Operator:

Good day, everyone. Welcome to VeriSign's Second Quarter 2024 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead.

Jim Bidzos:

Thank you, David. Good afternoon to everyone, and thank you for joining us. Before we cover results, I'd like to note that last week; we marked 27 years of 100% uninterrupted availability for the .com, .net domain name resolution system. This milestone represents an unparalleled achievement in our industry for operating secure, stable and resilient DNS infrastructure. For well over 1/4 of the century, amidst some of the most technologically significant changes the world has ever experienced, our teams have successfully built, maintained, operated and evolved the infrastructure that enables hundreds of billions of queries a day and supports trillions of dollars in global commerce. In fact, we answer on average, 328 billion queries per day, billion with a B. 24 hours a day, 7 days a week, 365 days a year, and that's over 3.7 million per second. We do this amidst ever-increasing Internet demand and resilience, evolving technology and a challenging global cyber threat environment. Turning now to our results. We delivered another quarter of operational and financial stability by focusing on our mission as a critical Internet infrastructure provider. For the second quarter, revenues grew 4.1% year-over-year, operating income grew 7.1% year-over-year and earnings per share grew 12.3% year-over-year. At the end of June, the domain name basin .com, .net totaled 170.6 million domain names. During the second quarter, the domain name base decreased by 1.8 million names. From a new registration perspective, the second quarter ended with 9.2 million new registrations compared with 10.2 million names for the same quarter last year. The renewal rate for the second quarter of 2024 is expected to be approximately 72.6% compared to 73.4% a year ago. As we have previously reported, we continue to see U.S. registrars prioritize ARPU over customer acquisition through higher retail pricing levels and reduced spend on marketing to customers compared with prior years. These factors impacting new registrations are impacting new registrations and renewal rates and are leading to weaker trends in 2024 that are below our original expectations. During the second quarter, the U.S. region was lowered by about 800,000 names. In addition and as expected, China-related weakness continues and contributed to most of the remaining sequential decline in the second quarter. The domain name base from our EMEA region was up slightly during the second quarter. We have rolled out new registrar marketing programs over the past several weeks to support our registrars and our goal of returning to domain name base growth in the second half of 2025. However, given the ongoing impact of the factors we've mentioned, we now expect the change in the domain name base to be between negative 3% to a negative 2% for full year 2024. Our financial and liquidity position continues to remain stable with $690 million in cash, cash equivalents and marketable securities at the end of the quarter. During the second quarter, we repurchased 2.2 million shares for $388 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by $1.11 billion, to a total of $1.5 billion authorized and available under the share repurchase program, which has no expiration. And now, I'd like to turn the call over to George. I'll return when George has completed his financial report with closing remarks.

Jim Bidzos:

Thank you, George. While we expect that the change in the domain name base for 2024 will be below prior year levels for the reasons we've discussed, we continue to believe our business fundamentals remain. As I mentioned earlier, we continue to introduce additional registrar marketing programs to target and support improvement in new registration trends once adopted and integrated into registrar our go-to-market activities. Our goals to fulfill our stewardship mission of providing care and reliable infrastructure services, managing our business responsibly and efficiently returning capital to our shareholders remain unchanged and support our commitment to deliver consistent financial results. Thank you for your attention today. This concludes our prepared remarks. And now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. I've got a few, and then I'll hop back into the queue. Jim, I guess, the first question would be, you talked a little bit about some of the activity at the registrars, particularly in North America and the focus on ARPU. Can you talk about the view out there that perhaps newer gTLDs are taking share from .com and what you're seeing in the data that gives you either a concern there or that would persuade you from that view? And then I have a couple of others.

Rob Oliver:

Got it. Okay. Very helpful, Jim. I appreciate all the color. Two other for me, if I may. The second would be -- so something that just came out today, there was a congressional letter to the NTIA asking for them to review the contract for .com? It's been our understanding that they can ask all they want, but there's no legal ground. But that follows, I guess, an earlier report from a think tank in New York also suggesting the same. So I just wanted to get your reaction to that letter, which came out today?

Rob Oliver:

Okay, that's extremely helpful. I guess the ultimate question we get most often from investors would be. Is there a risk the .com contract and your most recent thoughts on that would be great?

Rob Oliver:

Okay, that's really helpful. I have -- you know if you one or two others, but I'll hop back in the queue. So I appreciate it.

Ygal Arounian:

Similarly, we've lately been getting most of our questions around the agreements, both NTIA [ph] with ICANN and the Cooperative Agreement with Department of Commerce. So maybe just an opportunity to clarify; these are two separate contracts, are they interrelated at all? The date that -- the DOC would have to -- to give you notice on whether -- if they're not doing the cooperative agreement; is that August 2? Just to clarify. And then the part that people, I guess, investors are most confused about lately is where the pricing part of the contract sits. Does that sit with the Department of Commerce? Does that sit within the ICANN contract? Meaning, if the Department of Commerce on sets the cooperative agreement; what happens for the pricing? Where does that get negotiated regardless? Thanks.

Ygal Arounian:

It does. I know it's a multi-part of the question. Just to be clear, again, the pricing -- the wholesale pricing component right now sits between the VeriSign and ICANN in the registry agreement. Is that correct?

Ygal Arounian:

Yes, understood. There's a lot of legal elements here; so that's…

Ygal Arounian:

Yes, understood. And that's really helpful clarification. I want to ask about -- I want to ask about the marketing that you're doing with registrars in the U.S. I know you're saying it's just a couple of weeks, but maybe there is -- and the outcome is not going to come until next year, but maybe there's a little bit, so you can -- a little bit of color that you can add on what you're doing there or what the receptiveness has been from the registrars? So anything that would be helpful.

George Kilguss:

Thanks, Jim. So Ygal, as we mentioned last quarter, in addition to the annual marketing programs that we launched at the beginning of the year, we have rolled out some new programs. During late Q2, we launched some new programs on .net. And this quarter, we've rolled out some programs to the registrar community on .com. Again, our strategy is really to broaden the options that registrars can choose from, depending on their different business models, geographic footprints and installed bases. I would say the initial feedback has been positive to those programs but it is early. And of course, while we've had, I think, some good registrar engagement there, it will take a little bit of time to registrars to work those programs into their go-to-market strategies. So still early days, but we've gotten some actual feedback. And as you may also know, we will start working here in the fourth quarter to modify and enhance and target additional programs for 2025. We tend to gear that up in the fourth quarter and begin to talk to registrars about those programs as well. So any of the programs that we've rolled out better that we get feedback on, we'll look to try to tweak those to make sure that they work best for the registrar community.

George Kilguss:

Yes, sure. So if you look -- simply, if you look at the first half of the year, we're for the first 6 months, we're down about 2 million names. And so the midpoint of our guidance suggests that, that trend is probably going to continue here for the second half. Having said that, on the upside if some of our marketing programs start taking root or as Jim mentioned, if registrars stop being as aggressive in the marketplace with ARPU or there has been some recent news out of China where the Chinese government has put some stimulus into that marketplace, if those things start to take root, I think those are positive and can close that gap a little bit for us on the downside to the extent any of those trends worsen, i.e., the China market continues to not turn around or worsens and renewal rates from some of the activities [ph] continuing to exercise their pricing flexibility weaken that could potentially get to the bottom of that range. But right now, I think the simplest thing the midpoint of our guidance suggests that the second half will be similar to the first half of this year.

Ygal Arounian:

Got it. Thanks for the clarification.

Rob Oliver:

Thanks for squeezing me in for one more. Jim or George, just a question on capital allocation. I saw you guys re-up to the buyback. I guess, Jim, just thinking about your time since returning to VeriSign, you essentially unwound and so many of the noncore businesses and which our view has been, this is a tremendous competitive advantage for you guys. However, it was interesting in response to Ygal's question, what you just said about vertical integration because, yes, clearly, you can't do that with .com. But just wondering the extent to which the current malaise in .com growth and some of the activity with new gTLDs, coupled with a very strong financial position that you guys have might cause you to rethink your capital allocation strategy, either via M&A or getting more aggressive with the new gTLD market or in any other way?

Operator:

This does conclude today's question-and-answer session. I would now like to turn the call back to David Atchley for final remarks.

Operator:

This does conclude today's call. Thank you for your participation. You may now disconnect.

Operator:

Good day, everyone. Welcome to Verisign's First Quarter 2024 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

George Kilguss:

Thanks, Jim, and good afternoon, everyone. For the quarter ended March 31, 2024, the company generated revenue of $384 million, up 5.5% from the same quarter of 2023 and delivered operating income of $259 million, an increase of 7.3% from the same quarter a year ago. Operating expense in the first quarter totaled $125 million compared to $124 million last quarter and $123 million in the year ago quarter.

D. Bidzos:

Thank you, George. While we expect that the change in the domain name base for 2024 will be below historic levels for the reasons we've discussed, we continue to believe our business fundamentals remain strong.

Operator:

[Operator Instructions] Our first question comes from Rob Oliver with Baird.

George Kilguss:

Yes, Rob, thanks for the question. I would say not a necessarily direct expense associated with those programs. We do have expense already budgeted, and that is reflected in the current guidance that we're already putting out there for you.

Ygal Arounian:

If we could dig into the registrars and the focus on pricing and the impact that's having just a little bit more, is there anything within the pricing that's specific to .com that you're seeing, meaning if we look at kind of total domains beyond .com, the softness isn't necessarily as pronounced? So what are the dynamics? Why is it having a bigger impact on .com versus everything? Are they promoting some of the other TLDs more than they are .com? Just to understand that a little bit better.

Ygal Arounian:

Got it. So just a follow-up on that, then. With pricing focus with Amendment 35 and the structure of the current contracts, do you think that there's maybe less pricing power in the domain? I mean I would think still not retail $20 a year. It's not the highest consideration purchase. Does that give you any pause or thoughts on how you think about pricing at a wholesale level? I know you don't control the retail level, but how does that flow through on how you think about the wholesale level?

Robert Oliver:

Great. Jim, last quarter, you got a question on .web, so I think I'll ask it again. I'm not sure that there's been -- I know this doesn't seem like there's been any official update, but anything you guys have heard or seen or anything we should be aware of that constitutes any change? And could you just provide us your updated perspective on what you see as the possible time line or evolution of that web here?

Robert Oliver:

Great. That's helpful. I'll have to go back to the record to look at that again. But very helpful.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to Verisign's Fourth Quarter and Full Year 2023 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone, and thank you for joining us. 2023 marked another solid year of execution delivering consistent financial results while enhancing our critical internet infrastructure and extending our record of .com and .net DNS availability beyond 26 years. During 2023, revenue grew 4.8% year-over-year while operating income increased by 6.1%. Shares outstanding at the end of 2023 decreased by 3.7% from the total of outstanding shares at the end of 2022. Our financial and liquidity positions remains stable with $926 million in cash, cash equivalents and marketable securities at the end of the year. Over the course of the year, we returned $883 million of capital to shareholders through the repurchase of 4.2 million shares. At year end, $1.12 billion remained available authorized under the current share repurchase program which has no expiration. At the end of December, the domain base in .com and .net totaled 172.9 million domain names, down 0.6% from 173.8 million names at the end of 2022. During the fourth quarter, the domain name base decreased by 1.2 million domain names. From a new registration perspective, the fourth quarter ended with 9 million new registrations, compared with 9.7 million names for the same quarter last year. For the full year, new registrations were 39.4 million names, down 490,000 names from the 39.9 million names we saw during 2022. The renewal rate for the fourth quarter of 2023 is expected to be approximately 73.1% compared with 73.3% a year ago. For the full year 2023, a preliminary renewal rate of 73.9% is below the 74.2% renewal rate of 2022. Both first time and previously renewed names were lower year-over-year. While there are many factors that drive demand for domain names, declining demand from China remains the primary source of drag on the overall domain name base growth. Our domains under management from China-based registrars declined by 2.2 million names in 2023. China-based registrar demand has been weak as a result of several factors including challenging economic conditions, a more stringent regulatory environment and the impact of a weaker local currency combined with retail pricing adjustments. Excluding registrars based in China, our domain name base grew by 1.2 million names or 0.8% during 2023. While the domain name base thus far in 2024 has grown quarter-to-date, we have not yet seen any material changes in the current macroeconomic or regulatory landscape in China. Therefore we believe it’s prudent to expect China to continue to negatively impact revenue and domain base growth during 2024. However, with the China base portion of our base now at about 5% of our overall domain name base, we see the negative trend in China having a less pronounced effect on our overall business after 2024. For 2024, we are expecting the domain name base to remain flat year-over-year with a range of negative 1% and positive 1%. As announced in today’s earnings release, we have given notice of a price increase of $0.67 to the annual wholesale price for .com domain names with raises of our wholesale price from $9.59 to $10.26 effective September 1, 2024. Even after this increase, we believe com will remain highly competitive with other TLD choices. As a reminder, any of our domains maybe registered for terms up to ten years at the current wholesale price. Now I’d like to turn the call over to George. I’ll return when George has completed his financial report with closing remarks.

Operator:

[Operator Instructions] We will take our first question from Rob Oliver with Baird. Please go ahead.

Jim Bidzos:

Okay. Thanks. Yeah, definitely China is the main focus of the results that we add. I mentioned in my remarks that we saw a 2.2 million unit decline from China registrars and that we had 1.2 million growth from registrars outside of China. So that the issues for us are definitely concentrated in China. And as I’ve said, today and have for several quarters it’s a variety of factors in China. Those are hard to predict that the challenging economic climate there, very difficult to predict what impact it’s having, how long that will last. The regulatory environment is one in which the process of obtaining domain names is a little bit more challenging, a lot more process, a lot more identification, confirmation authentication of the person registering, et cetera, process basically that makes it a little bit more difficult. And as we’ve mentioned for a couple of quarters now, foreign exchange is an issue as well, that increases cost of goods obviously for registrars selling domain names. So all of those things are contributing. It’s really hard to say. It’s an opaque market to try to understand. It’s very fluid. There is a lot going on there. Some of the things that are going on, migration and other stuff are things or shifts are making it difficult to really assess the impact, is it at the bottom? Is it bouncing along the bottom? When will it change? Those are really hard to see inside of a very opaque market. And so, and an abundance of caution, we just find it prudent to really be careful about guidance concerning China and where it might go. So, those are certainly the influence we are guiding to a flattish DNB, domain name base as a result and it’s just really difficult to predict. But as I mentioned, we are reaching the point here where the China base registrars represent about 5% of our zone. So, I guess, the impact – if the negative impact continues at whatever rate it should be less pronounced as I mentioned.

George Kilguss:

Yeah, Rob, as Jim mentioned, in 2023, China clearly was a drag down about 2.2 million units and from a revenue perspective, which you will see in our when we file our Q, our revenue from China was down about $14.4 million. As we think about the guidance that we’ve provided, both from a revenue perspective and a domain name base perspective, we are assuming that the impact that we saw here in 2023 is going to have a similar impact in 2024 and as a result of that, that’s factoring into kind of the midpoint of our guidance of revenue and also factoring it to the midpoint of our guidance of the domain name base.

Jim Bidzos:

Yeah, thanks for that question too. So there is not a new update on .web. I’ll just reiterate what I said last time which hasn’t changed which is that I can’t publish their response to the latest IRP and they were very dismissive of it that described in detail. Again their process that they employed in determining the .web was handled properly and that there are no issues. And so, what we’ve seen so far is basically process and procedure delays. And we are confident that that’s going to come to an end that those will run out eventually. I just don’t think that anything is going to change in the meticulous process that I can again concluding with the Board both without objection to instruct that to proceed with processing the .web application. Those were the last official communications of the Board in writing to the community and to staff. So, we are waiting for some of these process things to clear up watching the website. So, nothing new from the last time. I’ll just reiterate our confidence in what the outcome will be and reiterate our strong desire and exciting anticipation of bringing .web to market to our extended channel and to their millions of customers.

Jim Bidzos:

Thank you.

Ygal Arounian:

Hey, good afternoon, guys. Maybe just to start, I am assuming that’s probably not a lot you can comment on the upcoming .com renewal, but if there is any chance to something you could say or something you want to comment on just to get and ask about that first?

Ygal Arounian:

Okay. Great. And that’s what I figured. For the global trends, understanding what’s going on in China, talk about the 1 million growth in domains outside of China. Can you frame that a little bit more? Is that typical? Is it still not at where you would call normal historical levels understanding there is some fluctuations over time? What are the trends you are seeing globally that give you confidence or not and if there is anything in particular that you could point on kind of maybe the US and Europe can be helpful?

Ygal Arounian:

Got it. And then, just I guess following down the lines, want to maybe dig into the margin outlook for next year in costs. Less margin expansion at least to start here on the expectation for next year than what we saw this year. Can you just talk about investments and where you are looking to spend next year? And maybe tie in with that expectations around buybacks for next year as well?

Ygal Arounian:

Okay, great. Thanks. And then, last one maybe bigger picture. GoDaddy had an interesting announcement earlier this week, a partnership with Ethereum Name Service or ENS and some of this stuff still on the crypto cycle little over my head, but I just wanted to get your thoughts on that, particularly because there were some commentary about the DNS and some of the challenges with integration there. I am just thinking about the kind of broader future domains and how block chain can impact, and maybe you have some views there.

Ygal Arounian:

Super. A much more thoughtful answer than I expect to be honest. But very interesting in the future of all that. We appreciate your time guys.

George Kilguss:

Sure. And maybe some under appreciation of the innovation in the space. So very helpful.

Jim Bidzos:

Great. Thanks.

Operator:

This concludes today’s question and answer session. I will now turn the conference back over to David Atchley for any additional or closing remarks.

Operator:

Once again, this concludes today's call. Thank you for your participation. And you may now disconnect.

