VeriSign, Inc.

Good day, everyone, and welcome to VeriSign's fourth quarter and full year 2021 earnings call. Today's conference is being recorded. Recording of this call is not permitted unless pre-authorized. At this time, I would like to turn the conference over to Mr. David Adgley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Thank you, Operator. Welcome to VeriSign's fourth quarter and full year 2021 earnings call. Joining me are Jim Bitzos, Executive Chairman and CEO of Todd Strube, President and COO, and George Kilgus, Executive Vice President and CFO. This call and presentation are being webcast from the Investor Relations website, which is available under About VeriSign on VeriSign.com. There you will also find our earnings release. At the end of this call, the presentation will be available on that site, and within a few hours, the replay of the call will be posted. Financial results in our earnings release are unaudited, and our remarks include forward-looking statements that are subject to the risks and uncertainties that we discuss in detail on our documents filed with the SEC, specifically the most recent report on Form 10-K. Bearsign does not update financial performance or guidance during the quarter unless it is done through a public disclosure. The financial results in today's call and the matters we will be discussing today include GAAP results and two non-GAAP measures used by VeriSign, adjusted EBITDA and free cash flow. GAAP to non-GAAP reconciliation information is appended to the slide presentation, which can be found on the investor relations section of our website, available after this call. Jim and George will provide some prepared remarks, and afterward, we will open the call for your questions. With that, I would like to turn the call over to Jim.

Thank you, David. Good afternoon to everyone and thank you for joining us. I'm pleased to report another solid quarter and full year of operational and financial performance for VeriSign. Throughout 2021, we delivered strong financial results while continuing to strengthen our critical internet infrastructure. We complied with the high operational standards required by our ICANN agreements and extended our record of .com and .net DNS availability to over 24 years. I would like to thank our team for their dedicated efforts and expertise, which enabled us to realize these results. The critical infrastructure we operate provides the domain name system navigation service, which people around the world increasingly depend on for commerce, education, healthcare, and person-to-person connection. For the full year 2021, we processed 44.6 million new registrations and delivered revenue of $1,328,000,000. while generating free cash flow of $754 million. During the full year of 2021, we repurchased 3.3 million shares for $700 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by approximately $705 million to a total of $1 billion authorized and available under the share repurchase program, which has no expiration. Our financial and liquidity position remains stable with $1.2 billion in cash, cash equivalents, and marketable securities at the end of the quarter. We continually evaluate the overall liquidity 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 173.4 million, consisting of 160 million names for .com, and 13.4 million names for .NET, with a year-over-year growth rate of 5%. Looking at fourth quarter operational results, we processed 10.6 million new registrations, and the domain name base increased by 1.37 million names. 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 2021 will be approximately 74.8%. This preliminary rate compares to 73.5% achieved in the fourth quarter of 2020 and 75% in the third quarter. As we look to 2022, we expect a domain name base to grow at a rate of between 2.5 and 4.5%. As announced in today's earnings release, we have given notice of a price increase of 58 cents to the annual wholesale price for .com domain names. which raises the price from $8.39 to $8.97 effective September 1st, 2022. I should point out that anyone can register a .com domain at any time before September 1st for up to 10 years and lock in that price for the full term of up to 10 years. Turning to .web, we noted last time that affiliates had filed an application for reconsideration of the May 2021 final decision, which, as a reminder, rejected their request to be awarded .web. Since we last spoke with you, the significant development in December was that Affilius' application for reconsideration was also rejected. And further, Affilius was sanctioned for filing it because the arbitration panel found that it was, quote, frivolous. Since then, in mid-January, ICANN's board of directors directed one of its standing committees to review the panel's final decision and provide the board with its findings. With the rejection of affiliates' application and the reaffirmation of the panel's final decision, those roadblocks are now out of the way, and ICANN looks to be moving forward with making the decision on the delegation of .web, and we will be monitoring their process. As we have said before, we continue to look forward to becoming the .web registry operator and establishing it alongside .com and .net as an additional option for businesses and individual end users worldwide. And now I'd like to turn the call over to George.