Executive Summary

Q4 2024 revenue was $395.4M (+3.9% YoY; flat sequentially vs Q3), operating income $263.8M (+2.9% YoY), and diluted EPS $2.00 (down vs $2.60 in Q4 2023 due to prior-year tax benefits) . Cash from operations rose to $232M in Q4 (vs $204M in Q4 2023) and free cash flow was $222M .
Domain Name Base (DNB) ended Q4 at 169.0M (-2.1% YoY); new registrations improved to 9.5M (+5.7% YoY), and preliminary Q4 renewal rate improved to ~73.9% (vs 72.2% final in Q3) .
2025 guidance initiated: revenue $1.615B–$1.635B, operating income $1.095B–$1.115B, capex $30M–$40M, GAAP tax rate 21%–24%, and DNB change -2.3% to -0.3% . Agreements for .com registry and NTIA Cooperative Agreement renewed for six years, de-risking the regulatory overhang .
Capital returns remain robust: $260M buybacks in Q4 (1.4M shares), $1.21B for 2024 (6.6M shares); $1.02B remains authorized with no expiration, a continuing support for EPS and downside protection .

What Went Well and What Went Wrong

What Went Well

New registrations strengthened: “fourth quarter new registrations of 9.5 million compared with 9.0 million…last year,” with sequential improvement vs Q3 (9.5M vs 9.3M) .
Preliminary Q4 renewal rate improved to ~73.9% (from 72.2% final in Q3), signaling stabilization in customer cohorts .
Regulatory de-risking: “successfully renewed our .com registry agreement with ICANN and the Cooperative Agreement with the NTIA” through Nov 30, 2030 (ICANN) and six-year term (NTIA) .
Strong cash generation and buybacks: Q4 CFO $232M (vs $204M in Q4 2023), FCF $222M; full-year CFO $902.6M and FCF ~$874.5M; $1.21B repurchases in 2024 .

What Went Wrong

DNB declined: ended Q4 at 169.0M (-2.1% YoY), with a net decrease of 0.5M names in the quarter; U.S. registrar ARPU focus and China weakness were headwinds .
EPS down vs prior year due to one-time tax benefit in Q4 2023 that added $69.3M to net income and $0.68 to diluted EPS; Q4 2024 diluted EPS $2.00 vs $2.60 .
Operating expenses stepped up in Q4 due to delayed spending pushed into the quarter (Q4 opex $132M vs $121M in Q3), pressuring sequential operating margin .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$380.4	$387.1	$390.6	$395.4
Operating Income ($USD Millions)	$256.3	$266.2	$269.3	$263.8
Net Income ($USD Millions)	$264.7	$198.8	$201.3	$191.5
Diluted EPS ($USD)	$2.60	$2.01	$2.07	$2.00
Operating Margin %	67.3%	68.7%	69.0%	66.8%
Net Income Margin %	69.6%	51.4%	51.5%	48.4%

Cash & Balance Sheet Metrics	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Cash Flow from Operations ($USD Millions)	$204.2	$160.0	$253.0	$232.0
Free Cash Flow ($USD Millions)	$199.1	$151.0	$248.0	$222.0
Cash, Cash Equivalents, Marketable Securities ($USD Millions)	$926.4	$690.0	$645.0	$600.0
Deferred Revenues ($USD Billions)	$1.242	$1.29	$1.30	$1.30

KPIs (Registry)	Q1 2024	Q2 2024	Q3 2024	Q4 2024
Domain Name Base (M) end-of-quarter	172.0	170.6	169.6	169.0
New Registrations (M)	9.5	9.2	9.3	9.5
Renewal Rate (%)	74.1% (final; Q1)	72.7% (final; Q2)	72.2% (final; Q3)	~73.9% (prelim; Q4)

Note: Verisign reports consolidated operations; no separate operating segments. Domain KPIs presented as operational performance indicators .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	n/a	$1.615–$1.635	Initiated
Operating Income ($USD Billions)	FY 2025	n/a	$1.095–$1.115	Initiated
Interest Expense & Non-Operating Income, net (expense; $USD Millions)	FY 2025	n/a	$50–$60	Initiated
Capital Expenditures ($USD Millions)	FY 2025	n/a	$30–$40	Initiated
GAAP Effective Tax Rate (%)	FY 2025	n/a	21%–24%	Initiated
Domain Name Base Growth (%)	FY 2025	n/a	-2.3% to -0.3%	Initiated

Clarification: The slides specify operating income guidance of $1.095B–$1.115B; CFO remarks contained a verbal misstatement (“1.95”), with slides providing the definitive range .

