VeriSign’s first quarter results were met with a notably positive market response, reflecting both steady operational execution and early signs of renewed growth in its core domain registration business. Management attributed the quarter’s performance to increased new domain registrations, higher renewal rates, and broad-based improvements across all key regions. CEO Jim Bidzos highlighted the company’s “sequentially improving trends and the soundness of our business model,” with new registrations rising to 10.1 million versus last quarter and the same period a year ago. The company also pointed to successful engagement with registrars, supported by recent marketing initiatives, as an important contributor to the improvement in domain name base trends.
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VeriSign (VRSN) Q1 CY2025 Highlights:
- Revenue: $402.3 million vs analyst estimates of $401.8 million (4.7% year-on-year growth, in line)
- EPS (GAAP): $2.10 vs analyst expectations of $2.09 (in line)
- Operating Margin: 67.4%, in line with the same quarter last year
- Market Capitalization: $26.36 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions VeriSign’s Q1 Earnings Call
- Ygal Arounian (Citigroup) asked about the timing and rationale for initiating a dividend now. CEO Jim Bidzos explained the decision reflected confidence in the company’s business stability and a desire to diversify cash return methods, while CFO George Kilguss noted both dividends and buybacks will continue.
- Ygal Arounian (Citigroup) inquired about the drivers behind domain name base outperformance and the factors influencing the updated guidance range. Kilguss attributed improvements to higher new registrations, registrar activity, and seasonal strength, but emphasized that macro uncertainty led to maintaining a cautious outlook.
- Ygal Arounian (Citigroup) asked about the absence of a .net price increase in February and future pricing plans. Kilguss responded that pricing is reviewed regularly but no specific guidance or advance notice was given for future changes.
- Rob Oliver (Baird) requested an update on marketing channel programs and their impact. Kilguss reported early positive results from registrar engagement, with “early adopters” contributing to improved registration trends, though broader adoption is still developing.
- Rob Oliver (Baird) asked about the macro environment’s impact on the outlook. Bidzos stated that while some headwinds have become tailwinds, a “bit of turmoil” remains, and clarity on macro conditions will be necessary for further guidance updates.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory analyst team will monitor (1) sustained improvement in the domain name base and renewal rates, (2) continued adoption and impact of new marketing programs among registrars, and (3) management’s ability to manage operating expenses while supporting dividend growth. Updates on the .web top-level domain and further clarity on macroeconomic trends will also be important markers of progress.
VeriSign currently trades at $281.64, up from $252.42 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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