Operator:

Good day, everyone. Welcome to Verisign's Third Quarter 2023 Earnings Call. Today's conference is being recorded. Recording of this conference is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone, and thank you for joining us. We delivered another solid quarter by focusing on our mission as a critical Internet infrastructure operator. In addition to delivering on our mission during the third quarter, I'm pleased with the financial results, which show the continued strength of our business model during this uncertain macroeconomic period. For the third quarter, revenues grew 5.4% year-over-year, while EPS grew 15.8% year-over-year. At the end of September, the domain name base in .com and .net totaled 173.9 million domain names, up slightly from 173.8 million names at the end of 2022. During the third quarter, the domain name base decreased by 0.5 million domain names. From a new registration perspective, the third quarter ended with 9.9 million new registrations, flat with the same quarter last year. We believe that the renewal rate for the third quarter of 2023 will be approximately 73.4% compared to 73.7% a year ago. While there are many factors that drive demand for domain names, the core value proposition for domain names remain strong, and we're seeing broad-based engagement from our registrar channel. However, even with those fundamentals intact, low demand from China remains the primary source of drag on the overall domain name base growth, excluding registrars based in China, both our domain name base and new registrations are up year-over-year through Q3. With this current trend, we now expect the change in the domain name base for full year 2023 to be between negative 0.4% and positive 0.4%. This updated range reflects continued uncertainty primarily due to the weakness we're seeing from China. Our financial and liquidity position remained stable with $943 million in cash, cash equivalents and marketable securities at the end of the quarter. During the third quarter, we repurchased 1.1 million shares for $220 million. At quarter end, $1.34 billion remained available and authorized under the current share repurchase program. Regarding web, Today, I can posted Altanovo's IRP complaint and ICANNs answer to its website. I urge anyone interested in this issue to read it as I believe it will help you understand our current and past statements on .web. We think ICANN's answer is informative, and I'd like to read the concluding paragraph from ICANN's document. First, I just want to clarify that the reference to NDC here is a company new .co, which is Verisign's partner in the .web application. The conclusion reads as follows

Jim Bidzos:

Thank you, George. We strongly believe our strategic focus and disciplined management continue to serve us well, allowing us to deliver another solid quarter in which we provided secure and reliable infrastructure services, managed our business responsibly and efficiently and return value to our shareholders. While there is ongoing turbulence in the economy due to macroeconomic and geopolitical issues and there continues to be low demand from China, the fundamentals of our business remain strong. These strong business fundamentals and our focus on managing items within our control continues to deliver strong financial results, including steady growth in revenue, operating income and EPS. Thanks for your attention today. This concludes our prepared remarks, and now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Jim, I'd like to start certainly noted the comments relative to China and that the rest of the business would have been up on the demand front had it not been for China. So loud and clear on that. Just curious to hear your take on the China market right now, maybe what you're hearing from your partners on the ground there as to when things might stabilize or if there's anything else going on in that market that we should be aware of. And then I had a follow-up.

Rob Oliver:

Okay. Great. Jim, for that very helpful color. My follow-up was around the ICANN post on .web. And I guess, pretty clear their view, but just -- and forgive me if I should know this, but there's been so -- it's been a labor journey here on .web. And so now that, that opinion from iCANN has hit. What -- where does that leave us? And what should we expect next? Or what do you think will happen next?

Operator:

And we'll take our last question from Ygal Arounian with Citi.

George Kilguss:

Just a couple of points. I mean there's obviously a lot going on in the world today. Obviously, we have some macroeconomic factors, still high interest rates, so there's still high inflation. Obviously, there's some geopolitical factors going on there. So I think those are -- like other companies, those things are impacting our business. But as Jim mentioned, we are seeing ex-China's registrars growth from those groups, both in new registrations as well as the domain name base there. Again, I would point to, we really don't break out the domain name base for competitive purposes. But I would point you to our geographic revenue disclosure, which really gives you a sense of some of the growth. We don't -- we charge the same price. We do charge the same price across all markets. So we offer that to everybody. So I think it's a fair comparison for you to take a look at that. But the domain name base continues to be resilient. I think the value proposition of the domain name remains strong. But the declines we're seeing in China, which is a smaller geographical segment, of ours is impacting the total domain name base growth, but we're able to offset that as the other geographies have performed better.

George Kilguss:

Yes. We'll provide full year guidance on our next earnings call for 2024. Our expenses or the midpoint of our guidance suggests that our expenses will be lower this year, around 3%, and that's down from prior years. Keep in mind, we did have some costs come out of the business with regard to .tv migrated away from us. That was about $5 million of fees that we paid to .tv that is not picked up this year. But if you were to normalize that out, we're probably at a similar expense growth rate this year than last year. And as you recall, last year, expenses grew about 4% or so. So we'll continue to manage expenses and be responsible. As Jim said, several quarters in a row. During this time of uncertainty, we're trying to control what we can control and that means being responsible, making sure we're making the right investments and areas where we can make some efficiencies, we'll do so. But I can assure you, we're making all the necessary investments we need to execute our mission and our strategic framework to protect the Company and meet our SLAs.

Operator:

And we will go back to Rob Oliver with Robert W. Baird.

Jim Bidzos:

Yes. That is all of the events around the world, whether it's Ukraine or the Middle East, all of those, we believe, are impacting the economy and indirectly are part of the geopolitical issues that affect some of the macroeconomic trends and headwinds that we're seeing. And I think those are broad and you're seeing that effect for companies -- tech companies, I think, across the board. That one is tough to assess how it's going to impact us in the future. It's relatively the events, they are relatively recent. So I don't know that we have any real insight into anything we can identify at this point. I can tell you, at least from what I'm seeing publicly, I think there are certainly challenges in the Chinese market, and that's obviously the biggest impact, and that seems to be felt broadly across the tech space as well. But we monitor these things we observe them. Nothing to report right now. I appreciate your question. I just don't have any trend data or transcends even really to share at this point. Certainly, they do have some negative impact. People are more cautious, interest rates rise, all sorts of second and third order effects occur from these. And that's what we were alluding to when we talk about them. They do sort of put some pressure on the business. Interest rates, in particular -- no particular order all of the things we mentioned. And as George said, what we do then as a result is we focus on what we can control. We make absolutely certain that we're delivering our services in accordance with our contracts. That's first and foremost. And secondly, we engage frequently constantly in responsible expense control. Those are the things we can do, and our business model allows us to deliver solid quarters while we wait for better economic climate.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's Second Quarter 2023 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone and thank you for joining us. We delivered another successful quarter by focusing on our mission as a critical infrastructure operator. The quarter included the renewal of the .net registry agreement and solid financial results. Additionally, last week, we marked 26 years of 100% availability in the .com, .net domain name resolution system. Throughout the various global challenges over the past 26 years, from the pandemic to natural disasters to evolving cyber threats, our purpose-built network has kept billions of people worldwide continuously connected to what matters most. The work we do to operate, protect and evolve key Internet infrastructure has never been more important than it is today. Reaching this mark is a testament to the ongoing investments made in our platforms, processes and people. On June 30, we announced the renewal of the .net registry agreement with ICANN, as expected, given the presumptive right of renewal in our agreement. The business terms of the agreement such as pricing, the fees paid to ICANN, our renewal rights and the 6-year term of the agreement are unchanged. The next renewal for the .net registry agreement will be June of 2029. In addition to delivering on our mission during the second quarter, I'm pleased with the financial results which showed the continued strength of our business during this uncertain macroeconomic period. For the second quarter, revenues grew 5.7% year-over-year while EPS grew 16.2% year-over-year. At the end of June, the domain name base in .com and .net totaled 174.4 million domain names, up from 174.3 million in Q2 2022 and up from 173.8 million names at the end of 2022. During the second quarter, the domain name base decreased by 0.3 million domain names, offsetting some of the 1 million names we added during the first quarter. From a new registration perspective, the second quarter delivered a 1.5% year-over-year increase with 10.2 million new registrations compared to 10.1 million last year. We believe that the renewal rate for the second quarter of 2023 will be approximately 73.4% compared to 73.8% a year ago. While there are many factors that drive demand for domain names, the core value proposition for domain names remain strong and we're seeing broad-based engagement from our registrar channel. However, with these fundamentals intact, low demand from China remains the primary source of drag on the overall domain name base growth. With this current trend, we now expect a domain name base growth rate of between 0% and 1% for the full year of 2023. This updated range reflects continued uncertainty, especially the weakness we continue to see related to China. Our financial and liquidity position remained stable with $936 million in cash, cash equivalents and marketable securities at the end of the quarter. During the third quarter, we repurchased 1 million shares for $220 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by $1.14 billion to a total of $1.5 billion authorized and available under the share repurchase program which has no expiration. On .web, as many of you have seen from our statement on May 3, ICANN's Board of Directors dismissed Afilias' objections regarding the .web auction and directed that NDC's .web application move forward. This was a significant finding by the Board and we're pleased that our role in the auction was proved to be consistent with ICANN's policies. Subsequently, according to ICANN's website, Afilias has filed another IRP complaint, presumably challenging the Board's decision. This filing has not been posted nor has any response from ICANN. ICANN has placed NDC's .web application on hold now. Given the Board's decision, we see no basis for any further delay in delegating .web but this is an ICANN process and we're not yet involved in it. Finally, as announced in today’s earnings release, we have given notice of a price increase of $0.99 for the annual wholesale price for .net domain names which will raise the price from $9.92 to $10.91 effective February 1, 2024. And now, I'd like to turn the call over to George. I'll return when George has completed his financial report with closing remarks. George?

Jim Bidzos:

Thank you, George. We strongly believe our strategic focus and disciplined management continue to serve us well, allowing us to deliver another solid quarter in which we provided secure and reliable infrastructure services, managed our business responsibly and efficiently and return value to our shareholders. I want to thank our teams for their dedication and focus. Thanks for your attention today. This concludes our prepared remarks and now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Jim, my first question is for you. I've got 3 questions total. But first is for you and it's on .com. I think we all can kind of see real-time some of the sluggishness in the market. And it looks like really domain activity in .com has not kind of come back to sort of prepandemic levels maybe as you guys had hoped. I know in your prepared remarks and appreciate the commentary relative to China but would just love to hear a little bit more about your view there on what's happening, whether it be China or if there are other factors? And I know Janet Yellen was just over in China, called for stimulus, sounds like there's some coming. So I just would also love to hear what you think gets us out of this rut.

Rob Oliver:

Very helpful, yes. And I also appreciate that you went into some detail in your prepared remarks on .web. And I think just stepping back now; it's been a 6-, almost 7-year journey now. And I think investors are confused by the landscape and what's going on. And it's very hard to know whether this sort of resets us back to the beginning of the process with the IRP or whether this is now a next step in the process which would circumvent the need to do that. If you could help us perhaps provide a little bit more color as to how you view that currently to the extent that you can.

Rob Oliver:

Yes, it's really helpful. I appreciate that summary, Jim and I'm glad it's on the transcript because I know for one, I'm going to need to look back at that, although I've looked at a lot of it.

Rob Oliver:

Yes, really. You even have me will through a lot of it. I really appreciate it. I know -- and I'm not the only one anymore, so I'll squeeze in one last question and that is just on .net. I just wanted to ask, so it's second year in a row where you guys are availing yourself of the opportunity to raise price on .net. And that's coming off for a long period where you did not. What's changed for you guys relative to your view to take price now on .net? What, if anything, in terms of your mindset, mentality has changed there and -- relative to .net pricing?

Operator:

We will take our last question from the line of Ygal Arounian with Citigroup.

George Kilguss:

Yes. Sure, Ygal. This is George. So your first question was from kind of a domain name base perspective. We have seen growth here in Q2. I would say the regions that we report out on the U.S., EMEA and our all other segments from a year-over-year domain name base have all been growing. But China, we've seen that domain name base segment decline. I think if you want to get some relative terms, you probably can look in our 10-Q that's filed this afternoon and look at the revenue growth rates of those segments. You'll see that China in the quarter was down about 10%, EMEA was up about 1% and the U.S. was up about 7% and all of the category was up about 15% and that really comprised -- the weighted average of that comprised 5.7%. So we're still seeing growth. As far as new units, I would say China, again, is down. The U.S. was relatively flat here in the second quarter from a new unit perspective. But the other markets that we report on were up. So still seeing some growth here in the market but China has really been, as Jim mentioned, a drag on new unit growth here and a little bit on revenue growth as well.

Ygal Arounian:

Okay. I'm asking because I think it was really interesting comment and just kind of tie from what we've seen from those channel partners like some of the key levers you've talked about, marketing efficiencies and to pull back materially on the marketing spend. And then we also saw some consolidation within the space on the [indiscernible]. So I'm not sure if what you think about that, if that has an impact to it, likely tying it to the marketing expenses.

Ygal Arounian:

No, that's it. I think you've got the question. It's really helpful and really interesting. I mean I haven't thought about it that way, so interesting to hear.

David Atchley:

Great. Thanks, Ygal.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's First Quarter 2023 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone and thank you for joining us. I'm pleased to report another solid quarter of operational and financial performance for VeriSign. We delivered these results while continuing to strengthen our critical internet infrastructure and complying with the high operational standards required by our ICANN agreements. For the first quarter, revenues grew 5.1% year-over-year, while EPS grew 19% year-over-year. At the end of March, the domain name base .com and .net totaled 174.8 million domain names with a year-over-year growth rate of 0.1%. During the first quarter, the domain name base increased by just over 1 million domain names. From a new registration perspective, the first quarter delivered a modest year-over-year increase with 10.3 million new registrations compared to 10.2 million last year and 9.7 million last quarter. Our renewal rates remain stable. We believe that the renewal rate for the first quarter of 2023 will be approximately 75.6% compared to the 73.3% final renewal rate last quarter and 75.9% a year ago. Having seen modest improvement in the registration trend during Q1, we now expect a domain name base growth rate of between 0.5% and 2.25% for the full year of 2023. This updated range reflects the current macroeconomic uncertainty and recent trends in our business. Our financial and liquidity position remained stable with $1.015 billion in cash, cash equivalents and marketable securities at the end of the quarter. Share repurchases during the first quarter totaled $220 million for 1.1 million shares. At quarter end, $639 million remained available and authorized under the current share repurchase program which has no expiration. As many of you are aware, we are in the process of renewing the .net registry agreement with ICANN as the current term ends on June 30. Consistent with ICANN's usual process on April 13, ICANN posted the new .net registry agreement for public comment which is open until May 25. The business terms of the agreement, such as pricing, the fees paid to ICANN, our renewal rights and the 6-year term of the agreement are all unchanged. Regarding .web. On Monday, ICANNs website published a notice of a scheduled Board of Directors meeting to take place this Sunday. One of the Board's agenda items is to further consider the .web IRP final declaration. ICANN then publish the minutes from 2 BAMC meetings, 1 held on January 31 which discussed the BAMC's consideration of certain recommendations related to web. And also the minutes from a meeting on March 2 which state that the BAMC approved recommendations related to .web and requested that those recommendations be sent to the Board. We believe that this new information published this week means progress towards a final resolution is being made but beyond what was posted, we have no updates. And now I'd like to turn the call over to George. I will return when George has completed his financial report with closing remarks.

Jim Bidzos:

Thank you, George. We strongly believe our strategic focus and disciplined management continue to serve us well, allowing us to deliver another solid quarter in which we provided secure and reliable infrastructure services, manage our business responsibly and efficiently and return value to our shareholders. I want to thank our teams for their dedication and focus. While there is some continuing turbulence in the economy due to macroeconomic and geopolitical issues, we see signs of stability and modest growth in our business. We're also pleased that there is progress on the resolution of .web. Thanks for your attention today. This concludes our prepared remarks and now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Jim, a lot on the call here. So I guess just to kind of level set at the outset, maybe you can give us a sense of kind of what you thought were kind of the biggest takeaways here for you guys? And then I had a few other questions.

Rob Oliver:

Okay. There's been so much -- and .web has been so long since we've had news. So I guess just trying to read into here what you told us about this meeting this coming Sunday. It sounds to me like that could be an indication that there's some decision would be rendered imminently here. Just curious to know if that's the way you think about it.

Rob Oliver:

Okay, really helpful. If I could squeeze in 1 one. I appreciate it. I know I'm not the only one anymore, so I want to be conscious of that which is great. Just around the macro -- I mean, you guys did tweak down the high end of the range a little bit. At the same time, Jim, you talked a little bit about the stability and kind of steady improvements, my language, not yours necessarily in the business. Can you talk about -- I think we've seen 13 the last 14 weeks or something with sequential improvement in domains. Can you talk about what you're seeing in the macro and specifically around how China reopening impacted you guys? And anything else relative to geographies that you would call out here?

Operator:

We'll take our last question from Ygal Arounian with Citi.

George Kilguss:

Ygal, it's George. Sorry, a little echo there. But in any event, as Jim mentioned, we had modest gains here in Q1 with the domain name base growing about 1 million names here in the first quarter. When we look around our various regions. We did see the domain name base grow and pretty much all of our major regions with the exception of our China registrars, that segment was lower year-over-year. And when we look at our new units, we also saw some modest gains in new registrations, as Jim mentioned, year-over-year. The U.S. was a little bit tepid or flat here in Q1 relative to the prior year ago quarter. We did see some improvements in EMEA and the rest of the world, again, excluding China. China's new registrations were also lower year-over-year. And so as Rob alluded to, as you're acquiring, as far as China and the reopening, I would just say it's a little early days for us. We haven't yet seen any meaningful impact there but we are keeping an eye out for it. And I think to the extent that, that reopening happens sooner than later. That clearly can help us get to the higher end of our domain name base range.

George Kilguss:

Yes. So as you point out, renewal rates were relatively stable year-over-year, 75.6% versus the 75.9% in the first quarter. We did see an improvement from Q4. I'd said -- I say when you look at renewal rates in a big picture, our domestic renewal rates are relatively stable and where we see fluctuations is more in the international markets. And when we look a little deeper there, it's more in the first time renewal rates there with international markets. And so we've seen the improvement here sequentially year-over-year. And I think renewal rates are pretty stable right now where we see them.

