威瑞信 (VRSN) 2024 Q2 法說會逐字稿

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.

現在，我想將會議交給投資者關係副總裁兼公司財務主管 David Atchley 先生主持。請繼續。

Thank you, Operator. Welcome to VeriSign's second-quarter 2024 earnings call. Joining me are Jim Bidzos, Executive Chairman, President and CEO; and George Kilguss, 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.

謝謝你，接線生。歡迎參加 VeriSign 2024 年第二季財報電話會議。與我一起的還有執行董事長、總裁兼執行長吉姆‧比索斯 (Jim Bidzos)；以及執行副總裁兼財務長 George Kilguss。本次電話會議和簡報透過投資者關係網站進行網路直播，網站可在 verisign.com 上的「關於威瑞信」下找到。您也可以在那裡找到我們的財報。本次電話會議結束後，該簡報將在該網站上發布，並且在幾個小時內，將發布電話會議的重播。

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 report on Form 10-K. VeriSign does not update financial performance or guidance during the quarter, unless it is done through a public disclosure.

我們的收益發布中的財務表現未經審計，我們的言論包括前瞻性陳述，這些陳述受到我們在向SEC 提交的文件（特別是10-K 表格的最新報告）中詳細討論的風險和不確定性的影響。除非透過公開揭露的方式，否則威瑞信不會更新本季的財務表現或指引。

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.

今天電話會議的財務表現以及我們今天將討論的事項包括 GAAP 業績和 VeriSign 使用的兩項非 GAAP 指標、調整後 EBITDA 和自由現金流。幻燈片簡報中附有 GAAP 與非 GAAP 調節訊息，您可以在本次電話會議後在我們網站的投資者關係部分找到該資訊。

Jim and George 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.

吉姆和喬治將提供一些準備好的發言，然後我們將開始電話詢問您的問題。說到這裡，我想把電話轉給吉姆。

Thank you, David. Good afternoon to everyone and thank you for joining us. Before we cover results, I'd like to note that last week, we marked 27 years of 100% uninterrupted availability for the .com, .net domain name resolution system. This milestone represents an unparalleled achievement in our industry for operating secure, stable and resilient DNS infrastructure. For well over a quarter of the century, amidst some of the most technologically significant changes the world has ever experienced, our teams have successfully built, maintained, operated, and evolved the infrastructure that enables hundreds of billions of queries a day and supports trillions of dollars in global commerce.

謝謝你，大衛。大家下午好，感謝您加入我們。在我們介紹結果之前，我想指出的是，上週，我們標誌著 .com、.net 網域解析系統 100% 不間斷可用性已達 27 年。這一里程碑代表了我們行業在運行安全、穩定和有彈性的 DNS 基礎設施方面取得的無與倫比的成就。在超過四分之一個世紀的時間裡，在世界上經歷過的一些技術上最重大的變化中，我們的團隊成功地建造、維護、運營和發展了基礎設施，這些基礎設施每天可實現數千億次查詢並支援數萬億次查詢。

In fact, we answer on average, 328 billion queries per day, billion with a B. 24 hours a day, seven days a week, 365 days a year, and that's over 3.7 million per second. We do this amidst ever-increasing Internet demand and resilience, evolving technology and a challenging global cyber threat environment.

事實上，我們平均每天回答 3,280 億次查詢，其中 10 億次是 B 級查詢。我們在不斷增長的互聯網需求和彈性、不斷發展的技術以及充滿挑戰的全球網路威脅環境中做到這一點。

Turning now to our results. We delivered another quarter of operational and financial stability by focusing on our mission as a critical Internet infrastructure provider. For the second quarter, revenues grew 4.1% year-over-year, operating income grew 7.1% year-over-year, and earnings per share grew 12.3% year over year. At the end of June, the domain name basin .com and .net totaled 170.6 million domain names. During the second quarter, the domain name base decreased by 1.8 million names. From a new registration perspective, the second quarter ended with 9.2 million new registrations compared with 10.2 million names for the same quarter last year. The renewal rate for the second quarter of 2024 is expected to be approximately 72.6% compared to 73.4% a year ago.

現在轉向我們的結果。透過專注於我們作為關鍵網路基礎設施供應商的使命，我們實現了另一個季度的營運和財務穩定性。第二季營收年增4.1%，營業收入較去年同期成長7.1%，每股盈餘較去年同期成長12.3%。截至6月底，盆地.com、.net網域總數達1.706億個。第二季度，網域數量減少了 180 萬個。從新註冊量來看，第二季末新增註冊量為 920 萬個，而去年同期為 1,020 萬個。2024 年第二季的續約率預計約為 72.6%，而去年同期為 73.4%。

As we have previously reported, we continue to see US registrars prioritize ARPU over customer acquisition through higher retail pricing levels and reduced spend on marketing to new customers compared with prior years. These factors impacting new registrations are impacting new registrations and renewal rates and are leading to weaker trends in 2024 that are below our original expectations. During the second quarter, the US region was lowered by about 800,000 names. In addition, and as expected, China-related weakness continues and contributed to most of the remaining sequential decline in the second quarter. The domain name base from our EMEA region was up slightly during the second quarter. We have rolled out new registrar marketing programs over the past several weeks to support our registrars and our goal of returning to domain name base growth in the second half of 2025.

