Verisign(VRSN) - 2023 Q3 - Quarterly Report

Financial Performance - For the three and nine months ended September 30, 2023, the company recorded revenues of $376.3 million and $1,112.7 million, representing a 5% increase compared to the same periods in 2022[45]. - The operating income for the same periods was $254.3 million and $744.3 million, reflecting a 7% increase year-over-year[45]. - Cash flows from operating activities for the nine months ended September 30, 2023, were $649.6 million, compared to $614.2 million for the same period in 2022[50]. - Net cash provided by operating activities increased to $649.6 million for the nine months ended September 30, 2023, compared to $614.2 million in the same period last year[69]. - Net cash used in financing activities decreased to $663.5 million for the nine months ended September 30, 2023, compared to $821.7 million in the same period last year[74]. Domain Registrations - As of September 30, 2023, the company had 173.9 million .com and .net registrations, a 0.1% decrease from the previous year and a net decrease of 0.5 million from June 30, 2023[45]. - The renewal rate for .com and .net domains for Q2 2023 was 73.4%, down from 73.8% in Q2 2022[45]. - The company experienced competitive pressure from ccTLDs and other gTLDs, which has limited the demand for domain names, particularly in China[52]. Revenue by Geography - Geographic revenue from the U.S. increased by 6% to $250.8 million for Q3 2023, while revenue from China decreased by 18% to $22.0 million[53]. Expenses - Research and development expenses increased by 4% to $21.7 million for the three months ended September 30, 2023, and by 6% to $68.1 million for the nine months ended September 30, 2023[57][58]. - Selling, general and administrative expenses rose by 5% to $51.7 million for the three months ended September 30, 2023, and by 5% to $151.5 million for the nine months ended September 30, 2023[60][61]. - The cost of revenues for Q3 2023 was $48.6 million, a 3% decrease from $50.0 million in Q3 2022[55]. - Cost of revenues decreased by $3.7 million due to a transition in registry operations, partially offset by a $3.1 million increase in compensation and benefit expenses[56]. Share Repurchase and Debt - The company authorized a total share repurchase program of up to $1.50 billion, with approximately $1.34 billion remaining available for future repurchases as of September 30, 2023[45]. - The company had $750.0 million in 2.70% senior unsecured notes due 2031 and $550.0 million in 4.75% senior unsecured notes due 2027 as of September 30, 2023[67]. Cash and Liquidity - Cash and cash equivalents decreased to $157.7 million as of September 30, 2023, down from $373.6 million at the end of 2022[65]. - The company believes existing cash, cash equivalents, and marketable securities will be sufficient to meet working capital and capital expenditure requirements for the next 12 months[68]. Taxation - The effective tax rate remained consistent at 24% for the three and nine months ended September 30, 2023[64]. Future Plans - The company plans to increase the annual registry-level wholesale fee for .net domain registrations from $9.92 to $10.91, effective February 1, 2024[50].