Good day, everyone. Welcome to VeriSign's fourth quarter and full year 2025 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 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 2025 earnings call. Joining me are Jim Bidzos, Executive Chairman, President, and CEO, and John Callis, 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 reports on Form 10-K and 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 John 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. 2025 marked another solid year for VeriSign as we continue to deliver on our mission by extending our record of 100% service delivery for the dot-com and net DNS to an unparalleled 28 years, even as utilization of our services increased significantly. New registrations during 2025 totaled 41.7 million names, the largest we have seen since 2021. During the year, the domain name base grew by 4.5 million names, or 2.6%, leading to a 2025 ending .com.net domain name base of 173.5 million names. Our revenue grew 6.4% year-over-year, while EPS grew by 10.1%. In 2025, we returned $1.1 billion to shareholders through share repurchases and quarterly dividends, which were initiated in the second quarter of 2025. The positive domain name-based trends we saw developing in late 2024 gained strength and continued throughout 2025. During the year, we saw sustained strength in new registrations, renewal rates, and domain name-based growth across our three main regions, the U.S., EMEA, and APAC. It is clear to us that end users are seeing value in domain names, and the domain name system is evidenced by our strong domain name metrics and the increasing utilization of our infrastructure. Net registrations added during the fourth quarter were 1.58 million names, driven by the strength of new registrations of 10.7 million, which is up from 9.5 million in Q4 of 2024, and a preliminary Q4 renewal rate of 75% compared to 74% a year ago. We continue to see solid demand for our domain names during the fourth quarter and ongoing registrar engagement with our programs. As we look to 2026, we're encouraged by the continued strength as we exited 2025 and register our feedback on our 2026 marketing efforts. For 2026, we expect a domain name base growth rate of between 1.5% and 3.5%. As a reminder, you can monitor the progression of the domain name base, which is updated daily on our website. Our financial and liquidity position remains stable, with $581 million in cash, cash equivalents, and marketable securities at the end of the quarter. There was $1.08 billion remaining available at the end of the quarter under the current share repurchase program, which has no expiration. As announced in today's earnings release, Verisign's board of directors declared a cash dividend of $0.81 per share of Verisign's outstanding common stock to stockholders of record as of the close of business on February 19, 2026, payable on February 27, 2026. This quarterly amount is an increase of 5.2 percent, which is consistent with the increase in net income we saw during 2025. Verisign intends to continue to pay a cash dividend on a quarterly basis, subject to market conditions and approval by Verisign's Board of Directors. Now I'd like to turn the call over to John. I'll return when John has completed his financial report with closing remarks.

Thank you Jim and good afternoon everyone. For the year ended December 31st, 2025, the company generated revenues of 1.66 billion, up 6.4% year-over-year. Operating income totaled 1.12 billion in 2025, up 5.9% from the previous year. Full-year EPS was $8.81, and 2025 free cash flow was $1.07 billion. For the quarter ended December 31st, 2025, the company generated revenue of $425 million, up 7.5% from the same quarter a year ago. Operating expense in Q4 2025 totaled $140 million, which compares to $135 million last quarter and $132 million for the fourth quarter of 2024. During the fourth quarter, we recorded an impairment charge on real estate we intend to sell, which accounted for a majority of the sequential quarter increase in operating expenses. Net income in the fourth quarter totaled $206 million compared to $213 million last quarter and $191 million in the fourth quarter of 2024. Fourth quarter diluted earnings per share was $2.23 compared to $2.27 last quarter and $2 for the same quarter of 2024. Net income reflects a higher income tax expense booked during the fourth quarter, primarily due to foreign-based income taxes. Operating cash flow for the fourth quarter of 2025 was $290 million and free cash flow was $285 million, compared with $232 million and $222 million, respectively, in the year-ago quarter. The increase in our free cash flow is partly due to higher quarterly earnings, increased cash from working capital, and lower cash tax payments. I will now discuss our full year 2026 guidance. Revenue is expected to be between $1,715,000,000 and $1,735,000,000. Operating income is expected to be between $1,160,000,000 and $1,180,000,000. The midpoint of our revenue range and operating income range reflect an expected operating margin more consistent with our long-term trend as compared with the level we saw during fourth quarter of 2025. Interest expense and non-operating income net, which includes interest income estimates, is expected to be an expense of between $57 and $67 million as our expectations for interest income are lower due to lower short-term rates and lower cash balances. Capital expenditures are expected to be between $55 and $65 million, which is higher than our typical range primarily for two reasons. First, we have a larger amount of end-of-life equipment that we are replacing in 2026, along with planned capacity expansion, both of which are facing significantly higher costs, largely attributable to intense AI industry-driven demand and supply constraints. Additionally, we are planning a few capital improvement projects to our corporate headquarters. The GAAP effective tax rate is expected to be between 22% and 25% as we are seeing a slight increase in foreign taxes. In summary, VeriSign continues to demonstrate sound financial discipline during the fourth quarter and throughout 2025, and as you can see from our guidance, we expect continued solid financial performance during 2026. I will now turn the call back to Jim for his closing remarks.

