VeriSign, Inc. (NASDAQ:VRSN) Q4 2017 Earnings Conference Call Transcript

Feb 08, 2018 • 04:30 pm ET

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VeriSign, Inc. (NASDAQ:VRSN) Q4 2017 Earnings Conference Call Transcript

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Executive
James Bidzos

we repurchased 6.3 million shares for $593 million. Effective today, the Board of Directors increased the amount of VeriSign common stock authorized for share repurchase by approximately $586 million to a total of 1 billion authorized and available under the share repurchase program which has no expiration. Our final position in strong with $2.4 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.

At the end of December, the domain name base in .com and .net totaled $146.4 million, consisting of 131.9 million names for .com and 14.5 million names for .net. During the fourth quarter, we processed 9 million new registrations and the domain name base increased by 0.57 million names. During the quarter we continued to see strength from domestic registrars which was offset by a lower second time renewal rate associated with the remaining China surge names from late 2015. 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 2017 will be 72.2%.

We expect full year 2018 domain name base growth of between 2% and 3%. For the first quarter we expect an increase to the domain name base of between 1.5 million to 2 million registrations.

I would like to comment now on a recent positive development in our efforts to become the registry operator for .web. You may have seen the 8-K we filed in January, in it we disclosed that the US Department of Justice's and Trust division notified us that it had closed its investigation regarding the .web top level domain. We're now engaged in ICANN's process to move the delegation of .web forward. However, as this is ICANN's process we cannot say when it will conclude and while it's possible that our operation of .web will commence this year, the 2018 revenue guidance we will provide does not include any revenue from .web. Of course, we will provide you with updates as appropriate.

And now I would like to turn the call over to George.

Executive
George Kilguss

Thank you, Jim, and good afternoon, everyone. For the year ended December 31, 2017 the company generated revenue of $1.165 billion up 2% from fiscal 2016 and delivered GAAP operating income of $708 million up 3% from $687 million for the full year 2016. Revenue for the fourth quarter totaled $296 million, up 3.2% year-over-year and up by 1.1% sequentially.

During the quarter, 60% of our revenue was from customers in the US and 40% was from customers abroad. As it relates to fourth quarter GAAP results, operating income totaled $176 million compared with $169 million in fourth quarter 2016. The operating margin in the quarter came to 59.7% compared to 59% in the same quarter a year ago.

Net income totaled $103 million compared to $106 million a