Price increases mask falling domain base.
Verisign (NASDAQ: VRSN) released Q2 2022 earnings after the markets closed this afternoon.
As I previewed earlier this week, the base of registered .com and .net domain names fell this quarter. It dropped 0.35 million domains to 174.3 million and has fallen further since the end of the quarter. There are many possible reasons for this, but a lot of it seems to be a hangover from the Covid boom.
But revenue and earnings were up, thanks partly to a 7% price increase in the wholesale cost of .com domains last year. Verisign recorded $352 million in revenue for the second quarter of 2022, up 6.8 percent from the same quarter in 2021. Earnings jumped from $148 million to $167 million. Its already healthy operating margin grew from 64.7% to 67.1%.
The company is set to hike prices by 7% again on September 1, which will boost earnings and margins even if the domain base declines.
There were 10.1 million new domain name registrations for .com and .net during the quarter, compared to 11.7 million for the same quarter of 2021.
The company also announced it is increasing the wholesale price of .net domains by 10%, from $9.02 to $9.92, effective February 1, 2023.