正如我們之前報導的那樣，我們繼續看到美國註冊商透過提高零售定價水準並減少新客戶行銷支出，將 ARPU 置於客戶獲取之上。這些影響新註冊的因素正在影響新註冊和續約率，並導致 2024 年趨勢減弱，低於我們最初的預期。第二季度，美國地區的名字減少了約80萬個。此外，正如預期的那樣，與中國相關的疲軟仍在繼續，並導致了第二季度剩餘的大部分環比下降。第二季度，歐洲、中東和非洲地區的域名基數略有增加。過去幾週，我們推出了新的註冊商行銷計劃，以支持我們的註冊商以及我們在 2025 年下半年恢復網域基礎成長的目標。

However, given the ongoing impact of the factors we've mentioned, we now expect the change in the domain name base to be between negative 3% to a negative 2% for full year 2024. Our financial and liquidity position continues to remain stable with $690 million in cash, cash equivalents and marketable securities at the end of the quarter. During the second quarter, we repurchased 2.2 million shares for $388 million. Effective today, the Board of Directors has increased the amount authorized for share repurchase of VeriSign common stock by $1.11 billion, to a total of $1.5 billion authorized and available under the share repurchase program, which has no expiration.

然而，考慮到我們提到的因素的持續影響，我們現在預計 2024 年全年域名基數的變化將在負 3% 到負 2% 之間。我們的財務和流動性狀況持續保持穩定，截至本季末現金、現金等價物和有價證券為 6.9 億美元。第二季度，我們以 3.88 億美元回購了 220 萬股股票。即日起，董事會已將 VeriSign 普通股的授權股票回購金額增加了 11.1 億美元，使股票回購計畫下授權和可用的總額達到 15 億美元，該計畫沒有到期日。

And now I'd like to turn the call over to George. I'll return when George has completed his financial report with closing remarks.

現在我想把電話轉給喬治。等喬治完成財務報告並發表結束語後我會回來。

Thanks, Jim, and good afternoon, everyone. For the quarter ended June 30, 2024, the company generated revenue of $387 million, up 4.1% from the same quarter of 2023 and delivered operating income of $266 million, an increase of 7.1% from the same quarter a year ago. Operating expense in the second quarter of 2024 totaled $121 million for the three months and $246 million for the six months ended June 30, which compares to $123 million in the second quarter of 2023 and $246 million for the first two quarters a year ago.

謝謝吉姆，大家下午好。截至2024年6月30日的季度，該公司實現營收3.87億美元，比2023年同季度增長4.1%，實現營業收入2.66億美元，比去年同期增長7.1%。2024 年第二季的營運費用在截至6 月30 日的三個月內總計為1.21 億美元，在截至6 月30 日的六個月內總計為2.46 億美元，而2023 年第二季的運營費用為1.23 億美元，一年前的前兩個季度為2.46 億美元。

Net income in the second quarter totaled $199 million compared to $186 million a year earlier, which produced diluted earnings per share of $2.01 for the second quarter of 2024, compared to $1.79 for the same quarter of 2023. Operating cash flow for the second quarter was $160 million and free cash flow was $151 million compared to with $145 million and $139 million, respectively, in the year ago quarter.

第二季淨利總計 1.99 億美元，而上年同期為 1.86 億美元，這使得 2024 年第二季的攤薄每股收益為 2.01 美元，而 2023 年同一季度的攤薄每股收益為 1.79 美元。第二季營運現金流為 1.6 億美元，自由現金流為 1.51 億美元，去年同期分別為 1.45 億美元和 1.39 億美元。

I'll now discuss our updated full year 2024 guidance. Revenue is now expected to be in the range of $1.553 billion to $1.563 billion. Operating income is now expected to be between $1.048 billion and $1.058 billion. Interest expense and nonoperating income net, which includes interest income estimates, is still expected to be an expense of between $25 million to $35 million. Capital expenditures are still expected to be between $30 million to $40 million. And the GAAP effective tax rate is still expected to be between 21% and 24%.

我現在將討論我們更新的 2024 年全年指南。目前預計收入在 15.53 億美元至 15.63 億美元之間。目前營業收入預計在 10.48 億美元至 10.58 億美元之間。利息支出和營業外收入淨額（包括利息收入估算）預計仍將在 2,500 萬美元至 3,500 萬美元之間。資本支出預計仍將在 3,000 萬至 4,000 萬美元之間。而GAAP有效稅率仍預計在21%至24%之間。

Overall, VeriSign continued to demonstrate sound financial performance during the second quarter. Now I'll turn the call back to Jim for his closing remarks.

整體而言，威瑞信第二季持續展現出良好的財務表現。現在我將把電話轉回給吉姆，讓他作結束語。

Thank you, George. While we expect that the change in the domain name base for 2024 will be below prior year levels for the reasons we've discussed, we continue to believe our business fundamentals remain. As I mentioned earlier, we continue to introduce additional registrar marketing programs to target and support improvement in new registration trends once adopted and integrated into registrar go-to-market activities.