Jim Bidzos:

Well, typically, in this process, comments will be collected and ICANN will address the comments in response. So I think until we see that, I can't really totally answer your question. But the process of engaging with ICANN and coming up with a contract that was proposed negotiated and the proposed and put out for comment with its consistent features, as you point out. That part is done. And of course, the comment as you mentioned. So until it's done and the comments are assessed and reported on by ICANN, then the next step concludes.

Jim Bidzos:

Sure. I can give you some information that I think will be helpful to your question. One is that there are -- first of all, there is nothing in our 2023 guidance that we provided that includes any revenue or expense for .web. And I think I don't want to speculate about what's going to happen at the Board meeting Sunday and I certainly don't want to speculate beyond that. But there are processes that are required to be followed. There are a number of things that have to be done. There are a number of security periods where certain things have to be done and then there are some other trademark holder protection periods where they're exclusively allowed to come in and acquire their protected domain name. So there's certainly a number of cycles that are all roughly collectively, it's some number of months. But I think at this point, whenever anything happens, if it does, that there will be no change in what I just said about the revenue or expense in 2023.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's Fourth Quarter and Full Year 2022 Earnings Call. Today's call is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos :

Thank you, David. Good afternoon to everyone, and thank you for joining us. I'm pleased to report another solid quarter of operational and financial performance for VeriSign. Throughout 2022, we delivered strong financial results while continuing to strengthen our critical Internet infrastructure. We complied with the high operational standards required by our ICANN agreements and extended our record of .com and .net DNS availability to over 25 years. I'd like to thank our team for their dedicated efforts, which enabled us to realize these results. The critical infrastructure we operate provides to the domain name system navigation service which people around the world depend on for commerce, work from home, education, healthcare and much more. During 2022, we acknowledged the uncertainty that macroeconomic and other challenges beyond our ability to influence presented and we said that we would focus on what was within our ability to control. We also indicated what that meant. First, reliably maintaining operating and investing in our critical Internet infrastructure. Next, exercising careful expense control where appropriate. And additionally, it meant keeping focused on long-term value creation and efficient return of capital. During 2022, revenue grew 7.3% year-over-year and operating income by 8.8% year-over-year. Additionally, shares outstanding at the end of 2022 decreased by 4.8% from those outstanding at the end of 2021. Our financial and liquidity position remained stable with $980 million in cash, cash equivalents and marketable securities at the end of the year. During the full year of 2022, we repurchased 5.5 million shares for $1 billion. At year-end, $859 million remained available and authorized under the current share repurchase program, which has no expiration. At the end of 2022, the domain name base in .com and .net totaled 173.8 million domain names with a year-over-year growth rate of 0.2%. In the fourth quarter, there were 9.7 million new registrations compared to 9.9 million last quarter and 10.6 million in the year ago quarter. While there are many factors that drive demand for domain names, we saw lower new registrations during 2022 as a result of factors that I've already mentioned in prior calls. These include pandemic-driven acceleration of new registrations in 2020 and 2021 which has subsided, global macroeconomic headwinds, reduced new registrations from China and lower first-time renewal rates. We believe that the renewal rate for the fourth quarter of 2022 will be approximately 73.2% compared to the 73.7% final renewal rate last quarter and 74.8% a year ago. For the full year 2022, the renewal rate for previously renewed names remained similar year-over-year. However, first-time renewal rates were lower year-over-year with the largest single driver being names renewing from China, which were registered during 2021. Looking to 2023, our expected 2023 domain name base growth rate is between 0% and 2.5%. This guidance reflects our knowledge about our domain name base, our channel and the broader macroeconomic backdrop. As announced in today's earnings release, we have given notice of a price increase of $0.62 to the annual wholesale price for .com domain names, which raises the price from $8.97 to $9.59, effective September 1, 2023. Even after this increase, we believe .com will remain highly competitive with other TLD choices. As a reminder, any of our domains may be registered for terms of up to 10 years at the current price. While we do not guide to pricing changes, I can say, as I did last year, that under the limited pricing flexibility we have the wholesale price of a .com registration cannot exceed $10.26 until at least October of 2026. Turning to web. The parties made their submissions to ICANN during Q3 and we are still waiting for ICANN to complete its process. And now I'd like to turn the call over to George. I will return when George has completed his financial report with closing remarks.

Jim Bidzos :

Thank you, George. We believe our strategic focus and disciplined management served us well during 2022, allowing us to deliver solid financial results in a challenging environment as the economy struggled to recover from disruption caused by the pandemic. VeriSign's mission is about security and stability, not only in the operation of our critical infrastructure, but financial stability is also important for our customers, employees and shareholders. Today, we reported profitable revenue growth for 2022, and we guided to profitable revenue growth for 2023. This was possible through modest domain name base growth, limited pricing flexibility and responsible expense management. We believe that the long-term fundamentals of our business remain strong. As I said earlier, our strategy prioritizes reliable, uninterrupted operation of our critical infrastructure, along with long-term value creation and its efficient return to shareholders with consistent, efficient management. We believe this strategy will serve all of our constituents well for the long term, and you can expect us to maintain this focus. Thanks for your attention today. This concludes our prepared remarks, and now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver :

Appreciate the opportunity to ask a question. First one for me is, just around the macro, obviously, second half of last year you guys really focused on kind of what you can control operationally, a lot of moving parts in the macro. And I think that, that approach really served you well. Looking out here into '23, also obviously, tremendous amount of moving parts, layoffs, macro uncertainty; on the other hand, China reopening. So just curious if you could add a few finer points to your thoughts relative to the outlook, having seen many cycles as well as to the domain guide that you guys offered of the 0% to 2.5%? And then I had a quick follow-up.

Rob Oliver :

Okay. Great. Thanks, Jim. And a bit on the road marketing for the last couple of weeks and particularly in the news now is ChatGPT. And I just wanted to get your thoughts relative to that. It's obviously very early, and we're in the high stage around this new technology now. And we've seen -- I've seen with you guys many times over the years where there have been calls for the demise of the domain. But I just wanted to get your preliminary thoughts relative to ChatGPT and potential risks, it seems to direct people towards information rather than directing them towards websites at least at the outset and just wanted to get your thoughts?

Operator:

And we'll take our last question from Ygal Arounian with Citi.

Jim Bidzos :

Well, I guess just -- well, first of all, just understanding. Oh, I'm getting an echo there. Do you hear that?

Jim Bidzos :

I don't know if the audience is hearing my echo. I'm hearing it. Seems to be gone now.

Jim Bidzos :

Okay. All right. Maybe there was some feedback there. So in 2022, we did see a lot of China names that were registered in 2021, renewing with lower first-time renewal rates. That was a factor in 2022. And also, China, as you know, has treated the pandemic differently. It's somewhat unique in that sense. And those are the factors that contributed to lockdowns, which are ongoing. There's zero COVID policy increased regulation, economic uncertainty, the proportion of names renewing from China that's higher. We mentioned last year that we did see some signs of returning. I think my comments about the -- what -- if there's any consensus about 2023, I think it's that uncertainty still exists and that the recovery is maybe a little bit slower than people thought. So we're sort of just factoring that in. China is certainly part of it. But things are changing in China. I think it's too early to say exactly what that impact will be. But certainly, the economy seems to be moving in a different direction there with some of the COVID restrictions lifting. Maybe after a quarter next quarter, we'll be able to tell you more about what that's doing to the 2023 outlook. And obviously, we'll update our guidance if we see something meaningful that we consider worthy of reporting and representing a trend. At this point, I think it's just too early to say.

David Atchley :

Yes, we're hearing you.

Ygal Arounian:

Okay. So one -- a couple of questions we get on domains. One is, I know the environment was different in the early part of the pandemic. But I get the question on counter cyclicality. We're seeing a lot of layoffs in the tech world right now. And often that can lead to kind of new business formation, people starting projects. Are there any indications of that are you seeing that? Is that factored into your guidance at all? And then the other thing people kind of ask us about regularly is how we think about normalized domain growth going forward, right? We've got some macro headwinds here, but prior to the pandemic, domains were growing at about 4%, plus 5% or let's just call it 4%, growing about 4%. We've been well below that now for duration this year. Our guidance is well below that for next year. How do you guys think about a normalized growth rate for domain? Return back to the levels of pre-COVID? Or are there other factors to think about?

George Kilguss :

The only thing I'd add, Ygal, is that when you look at our business and what we've previously indicated, we look at factors such as Internet adoption, Internet penetration and the growth of e-commerce influencing our business. And I think if you look back during 2020 and 2021, clearly, we saw a lot of those statistics increase significantly. And while they've come down, there's still, I think, a longer growing trend that I think bodes well for domain names.

Ygal Arounian:

Great. That's helpful, and I agree on the trends on e-commerce and all that. Last question. The operating margins, if I'm looking at it correctly, since have come in quite better than where the guidance applied for 4Q. Can you just talk about what is driving that and how that fits into the expense control that we're talking about? Or is it a separate thing?

Operator:

And that does conclude the question-and-answer session. I'll now turn the conference back over to Mr. David Atchley.

Operator:

Thank you. And that does conclude today's conference. We do thank you for your participation, and have an excellent day.

Operator:

Good day, everyone and welcome to VeriSign’s Third Quarter 2022 Earnings Call. Today’s conference is being recorded. Recording of this call is not permitted, unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thank you, David. Good afternoon to everyone and thank you for joining us. Last quarter we acknowledged the uncertainty that macroeconomic and other challenges presented and we said that we would focus on what was within our ability to control. We also indicated what that meant. First, maintaining, operating and investing in our critical infrastructure, next exercising careful expense control where appropriate. Additionally, it meant keeping our capital allocation activities focused on building and efficiently returning long-term shareholder value. During the third quarter, we extended our record of uninterrupted DNS availability for .com and .net to over 25 years. Also, during the third quarter, we grew our revenues by 6.8% year-over-year, and our EPS by 12.9% year-over-year. Our financial and liquidity position remained stable with $980 million in cash, cash equivalents and marketable securities at the end of the quarter. During the third quarter, we repurchased 1.5 million shares for $275 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by approximately 803 million to a total of $1 billion authorized and available under the share repurchase program, which has no expiration. At the end of September the domain name base in .com and .net totaled 174.2 million domain names with a year-over-year growth rate of 1.2%. In the third quarter, there were 9.9 million new registrations compared to 10.1 million last quarter and 10.7 million in the year ago quarter. And while there are many factors that drive demand for domain names, we have seen lower new registrations in the first three quarters of this year as a result of factors that I have already mentioned in prior calls. These include a pandemic driven acceleration of new registrations in 2020 and 2021, which have subsided, recent global macroeconomic headwinds and reduced new registrations from China. We believe that the renewal rate for the third quarter of 2022 will be approximately 73.8%, same as the 73.8% final renewal rate last quarter, which compares to 75% a year ago. The renewal rate for previously renewed names has remained similar year-over-year, and the first time renewal rates while similar to last quarter are lower year-over-year, predominantly due to a greater proportion of names renewing from China that were registered last year. We do see some signs that new registrations while still slow, continue to stabilize towards pre-pandemic levels. That said, current global economic and geopolitical conditions continue to introduce uncertainty through the remainder of 2022. Because of this macro uncertainty, we are adjusting our 2022 domain name based guidance and now expect a domain name based growth rate of between 0.25% and 1%. Turning to .web, the parties made their submissions to ICANN during Q3 and we are now waiting for ICANN to complete its process. Now I'd like to turn the call over to George. I'll return when George has completed his financial report with closing remarks.

James Bidzos:

Thanks, George. As we said last quarter, while the global macroeconomic outlook remains complicated by geopolitics, inflation, and risk of recession, we can and we did focus on what is within our control, managing our business efficiently with the unconditional prioritization of delivering on our mission. This focus on what we can manage will continue to serve all of our constituents well for the long-term, those being our customers, relying parties, employees, and shareholders, you can expect that focus to continue. We're confident that the long-term fundamentals of our business remain strong. Thanks for your attention today. This concludes our prepared remarks, and now we'll open the call to your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. Good afternoon, guys. Jim, thanks for the color, yet I appreciate this is the second quarter in a row where you really kind of laid out the focus on kind of the things that are within your control versus the things that are now within your control. And I'm just curious as you look at those things, if there's been any change since last quarter and if you could remind us of what some of those things in particular are as you see them?

Rob Oliver:

Great, that's helpful. You did make a comment Jim, about some stabilization in the domain base. You know, we've seen some of that in the numbers. You also talked about China. I just wanted to make sure I understood. Was that a general comment relative to domains or was that a China specific comment? And then, I'm just going to ask about geographies that I can ask Todd that one as well, but just curious about that stabilization comment.

Rob Oliver:

Got it, okay, thanks. And Todd a question for you sort of standard quarterly question just around any geographic trends, I know Jim just talked a little bit about China, which I'd asked about if there was anything else to call out from a geographic perspective relative to renewals or trends.

Rob Oliver:

Okay. Okay, that's great. Jim, a couple more for you if I may. You mentioned that you guys had fulfilled the submission to ICANN on .web, feels like one of many submissions you guys have made. Was there anything else other than you guys fulfilling the submission any other communication or anything else that would give an indication to you guys as to what a timeframe might be or anything else you can share there?

Rob Oliver:

Got it. Okay, thanks. And then on .net, you guys announced last quarter that you were going to take a price increase in .net and just, I know that's going to roll in here, but just wanted to get a sense if what if any feedback you could share in terms of what you've heard from channel partners or others there around the .net price increase?

Rob Oliver:

Got it. Okay. Okay, helpful. Jim, just one for you, we get this all the time and I just would, but just would love to just surface it again to get it out there. Just questions around political risk to you guys, if there is any at all like a lot of different political winds blowing and in DC and can you just remind us please just what, if any political impact there has ever been for you guys on decisions around the cooperative agreement contract or your ability to continue to fulfill your obligations?

Rob Oliver:

Got it, okay. Yes, that's really helpful. I appreciate you running through that. And then George, just quick one for you on just the impact of FX on dollar denominated purchases. Can you just talk overall about the FX impact that you guys have within your business and anything you're seeing there?

Rob Oliver:

Got it. Yep, okay, great. That's all from me guys. I really appreciate you taking all the questions.

Operator:

And at this time, I would like to turn the call back over to David Atchley for final comments.

Operator:

And again, this concludes today's call. Thank you for your participation. You may now disconnect.

Operator:

Good day, everyone. Welcome to VeriSign’s Second Quarter 2022 Earnings Call. Today’s conference is being recorded. Recording of this call is not permitted, unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thank you, David. Good afternoon to everyone and thank you for joining us. As global reliance on online services continues to increase, so does the importance of delivering uninterrupted and accurate DNS resolution. Last week we crossed a significant milestone by marking 25 years of uninterrupted uptime for the .com/.net domain name resolution system. Reaching this quarter century mark is a testament to the ongoing investments made in our platforms, processes and people. During the second quarter we grew our revenues by 6.8% year-over-year and our EPS by 17% year-over-year. At the end of June the domain name base and .com and .net totaled 174.3 million domain names consisting of 161.1 million names for .com and 13.2 million names for .net with a year-over-year growth rate of 2.2% and a sequential decrease of 354,000 domain names. The final renewal rate for the first quarter of 2022 was 75.9% compared to 76.0% for the same quarter of 2021. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the second quarter of 2022 will be approximately 73.6%. This preliminary renewal rate compares to 75.4% achieved in the second quarter of 2021 and 75.9% last quarter. The decline in the second quarter of preliminary renewal rate is primarily related to the proportion of names renewing from China registered in the year ago quarter which weighed on first time renewal rates. We do see continued strength in the renewal rates of previously renewed names. In the second quarter we processed 10.1 million new registrations compared to 10.2 million last quarter and 11.7 million in the year ago quarter. While there are many factors that drive demand for domain names, we have seen lower new units in the first half of this year as a result of the few factors that I will now mention. These include a pandemic driven acceleration of domain name registrations in 2020 and 2021, which has subsided, recent global macroeconomic headwinds and relative weakness in 2022 registrations from China. While we're still early in Q3, we do see some signs with new registrations are stabilizing and we continue to see strong renewal rates. However, we agree with the consensus view that the current economic conditions are likely to prevail through 2022 and possibly beyond. Therefore, we're adjusting our 2022 domain guidance and now expect a domain name base growth rate of between 0.5% and 1.5%. This range reflects our expectations that new registrations in Q3 and Q4 will be roughly similar to the levels we saw in the first half of 2022, and which are similar to pre-pandemic levels. This range also reflects our expectations for an improving renewal rate from the preliminary renewal rate we are seeing in Q2. As announced in today's earnings release, we have given notice of a price increase of $0.90 to the annual wholesale price for .net domain names, which will raise the price from $9.2 to $90.92 effective February 1st, 2023. Our financial and liquidity position remained stable with $997 million in cash, cash equivalents and marketable securities at the end of the quarter. During the second quarter, we repurchase 2 million shares for $349 million. At quarter end $543 million remained available and authorized under the current share repurchase program, which has no expiration. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. Turning to .web as we noted in our last call, ICANN’s Board directed one of its standing committees to review the independent review process panel's final decision and provide the Board with its findings. The committee then asked the parties to submit written summaries of their claims by July 29th, that's tomorrow, and then to submit responses by August 29th. We expect that the committee will conduct its review based on these submissions and will then provide its findings to the ICANN Board. Now I'd like to turn the call over to George. I will return when George has completed his financial report with closing remarks, including more about our areas of focus going forward. George?

James Bidzos:

Thanks George. There's little, if any disagreement in the statements made by many tech company leaders over the last few weeks on economic conditions. They expect the uncertainty they see today to continue for the foreseeable future. This macroeconomic uncertainty was a factor that influenced our revised domain base growth guidance. While we can't do much to change the pace of economic recovery from the pandemic or the geopolitical and macroeconomic events and forces that contribute to the downturn, we can and we will focus on what is within our ability, managing our business with the unconditional prioritization of delivering on our mission. This includes exercising careful and responsible expense management, some of which is evident in our Q2 results reported today, announcing as described earlier, a price increase for .net registrations, which we have held flat for five years, identifying and pursuing new growth opportunities such as .web, safely transitioning our teams to a new hybrid and flexible work environment which is currently underway, working to ensure VeriSign remains a company that will attract and retain top talent, and continually evaluating and optimizing our efforts to efficiently return value to our shareholders. This focus on what we can manage will continue to service well for the long-term success of the business. In closing, we're confident that the long-term fundamentals of our business are unchanged and remain strong. Thanks for your attention today. This concludes our prepared remarks and now we'll open the call for your questions. Operator, we’re ready for the first question.

