VeriSign, Inc. Q2 FY2025 earnings call

• VeriSign marked 28 years of 100% availability of the .com and .net domain name resolution system.
• Second quarter results reflect sequentially improving trends with the domain name base for .com and .net at 170.5 million, up 660,000 from the previous quarter. New registrations were 10.4 million, and the renewal rate for Q2 2025 is expected to be 75.5% compared to 72.7% a year ago.
• Expect the change in the domain name base to be between positive 1.2% and positive 2% for 2025, with improving trends across all geographic regions, particularly in Asia-Pac.
• Financial and liquidity position remained stable with $594 million in cash, cash equivalents, and marketable securities at the end of the quarter. Returned $235 million to stockholders, including $72 million in dividends and $163 million from share repurchases. Board increased share repurchase authorization by $913 million to $1.5 billion.
• Declared a cash dividend of $0.77 per share payable on August 27, 2025.

In the second quarter of 2025, VeriSign generated $410 million of revenue, which was a 5.9% increase from the same quarter the previous year. Net income for the quarter totaled $207 million. Diluted earnings per share were $2.21. Operating cash flow was $202 million and free cash flow was $195 million. The domain name base for .com and .net totaled 170.5 million domain names at the end of June, up 660,000 from the previous quarter, with new registrations for the quarter at 10.4 million.

• Revenue is expected to be between $1.645 billion and $1.655 billion.
• Operating income is expected to be between $1.117 billion and $1.127 billion.
• Interest expense and nonoperating income net (including interest income estimates) is expected to be an expense between $50 million and $60 million.
• Capital expenditures are expected to be between $25 million and $35 million.
• GAAP effective tax rate is expected to be between 21% and 24%.

• Economic and geopolitical uncertainty.
• Volatility in China domain activity, with continued monitoring of the strength and duration of positive trends.

Q: What are the drivers for domain strength and perspective on marketing programs?

A: Drivers include registrars refocusing on new customer acquisition and engagement with marketing programs. Marketing programs are accelerating improving trends in domain name demand and are being refined. The cost of marketing programs is included in the updated guidance and are accretive.

Q: Perspective on Asia-Pac as a driver and China domain activity?

A: Asia-Pac has seen solid demand with registrars there, and China is part of Asia-Pac. There has been volatility in China in the past, and conservatism is baked into the forecast due to monitoring the strength and duration of positive trends.

Q: Clarification on marketing programs and registrar changes?

A: Registrars are focusing on new customer acquisition and our marketing programs are contributing and accelerating, with synergy between the two. The diverse channel with different business models is being engaged with various programs, informing 2026 programs.

Q: Thoughts on 2026 programs, new gTLD program, and impact of AI?

A: 2026 programs are in development, learning from 2025 programs. New gTLD program target is Q2 next year, with no auctions currently expected. On AI, AI models create data from websites, and AI tools can help with domain name suggestions, but VeriSign is cautious in using AI internally for security and stability reasons.