謝謝你，喬治。儘管由於我們已經討論過的原因，我們預計 2024 年域名基礎的變化將低於去年的水平，但我們仍然相信我們的業務基本面依然存在。正如我之前提到的，我們將繼續推出其他註冊商行銷計劃，以瞄準並支持新註冊趨勢一旦採用並融入註冊商上市活動後的改進。

Our goal is to fulfill our stewardship mission of providing secure and reliable infrastructure services, managing our business responsibly and efficiently returning capital to our shareholders remain unchanged and support our commitment to deliver consistent financial results.

我們的目標是履行我們的管理使命，提供安全可靠的基礎設施服務，負責任地管理我們的業務，有效率地向股東返還資本，保持不變，並支持我們提供一致財務表現的承諾。

Thank you for your attention today. This concludes our prepared remarks. And now we'll open the call for your questions. Operator, we're ready for the first question.

感謝您今天的關注。我們準備好的演講到此結束。現在我們將開始電話詢問您的問題。接線員，我們準備好回答第一個問題了。

(Operator Instructions) Rob Oliver, Baird.

（操作員說明）Rob Oliver，Baird。

Great. Good afternoon. Thanks for taking my questions. I've got a few, and then I'll hop back into the queue. Jim, I guess, the first question would be, you talked a little bit about some of the activity at the registrars, particularly in North America and the focus on ARPU. Can you talk about the view out there that perhaps newer gTLDs are taking share from .com and what you're seeing in the data that gives you either a concern there or that would dissuade you from that view? And then I have a couple of others.

偉大的。午安.感謝您回答我的問題。我有一些，然後我會跳回隊列。Jim，我想，第一個問題是，您談到了註冊商的一些活動，特別是在北美以及對 ARPU 的關注。您能否談談目前的觀點，即較新的通用頂級域名(gTLD) 可能正在從.com 中奪取份額，以及您在數據中看到的內容讓您對此感到擔憂或阻止您放棄這種觀點？然後我還有其他幾個。

Okay. So ARPU -- while the primary ARPU is -- the primary factor in the US weakness remains register focus, registrar focus on ARPU and their reduced spend on marketing, two components there. These factors are having a bigger impact and lasting longer than we originally expected earlier this year. The unregulated retail channel has increased prices more than twice our limited wholesale pricing flexibility with some increasing 3 times or more.

好的。因此，ARPU——雖然主要的 ARPU 是——美國疲軟的主要因素仍然是註冊焦點、註冊服務商對 ARPU 的關注以及行銷支出的減少，這是其中的兩個組成部分。這些因素的影響比我們今年早些時候最初預期的更大，持續的時間也更長。不受監管的零售通路將價格提高了兩倍以上，而我們有限的批發定價彈性則提高了 3 倍或更多。

Also, we’ve seen some registrars focus on margin through price increases to the overall bundle. In addition, they’ve reduced marketing expenditures. So while our limited price increases on .com may have had an impact, we think the wholesale price impact is small relative to the overall price increases and other actions taken by the unregulated retail channel in the US.

此外，我們還看到一些註冊商透過提高整個捆綁包的價格來關注利潤。此外，他們還減少了行銷支出。因此，雖然我們對 .com 的有限漲價可能會產生影響，但我們認為，相對於整體漲價和美國不受監管的零售通路採取的其他行動，批發價格的影響很小。

In relation to the new gTLD taking market share question, very low-cost new gTLDs seem to be picking up some of the monetization demand, primarily from China. I would just add that there's a thriving market of ccTLDs and new gTLDs. There are 33 million of them. But these names tend to have lower renewal rates and lower lifetime values compared to traditional cohorts. Some of these are the more speculative names that we're seeing a declining demand from our China registrar base.

關於新 gTLD 佔據市場份額的問題，成本非常低的新 gTLD 似乎正在滿足一些貨幣化需求，主要來自中國。我想補充一點，ccTLD 和新 gTLD 市場正在蓬勃發展。其中有3300萬。但與傳統同類相比，這些名稱的續訂率和生命週期價值往往較低。其中一些是更具投機性的名稱，我們發現中國註冊商基礎的需求正在下降。

And let me remind you that new gTLDs operate under very different and more flexible contracts. They're allowed to offer special deals to individual registrars, some offer very low initial and renewal pricing. They can reserve and sell premiums anytime that they want. They're not as transparent. Very few are public companies. And it's important to note that there's a difference between a registry operator like us and some registries which are really registry marketers. They basically don't run a registry, but they outsource those operations to a back-end service provider who does it for them. So they tend to have very low overhead. Some of them have very, very few employees. They can sell these TLDs at very, very low prices and still be profitable.