Earnings Call Themes & Trends

Topic	Q2 2024 (Previous)	Q3 2024 (Previous)	Q4 2024 (Current)	Trend
Registrars’ ARPU vs customer acquisition	U.S. registrars prioritized ARPU; reduced marketing; wholesale price impact small vs retail; rolled out new programs	ARPU focus persisted; U.S. DNB down ~850k names; programs slipping into 2025; expect higher opex in Q4	Early adoption of new programs; expect registrars to refocus on customer acquisition (two registrars ran Super Bowl ads); programs success-based	Improving setup for 2025
China macro/registrar dynamics	China weakness continued; some shift to low-cost new gTLDs; EMEA up slightly	Weak macro/regulation; EMEA up ~200k; China contributed most of sequential decline	China now ~5% of DNB; expected to decline at slower pace in 2025	Headwind moderating
Regulatory/legal (ICANN/NTIA)	Clarified cooperative vs ICANN agreements; presumptive right of renewal; pricing framework	ICANN posted revised .com agreement; discussions with NTIA on pricing/ ecosystem health	Renewed .com registry (to 2030) and NTIA Cooperative Agreement (six years)	De-risked
Marketing programs	Launched new .net/.com programs; broaden options and align with registrars’ strategies; early positive feedback	Pilots in China; tweaks ongoing; accretive focus	Positive early signs; greater choice; embedded in 2025 guidance	Building momentum
Technology/infrastructure	27 years of 100% DNS availability; 328B daily queries; private cloud & proprietary infrastructure	27+ years availability; detailed infrastructure resiliency overview	27+ years availability; 400B average daily transactions; security/stability emphasis	Sustained operational excellence
New gTLDs / .web	Low-cost gTLDs taking monetization demand; differences in gTLD contracts	—	Considering new round; .web IRP hearings planned later in 2025	Optionality maintained
Capital allocation	Board raised buyback authorization to $1.5B; strong FCF	Large buybacks; conservative leverage stance	$260M Q4 buybacks; $1.21B in 2024; $1.02B remaining authorization	Continued support

Management Commentary

“In 2024 we extended our unparalleled record of uninterrupted availability for .com and .net resolution to more than 27 years. We also successfully renewed our .com registry agreement with ICANN and the Cooperative Agreement with the NTIA.” – Jim Bidzos, CEO .
“Revenue is expected to be between $1.615 billion and $1.635 billion… Operating income is expected to be between $1.095 billion and $1.115 billion… Capex $30–$40 million… GAAP effective tax rate 21%–24%.” – George Kilguss, CFO (slides corroborate ranges) .
“Given these conditions and trends for 2025, we are expecting the year-over-year change in the base to be negative 2.3% to negative 0.3%.” – Jim Bidzos .
“We began working to reengage registrars on new customer acquisition by launching new marketing programs for .com and .net… we are optimistic that our efforts will start to improve the DNB growth trend in 2025.” – Jim Bidzos .

Q&A Highlights

Domain Name Base trajectory and macro: Management expects an improving trend vs 2024, with China effects more muted and registrars likely refocusing on acquisition; cited visible marketing tailwinds (e.g., Super Bowl ads) .
Registrar marketing programs: Strategy shift to offer more flexible, success-based programs aligned to diverse models; early adoption underway and embedded in guidance .
Regulatory environment: Renewals clarify misperceptions; cooperative agreement does not fund Verisign; wholesale pricing is capped and transparent; retail/secondary markets drive consumer costs .
New gTLDs and .web: Verisign remains interested in .web; IRP process continues with hearings planned for later 2025; evaluating new gTLD round possibilities .
Capital allocation and leverage: Maintain conservative leverage posture; buybacks used to return excess cash efficiently, consistent with historical practice .

Estimates Context

S&P Global consensus estimates for Q4 2024 revenue and EPS were unavailable at time of review due to SPGI request limits. As a result, beat/miss analysis vs Wall Street consensus could not be performed and should be revisited once data access is restored. Values retrieved from S&P Global were unavailable due to data limits.

Metric	Q4 2024 Actual	Q4 2024 Consensus (S&P Global)	Outcome
Revenue ($USD Millions)	$395.4	n/a	n/a
Diluted EPS ($USD)	$2.00	n/a	n/a

Key Takeaways for Investors

Contract renewals (ICANN .com to 2030, NTIA six-year Cooperative Agreement) materially reduce regulatory risk and support long-term pricing and availability frameworks .
Operational KPIs improved: new registrations up and preliminary Q4 renewal rates improved, setting a foundation for DNB stabilization in 2025 despite expected slight decline (-2.3% to -0.3%) .
Cash generation remains strong, enabling ongoing buybacks ($1.21B in 2024; $1.02B remaining authorization), supporting EPS resilience even amid soft DNB .
2025 guidance implies continued margin discipline with operating income $1.095B–$1.115B and capex $30M–$40M; monitor opex tied to registrar programs (success-based and embedded in guidance) .
U.S. registrar ARPU focus and China macro are easing; Verisign’s targeted marketing programs aim to realign registrars toward acquisition and higher renewal cohorts, which could accelerate DNB inflection later in 2025 .
Watch .web IRP timeline and potential participation in new gTLDs; incremental registry assets could add optionality over medium term .
Reassess formal beat/miss vs consensus when S&P Global estimates access is restored; absent this, near-term stock reaction may hinge on contract renewals, KPI improvements, and capital returns .

VERISIGN INC/CA (VRSN)·Q4 2024 Earnings Summary