Jamesmichael Sherman-Lewis

Jamesmichael Sherman-Lewis from Citi asked for a breakdown of the macro and operational assumptions influencing the low and high ends of Verisign's 2026 domain growth guidance, noting the high end implies continued acceleration. He also inquired about Verisign's expectations and strategic approach regarding the upcoming ICANN new gTLD application round, including potential participation and portfolio considerations.

Answer

John Calys, EVP and CFO of Verisign, stated that the 2026 guidance reflects observed trends and discussions with channel partners, encompassing the most likely outcome. Jim Bidzos, Executive Chairman, President, and CEO, added that Verisign is studying the upcoming ICANN new gTLD round, which opens in April, looking for opportunities that align with their strategic role as a critical infrastructure provider, and mentioned their existing interest in .web. He noted that all applications will become public after the round opens.

Jamesmichael Sherman-Lewis inquired about the specific macro and operational assumptions underpinning Verisign's 2026 domain growth guidance, particularly what factors could lead to the low or high end of the range. He also asked for insights into Verisign's approach to the upcoming ICANN auction for new generic Top-Level Domains (gTLDs) and its portfolio strategy given the scaling of some emerging TLDs.

Answer

John Calys, EVP and CFO, stated that the guidance reflects observed trends and discussions with channel partners, encompassing the most likely outcome. Jim Bidzos, Executive Chairman, President, and CEO, added that Verisign is studying the upcoming ICANN round for new gTLDs, looking for opportunities that align with its strategic role as a critical infrastructure provider, and has an interest in .web from the previous round. He noted that applications will become public after the round opens in April.

Inquired about the evolving user engagement on the new platform's different surfaces and asked for insights into budget conversations with large advertisers and how new supply-side integrations could boost that revenue stream.

Answer

User sentiment (NPS) has improved significantly. Local news content now comprises 5% of the feed and is engaged with by over half of users. The alerts feature is seen as highly useful but its usage is event-driven and will scale over time. For large advertisers, there was a meaningful quarter-over-quarter improvement. Future growth is expected from better ad optimization and new programmatic integrations, with supply-side platforms showing early progress and demand-side platform integrations coming by year-end.

Asked for details on the new hyper-local alerts strategy and its impact on usage metrics and the shift to platform WAUs. Also inquired about the vision for balancing user-generated, publisher, and AI content within the recommendations feature.

Answer

The new alerts system will use authoritative data for hyper-local, precise targeting, which is expected to drive higher engagement. The shift to platform WAU aligns metrics with this on-platform focus. The AI recommendations feature uses 14 years of proprietary user-generated content to provide instant, summarized answers, which should enhance the user experience.

Asked about levers for top-of-funnel user growth given flat sequential adds, and the strategic shift behind the S&M savings that led to positive EBITDA.

Answer

Nirav Tolia noted that growth is coming from younger users and that the focus is on improving the product for the existing base, which will drive viral growth. Matt Anderson explained that S&M leverage comes from a shift to organic user acquisition and investing in product for SMBs instead of paid channels.

Jamesmichael Sherman-Lewis, on for Ron Josey, inquired about the specific form of investments planned for international growth in 2025 and their expected long-term impact on Marketplace margins.

Answer

Elisa Palazzo, CFO, stated that the international investments will be concentrated in two primary areas: go-to-market and marketing. The goal is to accelerate market share gains in these geographies. She described the opportunity as 'very compelling' with a strong expected payoff that will enhance future growth and market leadership.

Jamesmichael Sherman-Lewis, on behalf of Ron Josey, asked about the evolution of the omnichannel strategy for Driveway and GreenCars and inquired about changes in the competitive landscape.

Answer

CEO Bryan DeBoer highlighted positive momentum, noting that with expenses now optimized, the platforms are positioned for future scaling. He stated the primary competition comes from customers physically shopping at traditional dealerships, not other online-only retailers. He also clarified that the true burn rate is likely negligible if attributed sales from the stores were included.