讓我提醒您，新通用頂級域名 (gTLD) 在非常不同且更靈活的合約下運作。他們可以向個人註冊商提供特別優惠，有些註冊商提供非常低的初始價格和續約價格。他們可以隨時保留和出售保費。他們沒有那麼透明。很少有上市公司。值得注意的是，像我們這樣的註冊管理機構營運商和一些真正的註冊管理代理商行銷之間存在差異。他們基本上不運行註冊表，但他們將這些操作外包給為他們執行此操作的後端服務提供者。所以他們的開銷往往非常低。其中一些公司的員工非常非常少。他們可以以非常非常低的價格出售這些 TLD，並且仍然有利可圖。

Again, they're not a public company, so we don't have much visibility, but we can -- we certainly understand that these are factors in the market. So you need to look a little bit closer to really get the accurate picture there.

再說一次，他們不是上市公司，所以我們沒有太多的知名度，但我們可以——我們當然明白這些是市場因素。因此，您需要仔細觀察才能真正獲得準確的圖片。

Got it. Okay. Very helpful, Jim. I appreciate all the color. Two other for me, if I may. The second would be -- so something that just came out today, there was a congressional letter to the NTIA asking for them to review the contract for .com. It's been our understanding that they can ask all they want, but there's no legal ground. But that follows, I guess, an earlier report from a think tank in New York also suggesting the same. So, just wanted to get your reaction to that letter, which came out today.

知道了。好的。非常有幫助，吉姆。我欣賞所有的顏色。如果可以的話，另外兩個給我。第二個是 - 今天剛發布的消息是，國會給 NTIA 寫了一封信，要求他們審查 .com 的合約。我們的理解是，他們可以提出任何他們想要的要求，但沒有法律依據。但我猜想，紐約一家智庫早前發布的報告也提出了同樣的建議。所以，我只是想知道您對今天發出的那封信的反應。

Well, we've seen the letter and the questions to NTIA. So I can't speak for NTIA, but our reaction was that questions do typically occur every six years around the renewal of the .com registry agreement. Some of the questions in the letter are about wholesale .com price increases. As you know, our pricing is completely transparent and regulated. Since 2018, the com wholesale price has gone up $1.74. Our research shows that the benefit from our capped wholesale prices is not always passed on to consumers, either in a retail market where, as I just mentioned, prices have gone up more than twice as much as the wholesale price increases; or in the secondary market, where the average price for a .com domain is estimated to be $1,600 or about 166 times today's wholesale price.

我們已經看到了致 NTIA 的信函和問題。因此，我不能代表 NTIA 發言，但我們的反應是，圍繞 .com 註冊管理機構協議的續訂，問題通常每六年就會出現一次。信中的一些問題與批發.com 價格上漲有關。如您所知，我們的定價完全透明且受監管。自2018年以來，com批發價上漲了1.74美元。我們的研究表明，我們的批發價格上限所帶來的好處並不總是傳遞給消費者，無論是在零售市場，正如我剛才提到的，價格上漲幅度是批發價格漲幅的兩倍以上；或在二級市場，.com 網域的平均價格估計為 1,600 美元，約為當今批發價的 166 倍。

Academic research sizes the secondary market at over $2 billion that's with a B. $2 billion per year, which exceeds VeriSign's revenue. And unlike any actor in the secondary market, you know that VeriSign, as all of you know, VeriSign operates critical infrastructure which helps to enable the global digital economy.

學術研究認為二級市場規模超過 20 億美元，即每年 20 億美元，超過了 VeriSign 的收入。與二級市場的任何參與者不同，眾所周知，威瑞信經營著有助於推動全球數位經濟的關鍵基礎設施。

We understand that one of these secondary market players has warehoused about 4.8 million .com domains for resale on the secondary market. The businesses that buy these .com domains on the secondary market at high prices pass the cost on to consumers. So while we expect questions about wholesale prices, and we'll do our best to assist if asked by NTIA. The issue of retail, and especially secondary market pricing is an important part of the discussion of the .com domain name market that hasn't been sufficiently addressed yet.

據我們了解，其中一個二級市場參與者已經儲存了約 480 萬個 .com 域名，以便在二級市場上轉售。在二級市場上以高價購買這些 .com 網域的企業將成本轉嫁給消費者。因此，雖然我們預計會出現有關批發價格的問題，但如果 NTIA 提出要求，我們將盡力提供協助。零售問題，尤其是二級市場定價問題是 .com 域名市場討論的重要組成部分，但尚未得到充分解決。

Okay. That's extremely helpful. I guess the ultimate question we get most often from investors would be. Is there a risk, the .com contract and your most recent thoughts on that would be great. Thanks, Jim.

好的。這非常有幫助。我想我們最常從投資者那裡得到的最終問題是。是否存在風險，.com 合約以及您對此的最新想法會很棒。謝謝，吉姆。

Well, in a word, no, there's no -- there's no provision in the cooperative agreement to rebid .com and we believe that Amendment 35 is clear that should the DOC decide to sunset the cooperative agreement, which we're not seeking, then VeriSign would continue to operate the .com registry under the ICANN contract, which like all ICANN agreements has a presumptive right of renewal.