Rob Oliver:

Great. Hi, good afternoon guys. Thanks for taking my questions. So Jim, first one for you, just with domains decreasing here in Q2, can you talk a little bit about what that means for the business in a medium to longer term view? And then I want to dig in on some of the factors that have impacted that as well, that you cited.

Rob Oliver:

And on that, on the renewal rates what is it that gives you guys the confidence that the renewal rates will remain strong? Is it something geographic, anything else you're seeing there would be helpful?

Rob Oliver:

Got it, got it. And that cohort that you're talking about, Jim, is that a north American cohort, in other words, those that got domains for the first time now emerging from the pandemic are renewing?

Rob Oliver:

Got it. Okay, very helpful. And on the timing of the .net price increase, I just would love to hear your reasoning behind the timing. It comes at a bit of a curious time. On the one hand, you guys have not raised prices there, as you mentioned for five years on the other it hasn't been particularly strong and just wondering if you could walk us through understanding why now and help to get a better sense of that?

Rob Oliver:

Got it. Got it, okay. And on .web, you, you touched on it and I'm not sure that there's more that you can say, but this labyrinthine and seemingly unending process is now in another phase. So I guess by your comments, we could, I guess, infer that you guys have filed or will be filing by tomorrow everything that was requested here in the quarter in terms of both parties having to like resubmit all of their material. Was there anything new that was asked of you guys and then any other comment around potential timing on .web would be helpful?

Rob Oliver:

Okay, great. That's, that's helpful, Jim. George, I had one for you. You did mention that operating expenses were lower in the quarter, and that was due to the timing of certain expenses. Is that normal course timing or can you talk a little bit about what, if any of the expenses varied and I know you suggested or said that expenses would return back to the normal run rate in the back half of the year, but if you could just help us understand a little bit more about what went into that variability?

Rob Oliver:

Okay. Okay, that’s helpful. Last question, Jim, I'll just come back to you. I mean you've been through a lot of different cycles in your career and in some of your commentary and your prepared remarks certainly was at least relatively cautious about the macro. And, but just would love to hear a little bit more about what it is you're seeing, what data sets you're watching. I know you cited some of the commentary of other tech companies that gives you that, aside from the actual kind of numbers, what gives you that more cautious bent and how you think this might play out?

Rob Oliver:

Great, that's really helpful. Thank you guys very much. I appreciate it.

Operator:

It appears that there is no further the question at this time. Mr. Speaker, I'd like to turn the conference back to you for any additional or closing remarks.

Operator:

This concludes today’s call. Thank you for your participation. You may now disconnect.

Operator:

Please stand by. Good day, everyone. Welcome to VeriSign’s First Quarter 2022 Earnings Call. Today’s conference is being recorded. Recording of this call is not permitted, unless preauthorized. At this time, I’d like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone and thank you for joining us. As global reliance on online services continues to increase, so does the importance of delivering uninterrupted and accurate DNS resolution. Our focus remains on operating, protecting and enhancing our critical internet infrastructure. And I thank all of our employees who continuously execute our complex mission. I’m pleased to report another solid quarter of financial and operational performance for VeriSign. Revenues grew 7.2% year-over-year, while EPS grew 7.5% year-over-year. At the end of March, the domain name base and .com and .net totaled 174.7 million domain names, consisting of 161.3 million names for .com and 13.4 million names for .net with a year-over-year growth rate of 4%. During the first quarter, we processed 10.2 million new registrations, and the domain name base increased by 1.23 million names. The final renewal rate for the fourth quarter of 2021 was 74.8% compared to 73.5% for the same quarter of 2020. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the first quarter of 2022 will be approximately 75.9%. This preliminary renewal rate compares to 76% achieved in the first quarter of 2021 and 74.8% last quarter. We continue to see growth in the domain name base and demand for our – domain names. While there are many factors that drive demand for domain names, we have seen lower new units in the first quarter as a result of a combination of factors. These include the component of growth attributable to the pandemic which appears to have subsided, as well as recent global macroeconomic factors. For calendar 2022, we now expect the domain name base growth rate of between 1.75% and 3.5%. This updated range reflects the various trends we currently see in our business and our expectation for continued domain name base growth. Our financial and liquidity position remains stable with $1.2 billion in cash, cash equivalents and marketable securities at the end of the quarter. Share repurchases during the first quarter totaled $196 million for 895,000 shares. At quarter end, $893 million remained available and authorized under the current share repurchase program, which has no expiration. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. Turning to .web. As we noted on our last call, ICANN’s Board directed one of its standing committees to review the independent review panel’s final decision and provide the Board with its findings. We understand that process is ongoing and we don’t have any additional information to provide at this time. As we have said before, we continue to look forward to becoming the .web registry operator and establishing it alongside .com and .net as an additional option for businesses and individual end users worldwide. Now, I’d like to turn the call over to George.

Jim Bidzos:

Thank you, George. During the first quarter, we continued our work to protect, grow and manage the business, while continuing our focus on providing long-term value to our shareholders. In closing, I want to acknowledge again, the team here at VeriSign for their hard work in maintaining and operating our critical internet infrastructure, even while facing the challenges of working under pandemic conditions. In particular, I want to acknowledge the group of employees who have worked on-site continually throughout the pandemic in order to continue our infrastructure functions. And now, we’ll open the call for your questions. Operator, we’re ready for the first question.

Rob Oliver:

Great. Good afternoon, gentlemen. Thanks for taking my questions. So Jim, I’ll start with just you know the obvious changes in the macro environment which have caused you guys to make the adjustments that you’ve made here today relative to domain. So, let me just first ask for, you know just a bit more color around Q1. Obviously a lot has happened in a short period of time. So would love to hear what you saw and how that was manifest in your decision to take down the range?

Rob Oliver:

Yeah, that’s helpful. You touched a little bit. My follow-up was going to be on sort of that geographic makeup of that comment as well. I know you did say that played an element, meaning the war, I was in Europe this quarter you know marketing to investors and it was you know the exposure to the war over there you know was noticeably more acute than here in the US. And it just you know I know you said you’re still analyzing those factors, but any color around sort of the geographic makeup of what you saw this quarter would be helpful.

George Kilguss:

Yes, thanks, Jim –

George Kilguss:

Yeah. So, Rob you know as Jim mentioned in his remarks, we continue to grow our domain name base in the first quarter, we were above 4% year-over-year. Again, in the first quarter, we saw gains in the base primarily from the US, EMEA and Asia Pacific regions. From a new unit perspective, you know we generated 10.2 million of new units in the first quarter. And that compared to 10.6 million in the fourth quarter and 11.6 million in the first quarter a year ago. When you look sequentially, we saw continued growth in the US and Asia Pacific regions, with slowing growth in most other regions that we participate in. Year-over-year, we saw more of a broad-based slowing of growth. And as Jim mentioned, that’s really a result of the incremental demand from pandemic that appears to have subsided here. And additionally as Jim mentioned, we also believe the global macroeconomic conditions has also impacted our growth rates here in 2022.

Jim Bidzos:

Rob, I think it’s kind of too early to say. We’re studying all those things to the extent we’ll be able to, in any sort of granular manner, factor them in to that level of specificity, we’ll share with you when and if we do, but I think it’s early at this point, we do you know, the guidance that we gave does plan for a certain amount of uncertainty, which I think is obvious every business is doing that these days. These are you know global, geopolitical – macroeconomic events that are difficult to predict and obviously things that we can’t control. So, all I can tell you is that, you know those are factored in big based on the best information and analysis that we’re able to make today.

Jim Bidzos:

That’s a tough one for me to comment on with any specificity. We generally don’t talk about these things. I can say in general, that obviously we make certain assumptions about the cyber threat environment. We monitor it very, very closely. We think it varies and we think it’s in a higher state than it has been in the past. But we have in the recent couple of years and in particular, in 2020 and 2021, made some investments in our infrastructure and cybersecurity in general, we continue to make those that’s obviously job one. We take nothing for granted. We generally err greatly on the side of caution and precaution. So we are prepared on assumptions that I don’t want to go into detail on, I’m just – let’s just say that we’re continuing to make investments. We’ve made investments in providing the equipment and protection for our teams that are working at home. We constantly make investments to protect, evolve and strengthen our infrastructure and its resilience and reliability. And again, that is job one that’s first and foremost that takes a backseat to nothing at this company. That’s probably all I can say about that. Hope that’s helpful.

Jim Bidzos:

I believe we have no other information than what you can get from ICANN’s website. We – when we monitor, we’re monitoring ICANN’s public statements on its website. So you’ve seen everything that we’ve seen. And as I said you know they have assigned to one of their committees the task of executing on what the IRP assigned them to do and that seems to be ongoing and you’ll know something as soon as we do.

George Kilguss:

Yeah, sure, Rob. So sequentially you saw that our expenses were up about $3.8 million in total. And that was really due to a combination of factors, primarily increased labor as well as some of the flow through costs from the investments in cybersecurity and infrastructure made last quarter that Jim mentioned. Also in the first quarter, we tend to have higher employee payroll taxes and stock-based compensation as our performance-based plans are really measured and awarded in the first quarter.

Jim Bidzos:

Thank you, Rob.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone, and welcome to VeriSign's Fourth Quarter and Full-Year 2021 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thank you, David. Good afternoon to everyone, and thank you for joining us. I'm pleased to report another solid quarter and full-year of operational and financial performance for VeriSign. Throughout 2021, we delivered strong financial results, while continuing to strengthen our critical internet infrastructure. We complied with the high operational standards required by our ICANN agreements, and extend our record of .com and .net DNS available to over 24 years. I would like to thank our team for their dedicated efforts and expertise which enabled us to realize these results. The critical infrastructure we operate provides the domain name system navigation service, which people around the world increasingly depend on for commerce, education, healthcare, and person-to-person connection. For the full-year 2021, we processed 44.6 million new registrations, and delivered revenue of [$1,328 million] [Ph] while generating free cash flow of $754 million. During the full-year of 2021, we repurchased 3.3 million shares for $700 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by approximately $705 million, to a total of $1 billion authorized and available under the share repurchase program which has no expiration. Our financial and liquidity position remained stable with $1.2 billion in cash, cash equivalents, and marketable securities at the end of the quarter. We continually evaluate the overall liquidity and investing needs of the business, and consider the best uses for our cash, including potential share repurchases. At the end of December, the domain name base in .com and .net totaled 173.4 million, consisting of 160 million names for .com and 13.4 million names for .net, with a year-over-year growth rate of 5%. Looking at fourth quarter operational results, we processed 10.6 million new registrations, and the domain name base increased by 1.37 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the fourth quarter of 2021 will be approximately 74.8%. This preliminary rate compares to 73.5% achieved in the fourth quarter of 2020, and 75% in the third quarter. As we look to 2022, we expect the domain name base to grow at a rate of between 2.5% and 4.5%. As announced in today's earnings release, we have given notice of a price increase of $0.58 to the annual wholesale price for .com domain names, which raises the price from $8.39 to $8.97, effective September 1, 2022. I should point out that anyone can register a .com domain at any time before September 1 for up to 10 years, and lock in that price for the full term, of up to 10 years. Turning to .web, we noted last time that affiliates had filed an application for reconsideration of the May 2021 final decision, which, as a reminder, rejected their request to be awarded .web. Since we last spoke with you, the significant development, in December, was that affiliates' application for reconsideration was also rejected. And further, affiliates was sanctioned for filing it because the arbitration panel found that it was "frivolous". Since then, in mid January, ICANN's Board of Directors directed one of its standing committees to review the panel's final decision and provide the Board with its findings. With the rejection of affiliates' application and the reaffirmation of the panel's final decision, those roadblocks are now out of the way. And ICANN looks to be moving forward with making the decision on the delegation of .web, and we will be monitoring their process. As we have said before, we continue to look forward to becoming the .web registry operator and establishing it alongside .com and .net as an additional option for businesses and individual end users worldwide. And now, I'd like to turn the call over to George.

Jim Bidzos:

Thank you, George. Before we open the call for your questions, I'd like to update you, as I've done in previous quarters, on some of our activities in the field of corporate citizenship under our VeriSign Cares program, which aims to make a positive and lasting impact on the global internet community and the communities in which we live and work. During the fourth quarter, we once again joined forces with food banks in the areas where we have a footprint to help alleviate seasonal and COVID related food and security. We also renewed for a further year, our partnership with Virginia Ready, the launch partner of our initiative to help those whose employment has been adversely affected by the COVID-19 pandemic to access retraining and other assistance to find new jobs in the growing technology sector. And finally in Q4, we made a further contribution to the Equal Justice Initiative, recognizing that there remains much to be done in the important area of racial and social justice. And now we'll open the call for your questions. Operator, we're ready for the first question.

Sterling Auty:

Yes, thanks. Hi, guys. So, now that you've taken the second price increase, I know it's kind of a, what have you done for me lately question, but how should we think about the final two price increases that you still have left? And probably just as important, what happens after the six-year period of this contract?

Sterling Auty:

Yes, it is helpful. I appreciate that. And then, within the context of the initial guide you're giving here for '22 for the domain name growth of the 2.5% to 4.5%, I think there's a lot of us that have watched the data year-to-date and we're just in the very beginning. But any comments you give, do you feel like the base is off to a slower than normal start for the year, and is there timing of renewals or other things that investors should be thinking about and how that factored into your guide?

George Kilguss:

Yes, sure. Thanks, Jim. Yes, Sterling this is George. So, I would just remind you and others on the call that we do had some seasonality as it relates to certain holidays and how they fall on the calendar. This year in Q1 for example, the Chinese New Year is about two weeks earlier, started on February 1. Last year, it was February 12. And we tend to see new registrations from our Chinese registrar slowdown a few weeks before the actual holiday and then recover once the holiday is over. So, that could be playing into some of the data that you see on our Web site. But overall, as you mentioned, we do expect continued growth in the domain name base. We have got it to 2.5% to 4.5%. And if we recall, that was a similar growth rate that we got into last year at this time as well.

Jim Bidzos:

Yes. Well, so first of all, the process that I mentioned that was directed by ICANN Board, that is a process that's been held up for many years during litigation, which the panel has now basically shutdown for the second time and directed ICANN to move with this process. So, we're pleased to see ICANN doing it. That is ICANN's process. So, I can't speak quite for the duration that will take. Obviously, we hope it's as brief as it can be. But that is an ICANN process. And secondly, I think you're aware there are some standard processes that are associated with the launch of any TLD. There's a period where some security issues are observed and addressed. There's a period where trademark holders are given the right to make their registrations first. So, putting all that together, it's really hard to speculate in a way that allows me to answer your question. I will say that we have not budgeted in 2022, any launch or marketing costs, or any revenue for .web. We'd certainly like to be in the market if we could, but I think given all of those variables that it isn't helpful for me to speculate as to whether it plays exactly when or even what timeframe as you asked web will come to market. We hope it does soon, and we certainly intend to bring it to market and be successful with it, but beyond that, I don't think I can speculate.

Jim Bidzos:

Sure.

Rob Oliver:

Great. Thanks, guys. Good afternoon, Sterling asked a lot of good questions, I'll just follow-up on his. So, just I'll start with .web since Jim that's where you left off. You did mention in your prepared remarks that you're going to be monitoring the process at ICANN, I just want to understand what's the vehicle, who's actually doing that, how you monitor that? And then, I feel you used to say, rattling about further legal actions, and I'm just wondering from your perspective, what exactly that is like, what avenues they have left. They've been able to stretch this out for so long. And then I had a follow-up for George as well. Thanks.

Rob Oliver:

Got it. Okay. That's helpful Jim. Thank you. And then, George, just a couple quick ones for you, just on the operating margin guide for '22 assuming and I think you guys have, in the past never included things in guide that weren't -- assuming that guide does not include .web, and assuming you got .web, there would be some expenses associated with that. I'm not asking you to speculate on exactly what those expenses would be as Jim already said, that you guys wont, but instead could we understand that the initial operating margin guide may then have to be adjusted at some point, if we were -- you guys were to then get .web and proceed with some of the expenses around ramping .web?

Rob Oliver:

Got it. Okay. And then, just lastly, just -- you mentioned some of the kind of vagaries around global domain trends and Chinese New Year, of course, and just was wondering for about any sort of geographic color and again, a follow-up on Sterling's question just about kind of what you're seeing here early in the year and I know, renewal rates has been higher because of some of the activity that you guys have seen in U.S. and EMEA and how that is trending and how that looks to you here as well? Thanks.

Rob Oliver:

Great. We're going to get at Super Bowl. I mean, we're going to be watching that. That's what I'm going to be watching for the .com, right, and hopefully we get one of those this year. Thank you, guys.

Operator:

And so, that concludes the question-and-answer session. I will now turn the call back over to David Atchley for any final comments.

Operator:

Again, that does conclude today's call. Thank you for your participation. You may now disconnect.

