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A sign of things to come? Verisign slashes outlook in post-pandemic slowdown

Kevin Murphy, April 28, 2022, 20:55:57 (UTC), Domain Registries

Verisign is warning that its business is going to grow slower than expected in 2022, due to the after-effects of the pandemic and general economic conditions.

The registry tonight reported first-quarter revenue of $347 million, up 7% on the comparable period a year ago, after raising its .com prices 7% last year.

But the company has slashed its sales estimates for the year.

CEO Jim Bidzos told analysts this evening that the company and its registrars have started to see a post-pandemic slowdown in sales, exacerbated by other unspecified “macro-economic factors”.

“Incremental demand for new registrations that grew during the pandemic is subsiding,” Bidzos said.

Many domain companies, including Verisign, saw growth spikes during the pre-vaccine pandemic, when many small businesses moved to online sales to stay afloat during recurring lockdown restrictions.

But that’s all over now, and the economic fallout most of us are feeling seems to also be affecting domain sales.

The company said its net income for the first quarter was $158 million, up from $150 a year ago. Its operating margin slipped a little, however, from an enormous 65% to an enormous 64.8%.

Verisign ended the quarter with 161.3 million .com domains and 13.1 million .net domains under management, up 4% combined at 174.7 million.

The renewal rate for .com and .net domains was estimated at 74.8%, up from 73.5% a year ago.

The company expects its domain base to grow between 1.75% and 3.5% this year. That’s down quite significantly from its February estimate of growth between 2.5% and 4.5%.

It added 10.1 million new names in the quarter, compared to 10.6 million in Q4 and 11.1 million in Q1 last year.

While Bidzos did not drill very deep into the other factors contributing to his pessimistic outlook, he did say that the war in Ukraine was not a factor. Sales in Ukraine, Russia and Belarus are “not material”, he said.

I suspect what we’re looking at here is probably related to what the media here in the UK is calling the “cost of living crisis”, which is seeing the price of staples such as food and energy skyrocket and many people cut back on luxuries as a result.

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Comments (1)

  1. Jack says:

    Verisign broke its ever growing cash machine with greedy 7% price hikes when they already had an enormous 65% operating margin !

    It will get worse with the next 7% price increase and they will make .COM under management enter negative growth.

    That will spiral into the start of the end.

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