VERISIGN INC/CA Q4 FY2024 earnings call

• VeriSign extended its uninterrupted .com and .net resolution to over 27 years, with the network processing over 400 billion transactions daily.
• In 2024, revenue grew 4.3% year-over-year, operating income increased 5.7%, and shares outstanding decreased 6.2%.
• Returned $1.2 billion of capital to shareholders through share repurchases.
• Domain name base in EMEA was up sequentially and for the full year 2024, while US and China-based registrars saw decreases.
• Launched new marketing programs for .com and .net to reengage registrars and support domain name base growth.
• For Q4 2024, operating expenses totaled $132 million, with net income $191 million and diluted EPS $2.
• Full year 2024 operating cash flow was $903 million and free cash flow was $875 million.

For the year ended December 31, 2024, VeriSign, Inc. generated revenue of $1.557 billion, up 4.3%. Operating income was $1.058 billion, up 5.7% from 2023. For the fourth quarter ended December 31, 2024, revenue was $395 million, up 3.9% from the same quarter of 2023, and operating income was $264 million, an increase of 2.9% from the same quarter a year ago. The domain name base in .com and .net totaled 169 million domain names at year-end 2024, a decrease of 2.1% from the prior year. Fourth quarter new registrations were 9.5 million, up sequentially and year-over-year. The renewal rate for Q4 2024 was approximately 73.9%, showing improvement sequentially and year-over-year.

• 2025 revenue expected to be between $1.615 billion and $1.635 billion.
• 2025 operating income expected to be between $1.095 billion and $1.115 billion.
• Interest expense and non-operating income net expected to be an expense of between $50 million and $60 million.
• Capital expenditures expected to be between $30 million and $40 million.
• GAAP effective tax rate expected to be between 21% and 24%.

• Cyber threat environment poses risks to network operations.
• Continued decline in China-based registrar volumes could impact domain name base if not managed.
• Regulatory changes or shifts in ICANN/NTIA agreements could affect operations and financials.
• Mismatch between wholesale and retail pricing could impact margins.

Q: Rob Oliver asked about the three points of optimism for domain base growth in 2025, including China segment decline being more muted, marketing programs being adopted, and registrars refocusing on customer acquisition.

A: Jim Bidzos responded that China is lessening and now represents 5% of business, new marketing programs are being adopted with positive feedback, and registrars are starting to refocus on customer acquisition with signs like two registrars running Super Bowl ads.

Q: Ygal Aronian asked about cyclical trends, gross new registrations, and new generic TLDs.

A: George Kilguss noted gross new registrations were up, some due to early success of marketing programs, and Jim Bidzos discussed .web TLD arbitration process and considering new TLD applications but no current details to share.