Operator:

Good day, everyone. Welcome to the VeriSign's Third Quarter 2021 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. Thank you. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thanks, David. And good afternoon, everyone. I'm pleased to report another solid quarter of operational and financial performance for VeriSign. During the quarter, we continued to deliver strong financial results while maintaining, investing in and evolving our critical internet infrastructure and complying with the high operational standards required by our ICANN agreements. Our critical infrastructure enables us to reliably and accurately provide the domain name system navigation service, which people around the world depend on for commerce, education, healthcare and person-to-person connection. During the third quarter, we processed 10.7 million new registrations. And the domain name base increased by 1.48 million names. At the end of September, the domain name base in .com and .net totaled 172.1 million, consisting of 158.6 million names for .com and 13.5 million names for .net with a year-over-year growth rate of 5.1%. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the third quarter of 2021 will be approximately 75%. This preliminary rate compares to 73.7% achieved in the third quarter of 2020 and 75.4% last quarter. For the full year 2021, we now expect a domain name base growth rate of between 4.7% and 5.5%. This narrower range reflects the current pace of new additions to the base and our outlook for the remainder of the year. Our financial and liquidity position remained stable with $1.2 billion in cash, cash equivalents and marketable securities at the end of the quarter. Share repurchases during the third quarter totaled $172 million for 785,000 shares. At quarter end $565 million remained available and authorized under the current share repurchase program, which has no expiration. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. As it relates to .web, and as we stated last quarter, after the final IRP decision was issued in May Afilias' filed in June an application requesting that the IRP panel interpret and amend its final decision. The briefing on this application was completed in September. And the panel has now taken the matter under advisement without oral argument, which means we're just waiting for the IRP panel to respond. VeriSign believes Afilias' application is without merit, and we continue to expect the panel to rule on it in the fourth quarter of 2021. As we have said before, we continue to look forward to becoming the .web registry operator and establishing it as an additional option for businesses and individual end users worldwide. And now I'd like to turn the call over to George.

Jim Bidzos:

Thank you, George. Before we open the call for your questions, I would like to touch on some other things that we continue to do here at VeriSign. I've updated you in previous earnings calls on our commitment to responsible corporate citizenship principally through our VeriSign Cares program. During the third quarter, we established 3 new partnerships under the VeriSign Cares workforce retraining initiative. This greatly increases both the number of individuals we can help and our geographical coverage. Combined, our partners now reach dollars in 17 states plus the District of Columbia with remote options accessible throughout the U.S. And our partner organizations have expansion plans of their own, which we're pleased to support. We're delighted to note that our launch partner for this initiative, Virginia Ready recently passed the milestone of 3,000 scholars who have graduated from their program. And as a reminder, the objective of the VeriSign Cares program is to address pressing economic and social needs in the communities in which we live and work. We instituted this workforce retraining initiative in 2020 to provide individuals whose employment has been adversely affected by the COVID-19 pandemic with access to training and other assistance to help them pivot into the technology sector. You can learn more about these efforts on blog.verisign.com. And now we'll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. Thank you. Good evening, guys. A couple of questions for me. First, one for you, Jim. Just on the macro that you're seeing right now with business starts, I mean there's been some data this quarter. I think University of Michigan sentiment indicators rolling over a little bit. A lot of small, medium-sized business survey work we've seen expressing some concern. I think it's a mix of labor shortages as well as concerns heading into next year. It seems that the reduction of the high end of the domain growth name is just really a function of the timing here into Q4. I mean you guys have had a strong year. But can you talk a little bit about what you're hearing and seeing in the market relative to the prospects for demand activity going forward and kind of what you're seeing?

Rob Oliver:

Got it. Got it. Okay. That's fair. Thank you. And then, George one for you. Just on the strong margin performance this quarter. And I know you guys have made a series of investments over the past year plus both in security timely ones as well as infrastructure and provisioning as well as people. I'm just curious about the margin expansion that we saw and sort of the durability of that? Or is it more of kind of a onetime benefit? Thank you.

Rob Oliver:

Okay, great. Thank you.

Nick Jones:

Great. Thanks for taking the question. I guess one on .web. I guess, could you maybe remind us on assuming the TLD is delegated to you, you can start registering it. What is kind of the timeframe from when you're able to register to when consumers can actually buy? Is that like a relatively quick turnaround? Or are we looking at a couple of quarters once you're able to when .web could start showing up?

Nick Jones:

Correct.

Nick Jones:

Got it. And then I guess a follow-up to that is when you think about brands maybe trying to protect their trademarks, do you have any proxy as to whether people are buying like .shops or other TLDs and at which rate? Is it common for people to kind of protect their trademarks by buying all the TLDs? Or are there just certain ones? Any color or visibility you have into how brands behave?

Nick Jones:

Got it. Great. Thanks for taking questions.

Operator:

We'll take our final question from Sterling Auty with JPMorgan. Please go ahead.

George Kilguss:

Sterling, this is George. So as you mentioned, we had 10.7 million of new registrations in the third quarter. And that was pretty similar to what we did in the third quarter a year ago. So still a healthy level of registrations for the company. As far as regional performance goes, we saw year-over-year new registration strength from registrars in areas such as EMEA, APAC and China during the quarter and North American registrars as new registrations were a bit lower during the third quarter compared to the year ago quarter.

George Kilguss:

Again, when you talk about renewal rates we had a total renewal rate of about 75% in the third quarter. And that was similar to the first and second quarter. They were both in the mid-70% range. What I think you're alluding to is a year ago our renewal rate was 73.7%. And so when you look at the year-over-year improvement a lot of that does come from the mix of the names coming up for renewal. And I think as we talked about last quarter if you look back at 2019, we had a lot of higher percentage of names coming out of registrars from China and other areas that typically have lower first time renewal rates in 2020. We had more demand coming out of more mature markets like the U.S. and EMEA which had higher renewal rates. And so those names, obviously, last year are the ones that are renewing this year. And so you're seeing a slightly higher renewal rate trend this year compared to last year. Because the first time and the previous renewed rates are increasing because of the mix. And that's been consistent both in the first quarter and the second quarter of this year.

George Kilguss:

Again, they vary by country. Our first time renewal rates are still around 50% and our previous renewed rate is still around the mid-80s, 85%-86% range.

Jim Bidzos:

So Sterling, I guess, it's a bit early to speculate specifically. I know you hadn't asked specifically about revenue. But what I can say to you is that, first of all, .web is, of course, different from .com and net and that it's not a price controlled TLD. And I think at this point, it's just really too early to speculate how revenue would roll in or what it would look like. But we do have flexibility with it that we don't have - we would have flexibility with it that we don't have with other TLDs, and premiums are available. Other sorts of options are available. The infrastructure that we have is in a sense since we operate multiple TLDs.web is in a sense another TLD. But there certainly will be some sort of marketing launch that will occur, but I just think it's too early to really talk about what that would look like and what the expense impact will be. But we certainly intend to market and promote .web. Our plan, our desire, as we've stated - and I'll say again, is to offer our customers more choice and to make .web a very successful TLD.

Jim Bidzos:

Sure.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone, and welcome to VeriSign Second Quarter 2021 Earnings Conference Call. Today's conference is being recording. Recording of this call is not permitted unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thanks David and good afternoon everyone. I'm pleased to report another solid quarter of operational and financial performance for VeriSign. During the second quarter, we saw continued demand for our domain names, including year-over-year growth in new registrations from some of our foreign geographies. During the second quarter, we processed 11.7 million new registrations and the domain name base increased by 2.59 million names. At the end of June, the domain name base in .com and .net totaled 170.6 million, consisting of 157 million names for .com and 13.6 million names for .net with a year-over-year growth rate of 5.2%. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the second quarter of 2021 will be approximately 75.3%. This preliminary rate compares to 72.8% achieved in the second quarter of 2020% and 76% last quarter. As we look at full year 2021, we now expect the domain name base growth rate of between 4.7% and 6%. This range reflects the strength we continue to observe in new additions to the base and our outlook for the balance of the year. During the quarter, we continued to deliver solid financial results while maintaining investing in an evolving our critical infrastructure and complying with the high operational standards required by our ICANN agreements. Our critical infrastructure enables us to reliably and accurately provide the DNS navigation service which people around the world depend on for commerce, education, health care, and person-to-person connection. Just last week we marked 24 years of uninterrupted availability of our .com and .net domain name resolution system. Our financial and liquidity position remain stable with $1.2 billion in cash, cash equivalents, and marketable securities at the end of the quarter. Share repurchases during the second quarter totaled $172 million for 797,000 shares. At quarter end, $737 million remained available and authorized under the current share repurchase program, which has no expiration. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. Regarding .web, on May 20th, a final decision was issued in the Independent Review Process or IRP. The final decision rejected affiliates' petition to nullify the results of the .web auction and rejected affiliates' request to be awarded .web, also as we had requested, the final decision directed ICANN’s Board of Directors to review the objections, including objections as to affiliates' conduct and to make a determination on the delegation of .web. After the final decision was issued, however, affiliate’s filed an application requesting that the IRP panel interpret and amend its final decision. We believe affiliates' application is without merit and expects the panel to -- we expect the panel to rule on it in the fourth quarter of 2021, thereafter, we expect ICANN’s Board will proceed consistent with the final decision, and it will make a determination on the delegation of .web. The updated guidance we are providing today does not include revenue, or expenses related to .web. And now I'd like to turn the call over to George.

Jim Bidzos:

Thank you, George. We continued our work to protect grow and manage the business while continuing our focus on providing long-term value to our shareholders. Before we open the call for your questions, I'd like to touch on some other things we're doing at VeriSign. I have updated you on previous earnings calls on our commitment to responsible corporate citizenship in particular under our VeriSign Cares program. In recent months, we've expanded our work to help those affected by the COVID-19 pandemic in a number of ways including; alleviating food and security caused by COVID-related economic hardship in areas where we have a footprint, providing medical and other relief in India, where the pandemic took a significant turn for the worse earlier this year and our ongoing and growing efforts to help those jobs or careers have been affected by COVID to retrain and pivot to new careers in the tech industry. We've also kept our focus on the area of equity and justice both working with existing partners and adding new ones. You can read more about all of these initiatives in the new section we added to our investor website this quarter on our ESG work. And now we'll open the call to your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. Hi, good afternoon. Thank you, guys for taking my question. Jim, I would just start with you on very strong renewal rates. And obviously, you guys raising the domain growth guide again. You called out some foreign geographies, which saw I believe strong renewal trends. So just was wondering if we can get a little bit of color on kind of where you're seeing pockets globally of strength whether some of that surprised you, whether it's COVID recovery-related or any color around the foreign geography comment?

George Kilguss:

Yes. Thanks, Jim. Rob, this is George. So with regard to domain demand, as we mentioned in our prepared remarks and as you alluded to, we had a very solid quarter from a domain perspective. New units were $11.7 million and that was up about 600,000 from the year ago period. As far as regional preferences -- performance goes, I would say that US registrars performed similar to a year ago quarter, with a slight increase in demand coming from various international regions. As Jim mentioned, for example, both China and the EMEA regions were up year-over-year in new registrations. As far as renewal rates, as Jim mentioned, our preliminary renewal rate is 75% and that's up from 78% a year ago. I would say, part of the improvement there relates to a combination of the mixture of first time and previously renewed names, with the previously renewed name cohorts getting a little larger as the base ages, as well as the geographic mix. As you may recall, back in 2019, we had a higher proportion of new units coming out of China, out of that region, which came up for renewal in 2020 and contributed to a slightly lower average first-time renewal rate in 2020. We had more mature regions like the US and EMEA contribute to a larger portion of our new unit growth. So those historically higher renewing rate regions have helped our first-time renewal rate a little bit this year. So a combination of those two factors, but our first-time renewal rates are in the 50% range and our previous renewal rates are slightly up, but they are still in the mid 80% range.

Jim Bidzos:

Well, that will be dependent on ICANN’s timeframe for picking up what the IRP panel instructed them to do, which is to complete their process on .web and get it delegated. So I can't speak for that ICANN process, but that's what would occur following a ruling on that latest motion. ICANN would then basically do what the panel instructed. It was essentially remanded back to ICANN. So there is this delay with this current motion, but then it will go back to ICANN and they would conduct their process and determine the delegation of the TLDs. So, hopefully, that won't take too long, but I can't speak for ICANN.

Jim Bidzos:

Thank you.

Nick Jones:

Great. Thanks for taking the questions. Maybe another one on geographic trends and I think, as APAC still has pretty low internet penetration relative to kind of North America and Western Europe, is there any sense of .com’s popularity in those regions as, I guess, more people come online? And does that -- is that kind of a tailwind in the region for VeriSign or .com over time? And then I have a second question.

George Kilguss:

All right. Yes. So, Nick, this is George. I mean, I would just say that, look at comments of global brand. And we obviously try to continue to market our brand to be a very high-quality reliable brand across the world. As far as China is concerned as I mentioned last year, China was a little bit quieter while the pandemic was going on. And we've seen some of our registrars there had some increased demand and are doing well. So China is picking up. I do think China is a little bit of a different of a market though. I think China is much more of a platform and mobile-driven market. While domain names are still very relevant there and important they are driven more in these platforms. But as I mentioned China has performed better year-over-year in the second quarter here. And we'll see how they continue to perform, but they're still quite active over there.

Jim Bidzos:

Well that's a natural and good question given the expanded use of the Internet and particularly during COVID so many people working from home additional load etcetera, etcetera. I'll just say that the design of our network besides resiliency is there's also a design element of capacity and it's always been designed with overcapacity as part of the resiliency sort of formula. And I'll just say that the volume of traffic anticipated we're still meeting all of our obligations including specific performance and response time obligations. We have no difficulty meeting those with the demand. It's essentially part of all the planning that we get. It always has been from the beginning. So, it's not a new consideration in that sense. We've planned for it.

Jim Bidzos:

Thank you.

Unidentified Analyst:

Hi. This is Drew on for Sterling. I was wondering if you could provide some more color on what you're expecting for renewal rates in the second half of the year as we lap the surge in new businesses from 2020?

Unidentified Analyst:

Okay, got it. Thank you.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone, and welcome to VeriSign's First Quarter 2021 Earnings Call. Today's conference is being recording. Recording of this call is not permitted unless preauthorized. At this time, I would like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thanks, David, and good afternoon, everyone. I'm pleased to report another solid quarter of performance for VeriSign. During the first quarter, we saw increased demand for our domain names across most regions as businesses continue to expand their online presence. During the first quarter, we processed 11.6 million new registrations and the domain name base increased by 2.8 million names. At the end of March, the domain name base in .com and .net totaled $168 million, consisting of 154.6 million names for .com and 13.4 million names for .net, with a year-over-year growth rate of 4.6%. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the first quarter of 2021 will be approximately 75.9%. This preliminary rate compares to 75.4% achieved in the first quarter of 2020 and 73.5% last quarter. As we look forward for fiscal 2021, we now expect a domain name base growth rate of between 4.0% and 5.5%. This updated range reflects the strength we've witnessed in new additions to the base and our outlook for the balance of the year. During the quarter, we continued to deliver solid financial results while maintaining, investing in and evolving our critical infrastructure and complying with high operational standards required by our ICANN agreements. Our critical infrastructure enables us to reliably and accurately provide the DNS navigation service people around the world rely on for commerce, education, health care and person-to-person connection. Our financial and liquidity position remained stable with $1.18 billion in cash, cash equivalents and marketable securities at the end of the quarter. Share repurchases during the first quarter totaled $173 million for 876,000 shares. At quarter end, $910 million remained available and authorized under the current share repurchase program, which has no expiration. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. Regarding .web, we have been informed that the independent review process panel formally declared the IRP hearing closed on April 7, 2021. Under the applicable arbitration rules, the IRP panel should now issue a final decision within 60 days from that date. As a reminder, an IRP, under ICANN's bylaws, is for the purpose of ensuring that Ican followed its own policies and procedures when making decisions. Our expectation is that following the resolution of the IRP, the ICANN Board will make the final decision on the delegation of the .web TLD. The updated guidance we're providing today does not include any revenue or expenses related to .web. And now I'd like to turn the call over to George.

Jim Bidzos:

Thank you, George. In closing, I want to acknowledge the team here at VeriSign for their hard work in maintaining and operating our critical Internet infrastructure, even during the challenges of working remotely during the pandemic. Now we will open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. First one, Jim, for you. Just clearly, macro trends appear better with you guys taking up the range on domains on the revenue side. I know you mentioned in your prepared remarks that, that was sort of strength across the board. And I was wondering if you could add a little more context to that, maybe both from a geographic perspective to see if there are any particular pockets of strength as well as maybe to talk about some of the dynamics that you believe are driving or what you guys are seeing driving that increased domain activity. And then I had a follow-up.

Rob Oliver:

Got it. Okay. And then George, just one follow-up for you. I know you guys, going back a couple of quarters, have talked a bit about the need for increased operational spend for your infrastructure and R&D and security and things like that. I guess couple of questions. How do you feel you are in that trajectory? And I guess, by your implied increased revenue guide for the year for maintaining the margin you guys are looking to probably spend a little bit more. And just wanted to get a sense for you spending on the same things and how you're thinking about that this year.

Operator:

We will now go to our next question, and that will be from Nick Jones with Citi.

Jim Bidzos:

Well, first of all, the -- so the announcement from the IRP panel was that they had concluded their hearing on April 7, and that started the 60-day clock that you're referring to. So they have concluded the hearing. We assume that in that time frame, their final report will be issued. So that being the, hopefully, final step in the litigation part of this process, we don't comment on that pending litigation. I'll just simply say that according to their announcement, by the time we're talking again next quarter, we should have quite a bit more to say. So I think until that happens, it's premature to discuss exactly when and how .web will be delegated. And then we get it launched then into the hands of consumers. It's just simply too early to speculate about exactly how that will play out. As I mentioned, we do expect that at the a conclusion here when we do see the IRP report that the ICANN Board will then proceed to determine the delegation of .web. When we get to that point, I think, we'll be able to say more about the timing of our own efforts. But until then, it would be premature. So at least we know now that we'll have, hopefully, a lot more to say the next time we talk to you next quarter.

Jim Bidzos:

Well, so let me just say, first of all, that we did understand that this broad-based bit of growth in ads that we had this quarter. The registrars are reporting, this is growth from small businesses and individuals, and it's broad-based. The competitive registries, we don't have insights into their particular businesses and their exact numbers. I'll just simply say that as people are getting online, Common Net are trusted brands, and we continue to see that growth. The registrars are having success with them, and we're pleased with that growth in the quarter.

