VeriSign, Inc. Q1 FY2026 earnings call

Good afternoon. VeriSign delivered strong results in Q1 2026 operationally and financially. Combined.com and.net domain name base at record 176.1M names. New registrations largest since first half of 2021, strong renewal rates. Revenue up 6.6%, EPS up 11.4%. Returned over 100% free cash flow to investing public via share repurchases and dividends. Domain name-based trends continued with growth across regions, mostly U.S. and EMEA. Tailwinds from AI tools. Increased and narrowed guidance for domain name-based growth to 3.1 - 4.3% for 2026. Noticed price increase of 71 cents to annual wholesale price for.com domain names effective Nov 1, 2026.

The combined.com and.net domain name base is at a record 176.1 million names. Revenue is up 6.6% year over year, EPS increased 11.4% year-over-year. Domain name base for.com and.net grew 2.54 million from year-end 2025. New registrations for the first quarter were 11.5 million. Renewal rate for the first quarter of 2026 is expected to be 76.3%. Revenue for the quarter ended March 31, 2026 was $429 million. Operating income totaled $294 million, up $22 million or 8.3% from the previous year. Operating cash flow for the first quarter of 2026 was $272 million. Free cash flow was $265 million.

Revenue expected to be between $1,730,000,000 and $1,745,000,000. Operating income expected to be between $1,170,000,000 and $1,185,000,000. Interest expense in non-operating income net expected to be between $57 and $67 million. Capital expenditures expected to be between $55 and $65 million. Gap effective tax rate expected to be between 22 and 25%. Increasing and narrowing guidance for domain name-based growth to be between 3.1 and 4.3% for 2026.

Q: About marketing programs and AI contributing to domain strength.

A: Difficult to separate, registrars' engagement with tailored programs and AI tailwind collide and blend.

Q: Renewal rates and cohorts.

A: Renewal rate at 76.3% strong, programs incentivize registrars, first-time renewals mid-40% range, previously renewed mid-80% range with improvement.

Q: Upcoming ICANN TLD programs.

A: ICANN opening new round of GTLD applications, process long, VeriSign taking technical steps to be ready.

Q:.com price hike and renewal trends.

A: Renewals dependent on retail registrars' pricing, new.com price is modest. No announced.net price increase.

Q: Infrastructure for transactions.

A: Multiple orders of magnitude in excess capacity for resiliency.

Q: New services and security.

A: High assurance infrastructure important, additional security services being examined, blogs to roll out.

Q: Registrar services promotional intensity.

A: Channel is evolving and diverse, programs adapted to diverse needs, treating registrars fairly.