Thank you, John. We're pleased with the progress we made during 2025 and look forward to delivering on our mission during 2026. I've said over the years that while we divested what we considered non-core businesses, we would continue seeking and evaluating ways to offer enhanced functionality or security services that are consistent with our mission. We've continued this evaluation and we now believe we have strong candidates for new services that can help reduce known and unknown vulnerabilities and contribute significantly to information trust. These potential new services are strongly aligned with our core mission, leverage our long history of pioneering DNS and security technology, and can be offered to new or existing customers throughout our channel. We'll share more in the coming months. Thanks for your attention today. This concludes our prepared remarks, and now we'll open a call for your questions. Operator, we're ready for the first question.

Thank you. If you are using a speakerphone, please make sure your mute function is off to allow your signal to reach our equipment. Once your question has been stated, please mute your line. We will take our first question from Rob Oliver with Baird.

Great. Good afternoon, Jim. On the last quarterly call, you talked at some length about your view on AI and its impact on the domain base and that it actually was driving some benefit. Clearly, there's a lot of concern in the market around the open web and AI's impact on the web structure. So can you talk a little bit about, you know, give us an update on what you're seeing there, how much you think an uptick in activity on AI is contributing to some of this domain resurgence and what you're seeing among the domain base? And then I had a couple of follow-ups.

Okay. So impact of AI on our business, it's certainly having some impact, but it's one of several components that we've talked about before. We've talked about the utility of a domain name and its value. We've talked about the domain name as a digital trust anchor. We've talked about the reliability of our services, 28 years of uninterrupted service and uptime availability. All significant contributors. Internet use is growing. Traffic is expanding. We believe with confidence that a good portion of that is due to AI. and AI is benefiting us, as we've said, in several different ways. I mean, one interesting way is that the registrars are putting AI to work and developing tools that users find easier to build a website and also to select a good domain name. But we're also seeing that AI's building LLMs, we've all read about how they're basically scraping the Internet and collecting data. We see that in the increase in our queries. That's an indication that there's increased activity and traffic, no doubt a portion that we, difficult to measure with precision, but no doubt that a portion of that is AI. And that just means a greater dependence on the DNS. AIs are going to have to, especially agentic AIs, obviously conducting multiple tasks for people, are going to have to navigate. They're going to have to refresh data, collect current data. They're going to be using the DNS to do that. So increased dependence on it, increased value and utility of domain names, the established governance structure that exists for the DNS, a secure, trusted anchor that's supported across most of the world's countries in a well-governed system by ICANN, I think is just proving its value as the load on this infrastructure grows. And AI is undoubtedly a huge part of that, and I think it's probably safe to say that it's going to continue to grow for well into the foreseeable future.

Great. Really helpful. And then I wanted to pivot to the marketing programs. You know, you called out, you know, going back to 24 when you guys made the call that you were going to pursue some new strategic marketing programs. Those have definitely had an impact and are playing out really nicely. I was wondering if you could just address, you know, where in particular you're seeing that impact. Is it across the board? Is it more nontraditional channels? And then are there any tweaks you guys are making to the marketing programs coming into 26?