Sterling Auty:

So just following along that line of questioning, the $11.6 million gross new registration in the quarter was up nicely versus what you saw last year. You pointed to both small business and consumers, but I'm wondering what you might be hearing back from the registrars in terms of the mix. How much of this might be tied to the continued elevated new business application data that we see versus maybe other types of consumer use cases for domains?

George Kilguss:

Yes. I would say, Sterling, we don't quite get a detailed mix of all the registrars. I can tell you that from what we do here, the -- they're seeing good demand for consumer -- I mean, businesses wanting to get online. As you know, over the last couple of years, registrars have invested a lot of money in increasing the utility of a domain name and making it much easier to build a website and get online for consumers. And as a result, we're seeing registrar spending a lot more money, advertising and marketing to these small businesses to bring them online. And I think that has been helpful for the domain name industry. As far as the economy, the only insight we have there is that registrars just believe that this is -- this trend is a pretty good trend. I think it'll continue for the rest of the year. And when we query it to that, they just reply back that they feel the economy is opening up and that's supporting some of that optimism on their part.

Jim Bidzos:

Well, let me -- I'll ask George to comment on that. But first, let me just add this and this sort of goes to next question earlier as well. I think what we're not mentioning here is, this is a very competitive marketplace, and we haven't mentioned the country code TLDs, especially the ones that have been commercialized, for example, .co, .tv. Many of these country code TLDs that are not new gTLDs, not legacy TLDs. So the market is a little bit bigger than all of that. I just wanted to make sure that we understood that there's a bigger picture there that we normally don't talk about and have limited visibility into. But many of them have been commercialized, and so they certainly need to be factored in. George, do you want to comment further? I think, Sterling, the other half of your question was about marketing.

Sterling Auty:

Got you. And then for your own marketing programs here for 2021, can you give us a sense, within the context of the guidance you've given around margins? How should we think about the the marketing spend and in light of a potential favorable ruling on .web, what should we be thinking about the plans to put the marketing muscle behind the launch of .web?

Sterling Auty:

All right. Great. And last question because I get it quite a bit. I kind of know probably how you're going to answer, but I want to ask in a public forum anyway. .net in pricing. So you made a price decision here on .com, it's been announced. But it's been a little bit since you last took a price action on .net. What are your thoughts around -- what you might be doing here with pricing for .net in 2021 or 2022?

Operator:

And with that, that does conclude today's question-and-answer session. I'd like to turn things back to David Atchley for any additional or closing comments.

Operator:

And again, everyone, that does conclude today's call. We'd like to thank you again for your participation. You may now disconnect.

Operator:

Good day, everyone. Welcome to VeriSign's Fourth Quarter and Full Year 2020 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted, unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please, go ahead, sir.

Jim Bidzos:

Thanks, David, and good afternoon, everyone. This past year has presented challenges and uncertainties for all of us. This has also been a year when our mission has never been more relevant. Like many of you, we spent the majority of the year with most of our teams working remotely. During this time, we continued to maintain, invest in and evolve our infrastructure, which enables us to reliably and accurately provide the critical DNS navigation service people around the world rely on more than ever, for commerce, education, healthcare and person-to-person connection, while complying with the high operational standards as required by our ICANN agreements. Thanks to the dedication of our team and the resilience of the specialized network they operate and maintain, we extended our record of DNS availability to over 23 years during 2020 and we will continue our focus, as it appears we will be working remotely well into 2021. Turning to our results. I'm pleased to report another consistent quarter that concludes a solid year of operational excellence for the company. As I mentioned in 2020, we marked more than 23 years of uninterrupted availability of the VeriSign DNS for .com and .net. We also processed 42.4 million new registrations, delivered revenue of $1.265 billion and generated free cash flow of $687 million. During the full year 2020, we repurchased 3.7 million shares for $735 million. Effective today, the Board of Directors has increased the amount of VeriSign common stock authorized for share repurchase by approximately $747 million to a total of $1 billion authorized and available under the share repurchase program, which has no expiration. Our financial and liquidity position remains stable, with $1.17 billion in cash, cash equivalents and marketable securities at the end of the quarter. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. At the end of December, the domain name base in .com and .net totaled 165.2 million consisting of 151.8 million names for .com and 13.4 million names for .net, with a year-over-year growth rate of 4%. During the fourth quarter, we processed 10.5 million new registrations and the domain name base increased by 1.46 million names. Although, renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the fourth quarter of 2020 will be approximately 73.5%. This preliminary rate compares to 73.8% achieved in the fourth quarter of 2019 and 73.7% last quarter. Looking to 2021, we expect the domain name base growth rate of between 2.5% and 4.5%. As announced in today's earnings release, we have given notice of a price increase of $0.54 to the annual wholesale price for .com domain names, which raises the price from $7.85 to $8.39 effective September 1, 2021. This represents the first wholesale price increase of .com domain name since 2012 and is in alignment with a limited and regulated pricing flexibility permitted under our Registry Agreement. This announcement is consistent with our statements over the last several months that we expected to effectuate an increase in the wholesale price of .com domain names before October 25th 2021. We believe this positions .com competitively in the marketplace. And now, I'd like to turn the call over to George.

Jim Bidzos:

Thanks, George. I'd like to say again, that our priorities continue to be our mission of ensuring a secure, reliable and accurate operation of our critical Internet infrastructure and the safety of our people. And I also want to acknowledge once more, the team here at VeriSign for their hard work in maintaining and operating our infrastructure, even during the challenges of working remote during pandemic. Those efforts are undertaken almost entirely behind the scenes, that are not well known, but there are many hundreds of dedicated professionals that develop, maintain and operate our purpose-built network. And have done so without service interruption for over 23 years. Even today, some people may think we still operate an SSL Certificate Authority of PKI business that VeriSign's predecessor, RSA Data Security, built going all the way back to 1986. That business was sold in 2010 and we have increasingly tightened our focus on our core mission of secure Internet directory and registration services ever since. More information on just what we do today can be found on our homepage at verisign.com. Now we'd like to walk through your questions, which we believe is on your mind before opening the call for your additional questions. Many of you have asked are there any updates on the status of .web. As we noted last quarter, a final hearing took place in early August of 2020. We expect a decision from the panel in the coming weeks but we don't control the timing and the panel is not operating under any deadline. And as a reminder, VeriSign is not a party in these IRP proceedings but was granted the right to participate in certain limited aspects. Also as a reminder, an IRP under ICANN bylaws is for the purpose of ensuring that ICANN follow the term policies and procedures when making decisions. Our expectation is that following the resolution of the IRP, the ICANN Board will make a final decision on the delegation of the .web TLD. The guidance we provided today does not include revenue or expenses related to .web. Now we'll open the call to your questions. Operator we're ready for the first question.

Rob Oliver:

Great. Thank you, guys. Thanks for taking my question. Appreciate it. George, I was just hoping we could walk maybe through a little bit more of the thought process on the expense structure for 2021? And then also I wanted to sort of maybe get some color on that. I know you guys had talked a little bit in recent quarters about spending some more on the security side and certainly looked [indiscernible] given the headlines that happened in December, but wanted to get a sense for where you are on that spend, whether the bodies that you need to hire have been hired? And then also on the CapEx comment just wanted to understand what it was that came out of last year and into this year and just get a little bit more color on the CapEx, which is higher than in our model I believe?

Rob Oliver:

Yes. Were you guys able to hear my question?

George Kilguss:

I'm sorry. Yes I was. So yes, thanks for the question Rob.

George Kilguss:

That's okay. I'll do my best. But we've been talking about this most of the year that we've been making additional investments in both our infrastructure and our cybersecurity initiatives. And you see this bearing out in our numbers as both R&D and G&A are up in those areas and we continue to invest in personnel and hardware and software tools in those areas. As far as 2021, we expect our expenses to be similar as a percent of revenue next year for most of the categories that we report on with the exception of cost of revenue which we expect will increase slightly as a percent of revenue for next year. As far as capital expenditures, as stated in my prepared remarks, capital expenditures are expected to be between $55 million and $65 million. And that again reflects ongoing investment in our infrastructure as well as some expected 2020 capital spend that slipped into 2021. We – as I mentioned, we guided between $55 million and $65 million. Last year we guided between $45 million and $55 million at this time. So this year's range is slightly higher than last year but we feel these investments are appropriate to continue to ensure the security and stability of our infrastructure.

Jim Bidzos:

I'm sorry, did you just want clarification?

Jim Bidzos:

I'm not sure, I can give you any more detail beyond that, I guess. Maybe I don't understand your question. Let me...

George Kilguss:

Yes, Rob, this is George. Maybe I can jump in here a little bit. So I would say in general the trends that we're seeing in the domain name base are similar to the trends we've been seeing in the last few quarters in that registrars from both North America and EMEA are performing very well and that growth has been slightly offset by some slower activity from registrars based in China. But as you saw, yes, in the fourth quarter we had a pretty solid quarter delivering about 10.5 million registrations which was up from 10.3 a year ago. And during the year as we talked about we have seen some increased demand in those regions from people looking to get online, new business starts and there's been new functionality created in the registrar community from website builders. As we look into next year, we still see those trends continuing. However, we're not sure how the market will react as we come out of this work-from-home environment. And so we're being -- we typically do have a range this wide going into the year. January is off to a pretty good start. But right now we sit here that's our expectation between 2.5% and 4.5%. And as we go through the year we'll update you on that range.

Jim Bidzos:

Yes. I understand your question. I guess I -- if the idea is to sort of, associate some macroeconomic considerations and somehow relate them to the guidance that we gave, I think, probably the only thing I can really say about that is that there's obviously some uncertainty associated with how COVID is going to play out in 2021. There are a lot of ups and downs and gives and takes and that certainly is a factor that affected. But as George said there's a lot of factors that go into the range. But I would say if you wanted one macroeconomic indicator there's obviously some uncertainty around COVID. That's probably the single biggest influence in that range.

Operator:

We'll go ahead and take our next question from Nick Jones with Citi.

Jim Bidzos:

I'm sorry. You've got it right. The problem is that if you apply -- we don't bill in fractions of $0.01. And the actual increase came in with a 0.9 on the -- to the right of the decimal points in pennies. And so even though the number was a nine we rounded down because otherwise we would be slightly over the 7%.

George Kilguss:

Nick, this is George.

George Kilguss:

Those are going to be my comments Jim as well.

Nick Jones:

Okay. One last question just kind of as COVID restrictions may be loosened, in certain markets vaccines are rolling out. Are you seeing any change in kind of the trends we saw in 2020 in terms of people's SMBs switching to digital solutions, people leaning into online solutions? Is there any meaningful changes and trends kind of early in the year in certain regions, even just within the US in terms of registrations or anything to kind of give you pause as to kind of how the reopening may impact these trends? Thanks.

Nick Jones:

Great, thanks for taking the question.

Sterling Auty:

Yeah. Thanks. Hi, guys. When I saw that you announced the price increase, I'm like damn, what am I going to ask on the call now that you announced the increase?

Sterling Auty:

No. No, of course not. All right. So, let's start with renewal rate, the down 20 bps year-over-year. Anything that you saw in particular this year, whether it be -- I noticed that over the last month, there was a couple of days

Sterling Auty:

Now that makes sense. You made the comment that .web, neither the revenue or expenses, are factored into the guidance. If we just say hypothetically that you get the approval and you can move forward to getting it up and running, what should be some of the cost levels that investors should expect to get it launched, and perhaps some of your thoughts around the marketing muscle in terms of spend that you might put behind at launch?

Sterling Auty:

Okay. And then last question from my side is, in the US if you look at the new business applications, they spiked late summer early fall. So, I think August, September time frame, but they're still elevated in the fourth quarter especially on a year-over-year basis. If I think about that relative to your new domain registrations the 10.5, new registrations have been up relative to historical norms for a while now, is there a correlation there? And does that actually will give you some confidence that hopefully the economy opens back up on the back of vaccines and perhaps we could see even faster domain growth in 2021?

Sterling Auty:

And maybe just a follow-up to that. On mix of domains, the new TLDs I think have given back some of the share that we saw them -- saw that category gain in years past, are you seeing that mix having any impact on your business?

Sterling Auty:

Well, to be more specific you're a thin registry, but you work with hundreds of registrars on a global basis. Are registrars coming back to you given that you do marketing programs and suggesting that they want to put more muscle behind .com because they're just not seeing the traction that perhaps they expected in the new TLDs?

George Kilguss:

Yeah. I think that's right Jim. I mean I think that's probably a great question for one of the registrar's earnings calls but as to what they're seeing specifically. But our programs tend to be relatively set at the beginning of the year. We rolled them out we announced them and we tend not to change them too much year-over-year or intra-year I would say. But I don't think I have anything more to add than what Jim commented on.

George Kilguss:

Thanks.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's Third Quarter 2020 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. Now at this time, I like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Jim Bidzos:

Thanks, David, and good afternoon, everyone. Today VeriSign reports 318 million in revenue for the quarter, up 3.1% from the same quarter a year ago. But before we dive deeper into our results, I wanted to speak just a bit about COVID-19 and how we're addressing it within VeriSign. With the increased demand for and reliance on internet services during the COVID-19 pandemic, securing reliable operation of our infrastructure has become even more important. Our focus remains on our mission, which is to ensure the availability of our critical internet infrastructure for the benefit of internet users. We continue to operate our registry services for .com and .net and our root operations, at the rigorous standards of performance and availability governed by our agreements with ICANN, while most of our employees continue to work remotely. Now, I'll address our quarterly results. The third quarter of 2020 was another consistent quarter for VeriSign, in which we focused on our core business, expanded the domain name base and delivered solid financial results. Regarding third quarter operational highlights, at the end of September, the domain name base and .com and .net totaled 163.7 million, consisting of 150.3 million names for .com and 13.4 million names for .net with a year-over-year growth rate of 4%. During the third quarter, we processed 10.9 million new registrations, and the domain name base increased by 1.65 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the third quarter of 2020 will be approximately 73.4%. This preliminary rate compares to 73.7% achieved in the third quarter of 2019 and 72.8% last quarter. For 2020, we now expect the domain name base growth rate of between 3.5% and 4%. This updated range reflects the strength we have seen in new registrations and our expectations for domain name base growth for the remainder of the year, balanced with the ongoing uncertainty presented by COVID-19. During the third quarter, we continued our share repurchase program that resulted in 823,000 shares of common stock repurchase for 170 million. At quarter-end, 506 million remained available and authorized under the current share repurchase program, which has no expiration date. Our financial and liquidity position remain stable with 1.15 billion in cash, cash equivalents, and marketable securities at the end of the quarter. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. And now, I'd like to turn the call over to George.

Jim Bidzos:

Thank you, George. I'd like to say again that our priorities continue to be our mission of ensuring the availability of our critical infrastructure and the safety of our people. Internet usage has increased during the pandemic and reliance on online services even more so. For many people who are working from home and isolating at home, online services are critical, and more businesses and individuals than ever depend on internet infrastructure for their livelihood. I'd like to acknowledge the team here at VeriSign for their hard work and maintaining our critical internet infrastructure, even during the pandemic. We'd like to walk through two questions which we believe are on your mind before we open the call for your additional questions. First question, are there any updates regarding your plans to use the limited pricing flexibility you have for .com? No updates from what we said last quarter. We still expect to effectuate the .com wholesale price increase before October 25, 2021 and the prices for all of our TLDs are frozen through March 31, 2021. Second question, are there any updates on the status of .web? As we noted last quarter, a final hearing was scheduled in August. The hearing took place in early August. The participants, including VeriSign then submitted their post hearing briefs. A final decision from the panel may be issued later this year or early next year. As a reminder, VeriSign is not a party in these IRP proceedings, but was granted the right to participate in certain limited aspects. Also, as a reminder, in IRP under ICANN bylaws is for the purpose of ensuring that ICANN followed its own policies and procedures when making decisions. Our expectation is that following the resolution of the IRP, the ICANN Board will make a final decision on the delegation at the .web TLD. And now, we’ll open the call for your questions. Operator, we're ready for the first question.

Rob Oliver:

Great, thank you very much. Thank you guys for taking my questions. Appreciate it. Jim, just to start with you. You know, just overall, I'd love to get your thoughts on the domain environment, you know, clearly coming out of COVID a lot of concerns about small business, small business failure. And you guys have, you know, consistently from that time when you took down the guide on domain growth have kind of ratcheted it back up and [came in] for this quarter, pretty impressive. So, I just was wondering if you could maybe step back and talk a little bit about what you're seeing in the environment. You know, a lot of new business starts. And it would seem that that would be offsetting some of the kind of macro concerns that you know, that they may be weighing on small businesses, or maybe they're holding on to their websites. We'd love to hear your thoughts there. And then I have a quick follow up. Thanks.

George Kilguss:

Sure. This is George Kilguss. So, as Jim mentioned, we had a good quarter, new registrations were 10.9 million, which was up about 980,000 new names from a year ago, but very similar to last quarter. And the trends that we're seeing here in Q3 are very similar to last quarter. In that we saw strength in registrations from North American registrar's and media registrars, and APAC registrars. New units from China based registrar's during the quarter was similar to Q2 level However, they were down year-over-year. But overall, a very solid quarter continuing to see good demand here in the third quarter, and I think as Jim said, those are just secular trends that we're seeing with people seeing the value in the utility of having a website and getting a domain name to better service their customers and maximize their e-commerce objectives. And I think we're helping to support that – those small businesses in doing that and those trends, at least so far this year had been good for us.

George Kilguss:

Yeah Rob, I would say nothing out of the ordinary. I think if you look in the past couple of years, we have tended to spend a little bit more in the sales and marketing area in the fourth quarter just based on the timing of events. This year, we had some activities that we’re going to be early in the year, but with the pandemic in full swing, we kind of pivoted on some of those efforts and we've repositioned them here in the fourth quarter. So, I don't think there's anything unusual there, just the normal management of our marketing activities throughout the year.

Operator:

Thank you. We'll take our next question from Nick Jones with Citigroup.

