Verisign, a well-known manager of internet domains such as .com and .net, has announced a reduction in its financial forecasts for 2024. This decision comes in response to weaker than expected results in the first quarter of the year.
At the end of the first quarter of 2024, Verisign managed 172.5 million domains within .com and .net, which represents a decrease of 0.27 million compared to the end of 2023. The number of .com domains decreased by 0.2 million, while the number of .net domains remained virtually unchanged. This is a concerning trend for the company, which relies on the growth of managed domains as one of its main sources of revenue.
Revenue and forecasts
Despite the decline in domain numbers, Verisign recorded a revenue increase of 5.5% in the first quarter, primarily due to earlier price increases. However, the company does not anticipate automatic price hikes in 2025 and 2026, meaning it needs to increase domain registrations to sustain revenue growth. This does not exclude the announced domain registration price increase of 7% for .com domains in September.
Verisign must now consider long-term strategies that will allow the company to increase domain registrations, and thus revenues. This may include investments in marketing, promotions, and exploring new markets and opportunities. In response to these challenges, Verisign has lowered its revenue forecast for 2024 from a range of $1.56-$1.58 billion to $1.555-$1.57 billion. Additionally, the company must be ready to adjust its prices to remain competitive in an increasingly saturated market for internet domains.
Summary
Verisign’s lowering of forecasts shows that even the largest companies in the tech industry are not immune to the impact of external economic factors and changing market trends. The decline in the number of domains under the company’s management in the first quarter is a clear signal to the management that new strategies and innovations are needed to maintain financial stability and growth in the future.
