Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star-1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is off to allow your signal to reach our equipment. Once your question has been stated, We will now take our first question from Robert Oliver with Baird.

Great. Good afternoon. First 1, Jim, it is a 2-parter for you. The gross domain ads continue to be stunningly strong. up 24% year over year. You guys added another over 13 million this quarter. So I was wondering if you could just touch on and remind us, or update us on, what you are seeing in terms of the drivers of that I know clearly AI, but are you also seeing digital providence or other things like that playing into that And the follow-up question I have is, regarding trends you are seeing in first year renewals. You guys have been clear with us about the fact that renewal rate would be impacted by, this large bolus of domain. New domains that you have but it sounds as if those first year renewals have been coming in pretty strong. So I wanted to understand what you are seeing in terms of those. The stickiness the quality of those first year renewal trends. Thank you.

Alright. Well, let me address your first question. First. So some of the drivers that we are seeing in new registrations which is, as you pointed out, at 13.1 million during the quarter, is a record for us. Q2 was a record for us. Key drivers, that we see are, what I referred to before as a synergistic convergence of demand for domain names from businesses, new business starts, but also our marketing programs and, an AI tailwind, and we are hearing from some registrars that AI is a factor. AI, clearly makes it easier to find a domain name, develop a website, and maintain a website. We are seeing that content creators want their content bound by AI, and a domain name is 1 of the primary ways to have that content available. I think what we have been saying historically for a number of years that, the, well governed, DNS is going to continue its value. The decades of investment in infrastructure like ours. Governance by ICANN, strengthening and ensuring that a domain name is a unique, trusted, secure, global identifier, I think, is really demonstrating its value in a world where people still get online for the fundamental purpose of being found and conducting commerce. And I think all that just really works together to drive that growth. I think your second question John, I will let you address that about renewal rates.

Yes. Good afternoon, Robert. Now, through the third quarter, what we have seen with our first timer renewal rates is they have remained fairly steady in the mid 40% range. And the previously renewed rates have been the same. They have remained fairly steady in the mid 80% range. So we have not seen a great deal of movement either direction in those. But as Jim mentioned, you know, with the strong new registrations, the mix of first time renewing names is growing versus in proportion to the total base. And that does result just from math, in the renewal rate going down. We are going to be watching very closely next year because this year's registrations have been very strong, and we will be looking to see if there is any trends in the first time renewal rates. But nothing of significance to report to you right now.

Great. Thanks, John. Jim, I just had 1 follow-up for you, and then I will cede the floor. I would love to get your take on just the timing of .web it strikes me you guys might be in a unique position here relative to the timing of, this, you know, pretty strong generic TLD which is coming out ahead, and by a period of time of many of the new TLDs that will come out as part of the auction. So wanted to get a sense from you of, if it is--if that is right, if that early access to the market is a benefit to you guys, and any other way you can help us, you know, think about that timing or frame that opportunity. Thank you.

Yes. Thanks, Robert. Well, certainly, you stated made some fact statements about the timing. that is true. I think the strength of .web is it is always been. it is a short generic, relevant, TLD operating in our infrastructure, our high assurance infrastructure. I am kind of looking beyond the short term period. I do understand, and I do agree there is an opportunity. There will be another round, but it is a ways down the road. And there is an opportunity here with .web. But I think the strength of running on our reliable infrastructure with its track record providing more choice to our customers with a short relevant TLD is gonna be a value proposition that will continue beyond this opportunity that we may have in the short term. I think the flexibility that we have in marketing and all of the things that come with the pure generic TLD that is not regulated the way .com and .net are all those things, play well. I think the enduring value of a domain name plays well. Certainly, the timing is good. We waited a long time. It would have been nice to have it sooner, but, I think there is always room for a secure, reliable domain name that gives people more choice, and that is how we view it. We see .web as another member of the trusted family of .com and .net that is provided 29 years of 100% availability And I think that value is going to be continue to be enduring, the longer that record gets. Great. Thank you both very much.

Thank you. Thank you. We will take our next question from Ygal Arounian with Wedbush.

Maybe just follow-up first on Robert's first question. You are adding going to be adding about 11 million domains this year. I mean, that is, I think, going back as high as it is been in decades, if I am not mistaken. And I know it is being driven by, multiple factors. But if I can get you to look forward a little bit, Jim, into next year, like, what gets this to slow down? It feels like AI trends and Agentic in particular, that starts to pick up can especially when you guys point to things like queries and the rate of change that you are seeing in query growth. It feels like this strength has a lot of runway and just want to maybe get some of your thoughts as we look forward into next year. Without getting guidance.