Jim Bidzos:

Well we're waiting to hear the final resolution of this IRP. And just as a reminder, this IRP, this form of arbitration that's used in the ICANN community actually involves two parties, primarily that's affiliates, who's essentially the plaintiff here and ICANN [view as] the defendant. And as I mentioned in the question that I asked and answered, this is about whether ICANN follows its own policies and procedures when it makes decisions. So, that is what the panel will decide. And our expectation, as I said is that following that resolution, the ICANN Board then – the matter will be returned to ICANN for its process, which is to make a final decision on the delegation of the .web TLD. So that's the expectation, as in any litigation, it's really not proper to speculate on those outcomes, obviously, when something is pending, but we do know, in the process, what's pending here, which is a decision by the panel. And they have – the final hearing was scheduled and it was held and of course as a participant, but not a litigant so to speak. We were there at the table. So, we're waiting hopefully by the end of this year or early next year, we will hear from the panel. They will answer the allegations by the plaintiff affiliates against ICANN and then the matter should be handed to the ICANN Board for resolution on the .web issue. That's our expectation. And that's what we hope to see. And then we'll certainly share with you what we know when we know it beyond that.

Jim Bidzos:

Well, I'll just say that, I mean, I don't know what data you're referring to. So, I can't really address that specifically. I can tell you though that the market does not consist only of .com and then new gTLDs or alternate TLDs. There's a large and thriving market of country code TLDs like .CN for China, .DE for Germany. Many of those have been commercialized like .CO from Colombia, .Co is the commercialized TLD that many, many organizations and individuals have chosen to brand themselves on. And there are a large number of those. So, the market is far broader than that. Com is a good brand, and its performance is strong, and registrants like the .com brand, because it helps them get found. But beyond that, without seeing what you're referring to, I really can't comment on it. I would just caution that, very often when I think people talk about the market, they haven't really considered how large that market is. I would also refer you to our domain name brief. I think there's a good survey of all of the TLDs there. And I think if you look at that, you might get a slightly different picture. So, I hope that's helpful.

Jim Bidzos:

Certainly.

Sterling Auty:

Yeah, thanks. Hi, guys. So, going back to the domain name growth, in the context of the guidance that you’ve given for the full-year, it would seem to indicate a slowdown in the year-over-year new registrations embedded in that. So, I guess my question is, do you think that there was some one-time you know benefits from COVID that you're not factoring into the guidance for the fourth quarter or what else is kind of influencing how you kind of guided here for full-year?

Sterling Auty:

Understood. And I know that .com is a thin registry, but based on your interactions with registrar's and industry participants, any sense as to what percentage of domains that are coming on board have e-commerce attached to them at this point, or any other type of granular breakdown you might have?

Sterling Auty :

And that kind of brings, I don't know if you guys have seen it, but the Census Bureau has a number of business applications. And it looks like there was a significant spike in late summer coming into the fall. And you know, based on that comment, I wonder if you're seeing some of those come in or is there the potential that there might be a delayed tailwind? You know, from maybe new business formation?

Sterling Auty:

Got it? And one housekeeping, George, what's the number of names up for renewal in Q4?

Sterling Auty:

Alright, great. And very last one, you commented a little bit, so I wanted to just put a fine point, you know, given bringing down the high-end of the operating margin for the full-year, what would you say the incremental spend that you're now factoring into that guidance is going to that maybe wasn't there before? Or is that the wrong way to look at it?

Sterling Auty:

Understood. Thank you.

Sterling Auty:

Make sense. Thank you, Jim. I really appreciate that.

Operator:

Thank you. And that concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Atchley for any additional or closing remarks.

Operator:

Thank you. And that does conclude today's conference. Thank you all for your participation. You may now disconnect.

Operator:

Good day, everyone. Welcome to VeriSign's Second Quarter 2020 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thanks, David, and good afternoon, everyone. With the increased demand for and reliance on internet services during the COVID-19 crises, securing reliable operation of our infrastructure becomes even more important. Our focus remains on our mission, which is to ensure the availability of our critical infrastructure. We have been and are prepared to continue operating all of our services including registry services for dotcom and dotnet and our route operations at the rigorous standards of performance and availability governed by ICANN with more of our employees continuing to work remotely. Our focus on mission is emphasized by the fact that the company last week marked 23 years of 100% availability of the dotcom and dotnet domain name resolution system. This achievement is the result of the dedication and expertise of our team and our specialized infrastructure. Also as part of our response to the COVID-19 crisis, we announced in March a freeze of the wholesale prices in all of our TLDs including dotcom through the end of 2020. Today given the current environment we're further extending that price raise for the wholesale prices in all of our TLDs through March 31, 2021. Additionally, we're also extending the waiver of the wholesale restore fee for expired domain names through the end of 2020. Now I'll address our quarterly results. Q2 of 2020 was another consistent quarter for VeriSign in which we focused on our core business, expanded the domain name base and delivered solid financial results. Regarding second quarter operational highlights, at the end of June the domain name base in dotcom and dotnet totaled $162.1 million consisting of 148.7 million names for dotcom and 13.4 million names for dotnet with a year-over-year growth rate of 3.8%. During the second quarter we processed 11.1 million new registrations and the domain name base increased by 1.41 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the second quarter of 2020 will be approximately 72.8%. This preliminary rate compares to 74.2% achieved in the second quarter of 2019 and 75.4 last quarter. For 2020, we now expect a domain name base growth rate of between 2.75% and 4%. This updated range which recognizes the ongoing uncertainty presented by COVID-19 reflects the strength we've seen in new registrations and our expectation for domain name base growth for the balance of the year. During the second quarter, we continued our share repurchase program that resulted in 730,000 shares of common stock repurchased for $150 million. At June 30, 2020, $676 million remained available and authorized under the current share repurchase program, which has no expiration. Our financial and liquidity position remains stable with $1.2 billion in cash, cash equivalents and marketable securities at the end of the quarter. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash including potential share repurchases. Now I'd like to turn the call over to George.

James Bidzos:

Thank you, George. I'd like to say again that our priorities are our mission of ensuring the availability of our critical infrastructure and the safety of our people. Internet usage has increased during the pandemic and reliance on online services even more so. For many people who are working from home and isolating at home, online services are critical and more businesses and individuals and network depend on internet infrastructure for their livelihood. Our record of dotcom and Verisign for their hard work in maintaining our uptime record even during the pandemic. Given that participants are dialing in remotely for this call, I'd like to walk through a few questions which we believe are on your mind before we open the call for your additional questions. The first question, with today's announced extension of the price freeze, how should we think about limited pricing flexibility you have for dotcom? First as a reminder, the wholesale price for dotcom domain names has been unchanged at $7.85 for eight years since 2012. Also as a reminder, our wholesale prices for dotcom are governed by our registry agreement with ICANN. The retain price that the end user actually pays for a domain name is set by the retail channel, which is the registrars who have no regulation of their pricing. Additionally, there's a unregulated secondary market for domain names. With that background, under amendment three to the dotcom registry agreement, Verisign is not permitted to raise the wholesale price of dotcom domain names by up to 7% in each of the final four years of every six year period. Within the current six year period, the first year in which we may increase the wholesale price ends on October 25, 2021 and we expect to effectuate a dotcom wholesale price increase before that October 21 date -- 2021 date. The second question, are there any updates on the status of dotweb? Answer, as we noted last quarter, a final hearing is currently scheduled to begin on August 03 in the Independent Review Process or IRP that affiliates initiated in November 2018. That hearing is scheduled to take place on videoconferencing. As a reminder Verisign is not a party in these IRP proceedings, but was granted the right to participate in certain limited aspects. Also as a reminder an IRP under ICANN's bylaws is for the purpose of ensuring that ICANN follow its own policies and procedures when making decisions. Our expectation is that following the resolution of the IRP the ICANN board will make the final decision on the delegation of the dotweb PLT. Question three, can you help me better understand what is impacting the increase in new registrations and the lower preliminary quarterly renewal rate for the second quarter? Most of the strength in new registrations came from registrars in North America. While we don't have the same visibility that retailers do, based on feedback from our retailers they are seeing increased demand from small businesses getting online. This strength was partially offset by slower activity from registrars in China. As it relates to the preliminary quarterly renewal rate, the year-over-year decrease is primarily related to the lower overall first time renewal rate. Year-over-year the overall previous renewal rate remained relatively consistent. Question four, are there any updates to the donations you announced earlier this year? Yes, there are. During the first quarter, we made an initial $2 million donation to organizations assisting those impacted by COVID-19 locally and nationally. During the second quarter, we made a cash contribution of $1 million to the Equal Justice initiative in support of their work. We are actively working on an expansion to our VeriSign Cares Program beyond the $3 million the company donated during the first half of the year again with a focus on providing assistance to those impacted during the COVID-19 crisis. I'm sure you have questions and I can only say that these additional efforts should be further along by the time we talk to you again next quarter. And now we'll open the call for your questions. Operator, we're ready for the first question.

Robert Oliver:

Great. Thank you guys for taking my question and thanks for all the color. So on if I can maybe try a little bit more remarkably the domain growth is back now above where it was pre-COVID at least lower end of the range, which is a pretty remarkable. You mentioned some of the drivers there you guys have strength, can you that a little bit more and then China weakness maybe being responsible for the lower renewal rate. Can we perhaps get a little bit more color on that above geographically as well as some of the economic puts and takes around SMBs and what you guys are seeing there and then I had one follow-up? Thanks.

George Kilguss:

Yes thanks Jim and thanks for the question Rob. So as you mentioned in Q2 we basically strengthened gross additions on new registrations in North America and will say EMEA and APAC were also strongly. They also improved in the quarter year-over-year and China was a little bit lower. As far as the China gross ads they were similar to the gross ad levels we had last quarter there but they were down from year ago levels. As far as renewal rates, Jim mentioning they were down about 1.4% in total year-over-year and we saw that decline primarily manifests itself in lower first time renewal rates and they were down also in most markets that we track, keep an eye on. And as Jim also mentioned, we're a thin registry we talk to before. We don’t have direct visibility into the end user. So it's a little more difficult for us to understand the economic impact per se, but in general gross ads were very strong this quarter. Our net ads were good. They were $1.4 million with two was slightly above the second quarter of 2019 only totaled $1.3 million.

George Kilguss:

Sure thanks Rob. I don’t think I can meet that anything you summarized it accurately. We are taking another freeze of prices through March 31, 2021 that is related to the current environment via data the first year period of our available price increase is October 25, 2021 and you accurately stated that we expect to effectuate dotcom wholesale price increase before that date. I think we're ready for another question, operator.

Nicholas Jones:

The first one as you extend the waiver for retail fees, can you tell me what are the implications there? Is there kind of a building group of domain that are up that could potentially generate some money from these restore fees and maybe fall off, would you then recognize those as churn, I guess as you go walkthrough kind of the dynamic of the restore fee and provide a little bit color on is there any build out coming out and I've one follow-up after that?

George Kilguss:

First off the impact of waiving the restore fees is immaterial to our financials and is accounted for in the revenue guidance we provided today. There is a period of time after our registrar deletes the domain name and still this is a redemption rates, it's a 30 day period and the registrar has a chance to get the name back then before those of the general availability. So those names are talking about. It's already been deleted by the registrar and so this restore fee is in addition to the standard registration renewal fee associated with the domain name renewal and we don’t disclose our wholesale restore fee which is charged for the registrar and of course they determine what the actual retail restore fee is and we've seen many registrars pass on the waiver from a retail perspective. So anecdotally we believe that small businesses and individuals are benefitting from our waiver.

George Kilguss:

Thanks Nick. I mean clearly every quarter, we're looking at our expenses and making sure we're spending the appropriate amount in each of the categories to drive profitable growth in support of the business. Sales and marketing expense sequentially was up and we do have plans to continue marketing activities throughout the year, but those costs again are factored into the guidance that we provided, but we do expect to continue to invest in sales and marketing activity for the rest of 2020 year.

Sterling Auty:

Couple of questions, so the new guidance for the domain growth for the full year, what have you factored in for the last two quarters in terms of the pace of new registrations and the renewal rate?

George Kilguss:

So we don’t guide to gross registrations or renewal rates. We guide to the net zone increase. Clearly we've done pretty well here through the first half of the year and we expect that continued demand for the product but as far as what will happen specifically to the renewal rate into a quarter, gross ads, we'll wait and see. We published the gross ads, the new information in the domain name base on the left side. You can see what is going on there, but our full year guidance is the guidance we provided on breaking out quarterly.

George Kilguss:

We forecast or model our results that way. We do a lot of algorithmic computations and models that have proven fairly active over the prior period and we use that algorithmic model to guide us not only through the quarters here but also in our planning. It's been very reliable for us and so that's the methodology that we're looking at. It's very hard to go down and forecast demand by and end user or by a registrar of by a country level. We clearly look at those results but the data is so voluminous that we have to use algorithms that do that and the algorithms which like I said before have been relatively accurate are giving us the range that we put out here for our guidance.

George Kilguss:

So the number of names that were up for renewal in the second quarter 2020 was 35.1 million. We expect 34.2 to go up for renewal next quarter in the third quarter. When I go back a year ago in the second quarter of 2019 that was closer to 33.3 million and the third quarter of 2019 was 32.6 million.

George Kilguss:

I am not entirely sure I understand your question, but I think maybe the answer can be determined by having a nearly state as you point out there is a six-month notice that's required to effectuate a price increase before we have to provide six months notice and obviously we will do that. The date of the expiration of the first year of the four price increases available in the six year period is October 25, 2021 and we of course prior to today's announcement are freezing wholesale prices in all of our TLDs through March 31, 2021. So I think a little bit of math could answer your question. Till that point somewhere right.

George Kilguss:

Well Go Daddy has been and is all it has been an important channel partner for us to obviously ever since probably back to when Bob Parsons started to build their company. We certainly expect that to continue. End users see tremendous value in dotcom and dotnet in those TLDs and we know that our channel partners recognize that value as well. I just should point out that vertical integration is not new. Several of other of our register channel partners also operate TLD registries. Google has Google Registry, name.com has donuts with over a 200 TLDs in it and each of those cases these registrars continue to be an important channel partner to Verisign for our TLDs. I expect those relationships to continue.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's First Quarter 2020 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thanks, David, and good afternoon, everyone. As people work to address the global challenges posed by COVID-19, we are focused on protecting our people, managing our operations, supporting our local communities and helping small businesses through our general partners. While the issues posed by COVID-19 are unprecedented, they fall within our standard preparation for disruption caused by local, regional and global events. The company's readiness plans, which are routinely exercised, include the ability to maintain critical Internet infrastructure with most employees working remotely. We are prepared to continue to operate all of our services, including registry services for .com and .net and our route operations at the rigorous standards of performance governed by ICANN even in the demanding environment created by COVID-19. Additionally, to help our local communities, as announced in March, we made an initial $2 million donation during the first quarter to first responders and medical personnel in the Northern Virginia area, the United Way's Worldwide COVID-19 Community Response and Recovery Fund and Semper Fi & America's Fund. Additional efforts to protect our people, manage our operations, help communities and help small business through our channel partners can be found in our company blog, which is available at verisign.com. Now I'd like to address updates and first quarter results. I'm able to report another solid quarter for VeriSign in which we focused on our core business, expanded the domain name base and delivered consistent financial results. On March 27, we announced that VeriSign and ICANN entered into the third amendment to the .com registry agreement and a separate binding letter of intent, which formalized a new framework for ICANN and VeriSign to work together on initiatives related to the security ability and resiliency in the domain system. We are pleased with the outcome of the process and remain confident that these agreements will serve the public interest by providing pricing certainty and by helping to hold the security, stability and resiliency in .com and the critical Internet functions it supports globally. In addition, we announced that in light of the global disruption caused by COVID-19, we have registry fees for all TLDs, including .com and .net, through the end of 2020. As we stated last quarter, regarding the letter of intent, one-time commitment to provide $4 million per year over 5 years beginning on January 1, 2021, for ICANN to support activities to preserve and enhance the security, stability and resiliency of the DNS and the Internet. We believe that the activities funded by this commitment will benefit the entire Internet community. Also, as an update, in February, Todd Strubbe was promoted from Executive Vice President and Chief Operating Officer to President and Chief Operating Officer, further strengthening our senior management team. Relating to first quarter operational highlights. At the end of March, the domain name base in .com and .net totaled 160.7 million consisting of 147.3 million names for .com and 13.4 million names for .net with a year-over-year growth rate of 3.8%. During the first quarter, we processed 10 million new registrations, and the domain name base increased by 1.83 million names. Although our renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the first quarter of 2020 will be approximately 75.4%. This preliminary rate compares to 75.0% achieved in the first quarter of 2019 and 73.8% in the fourth quarter of 2019. By the way, our press release that we just released this afternoon has a typo. And in the sentence that I just read, in the press release, it says in the fourth quarter of 2020 instead of the fourth quarter of 2019 when it mentions the 73.8% renewal rate. So the fourth -- the first quarter -- sorry, the fourth quarter of 2019 renewal rate was 73.8%. And the typo, it says fourth quarter of 2020. That's getting ahead of yourself, I suppose. So I just wanted to point out that typo. So back to the business. For 2020, we now expect a domain name base growth rate of between 2% and 3.75%. Recognizing the uncertainty presented by COVID-19, this updated range reflects a more cautious view of domain name base growth for the balance of the year. During the first quarter, we continued our share repurchase program that resulted in 1.3 million shares of common stock repurchased for $245 million. At March 31, 2020, $826 million remain available and authorized under the current share repurchase program, which has no expiration. Our financial and liquidity position remains strong with $1.139 billion in cash, cash equivalents and marketable securities at the end of the quarter. We continually evaluate the overall liquidity and investing needs of the business and consider the best uses for our cash, including potential share repurchases. And now I'd like to turn the call over to George.