嗯，總而言之，不，沒有——合作協議中沒有重新競標 .com 的條款，我們認為第 35 號修正案很明確，如果商務部決定終止合作協議（我們並不尋求這樣做），那麼VeriSign 將繼續根據ICANN 合約營運.com 註冊管理機構，與所有ICANN 協議一樣，該合約具有推定續約權。

Okay. That's really helpful. I have -- you know, one or two others, but I'll hop back in the queue. So thank you, guys very much. I appreciate it.

好的。這真的很有幫助。我還有──你知道，還有一兩個，但我會跳回隊列。非常感謝你們。我很感激。

Thank you.

謝謝。

Ygal Arounian, Citigroup.

Ygal Arounian，花旗集團。

Hey. Thanks, guys. Good afternoon. Similarly, we've lately been getting most of our questions around the agreements, both the registry agreement with ICANN and the Cooperative Agreement with the Department of Commerce. And so maybe just an opportunity to clarify. These are two separate contracts. Are they interrelated at all? The date that the DOC would have to give you notice on whether if they're not renewing the Cooperative Agreement, is that August 2, just to clarify?

嘿。謝謝，夥計們。午安.同樣，我們最近收到的大部分問題都圍繞著協議，包括與 ICANN 的註冊管理機構協議以及與商務部的合作協議。所以也許只是一個澄清的機會。這是兩份單獨的合約。它們有相互關聯嗎？美國商務部必須向您發出是否不續約合作協議的通知的日期是 8 月 2 日，只是為了澄清嗎？

And then the part that people, I guess, investors are most confused about lately is where the pricing part of the contract sits. Does that sit with the Department of Commerce? Does that sit within the ICANN contract? Meaning, if the Department of Commerce sunsets the Cooperative Agreement, what happens to the pricing? Where does that get negotiated or does it? Thanks.

我想，投資人最近最困惑的部分是合約的定價部分。這屬於商務部嗎？這是否屬於 ICANN 合約的範圍？這意味著，如果商務部終止合作協議，定價會發生什麼變化？這是在哪裡進行談判的？謝謝。

Okay. Thanks, Ygal. So maybe it would just be helpful if I briefly covered what that the two contracts are at a very high level and briefly on the interest of time and what their interrelationship is. I think that was the first thing that you asked me.

好的。謝謝，伊加爾。因此，如果我簡要介紹這兩個合約的高層次內容，並簡要介紹時間的利益以及它們之間的相互關係，也許會有所幫助。我想這是你問我的第一件事。

So the Cooperative Agreement is between VeriSign and the NTIA, Department of Commerce. And that contract in the past prior to 2018 was a contract that oversaw the conditions of renewal with our registry agreement with ICANN. So after we negotiated with ICANN to exercise our presumptive right of renewal, the NTIA had to approve what we did.

因此，合作協議是 VeriSign 和 NTIA、商務部之間的協議。2018 年之前的合約是監督我們與 ICANN 註冊管理機構協議續約條件的合約。因此，在我們與 ICANN 協商行使我們的推定續訂權後，NTIA 必須批准我們所做的事情。

In 2018, Amendment 35 basically gave ongoing a priori consent to do that provided that we didn't change certain provisions of the registry agreement with ICANN. The first one was that we not change the termination provisions, not change the performance requirements that we had to deliver, and not change the pricing. And so that pricing in 2018 was unlimited ability to raise prices. And through Amendment 3 to the contract with ICANN, that new pricing that was permitted in 2018 is now part of the .com registry agreement.

2018 年，第 35 號修正案基本上給予了持續的先驗同意，前提是我們不更改與 ICANN 的註冊管理機構協議的某些條款。第一個是我們不改變終止條款，不改變我們必須交付的性能要求，也不改變定價。所以2018年的定價是無限提價能力。透過與 ICANN 簽訂的合約第 3 號修正案，2018 年允許的新定價現已成為 .com 註冊管理機構協議的一部分。

So therefore, the Cooperative Agreement has three outcomes. One is that as it's coming up for renewal here. Renewal is sort of a different word. It's not quite like the ICANN agreement. The Department of Commerce has the unilateral right to sunset the Cooperative Agreement if it chooses to and that has to give notice that it intends to do so. We don't seek, by the way, the sunset. I think renewal is sort of a strange -- it's an evergreen renewal. If nothing is done, the contract automatically renews under the exact same provisions that it has, which is that we can get our business done with ICANN and renew the com agreement provided we don't change those three things, which we never seek to do.

因此，合作協議有三個結果。一是因為它即將在這裡更新。更新是一個不同的字。這與 ICANN 協議不太一樣。如果商務部選擇這樣做，則有權單方面終止合作協議，並且必須發出通知表明其打算這樣做。順便說一句，我們並不尋找日落。我認為更新有點奇怪——這是一種常青的更新。如果不採取任何措施，合約將根據其完全相同的條款自動續訂，即我們可以與 ICANN 完成業務並續訂 com 協議，前提是我們不更改這三件事，而我們從未尋求這樣做。

However, as I said, they could sunset it and they have to give notice, and I believe that's the right date. I don't -- I haven't looked at that part of the contract in a while, but I think that August date is the right one. So if they choose to sunset it, they have to give notice, and I believe that's the date by which they must give notice so that the contract, which will either expire or renew that would be at the end of November.