Sure. I guess I would point to what we see as the very long trend lines here. First of all, there is just simply a growing, the economy is built on a digital platform that continues to grow. So there is there is a dish. there is constant new adoption of delivering services digitally. There is greater reliance on digital services cloud service providers, new entrants offering new services, more businesses converting to online, the efficiencies that with AI is a relatively recent driver and certainly contributing to that as well. So I see the combination of that long trend line of just simple growth and adoption of online services that the ongoing move towards more digital efficient services AI is a boost and the enduring value of a domain name and the very mature and trusted because of all the security that is been built in over the last decades in the DNS Our infrastructure, I think, is an important component of that. I just see those long trend lines, and I do not think in terms of quarters of years. Obviously, what we do is we report quarterly and annually. But, I think those trend lines run much longer, and I think they bode well. I think also, our carefully assessed and measured addition of VeriSign Inform to our offerings, the way it leverages our infrastructure, I think the long trend line favors that as well. New advanced services, Agentic AI, etcetera, I think we are already seeing evidence that, there are security challenges that come. We think offering tools that can close security gaps are very important. So we tend to take the longer term view, but I think you could certainly, looking out a year, I can see all of those factors coming into play. Registrars are very engaged. They are seeking more customers. There are a lot of factors driving their business as well. So yeah, there is quite a bit of synergy in all of the factors that are driving this growth. And there may be ups and downs along the way. There always are, but, I think the long trend line is really strong, and that is what we keep our eye on.

Okay. Great. Very helpful there. And I want to ask maybe if we could elaborate a little bit more on VeriSign Informed. I guess, first, can you help us understand why VeriSign has the right to win in this business versus, other cybersecurity providers? Why are enterprises or consumers choosing VeriSign and not, Maybe particularly on the enterprise side, but on both on what you can hit And then I know you talked about pricing, finalizing pricing plans. If you could help investors think through what the maybe not the actual price, but the structure. What does pricing look like? How should we be thinking about not, again, not the actual number, but what it means in general and how to think about it. Any help there would be great. Thank you.

Sure. Well, let me take those in reverse order. I think with respect to pricing we are just a few months away from having more to say about that, which I think will help people assess the opportunity. As I mentioned, we think this is a leveraged, carefully assessed core offering that, where the real the real synergy and what I think will make, VeriSign Informed strong back to your. The first part of your question, why VeriSign Informed? I think it is really-- first of all, OCSP, the online certificate status protocol, is difficult to do as quickly as we do DNS and operating in our infrastructure. We are going to offer that level of performance And the key distinction here is that, there are a couple of things we can do. Number 1 is that at the time of making the trust decision, and here's another important aspect. Whether that is a person to machine, interaction or whether it is a machine to machine interaction, which it clearly will be with Agentic AI becoming, prevalent, performance, speed, and reliability matter. I think all of those aspects of our high assurance infrastructure combined with this service which closes these gaps if you do not do credential revocation, certificate revocation, quickly, those gaps can be exploited. I think if we are learning anything, at this point, we can see that AI is extremely good at, identifying vulnerabilities, and those usually are followed up very quickly with AI enabled attack chains and closing all vulnerability windows, as much as possible is really important and I think going to increase in importance. And I think we just have a solid offering. So with respect to why VeriSign informed, I would say it offers the sort of, and I think if you look at some of our blogs I would say demonstrable reduction in risk when making trust decisions that are better informed. And I think that value proposition will be of a great interest to a lot of folks out there. We are seeing it already in the financial industry. I think that will that will grow in our opinion. Alright. Great. Thank you so much.

Thank you. Thank you. We will take our next question from Jamesmichael Sherman-Lewis with Citi.

Hi there. Thank you for taking my questions. 2 here, if I may. First of all, with the .com price increase coming into effect, any early color here on registrar pricing actions? Or customer renewal rate benefits that you are seeing that could be mitigating the first time renewal headwinds that you talked about earlier?

Hi, Jamesmichael. This is John. You know, we have been watching closely what our registrars are doing with pricing. And at least for the last you know, 3 months since,. Or since we have announced the price increase. I think that was, last April. Our. Yeah. For.com. Yep. You know, we have not seen a significant increase in pricing on new registrations or renewals. You know, our analysis shows it is the price increases during that time period are you know, in the neighborhood of 1% or even less. So we have not seen a lot of move. We. In the past, when we have done price increases, we have seen some registrars in advance of the effective date raise prices or in conjunction with the effective date, But so far, that is something we have not seen. A lot of, but we do continue to keep our eye on that.

Perfect. I guess I would I would just add. Oh, sorry. Go ahead. May interrupt. No. Go ahead. I was just gonna add to that. The price increase is $0.71, and I think given that we do not control the retail price, of course, that is set by the registrars. And it is it is a modest price increase that, they can certainly, absorb and adjust accordingly. But, the impact on the retail channel, where prices are unregulated is different. Than our pricing. We did provide as required 6 months notice of the price increase, so it is not a surprise.

Yep. Understood. Follow-up here on the ICANN new gTLD rounds. We saw, like, .pkias news, but there are other TLDs out there that are pretty key, including .agent. So curious if you could elaborate on your strategic approach overall to new gTLD acquisition. Thank you.

