VeriSign, Inc.

Good day, everyone. Welcome to VeriSign's fourth quarter and full year 2022 earnings call. Today's call is being recorded. Recording of this call is not permitted unless pre-authorized. At this time, I'd like to turn the conference over to Mr. David Atchley, Vice President of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Thank you, Operator. Welcome to VeriSign's fourth quarter and full year 2022 earnings call. Joining me are Jim Bidzos, Executive Chairman and CEO, 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 in our documents filed with the SEC, specifically the most recent report on Form 10-K. VeriSign 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 of operational and financial performance for VeriSign. Throughout 2022, 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 25 years. I'd like to thank our team for their dedicated efforts, which enabled us to realize these results. The critical infrastructure we operate provides the domain name system navigation service, which people around the world depend on for commerce, work from home, education, healthcare, and much more. During 2022, we acknowledged the uncertainty that macroeconomic and other challenges beyond our ability to influence presented, and we said that we would focus on what was within our ability to control. We also indicated what that meant. First, reliably maintaining, operating, and investing in our critical internet infrastructure. Next, exercising careful expense control where appropriate. And additionally, it meant keeping focused on long-term value creation and efficient return to capital. During 2022, revenue grew 7.3% year-over-year and operating income by 8.8% year-over-year. Additionally, shares outstanding at the end of 2022 decreased by 4.8% from those outstanding at the end of 2021. Our financial and liquidity position remains stable with $980 million in cash, cash equivalents, and marketable securities at the end of the year. During the full year of 2022, we repurchased 5.5 million shares for $1 billion. At year end, 859 million remained available and authorized under the current share repurchase program, which has no expiration. At the end of 2022, the domain name base in .com and .net totaled 173.8 million domain names with a year-over-year growth rate of 0.2%. In the fourth quarter, there were 9.7 million new registrations compared to 9.9 million last quarter and 10.6 million in the year-ago quarter. While there are many factors that drive demand for domain names, we saw lower new registrations during 2022 as a result of factors that I've already mentioned in prior calls. These include pandemic-driven acceleration of new registrations in 2020 and 2021, which has subsided, global macroeconomic headwinds, reduced new registrations from China, and lower first-time renewal rates. We believe that the renewal rate for the fourth quarter of 2022 will be approximately 73.2% compared to the 73.7% final renewal rate last quarter and 74.8% a year ago. For the full year 2022, the renewal rate for previously renewed names remained similar year over year, However, first-time renewal rates were lower year over year, with the largest single driver being names renewing from China, which were registered during 2021. Looking to 2023, our expected 2023 domain name base growth rate is between 0 and 2.5%. This guidance reflects our knowledge about our domain name base, our channel, and the broader macroeconomic backdrop. As announced in today's earnings release, we have given notice of a price increase of 62 cents to the annual wholesale price for .com domain names, which raises the price from $8.97 to $9.59, effective September 1, 2023. Even after this increase, we believe .com will remain highly competitive with other TLD choices. As a reminder, any of our domains may be registered for terms of up to 10 years at the current price. While we do not guide to pricing changes, I can say, as I did last year, that under the limited pricing flexibility we have, the wholesale price of a .com registration cannot exceed $10.26 until at least October of 2026. Turning to .web, the parties made their submissions to ICANN during Q3, and we are still waiting for ICANN to complete its process. And now I'd like to turn the call over to George. I will return when George has completed his financial report with closing remarks.