Sure. Let me first say this. I think we can sort of break this into two pieces. One is the registrar channel, of course, who engage with these programs and actually make the sales. First, I'll say that over the years that channel has evolved. Their business models have evolved. There have been some that have gone public, some that have gone private, some that have changed management, some that have changed business strategies. And so it took us a little while, but in 2024, we began to adjust and develop programs that met their needs far better. We're kind of a slow, careful, deliberate company. Our priority is our infrastructure and its secure operation. But give us credit, we did catch up. And I think one of the most significant changes that we made was simply giving this evolving, changing channel the flexibility to choose from a basket of programs that we began to provide. That allowed them to engage in the ones that are most effective for them. We also included some aspects of the program that sort of incentivize, shall we say, registrations in the categories that tend to have stronger renewal rates. And so I think all of that is paying off.

Great. And then last quick one for me. I couldn't resist since you threw out a teaser at the end there, Jim. You know, you mentioned how you think AI is going to drive, you know, sort of increased dependence on that sort of trusted, secure, anchored DNS system that you guys play a critical role in. You mentioned some new services. I know we're going to get more information in the future, but just in the interest of, try to mitigate any surprises on any conference calls nowadays, any color around that would be helpful. You know, there are many folks like me have been around long enough to remember when you guys sold Virgin Security Solutions, and just be curious for any more color you can provide around what those additional services might be. Thank you.

Okay, well, thanks for all those questions. I guess what I can say is this. Yes, we did divest, kind of ending in 2015, a number of services that proved to be more distraction for us than real benefit, and maybe even sort of complicated matters in our core mission. We focused exclusively on our core missions starting in 2015. However, I've said consistently, maybe not every earnings call, not every year, but sporadically throughout the last 10 years, that we don't stop looking for ways to enhance things. And let me start by saying that we are constantly doing R&D. We are constantly improving our own infrastructure. We are supporting IETF standards. We're working to bring innovations and new technologies. A lot of them are made available at no cost if they, in our sort of stewardship role as stewards of common net, the two of the 13 routes that we run, managing the route zone. In all of these areas, we see ourselves as having stewardship responsibilities. And so we're always looking to enhance security and stability. That's literally what we're about. If we find things that may be of interest to a broader community, either in a stewardship role or as a commercial product, they'd have to meet a number of different tests. We're not going to become a sales organization. We're staying in our wheelhouse. And I think given the increased dependence on the Internet, given the increased usage, given further dependence on the Internet itself and all of the infrastructure that it sits on, including ours, If there are small enhancements that we've made that we think could add value and benefit folks, either in functionality or particularly in security and stability, at some level, some of those appear as if they may have value to folks through our channel. And that's what I was alluding to. And we'll have more to say about that in a few months.

Great. Appreciate it. Thank you.

We will take our next question from James Michael Sherman-Lewis with Citi.

Good afternoon. Thank you for taking my questions. Two, if I may. First, on the 2026 domain guidance, can you unpack your assumptions, either macro or operational, that could drive domain growth to the low or the high end of the guide? The high end implies, you know, continued acceleration in domain growth.

Yeah. Yeah, so our guidance really reflects what we've seen trend-wise over the last year. We've been encouraged by the trends. I think each of our major regions has showed growth during the year, and we monitor those trends. We also meet and talk regularly with our channel to see what trends they're seeing and to hear what their plans are. And so, you know, we think our range encompasses the most likely outcome in our best estimate at the time. And as the year progresses, we'll continue to update on that.

Helpful. Thank you.

Any expectations then for maybe the ICANN auction, you know, in context of the .com domain growth acceleration we've seen, but also some emerging TLDs that have begun to scale faster? just any insights into your approach here would be helpful okay I'm sorry I missed didn't quite catch the last part of that the first part was about the upcoming I can auction you said yes okay you mean their their next round of new generic top-level domains there may there may or may there may be auctions where they may have contention for domain names but it isn't it isn't an open auction it's an application process I think that's what you're referring to right the one that opens in April yes absolutely okay yes so they're opening a round of new GTLDs like they did roughly 15 years 14 15 years ago and we are you asking us what our participation will be or would did you want some general comments on on how we view ICANN's new round I apologize some of some of your question broke up just a little bit yeah apologies for breaking up I curious how you're thinking about new TLDs and your portfolio here well we're studying I can't hasn't opened the round yet but we are studying it we're looking for any opportunities that may present themselves I think we would be an interested party if if there were some something specific that would contribute to our strategic role as a critical infrastructure provider. I think think of it that way. We do, of course, have CommonNet, and there is .web as well from the last round that we have an interest in, but nothing more really to say about that now. Other than the round opens up in April, there is a process that could include auctions depending on contention, and then there's a lot of process behind that to launch a new GTLD, but yes, we're familiar with it, we're studying it, and we don't have anything to say with respect to how we may view our own applications at this point. All of them will be visible shortly after the round opens. There will be a period in time in which everyone's applications will be public and visible.