然而，正如我所說，他們可以取消它，但他們必須發出通知，我相信這是正確的日期。我已經有一段時間沒有看過合約的這一部分了，但我認為八月的日期是正確的。因此，如果他們選擇取消合同，他們必須發出通知，我相信這是他們必須發出通知的日期，以便合約在 11 月底到期或續約。

So if they want to sunset it, they would give notice by August 2. If they do nothing, the contract will automatically renew for another six years with all of its provisions intact. Those are the outcomes that can't be changed unless we mutually agree to whatever changes. So that's the cooperative agreement. The ICANN agreement, although separate, as you can see now, requires that we don't change those three things, which we never seek to do. And with ICANN, like every one of the hundreds, actually thousands of registry agreements, they all contain a presumptive right of renewal. And that we've exercised most recently with .net, relatively straightforward renewal.

因此，如果他們想取消它，他們會在 8 月 2 日之前發出通知。如果他們不採取任何行動，合約將自動續約六年，且所有條款均完好無損。除非我們雙方同意做出任何改變，否則這些結果是無法改變的。這就是合作協議。正如您現在所看到的，ICANN 協議雖然是獨立的，但要求我們不得更改這三件事，而我們也從未尋求這樣做。對於 ICANN 來說，就像數百甚至數千份註冊管理機構協議中的每一份一樣，它們都包含推定續約權。我們最近在 .net 上進行了相對簡單的更新。

And I think we got a question on the last call, so maybe I'll anticipate that you're thinking it. We are engaged with ICANN. We are very much engaged in preparing the .com registry renewal, which comes up for renewal by November 30. So we're well in advance of that, and we're working on it. I hope that answers your question.

我想我們在上次通話中提出了一個問題，所以也許我會預料到您正在考慮這個問題。我們與 ICANN 合作。我們正在積極準備 .com 註冊續訂，將於 11 月 30 日進行續訂。因此，我們已經提前實現這一目標，並且正在努力實現這一目標。我希望這能回答你的問題。

It does. I know it's a multi part of the question. Just to be clear, again, the pricing -- the wholesale pricing component right now sits between the VeriSign and ICANN in the registry agreement. Is that correct?

確實如此。我知道這是問題的多個部分。再次澄清一下，定價——批發定價部分目前由 VeriSign 和 ICANN 之間的註冊管理機構協議決定。這是正確的嗎？

Well, it was negotiated with the Department of Commerce in 2018 and that's through Amendment 3 in 2020, it was moved into the com agreement as it's required to do. Those changes in the Cooperative Agreement pass on yet. So and we can't change them in our negotiations with ICANN. So they stay as does the performance requirements and as do the termination provisions. And you can see how all those work together.

嗯，它是在 2018 年與商務部進行談判的，並在 2020 年通過了第 3 號修正案，按照要求將其轉移到了 com 協議中。合作協議中的這些變更尚未生效。因此，我們無法在與 ICANN 的談判中更改它們。因此，它們與績效要求和終止條款一樣保留。您可以看到所有這些如何協同工作。

Yeah. Understood. There's a lot of legal elements here. So that's --

是的。明白了。這裡有很多法律因素。所以那就是--

It's a bit tricky, but -- yeah. No, I understand. But if you look carefully at the different components, the outcomes sort of are pretty straightforward.

這有點棘手，但是——是的。不，我明白。但如果你仔細觀察不同的組成部分，結果就相當簡單了。

Yeah. Understood. And that's really helpful clarification. Thank you. I want to ask about the marketing that you're doing with registrars in the US. I know you're saying it's just a couple of weeks, but maybe there is -- and the outcome is not going to come until next year, but maybe there's a little bit, so you can -- a little bit of color that you can add on what you're doing there or what the receptiveness has been from the registrars? So anything that would be helpful. Thanks.

是的。明白了。這是非常有用的澄清。謝謝。我想詢問一下你們與美國註冊商進行的行銷活動。我知道你說這只是幾週的時間，但也許有——而且結果要到明年才會出現，但也許有一點，所以你可以——一點點你可以做的事情可以補充一下你在那裡所做的事情或是註冊商的接受程度嗎？所以任何有幫助的事情。謝謝。

Sure. George is taking a lead on that. So George?

當然。喬治在這​​方面發揮了帶頭作用。那麼喬治呢？

Well thanks, Jim. So Ygal, as we mentioned last quarter, in addition to the annual marketing programs that we launched at the beginning of the year, we have rolled out some new programs. During late Q2, we launched some new programs on .net. And this quarter, we've rolled out some programs to the registrar community on .com. Again, our strategy is really to broaden the options that registrars can choose from, depending on their different business models, geographic footprints, and installed bases.

