VeriSign, Inc. (NASDAQ:VRSN) Q1 2023 Earnings Conference Call April 27, 2023 4:30 PM ET Company Participants David Atchley - Vice President, Investor Relations & Corporate Treasurer Jim Bidzos - Executive Chairman & Chief Executive Officer George Kilguss - Executive Vice President & Chief Financial Officer Conference Call Participants Rob Oliver - Robert W. Baird Ygal Arounian - Citigroup Operator Good day, everyone. Welcome to VeriSign's First Quarter 2023 Earnings Call. Today's conference is being recorde ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR Registrant's telephone number, including area code: (703) 948-3200 For the transition period from to Securities registered pursuant to Section 12(b) of the Act: Commission File Number: 000-23593 | Title of each class | T ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Verisign provides global domain name registry services and internet infrastructure, operating .com and .net, ensuring security and stability [Overview](index=3&type=section&id=Overview) Verisign is a global provider of domain name registry services and internet infrastructure, enabling internet navigation for recognized domain names like .com and .net - Verisign is a global provider of domain name registry services and internet infrastructure, enabling internet navigation for recognized domain names like .com and .net[11](index=11&type=chunk) - The company ensures the security, stability, and resiliency of key internet infrastructure, including Root Zone Maintainer services and operating two of the 13 global internet root servers[11](index=11&type=chunk) [Services](index=3&type=section&id=Services) Verisign operates authoritative directories and back-end systems for various domain names, including .com and .net, under agreements with ICANN and the U.S. Department of Commerce - Verisign operates authoritative directories and back-end systems for .com, .net, .cc, .gov, .edu, and .name domain names, providing secure and always-on access[17](index=17&type=chunk) - The company is the exclusive registry for .com, .net, and .name gTLDs under agreements with ICANN and the U.S. Department of Commerce, maintaining authoritative directories and providing DNS resolution[18](index=18&type=chunk) - Domain name registration prices for .com, .net, and .name are controlled by ICANN agreements, with .com and .name incurring a **$0.25 quarterly fee** to ICANN per annual registration, and .net a **$0.75 fee**[21](index=21&type=chunk) [Operations Infrastructure](index=4&type=section&id=Operations%20Infrastructure) Verisign's operations infrastructure includes secure global data centers and points of presence, designed for high availability, rapid failover, and robust security - Verisign's main operations infrastructure includes secure data centers in Dulles, Ashburn (Virginia), and New Castle (Delaware), along with over **200 global points of presence**[23](index=23&type=chunk) - The infrastructure processes hundreds of billions of transactions daily, featuring distributed servers for rapid failover and load balancing, redundant global networking, and robust security measures including firewalls and intrusion detection[23](index=23&type=chunk)[24](index=24&type=chunk) - The company maintains disaster recovery and business continuity capabilities with mirrored services and advanced storage systems to ensure continuous operation and data protection[28](index=28&type=chunk) [Marketing, Sales and Distribution](index=5&type=section&id=Marketing,%20Sales%20and%20Distribution) Verisign aims to expand its domain name base through targeted marketing campaigns, providing tools for registrars and end-users - Verisign aims to expand its business through targeted marketing campaigns to grow the .com and .net domain name base, both domestically and internationally, providing tools for registrars and end-users[29](index=29&type=chunk) [Research and Development](index=5&type=section&id=Research%20and%20Development) Continuous R&D is crucial for Verisign's competitiveness, focusing on new and enhanced services, monitoring, registry platforms, and security - Timely development of new and enhanced services, including monitoring, registry platforms, and security, is crucial for competitiveness[30](index=30&type=chunk) - Future enhancements and new services are expected from internal development, collaboration with vendors and customers, and potential third-party technology acquisitions or licenses[31](index=31&type=chunk) [Competition](index=5&type=section&id=Competition) Verisign faces competition from other TLD registries and alternative online presence providers, with its agreements imposing pricing and distribution restrictions - Verisign faces competition from other gTLD and ccTLD registries (e.g., CNNIC, DENIC, Google) and from alternative online presence providers like search engines (Google, Baidu), social media (Facebook, WeChat), and e-commerce platforms (Amazon, eBay)[32](index=32&type=chunk)[33](index=33&type=chunk) - The company's agreements with ICANN impose pricing, bundling, and distribution restrictions on .com, .net, and .name, potentially creating a competitive disadvantage compared to other TLDs[32](index=32&type=chunk) [Industry Regulation](index=6&type=section&id=Industry%20Regulation) The DNS is governed by a multi-stakeholder model with ICANN, and Verisign is subject to various country-level laws and regulations, including data security and privacy - The DNS is governed by a multi-stakeholder model, with ICANN playing a central coordination role, and Verisign is obligated to follow ICANN's Consensus or Temporary Policies[35](index=35&type=chunk) - Verisign is subject to country-level laws and regulations, including licensing requirements in China for .com, .net, and .cc, and data security/privacy regulations (e.g., GDPR) in various jurisdictions[36](index=36&type=chunk) [.com Generic Top-Level Domain](index=6&type=section&id=.com%20Generic%20Top-Level%20Domain) Operation of the .com gTLD is governed by a six-year registry agreement with ICANN, renewable by November 30, 2024, and a Cooperative Agreement with the U.S. DOC - Operation of the .com gTLD is governed by a six-year registry agreement with ICANN, renewable by November 30, 2024, with a presumptive right of renewal but subject to termination conditions[37](index=37&type=chunk) - Amendment 3 to the .com Registry Agreement allows for annual price increases of up to **7%** in the final four years of each six-year period, with the first period starting October 26, 2018[39](index=39&type=chunk) - The .com gTLD operation is also subject to a Cooperative Agreement with the U.S. DOC, extended until November 30, 2024, with automatic six-year renewals unless non-renewal notice is given[40](index=40&type=chunk) [.net Generic Top-Level Domain](index=7&type=section&id=.net%20Generic%20Top-Level%20Domain) The .net gTLD is operated under a six-year registry agreement with ICANN, expiring July 1, 2023, with terms similar to .com but allowing annual price increases of up to 10% - The .net gTLD is operated under a six-year registry agreement with ICANN, expiring July 1, 2023, with terms similar to .com but allowing annual price increases of up to **10%**[45](index=45&type=chunk) [Root Operations](index=7&type=section&id=Root%20Operations) Verisign operates two of the world's thirteen root servers and performs the Root Zone Maintainer function under an agreement with ICANN expiring October 19, 2024 - Verisign operates two of the world's thirteen root servers and performs the Root Zone Maintainer function, publishing authoritative root zone data under an agreement with ICANN expiring October 19, 2024[46](index=46&type=chunk) [Human Capital Management](index=7&type=section&id=Human%20Capital%20Management) As of December 31, 2022, Verisign had 917 employees, focusing on talent attraction, development, and retention, with a commitment to DEI and a hybrid work model - As of December 31, 2022, Verisign had **917 employees** (**914 full-time**), with **93%** based in the U.S. and **7%** internationally[49](index=49&type=chunk) - The company focuses on attracting, developing, and retaining talent, with an average employee tenure of approximately **9 years**, and a high engagement rate (**85% participation** in the October 2022 survey)[49](index=49&type=chunk)[50](index=50&type=chunk) - Verisign is committed to Diversity, Equity, and Inclusion (DEI), with **28% female** and **43% ethnically/racially diverse** U.S. employees as of December 31, 2022, and is transitioning to a hybrid work model[49](index=49&type=chunk)[51](index=51&type=chunk)[55](index=55&type=chunk) Employee Headcount by Function (as of December 31) | Function | 2022 | 2021 | 2020 | | :------------------------ | :--- | :--- | :--- | | Cost of revenues | 242 | 235 | 235 | | Research and development | 255 | 250 | 260 | | Selling, general and administrative | 420 | 419 | 414 | | **Total** | **917** | **904** | **909** | [Intellectual Property](index=8&type=section&id=Intellectual%20Property) Verisign protects its proprietary assets through copyrighted software, trademarks, patents, trade secrets, and confidentiality agreements, relying on its brand for differentiation - Verisign protects its proprietary assets through copyrighted software, trademarks, patents, trade secrets, and confidentiality agreements[57](index=57&type=chunk) - The company holds numerous U.S. and international patents and actively files new applications, while also relying on its Verisign brand for differentiation[58](index=58&type=chunk)[59](index=59&type=chunk) - Key intellectual property includes proprietary software for its Shared Registration System and ATLAS distributed lookup system, though some software and protocols are public domain or open standards[60](index=60&type=chunk) [Information About Our Executive Officers](index=9&type=section&id=Information%20About%20Our%20Executive%20Officers) Executive Officers (as of February 17, 2023) | Name | Age | Position | | :------------------ | :-- | :------------------------------------------------- | | D. James Bidzos | 67 | Executive Chairman and Chief Executive Officer | | Todd B. Strubbe | 59 | President and Chief Operating Officer | | George E. Kilguss, III | 62 | Executive Vice President, Chief Financial Officer | | Danny R. McPherson | 48 | Executive Vice President, Engineering, Operations and Chief Security Officer | | Thomas C. Indelicarto | 59 | Executive Vice President, General Counsel and Secretary | [Item 1A. Risk Factors](index=10&type=section&id=Item%20

