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VeriSign (VRSN) Q1 Domain Name Registrations Rise 1% Y/Y

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VeriSign (VRSN - Free Report) has announced that domain name registrations increased 3.5 million or 1% year over year across all top-level domains (TLDs) in the first quarter of 2023. Sequentially, domain name registrations were up 1% to 354 million.

The company continues to benefit from healthy growth across .com and .net domain name registrations. For 2023, the company expects domain name base growth rate to be between 0.5% and 2.25% due to modest improvement in the registration trend. The domain name base’s growth was projected to remain flat to up 2.5%.

In the first quarter, the .com and .net TLDs increased 0.1 million domain name registrations, or 0.1%, year over year to 174.8 million. Also, the .com and .net domain name bases totaled 161.6 million and 13.2 million domain name registrations, respectively, for the quarter that ended Mar 31, 2023.

The company processed 10.3 million new domain name registrations for .com and .net compared with 10.2 million in the prior-year quarter.

In the first quarter, the final .com and .net renewal rate for fourth-quarter 2022 was 73.3% compared with 74.8% in the year-ago quarter. Management expects the renewal rate for first-quarter 2023 to be around 75.6% compared with 75.9% in the year-ago quarter.

VeriSign marginally raised the lower end of its revenue guidance. Management now expects 2023 revenues to be between $1.49 billion and $1.505 billion compared with the earlier guided range of $1.485-$1.505 billion.

The company reported first-quarter 2023 adjusted earnings of $1.70 per share, which beat the Zacks Consensus Estimate by 3.7%. The company had reported earnings of $1.43 in the prior-year quarter. Revenues jumped 5.1% year over year to $364 million but missed the Zacks Consensus Estimate by 1.8%.

The company plans to increase the annual registry-level wholesale fee for each new and renewal .com domain name registration from $8.97 to $9.59, with effect from Sep 1, 2023.

VeriSign currently sports a Zacks Rank #1 (Strong Buy). Shares of VRSN have gained 35.8% against the sub-industry’s decline of 2% in the past year.

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