James Bidzos:

Thank you, George. Before moving to the question-and-portion of this call, I would like to acknowledge and efforts of critical staff, not only here at VeriSign but everwhere, of the hard work and commitment they are demonstrating during this crisis. We appreciate the training, skill and dedicated effort of our team, which remains focused on operating our critical infrastructure. I hope everyone remains well and continues to stay safe. Given that participants are dialing in remotely for this call, we would like to walk through a few questions which we know are on your mind before we open the call for your additional questions. The first question I'll ask and then answer is, could you provide more information then on COVID-19's impacts to your business in terms of your infrastructure, supply chain, customers, demand for .com and .net and capital allocation? The answer is that we recognize that VeriSign operates critically within that infrastructure that's relied on now more than ever. Protecting unconditionally the infrastructure that operates registry services for.com and net as well as our root operations remains job one. The company's readiness plans, which are routinely exercised, include the ability to maintain critical Internet infrastructure with most employees working remotely. VeriSign maintains multiple redundant operation centers as well as hundreds of service locations distributed worldwide across 6 continents. VeriSign's diverse DNS infrastructure is not dependent on a single type of technology, vendor or power source at a given location, and VeriSign technical teams across the globe are able to perform key functions from multiple locations. We are prepared to continue to operate all of our services, including registry services for .com and .net and our route operations at the rigorous standards of performance governed by ICANN even in the demanding environment created by COVID-19. In respect to our supply chain, we're monitoring these issues and are taking action where appropriate to ensure that we continue to have everything necessary for the ongoing operation of our infrastructure. It is important to remember that our infrastructure is not dependent on a single type of technology, vendor or power source at a given location. With regards to our customers, these are clearly uncertain times for businesses and the economy. As we discussed in our blog post, we're taking actions to help small business through our channel partners. In order to support individuals and small businesses affected by this crisis, VeriSign is freezing registry prices for all of our TLDs, including common net, through the end of 2020. In addition, from April 2 until June 1, VeriSign is waiving what is known as the restore fee for .com and .net domain names. Typically, when a domain name registration is deleted by a registrar, there is a period of time during which the person who registered the name can pay a one-time restore fee to get it back before the name goes back into general availability. This helps protect registrants who may have left their domain names lapse accidentally at an inopportune time. As it relates to demand for .com and .net domain names, you see in today's results that we saw a good demand for new registrations during the first quarter as well as an improved preliminary renewal rate. That being said, as I stated earlier, recognizing the uncertainty over the duration and economic impact of the COVID-19 crisis, the updated guidance range reflects a more cautious view of domain name base growth for the rest of the year. As a reminder, you can track the performance of the domain name base with daily updates on our website. Finally, regarding capital allocation, recognizing that these are unprecedented times, and that is a period of market uncertainty for at least the next quarter, our capital return will be more in line with historical amounts. Second question I'll ask and address. With amendment 3 finalized, when can you take price increases for .com? Amendment 3 for the COM Registry Agreement reflects certain changes agreed to under Amendment 35 to the cooperative agreement with the U.S. Department of Commerce, including the pricing changes, which allow limited .com price increases in each of the last 4 years of every 6-year period. The first period began on October 26, 2018. Therefore, October 26, 2020, was the earliest date that VeriSign could have taken a price increase. That said, as we announced in March, VeriSign is freezing its registry prices for all of our top-level domains, including .com and .net, through the end of 2020 in order to support individuals and small businesses affected by the COVID-19 pandemic. Also, as a reminder, the com and net registry agreements require VeriSign to provide 6 months' notice of any price increase. Now the third and last question I'd like to answer before we take yours. Are there any updates on the stats of .web? As mentioned on our last call, we were awaiting a ruling on whether VeriSign could participate in the arbitration called an independent review process under ICANN's rules. As announced in our 10-K in February, the arbitration panel permitted VeriSign and new .co to participate in aspects of the independent review process. We do not have further updates at this time. Now we'll open the call for your questions. As a reminder, due to the remote nature of participants, we will do our best to respond to each question, and we appreciate your patience if we experience technical issues. Operator, we're ready for the first question.

Robert Oliver:

Great. And, Todd, congratulations on your promotion. Jim, you guys are already a model of efficiency, but, yes, answering your own questions takes it to a new level. You've taken most of mine, but I did want to just flush out the strong renewal rates, which were very strong, and maybe get a bit more color on what you guys are seeing in terms of domain activity. I mean, the slight tweak down of the revised range is fairly modest. And just curious what you guys are seeing and how that plays into your forecasting about any residual effects on SMBs from COVID-19?

George Kilguss:

Sure. Rob, it's George. From a renewal rate perspective, we did see renewal rates tick up a little bit from year ago levels. When we take a deeper look, we see the previously renewed rate really being the driver of that. So we're seeing people who have renewed names previously continue to hold on to those names. And as we talked about before, that's a normal function that we've seen previously as the base stages. As we look at the domain name base performance itself, clearly here in the first quarter, as Jim mentioned, we had what actually was a good Q1. New units were up 2.1% from a year ago and delivered $1.8 million. As you mentioned, we're keeping an eye on the domain name base and demand for the rest of the year. In the quarter, we saw good strength from the United States registrars. And I would say the China market was a little softer, but the strength from the U.S. registrars really outpaced that and overcompensated for that, helping the domain name base to continue to grow here in Q1.

Nicholas Jones:

Just two quick ones, one on the .com pricing agreement. I guess, just one on the timing without, I guess, asking for specific timing. But as you aren't taking any pricing increases in 2020, are you able to tick the October 26, say, in early 2021? And if you were to take it in 2021, the way the contract reads, are you then not able to take the October 26, 2021? Ultimately, could you do 2 prices -- 2 increases in the same year? I'm not sure if you follow me, but that's my first one. And then I have a quick follow-up.

Nicholas Jones:

That does. That's helpful. That's helpful. And then the second one, just quickly on kind of new top level domain, a large registrar acquired a registry that issues new TLDs and some country code TLDs. Does that potentially increase the risk of impacting .com demand? Or is there -- do you have any thoughts around that?

Operator:

We'll take our last question from Sterling Auty with JPMorgan.

George Kilguss:

There was no non-domain name revenue that was material that we didn't have present in the fourth quarter. I think what may be impacting your perception is we had a very, very strong fourth quarter. And so we had quite a few domains come in the fourth quarter, and that's just waterfalling here into the first quarter and helping us getting a little bit of a tailwind here in Q1.

James Bidzos:

I really -- I don't see that it really has any impact on any thinking about that. As I said, this is not the first time that a registrar has become a registry. There are several of them out there, and those relationships work fine. But I think there's no update on .web, so it's early to speculate about .web per se. But at this point, no real comment to say about that. I mean, we've certainly discussed the ability to be vertically integrated, but let me just say Amendment 35 to the cooperative agreement clarified that the vertical integration within the com registry was only meant to apply to com. So we can't be vertically integrated for com. That clarification is now included in Amendment 3 to the COM Registry Agreement. And the net registry agreement doesn't have a similar clarification.

James Bidzos:

I don't believe it has. The proceedings in this arbitration are -- actually have even preceding the COVID-19 crisis, even the appearance of COVID-19 have always been telephonic. And so it's unlike appearances in court where people need to show up and physically be there. I believe there is an upcoming hearing later this year that is at least planned to be in person, but I can't speculate about what would happen there. But everything that's gone on thus far has been telephonic. So thus far, there's been no slowdown. Beyond that, I can't speculate about what will happen.

James Bidzos:

I can't speculate about exactly what will happen when. I just know that there was a hearing that was at least planned to be an in-person hearing. I don't know if that's subject change or not. I'm not familiar with that level of detail with the rules, the flexibility or the plans or what impact the COVID-19 crisis may have on that particular plan. I just know that things have proceeded so far because, again, all of the proceedings of literally everyone has been telephonic.

James Bidzos:

We are very pleased with the performance of our network under increased traffic loads. It's designed with considerable excess capacity. And as I stated earlier, we are -- we planned for situations like this, which certainly, the -- not just from the work-from-home environment perspective, but also from an increased traffic capacity. Excess capacity to deal with traffic loads has always been a design criteria in our network, and we're accommodating traffic without issues.

David Atchley:

Thank you, Operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to VeriSign's Fourth Quarter and Full Year 2019 Earnings Call. Today's conference is being recorded. Recording of this call is not permitted unless preauthorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thanks, David. Good afternoon, everyone. I’m pleased to report another solid quarter for VeriSign that caps off not only a solid year but also a strong decade in which we’ve focused on our core business, expanded the domain name base and returned value to our shareholders. In 2019, we marked more than 22 years of uninterrupted availability for the VeriSign DNS for .com and .net. 2019 was also a strong year for the .com and .net domain name base as we processed a record 40.3 million registrations and concluded the year with 158.8 million names. Finally, 2019 was characterized by solid financial performance with revenues of 1,232 million and free cash flow of 714 million. On January 3, VeriSign and ICANN announced a proposed agreement to amend the .com registry agreement and the new proposed framework for working together on initiatives related to the security, stability and resiliency of the domain name system in the form of a binding Letter of Intent between the two organizations. Together, these agreements fulfill commitments that ICANN and VeriSign made in 2016 when the .com registry agreement was previously amended. The new proposed amendment updates the .com registry agreement to reflect certain changes under amendment 35 to the cooperative agreement with the U.S. Department of Commerce, including the pricing changes. According to the terms of the proposed Letter of Intent, VeriSign will have a one-time commitment to provide $4 million per year over five years beginning on January 1, 2021 for ICANN to support activities to preserve and enhance the security, stability and resiliency of the DNS and the Internet. We believe that the activities funded by this commitment will benefit the entire Internet community. ICANN's public comment period for these two documents closes February 14. The steps that follow the comment periods closing according to ICANN's Web site are that ICANN staff will prepare a report of the public comments by March 6, 2020 and then ICANN will submit the report to its Board of Directors. Now I’ll discuss fourth quarter operational highlights. At the end of December, the domain name base in .com and .net totaled 158.8 million consisting of 145.4 million names for .com and 13.4 million names for .net with a year-over-year growth rate of 3.9%. During the fourth quarter, we processed 10.3 million new registrations and the domain name base increased by 1.46 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the fourth quarter of 2019 will be approximately 73.7%. This preliminary rate compares to 74.3% achieved in the fourth quarter of 2018 and 72.2% in the fourth quarter of 2017. Looking forward to 2020, we expect the domain name base growth rate of between 2% and 4%. During the fourth quarter, we repurchased 1 million shares of common stock for 195 million. During the full year 2019, we repurchased 3.9 million shares for 738 million. Effective today, the Board of Directors increased the amount of VeriSign common stock authorized for share repurchase by approximately 743 million to a total of 1 billion authorized and available under the share repurchase program, which has no expiration. Our financial position remains strong with 1,218 million in cash, cash equivalents and marketable securities at the end of the quarter. We continually evaluate the overall cash and investing needs of the business and consider the best uses for our cash, including potential share repurchases. Lastly, regarding .web, as we mentioned last quarter, a hearing on VeriSign and NBC's request to participate in the arbitration process was held last year. We expect a ruling on our request in 2019, but we have been told by the panel that it now hopes to issue its ruling this month. And now I'd like to turn the call over to George.

James Bidzos:

Thank you, George. The fourth quarter was another solid quarter for VeriSign capping a solid year for the company as further expansion of the domain name base and year-over-year revenue growth we generated and efficiently returned value to shareholders. We continue our work to protect, grow and manage the business while continuing our focus on providing long-term value to our shareholders. We will now take your questions. Operator, we're ready for the first question.

Rob Oliver:

Great. Good afternoon, gentlemen, and thank you for taking my questions. A question for you, George, just on the full year guidance, just curious if you could help us understand what might be in there in terms of – I guess we’re expecting price increases to roll in starting later this year and if that’s been factored in? And additionally on .web, I know it’s tough to know exactly when that closes, but expecting that it would in '20 obviously less meaningful, but just curious whether those were included in the guide? And then I just had a quick follow up. Thanks.

James Bidzos:

And there’s no – none of the guidance that you’ve been given includes any revenue from .web at this point.

George Kilguss:

Rob, so from a marketing perspective, I would say in general the programs and types of programs that we ran this year were similar to last year. So there’s really not a huge change. What we’re doing again, if we recall last year, we also had some seasonal increase in sales and marketing in the fourth quarter and we articulated that in our 10-Q that we filed last quarter that we expected that to go up as a percent of sales as well.

Operator:

Next we’ll hear from Nick Jones with Citi.

George Kilguss:

I’m sorry, I didn’t catch the second part of the question.

George Kilguss:

Okay. So, yes, in the fourth quarter – we had a very strong fourth quarter as Jim alluded to, 10.3 million new additions which was up from 9.5 million in the fourth quarter of '18. When we look at where that demand came from, it came from registrars based in the United States, Asia Pacific region and EMEA. So as far as renewal rates, again, they vary by geography. It’s something we keep an eye on. But as it relates to any virus over in China, we’re not seeing any impact to date but it’s something we’ll keep an eye on.

James Bidzos:

So the question, Nick, that was about spend on the infrastructure. Was that the question?

George Kilguss:

I’m sorry. Can you just --

Nicolas Jones:

I’m just looking for a little more color on what exactly the money is going to be going towards and what needs to be improved, what needs to be preserved, is there any kind of additional color you can provide there?

Nicolas Jones:

Got it. Thank you for taking my questions.

Sterling Auty:

Thanks. Hi, guys. I got a couple of questions. First one to revisit the renewal rate, I know you mentioned that renewal rate varies by geography. But given that it was down year-on-year, any more color that you can give? Is it just mix driven where the renewal rates in each of the geographies consistent with last year, or did you see any changes in any of the renewal rates in those geographies?

Sterling Auty:

Okay. And then following up on the 10.3 million gross additions, you basically said there is growth out of U.S., Asia Pacific and EMEA. But can you peel that back a little bit more? So 10.3 is better than what we have been seeing. I think it’s the first time you’ve done over 10 million in quite some time. Which area contributed more than what you have been seeing? In other words, which geography generated incremental growth this quarter?

Sterling Auty:

Okay, got it. And I want to clarify. Jim, you mentioned in terms of the panel decision on .web, that’s just the final decision as to whether you can be a party to the process or what is that decision that you’re waiting for this month on?

Sterling Auty:

Okay. And then back – operationally you mentioned the investments that you were making both in sales and marketing as well as some infrastructure investments. Can you kind of parse out where was the bigger portion of that investment, in which of those two areas?

Sterling Auty:

All right. Last question is one of the questions I get frequently from investors is what your appetite and what your view would be on acquisitions and being a consolidator in the market especially now that you’ve got the ability to be a vertically integrated company outside of .com? What’s your interest level in pursuing those opportunities?

Sterling Auty:

Understood. Thank you.

David Atchley:

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator:

Good day, everyone. Welcome to Verisign's Third Second Quarter 2019 Earnings Call. Today's conference is being recorded. Unauthorized recording of this call is not permitted. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

James Bidzos:

Thanks, David, and good afternoon, everyone. I am pleased to report another solid quarter for VeriSign. Our results are in line with our objectives of offering security and stability to our customers, while generating profitable growth and providing long-term value to our shareholders. At the end of September, the domain name base in dot-com and net totaled 157.1 million, consisting of 144 million names for dot-com and 13.4 million names for dot-net with a year-over-year growth rate of 3.8%. During the third quarter, we processed 9.9 million new registrations, and the domain name base increased by 1.27 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, we believe that the renewal rate for the third quarter of 2019 will be approximately 73.6%. This preliminary rate compares to 74.8% achieved in the third quarter of 2018. For 2019 full year, we now expect the domain name base growth rate to be between 3.2% and 3.7 %. As noted during our recent earnings calls, we are engaged in a process with ICANN to incorporate the terms of Amendment 35 to the Cooperative Agreement, including the pricing terms into our dot-com registry agreement. For those not familiar with this, let me remind you that under the 2016 amendment to our com registry agreement with ICANN, which extended the term of the agreement, we and ICANN also agree to negotiate in good faith to do two things; first, we agree to reflect changes to the Cooperative Agreement in the com agreement, including pricing terms. Second, we agree to amend the com agreement to include terms to preserve and enhance the security and stability of the com registry or the Internet. We believe these discussions with ICANN are nearly complete. While it will be inappropriate at this time to provide more details, I can say that we were satisfied with the results so far. As noted, this is an ICANN process and we expect that before long ICANN will be publishing for public comment the documents we have been discussing. During the third quarter, we continued our share repurchase program by repurchasing 1 million shares of common stock for $194 million. Our financial position remained strong with $1.23 billion in cash, cash equivalents and marketable securities at the end of the quarter. we continually evaluate the overall cash and investing needs of the business and consider the best uses for our cash, including potential share repurchases. And now I'd like to turn the call over to George.

James Bidzos:

Thanks George. The third quarter was another solid quarter for VeriSign. There was further expansion of the domain name base and year-over-year revenue growth we generated and efficiently returned value to our shareholders. We continued our work to protect, grow and manage the business while continuing our focus on providing long-term value to our shareholders. And we'll now take your questions. Operator, we are ready for the first question.

MattLemenager:

Good afternoon. It is Matt Lemenager on for Rob. I appreciate the comments around the ICANN Registry Agreement negotiation. So when -- as we look forward, could you remind us once the public comment period would open up, what does the timeline look like after that? I believe you have to give a six-month notification period before making you can make any formal changes in pricing. So I assume that entire review period with ICANN would be complete by kind of the April 2020 would kind of be the timeframe that it would need to be completed by? But could you just remind us what the timeline looks like after the public comment period opens?

Matt Lemenager:

Yes, that's helpful. And then another one on kind of the newer initiatives I suppose, is there any update to dot-web and the process there?

Matt Lemenager:

Okay, got it. And then lastly just on the sales and marketing expense, is down 28% every year, I think it is a couple close in a row that has declined. I mean, do you -- is there any expectation, would that go, just trying to take the bottom [ph] of that out into 2020 it seems like with that level off at some point as we kind of do dot-web and put marketing dollars behind that, or anything, if you could give any color around the sales and marketing expense?

Matt Lemenager:

Okay, got it, thanks guys.