Financial Data and Key Metrics Changes - In 2022, revenue grew by 7.3% year-over-year to $1.425 billion, and operating income increased by 8.8% to $943 million [6][10] - Operating expenses totaled $482 million, up 4.6% from the previous year, with an operating margin of 66.2% [10] - For Q4 2022, revenue was $369 million, an increase of 8.5% year-over-year, while operating income rose by 10.5% to $245 million [10][11] - Net income for Q4 2022 was $179 million, resulting in diluted earnings per share of $1.70, down from $2.97 in Q4 2021 [11][12] Business Line Data and Key Metrics Changes - New registrations in Q4 2022 were 9.7 million, down from 10.6 million in the same quarter a year ago, attributed to various factors including reduced registrations from China [7] - The renewal rate for Q4 2022 was approximately 73.2%, slightly down from 73.7% in the previous quarter and 74.8% a year ago [7] Market Data and Key Metrics Changes - The domain name base in .com and .net reached 173.8 million, with a year-over-year growth rate of 0.2% [25] - The expected growth rate for the domain name base in 2023 is projected to be between 0% and 2.5% [26] Company Strategy and Development Direction - The company aims to maintain reliable operations and invest in critical Internet infrastructure while exercising careful expense control [24][54] - A price increase for .com domain names from $8.97 to $9.59 is set to take effect on September 1, 2023 [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties and indicated that the recovery from the pandemic will take longer than expected [57] - The company remains optimistic about the long-term fundamentals of the domain name business, despite current challenges [64] Other Important Information - The company repurchased 5.5 million shares for $1 billion in 2022, with $859 million remaining under the current share repurchase program [25][54] - The transition of the .tv agreement to a new registry operator was completed, with revenue from this agreement totaling approximately $19 million for 2022 [29] Q&A Session Summary Question: Thoughts on macroeconomic factors and domain growth - Management noted that while there are uncertainties, they have not factored in the impact of layoffs on new business starts, although they track this data [46] - They believe that domain name activity will eventually return to pre-pandemic levels, but 2023 remains difficult to predict [47] Question: Impact of ChatGPT on domain names - Management views ChatGPT as potentially beneficial, as it may help users find suitable domain names through their NameStudio product [59] Question: Insights on the Chinese market and its reopening - Management highlighted that lower first-time renewal rates from China were a factor in 2022, and it is too early to assess the impact of China's reopening on 2023 [42][43] Question: Operating margins and expense control - Management indicated that responsible expense management contributed to better-than-expected operating margins, with overall expenses growing by about 4.6% [68]

