-year revenue growth in 2024, demonstrating strong financial performance.
- The company increased its operating income by 5.7% in 2024, showcasing effective cost management and operational efficiency.
- VeriSign Inc (VRSN) returned $1.2 billion of capital to shareholders through the repurchase of 6.6 million shares, indicating a strong commitment to shareholder value.
- The renewal rate for the fourth quarter of 2024 improved to approximately 73.9%, reflecting positive trends in customer retention.
- The company successfully renewed the .com registry agreement with ICANN and the cooperative agreement with the NTIA, ensuring continued operational stability and regulatory compliance.
Negative Points
- The domain name base in .com and .net decreased by 2.1% or 3.7 million names year-over-year, indicating challenges in maintaining domain growth.
- Net income in the fourth quarter of 2024 was $191 million, down from $265 million a year earlier, reflecting a decline in profitability.
- The domain name base decreased by 500,000 names in the fourth quarter, highlighting ongoing challenges in domain retention.
- VeriSign Inc (VRSN) expects a negative year-over-year change in the domain name base for 2025, projecting a decline between 2.3% and 0.3%.
- The company faces continued declines in domain volumes from China-based registrars, which could impact future growth prospects.
Q & A Highlights
Q: Jim, you mentioned optimism about the domain base growth due to three points. Could you elaborate on these points and the macro environment?
A: We expect the domain name base to decrease in 2025, but trends are improving. The decline in China-based registrars is lessening, now only 5% of our business. Our new marketing programs are being adopted, and registrars are refocusing on customer acquisition. Two registrars are even running Super Bowl ads, reaching 200 million viewers. These factors, along with improved renewal rates, give us optimism.
Q: Can you provide more details on the marketing programs and their regional impact?
A: The programs are designed to align with registrars' go-to-market strategies. We've received positive feedback, and while it's early, registrars are gearing up to roll them out in 2025. The programs offer more options and flexibility, which registrars appreciate. It's too early to specify regional impacts, but we are optimistic about their potential.
Q: With leadership changes in DC and ICANN, how might this affect Verisign? Are discussions with NTIA ongoing?
A: Verisign's position is the result of decades of consistent policy across administrations. We maintain strong relationships with ICANN and NTIA. We look forward to working with the new ICANN CEO and the incoming NTIA administrator. Discussions with NTIA are ongoing, focusing on security and stability. Our cooperative agreement ensures content neutrality and rigorous performance standards.
Q: Are the marketing programs distinct from the cyclical trends you mentioned? Why are they important if a cyclical turn is expected?
A: The programs are distinct and designed to meet the evolving needs of our diverse channel. They provide flexibility and choice, supporting registrars' strategies. While we expect a cyclical shift back to customer acquisition, the programs help strengthen the channel and target high-renewal cohorts, benefiting both registrars and Verisign.
Q: With new generic TLD auctions coming up, is Verisign interested in bidding? What's the update on .web?
A: We remain interested in being the registry operator for .web, though the process is ongoing with ICANN. We expect more hearings in 2025. Regarding new TLDs, we're considering potential applications but have nothing to announce yet. Our strategy remains focused on expanding our portfolio where it aligns with our business goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
