Domainnamewire：Verisign (NASDAQ: VRSN), the registry operator for .com and .net, saw its shares rise over 9% following its latest earnings release, even as the broader NASDAQ remained flat. The surge reflects investor optimism after the company announced a stronger financial outlook and its first dividend in over a decade.
One of the key takeaways from the earnings call is a return to growth in Verisign’s domain name base. The company revised its 2024 forecast, shifting from a previously expected contraction of 2.3% to 0.3%, to a new range of -0.7% to +0.9% growth. Additionally, the upper limit of its former revenue forecast, $1.635 billion, is now the lower limit, with potential revenues reaching up to $1.65 billion.
Operating income is also expected to rise, now projected between $1.11 billion and $1.125 billion, up from the earlier range of $1.095 billion to $1.115 billion.
Verisign credits stronger engagement from domain registrars with its promotional programs, indicating that incentives are translating into registrations. However, the company remains cautious due to broader macroeconomic trends and seasonal fluctuations, noting that Q1 is typically the strongest quarter for new registrations.
Interestingly, the earnings call made no mention of Google’s recent changes to AdSense for Domains—a move that could impact domain investors who rely on monetization strategies. Still, Verisign’s 10-Q filing reiterated that speculative investments in domain names for resale or ad revenue continue to limit long-term demand.
Despite its strained relationship with domain investors—who have pushed back on wholesale price increases—Verisign remains dependent on them as a significant part of its customer base.
The introduction of a dividend after 14 years signals confidence in the company’s long-term financial health, positioning Verisign not only as a stable infrastructure provider but also as a more attractive option for income-focused investors.
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