The company expects annual growth of 1% or less.
Verisign (NASDAQ: VRSN) reported third quarter results after the market close today.
The company’s revenue was $357 million, up 6.8% year-on-year. It achieved an operating margin of 66.3% and generated operating cash flow of $262 million.
The .com and .net namespaces ended the quarter with 174.2 million domain names. That’s up 1.2% year-over-year, but down about 160,000 domains from the end of Q2 2022. It’s the second straight drop in a quarter to quarter of the base.
For the year, Verisign expects the domain base to grow only 0.25% to 1.0%. That’s down from its previous forecast of 0.5% to 1.5%. At the beginning of the year, it expected the basis to rise by 2.5% to 4.5%.
Several factors are behind the decline:
- A hangover from the Covid boom, with registration numbers returning to pre-pandemic levels
- Global macroeconomic headwinds
- Fewer registrations in China and more registrations there last year that are renewing at lower rates
- The price of .com is rising – although Verisign hasn’t talked about it, it’s likely losing a few records due to the 7% rise in the price of .com this year. Certainly, the low price elasticity of .com domains has helped the company increase revenue despite the decline in domains under management.
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