VeriSign, Inc. (NASDAQ:VRSN) Q3 2022 Earnings Conference Call October 27, 2022 4:30 PM ET Company Participants David Atchley - Vice President, Investor Relations and Corporate Treasurer James Bidzos - Chairman and Chief Executive Officer George Kilguss - Executive Vice President and Chief Financial Officer Todd Strubbe - President and Chief Operating Officer Conference Call Participants Rob Oliver - Baird Operator Good day, everyone and welcome to VeriSign’s Third Quarter 2022 Earnings Call. Today’s confere ...

Business Performance - The Domain Name Base reached 174.2 million names, a 1.2% year-over-year increase[10] - .com domain names accounted for 160.9 million, while .net domain names totaled 13.2 million[10] - New name registrations in Q3 2022 were 9.9 million, compared to 10.7 million in Q3 2021[12] - The renewal rate for Q2 2022 was 73.8%, with the Q3 2022 renewal rate expected to be approximately 73.8%, compared to 75.0% in Q3 2021[12] - The Domain Name Base is expected to increase by between 0.25% to 1.0% from the end of 2021 to the end of 2022[12] Financial Highlights - Revenue for Q3 2022 was $357 million, up 6.8% year-over-year[8, 17] - The operating margin was 66.3%[17] - Diluted EPS was $1.58[17] - Operating cash flow was $262 million[17] - Free cash flow was $255 million[17] Full Year 2022 Financial Guidance - Revenue is projected to be between $1.418 billion and $1.426 billion[18] - Domain Name Base growth is expected to be between 0.25% and 1.0%[18] - The operating margin is projected to be between 65.75% and 66.25%[18] - Interest expense and non-operating income, net, are expected to be an expense of $60 million to $65 million[18] - Capital expenditures are projected to be between $30 million and $35 million[18]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 000-23593 Indicate by check mark whether the registrant is a large ...

VeriSign, Inc. (NASDAQ:VRSN) Q2 2022 Earnings Conference Call July 28, 2022 4:30 PM ET Company Participants David Atchley - Vice President, Investor Relations and Corporate Treasurer James Bidzos - Chairman and Chief Executive Officer George Kilguss - Executive Vice President and Chief Financial Officer Todd Strubbe - President and Chief Operating Officer Conference Call Participants Rob Oliver - Baird Equity Research Operator Good day, everyone. Welcome to VeriSign’s Second Quarter 2022 Earnings Call. Toda ...

Q2 2022 Earnings Conference Call July 28, 2022 Safe Harbor Disclosure Statements in this presentation other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements regarding (i) Q2 2022 renewal rate expectations, (ii) Domain Name Base increase expectations, and (iii) our full year 2022 financial guidance fo ...

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 Registrant's telephone number, including area code: (703) 948-3200 Securities registered pursuant to Section 12(b) of the Act: | T ...