Verisign(US:VRSN)2023-02-09 23:39Financial 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]