1.45 million domains in Q3, ups guidance, addresses AI and Adsense — Verisign adds
Domain base grew at faster clip in most recent quarter.
Verisign (NASDAQ: VRSN) disclosed Q3 earnings following the market closed today.
The firm added 1.45 million domains to the combined .com/.net domain base during the quarter. It processed 10.6 million fresh registrations, compared with 9.3 million in the same quarter a year ago and 10.4 million in Q2 of this year.
Growth came from .com; .net lost 0.1 million registrations during the quarter.
On the financial front, revenue grew 7.3% year over year to $419 million, and operating income increased 5.6% to $284 million.
Net income increased 6.0% to $213 million.
The firm disclosed a cash dividend of $0.77 per share, payable to stockholders as of the close of business on November 18. Verisgin also spent $215 million buying back shares in Q3.
Verisign has increased its guidance for the year. It now expects the domain base to grow 2.2% to 2.5% during the year. Last quarter, it predicted growth of 1.2% to 2.0%.
In the Q&A section of today’s investor conference call, CEO Jim Bidzos stated he believes AI is having a positive impact on registration trends.
Two analysts asked Bidzos regarding changes to Google AdSense for Domains.
His initial response was that Google has been shifting its focus away from domain monetization revenue since 2011. While true, I believe analysts are more concerned regarding AdSense effectively shutting down its AdSense for Domains program this year and the impact that could have on registrations.
A second analyst asked for more color and brought up that some public firms are reporting revenue shortfalls due to Google’s changes. Bidzos reiterated that Google has been making changes since 2011. He referred to the Panda update and other updates that impact what shows up in Google’s search results.
Bidzos stated that if your revenue model is to make money on parked domains, that’s been on a downhill slide for 15 years.
None of this addresses what impact Google pulling the plug on the AdSense for Domains program will have; this is clearly a major escalation in de-prioritizing paid domain parking. Still, any reduction in registrations or renewals due to Google’s actions appears to be offset by overall domain growth trends.
