VeriSign, Inc.

Good day, everyone. Welcome to VeriSign's fourth quarter and full year 2023 earnings call. Today's conference 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 2023 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-Q. 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. 2023 marked another solid year of execution, delivering consistent financial results while enhancing our critical Internet infrastructure and extending our record of .com and .net DNS availability beyond 26 years. During 2023, revenue grew 4.8% year over year, while operating income increased by 6.1%. Shares outstanding at the end of 2023 decreased by 3.7% from the total of outstanding shares at the end of 2022. Our financial and liquidity position remains stable with $926 million in cash, cash equivalents, and marketable securities at the end of the year. Over the course of the year, we returned $883 million of capital to shareholders through the repurchase of 4.2 million shares. At year end, $1.12 billion remained available and authorized under the current share repurchase program, which has no expiration. At the end of December, the domain name base in .com and net totaled 172.7 million domain names, down 0.6% from 173.8 million names at the end of 2022. During the fourth quarter, the domain name base decreased by 1.2 million domain names. From a new registration perspective, the fourth quarter ended with 9 million new registrations compared with 9.7 million names for the same quarter last year. For the full year, new registrations were 39.4 million names, down 490,000 names from the 39.9 million names we saw during 2022. The renewal rate for the fourth quarter of 2023 is expected to be approximately 73.1%. compared with 73.3% a year ago. For the full year 2023, the preliminary renewal rate of 73.9% is below the 74.2% renewal rate of 2022. Both first-time and previously renewed names rates were lower year over year. While there are many factors that drive demand for domain names, declining demand from China remains the primary source of drag on the overall domain name base growth. Our domains under management from China-based registrars declined by 2.2 million names in 2023. China-based registrar demand has been weak as a result of several factors, including challenging economic conditions, a more stringent regulatory environment, and the impact of a weaker local currency combined with retail pricing adjustments. Excluding registrars based in China, our domain name base grew by 1.2 million names, or 0.8% during 2023. While the domain name base thus far in 2024 has grown quarter to date, we have not yet seen any material changes in the current macroeconomic or regulatory landscape in China. Therefore, we believe it's prudent to expect China to continue to negatively impact revenue and domain base growth during 2024. However, with the China-based portion of our base now at about 5% of our overall domain name base, we see the negative trend in China having a less pronounced effect on our overall business after 2024. For 2024, we're expecting the domain name base to remain flat year over year with a range of negative one and positive 1%. As announced in today's earnings release, we have given notice of a price increase of 67 cents to the annual wholesale price for .com domain names, which raises the wholesale price from $9.59 to $10.26 effective September 1st, 2024. 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 up to 10 years at the current wholesale price. Now I'd like to turn the call over to George. I'll return when George has completed his financial report with closing remarks.