Great, thank you.

Sure.

Thank you. And we will take our last question from Alexey Gogolov with JP Morgan.

Hello everyone. Maybe first question either Jim or John. Could you double click a bit more on the guidance? Obviously I appreciate the range that you provided. Would it be possible to give a bit more granularity in your assumptions, how much domain growth are you assuming for dot-com and what sort of direction or trend are you assuming for dot-net?

Typically, we don't guide to com and net specifically. We guide to the DMV base that is the combination of those two. You know, I think, you know, over the recent years, you know, .NET has had a little bit of a decrease in its size. You know, we've obviously implemented programs, some of which target .NET and hopefully will have a positive impact. Our other programs, as Jim mentioned, are some of them. Some of them are focused on specific use cases that we believe will drive better retention rates. So we're pleased with what we saw last year. We've made some adjustments this year to those. So we do think we have good momentum coming out of 2025 and starting the year right now. You know, I think we've talked in the past that, you know, while our renewal rates have improved here during 2025, we have mentioned that, you know, we will have a higher mix of first-time renewal rates during 2026, so that potentially will pull down our overall renewal rate. But while I say that, you know, during 2025, both our first-time renewal rates and previous renewal rates have improved. So, several positive trends throughout 2025 that seemed to gain steam as the year progressed. And obviously, we're doing the types of things that we think are important to continue that momentum and continue to build on it.

Yeah, Alexi, I would say we do treat the zone as a combination of common net, but the daily report that we get, I'm sure you're aware, does show you what has happened in each of those and you can track that as it progresses. That's helpful.

Thank you, Jim and John. And maybe just to follow up on that, so it just seems like the midpoint of the guidance being a little bit conservative, considering the trend that we're seeing for dot-com at the moment. And I was just wondering if your assumptions, at least at the midpoint of the guide, are implying that the growth will taper off in the second half of the year. Is that the logic?

You know, we exited, what, at 2.6% growth for 2025 over 2024. midpoint of 2.5. I feel like I'd be splitting hairs to explain that one-tenth of a percent. But, you know, certainly, you know, if you look at the trend of our new registrations during 2025, they might be a little bit more back second half loaded, which, like I said, will impact our first time renewal rates. But we tend not to guide to quarterly numbers.

Well, the other factor, Alexi, obviously, I know you're aware of this. I just want to point it out for some who may be new and just remind everyone as well that we don't sell directly. We sell through a channel. And it's a very, very diverse channel. There are many, many registrars with different business models. They're engaged in different programs. There's been quite a bit of change in a channel. There's been some M&A activity. So I kind of feel as if, you know, we're being, given those factors, I think we're being pretty precise, given all the things that we don't control in that particular channel. So we try to tighten that range up as much as we can. And as John said, you know, a tenth of a percent, if we can be that close, I'm going to feel like we pretty much hit the bullseye.

I hear you, Jim. Thank you. And final question. Maybe if you could comment on your intention to raise prices for .com. Have you made a decision? Are you going to raise prices this year? And when do you think you may announce that?

So we don't guide to pricing, but again, for those who may be new or unfamiliar, we do have the ability to raise prices in every six-year period in the back four years, 7% each of those back four years. It requires six months' notice. The first available price increase will come at the end of October of 2026. And therefore, if we choose to execute some level of a price increase, the first opportunity to take advantage of that would be an announcement made in April. But we We don't guide to it, but April isn't that far away, so you won't have to wait long to see what we're doing, but I can't answer your question directly because it's our policy not to guide to price increases.

Thank you. I appreciate the answers. You're welcome.

Thank you. This does conclude today's question and answer session. I would now like to turn the call back to David Atchley for final comments.

Thank you, Operator. Please call the Investor Relations Department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

This does conclude today's call. Thank you for your participation. You may now disconnect.