好吧，謝謝，吉姆。因此，Ygal，正如我們上季度提到的，除了年初推出的年度行銷計劃外，我們還推出了一些新計劃。在第二季末，我們在 .net 上推出了一些新程式。本季度，我們向 .com 上的註冊商社群推出了一些計劃。同樣，我們的策略實際上是根據註冊商不同的業務模式、地理足跡和安裝基礎來擴大註冊商的選擇範圍。

I would say the initial feedback has been positive to those programs, but it is early, and of course, while we've had, I think, some good registrar engagement there, it will take a little bit of time for registrars to work those programs into their go-to-market strategies. So still early days, but we've gotten some actual feedback. And as you may also know, we will start working here in the [third quarter](corrected by company after the call) to modify and enhance and target additional programs for 2025. We tend to gear that up in the fourth quarter and begin to talk to registrars about those programs as well. So any of the programs that we've rolled out that we get feedback on, we'll look to try to tweak those to make sure that they work best for the registrar community.

我想說的是，這些計劃的初步反饋是積極的，但現在還為時過早，當然，雖然我認為我們已經在那裡進行了一些良好的註冊服務商參與，但註冊服務商需要一些時間來處理這些問題計劃納入他們的進入市場策略。雖然還處於早期階段，但我們已經收到了一些實際回饋。您可能也知道，我們將在[第三季]開始在這裡工作（由公司在電話會議後更正），以修改和增強並瞄準 2025 年的其他計劃。我們傾向於在第四季度做好準備，並開始與註冊商討論這些計劃。因此，我們推出的任何收到回饋的計劃都會嘗試調整這些計劃，以確保它們最適合註冊商社群。

All right. Thanks. And I'll ask one last one. Just on the updated domain guidance. You're giving down 3% at the low end, that would -- based on the first half, the current trends, that would seem to imply trends get worse, not continue at the current level. So just want to know how to think about that number? Is it just incremental caution around the trends? What is it something you're seeing or what needs to happen to get -- go from down two to down three. What's contemplated there. Thank you, guys.

好的。謝謝。我會問最後一個問題。只是關於更新的網域指南。你在低端下降了 3%，這——根據上半年的當前趨勢，這似乎意味著趨勢會變得更糟，不會持續在當前水平。所以只想知道如何看待這個數字？這只是對趨勢的謹慎態度嗎？你正在看到什麼或需要發生什麼才能得到什麼——從下降二到下降三。那裡在想什麼。謝謝你們，夥計們。

Yeah, sure. So if you look -- simply, if you look at the first half of the year, we're for the first six months, we're down about 2 million names. And so the midpoint of our guidance suggests that, that trend is probably going to continue here for the second half.

是的，當然。所以如果你看一下——簡單來說，如果你看一下今年上半年，前六個月，我們減少了大約 200 萬個名字。因此，我們指導的中點表明，這種趨勢可能會在下半年繼續下去。

Having said that, on the upside if some of our marketing programs start taking root or as Jim mentioned, if registrars stop being as aggressive in the marketplace with ARPU or there has been some recent news out of China where the Chinese government has put some stimulus into that marketplace, if those things start to take root, I think those are positive and can close that gap a little bit for us. On the downside to the extent, any of those trends worsen, i.e., the China market continues to not turn around or worsens and renewal rates from some of the registrar activities continuing to exercise their pricing flexibility weaken, that could potentially get to the bottom of that range. But right now, I think the simplest thing is, the midpoint of our guidance suggests that the second half will be similar to the first half of this year.

話雖如此，如果我們的一些行銷計劃開始紮根，或者正如Jim 提到的那樣，如果註冊服務商不再在ARPU 市場上那麼激進，或者最近有來自中國的消息稱中國政府採取了一些刺激措施，那麼從好的方面來看進入這個市場，如果這些事情開始紮根，我認為這些都是正面的，可以為我們縮小一點差距。不利的一面是，任何這些趨勢都會惡化，即中國市場繼續沒有好轉或惡化，並且一些註冊商活動繼續行使定價靈活性的續訂率減弱，這可能會觸底。但現在，我認為最簡單的事情是，我們指導的中點表明下半年將與今年上半年相似。

Great. Thank you, guys.

偉大的。謝謝你們，夥計們。

Hey, Ygal, this is Jim. I just -- there's a couple of other things in the Cooperative Agreement that can't be changed. We normally don't think of them because they aren't generally of interest to investors. But I think everybody is aware of them. But one is that we cannot be vertically integrated for .com. We cannot be our own registrar for .com. And I think you might recall that in Amendment 35, we got clarification that only applies to .com. So we don't have any plans to become a registrar for anything, but there is a restriction in the Cooperative Agreement has been forever that we cannot -- for quite a few years that we could not be our own registrar for .com.

