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

Feb 08, 2018 • 04:30 pm ET


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


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George Kilguss

of 2018 approximately $1.1 billion of cash held by foreign subsidiaries net of foreign withholding taxes based on current exchange rates.

Additionally, on a go-forward basis due to the Tax Act, annual earnings of our foreign subsidiaries will be taxed by the US. This allows for annual repatriation without further US taxation of distributable capital reserves from foreign entities. The taxation of foreign earnings and withholding taxes associated with ongoing repatriations will increase cash taxes over the amount the company has historically paid.

Also, the lower corporate tax rates and limitations on the deductibility of interest implemented by the Tax Act, decreases the value of future interest expense deductions. In light of the Tax Act, we're presently evaluating our capital structure including the possible redemption of our convertible debentures.

Finally, since mid-2017, we've used a tax rate of 25% to calculate our non-GAAP net income and non-GAAP earnings per share. Looking ahead we believe the more reasonable estimate of the tax rate to calculate our non-GAAP net income and non-GAAP earnings per share is 22%. As a result, we will begin to use 22% non-GAAP tax rate when reporting first quarter 2018 non-GAAP results.

With respect to full year 2018 guidance, revenue is expected to be in the range of $1.195 billion to 1.215 billion . Non-GAAP operating margin is still expected to be between 65.5% and 66.5%. Our non-GAAP interest expense and non-GAAP non-operating income net is expected to be an expense of between $115 million and $122 million.

Capital expenditures are expected to be between $45 million and $55 million, and finally cash taxes are expected to be between $70 million and $90 million. This 2018 cash tax guidance reflects our best estimate of the various impacts of the Tax Act including the impacts of our intended repay reaction.

In summary, the company continued to demonstrate sound financial performance during the fourth quarter and the full year 2017.

Now I'll turn the call back to Jim for his closing remarks.

James Bidzos

Thank you, George. 2017 was another solid year for VeriSign. There was further expansion of the domain name based and revenues, we generated an efficiently return value to shareholders, we renewed the .net registry agreement for another six years until 2023 and we mark more than 20 years of uninterrupted availability of the VeriSign DNS for .com and .net.

Finally, earlier this year we disclose that the US Department of Justice notified as closed it investigation regarding .web top level domain. We continued our work to protect grow advance of business, while continuing our focus on providing long-term value to our shareholders. We think our focus on profitable growth and disciplined execution in extent the long-term lines of growth in our top and bottom line and allow us to continue our consistent track record of generating and returning value to our shareholders in the most efficient manner.

We will now take your questions. Operator, we're ready for the first question.