嘿，伊加爾，這是吉姆。我只是——合作協議中還有一些其他內容無法更改。我們通常不會想到它們，因為投資者通常不感興趣。但我想每個人都知道它們。但其中之一是我們無法對 .com 進行垂直整合。我們不能成為我們自己的 .com 註冊商。我想您可能還記得，在第 35 號修正案中，我們得到了僅適用於 .com 的澄清。所以我們沒有任何計劃成為任何東西的註冊商，但合作協議中有一個限制，我們不能——在相當長的幾年裡，我們不能成為我們自己的 .com 註冊商。

And there's a function called “who is”, where people can query registrations and there are some requirements to continue to support that. Just for all clarity, I think there's one more technical one, but it's all in Amendment 35, pretty easy to find. But I think the important ones for investors are pricing SLA, the service level agreement, the performance, and termination. And we don't seek -- and by the way, we don't seek to change any of the other ones either since we got clarification on the vertical integration, there's really nothing in the Cooperative Agreement that we would seek to change, and we don't seek termination or sunset.

還有一個名為「who is」的功能，人們可以在其中查詢註冊情況，並且需要滿足一些要求才能繼續支援該功能。為了清楚起見，我認為還有一項技術性的內容，但都在第 35 號修正案中，很容易找到。但我認為對投資者來說重要的是定價 SLA、服務等級協議、性能和終止。我們不尋求——順便說一句，自從我們得到關於垂直整合的澄清以來，我們也不尋求改變任何其他協議，合作協議中確實沒有我們想要改變的內容，並且我們不尋求終止或日落。

Got it. Thanks for the clarifications.

知道了。感謝您的澄清。

Sure.

當然。

Rob Oliver, Baird.

羅布·奧利弗，貝爾德。

Great. Thanks for squeezing me in for one more, guys. Jim or George, just a question on capital allocation. I saw you guys re-up the buyback. I guess, Jim, just thinking about your time since returning to VeriSign, you essentially unwound and so many of the noncore businesses and which our view has been, this is a tremendous competitive advantage for you guys.

偉大的。夥計們，謝謝你們讓我再多做一件事。吉姆或喬治，只是一個關於資本配置的問題。我看到你們重新回購了。我想，吉姆，想想自從你回到威瑞信以來，你基本上放鬆了很多非核心業務，我們的觀點是，這對你們來說是一個巨大的競爭優勢。

However, it was interesting in response to Ygal's question, what you just said about vertical integration because, yes, clearly, you can't do that with .com. But just wondering the extent to which the current malaise in .com growth and some of the activity with new gTLDs, coupled with a very strong financial position that you guys have might cause you to rethink your capital allocation strategy, either via M&A or getting more aggressive with the new gTLD market or in any other way? Thank you.

然而，回答 Ygal 的問題很有趣，你剛才所說的垂直整合，因為，是的，顯然，你不能用 .com 做到這一點。但只是想知道當前.com 增長的萎靡程度以及新gTLD 的一些活動，再加上你們擁有的非常強大的財務狀況，可能會導致您重新考慮您的資本配置策略，無論是通過併購還是獲得更多資金積極進軍新 gTLD 市場還是以其他方式？謝謝。

It's a good question. We don't guide to any of those things. I'd be reluctant to say anything about it. Now we do -- I will say though that, as you're aware, we have pursued growth through the pursuit of a new TLD, .web, and that continues, of course, in litigation, and there's no update, unfortunately, this quarter.

這是一個好問題。我們不指導任何這些事情。我不願意對此說什麼。Now we do -- I will say though that, as you're aware, we have pursued growth through the pursuit of a new TLD, .web, and that continues, of course, in litigation, and there's no update, unfortunately, this四分之一.

But I think that adding a new TLD and giving our customers more choice was a good plan, a good growth plan for us. But also, to remember that our primary mission, the 328 billion queries a day and delivering that and having delivered it for 27 years is a primary mission. We have a strategic framework that balances growth against meeting our SLAs, which is obviously a very important thing.

但我認為添加新的 TLD 並為我們的客戶提供更多選擇是一個很好的計劃，對我們來說是一個很好的成長計劃。但也要記住，我們的首要任務是每天處理 3,280 億個查詢，並交付這項任務，並且已經交付了 27 年，這也是我們的首要任務。我們有一個策略框架，可以在成長與滿足 SLA 之間取得平衡，這顯然是一件非常重要的事情。

So we certainly have the flexibility to become a registrar for .web, if we wanted to. But all the other things that you mentioned, and we have no intention of doing that. But the other things that you mentioned, we wouldn't guide to and are complicated processes. I -- all I can say is that if you look at our long track record of capital allocation, as you can see from our financial results today it's serving us well.

因此，如果我們願意，我們當然可以靈活地成為 .web 的註冊商。但你提到的所有其他事情，我們無意這樣做。但你提到的其他事情，我們不會指導，而且是複雜的過程。我只能說，如果你看看我們長期的資本配置記錄，你可以從我們今天的財務表現中看到，它對我們很有幫助。

Great. Thanks, Jim. I appreciate it. Thank you, guys.

偉大的。謝謝，吉姆。我很感激。謝謝你們，夥計們。

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

今天的問答環節到此結束。現在我想將電話轉回給大衛·阿奇利，讓其作最後發言。

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.

謝謝你，接線生。如果本次電話會議有任何後續問題，請致電投資者關係部門。感謝您的參與。我們的通話到此結束。祝你晚上愉快。

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

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。