Sorry, Jamesmichael. That was a specific question about. PKI. Yeah. Dot PKI. PKI. Alright. Your strategic approach to new gTLDs. Well, PKI, of course, stands for public key infrastructure. This is something that actually, VeriSign's parent company, RSA, brought to market back in the '80s and '90s. We wrote standards. We enabled the first browsers with a full PKI suite that allowed e commerce to flourish with security and, the ability to conduct commerce. And so PKI has only grown since then. it is the critical trust component of much of the commerce that is conducted on the Internet. Not only that, it is, it also, includes as I mentioned, all the different use cases, code distribution, and lots of other things. And so, we think that, we have announced VeriSign Informed That is very much a PKI related service, and, we think that there are some interesting things we are looking at and considering with that TLD. We chose carefully, and that is the only TLD that we applied for. But we think it is very relevant to the security services that we provide. Okay. Thank you so much.

Thank you. Thank you. And we will take our last question from Alexei Gogolev with JPMorgan.

Jim, I was wondering if, you can maybe provide a bit more color and decompose 3Q net adds into gross adds versus deletions, and specifically how deletion and churn rates are performing, including any post promo churn How is that trending versus last year? So if I understand your question, you wanna. You want commentary, Alexei, on how our new registrations relate to deletes and the trends in deletes. Is that fair? Yeah. Because I am trying to understand, like, what are you incorporating in the guidance of 6.5% to 7% Like, what sort of assumptions are embedded in terms of gross adds, deletions, renewals, and mix? So just trying to understand Yeah.

Okay. So, well, typically, we do not guide on each individual component. You So that is the first thing. You know, what I would say is we do see continued good demand for registrations. And we expect that to hold up reasonably well. Of course, fourth quarter has the holiday season in it. And that usually creates a little bit of a seasonal downturn for us. As far as deletions go, I think it is really what we have already talked about, and that is we are gonna continue to see a greater mix of first time renewing names Those names renew at almost half the rate of previously renewed names. And so as the proportion of the entire base has more first time renewing names, it is just a natural occurrence that the renewal rate will drop slightly. So we are forecasting that for the fourth quarter. I. You know, beyond that, I do not know if there is more that I can say. I do not know, Jim, if you have any additional comments or not.

I think your question was about trends, and I guess there is there are no, trends that we think are significant such that we are calling them out as something substantially different than what we have done in the past.

What John described, a first time renewal rate, in the forties and a second or subsequent renewal rate in, the mid eighties. Has held pretty constant. Whenever we get a boost. I mean, we saw this in 2016 when we had a large China surge. We saw first time renewal rates just kinda fall off the edge, in the year and 2 that followed because of the, huge sudden and abrupt number of, first time renewing rates. I think this is not nearly as dramatic as that. And secondly, I think the underlying drivers for these registrations is quite different. I think that, our analysis. I can share this. Our analysis of the websites, the. I am sorry. The new registrations that we are getting to the extent we can identify the purpose of the websites is that they fall into our cohort that is the best renewing core. Cohort, the online presence. Cohort. I think this sort of ties into people finding it easier with AI develop a meaningful website and get an online presence. So I think in the long run, you know, we will see basically sort of a. If there if there are any significant deviation, some regression to the mean. it is held over a very, very long period of time. Thank you for that, Jim.

And you noted that the registrar retail pricing has only moved about 1% or less since the April .com notice. So do you expect a step up closer to the effective date And what is your best read on elasticity versus renewal? Impact? From that $0.71 wholesale increase?

Yeah. that is a tough 1 to answer. I think that what we are seeing with the various tailwinds and the various factors driving these new registrations. Obviously, if we are seeing a benefit from it, the registrars are seeing even more because they have the freedom of pricing, and, of course, they have base of comms that renew the. Many registrars are renewing comms at twice the wholesale price. So I think that, that is a factor that just, sort of argues that it might be easier for them to. It might be easier to stay focused on what they are doing. I cannot speak for them, but I think that if they have found formulas that are working, perhaps they have had 6 months to prepare. And so maybe it is a it is a rate of growth that they enjoy and want to continue. I am not sure, but it is a modest increase that I think they can absorb. We track their, their retail prices, of course, and, there is certainly room there. But, I think they are selling. They are obviously selling the domain names that we are registering, so they are getting a benefit. I expect they are making decisions that drive their business, which drives ours. Thank you, Jim.

And just to clarify, are you seeing any meaningful early renewal activity ahead of the .com increase, like, media cash pull forward or renewal date shifts. And how should we think about the knock on impact to the timing of recognized revenue versus cash that is for John, I think.

Yeah. You know, Lexi, we have not seen a lot of early renewals at this point. So we are not necessarily seeing a pull forward of renewals. You know, to the lower price point pre November 1st. Obviously, we watch for that, but we have not seen any significant evidence of that. You know, there is still another week or so before the price increase, but so I cannot predict what had happened during that time. But we have not seen anything yet.

I think I would just add too that even with the price increase Com is still very, very competitively priced with respect to all of the other generic TLDs that are out there. I think that is a factor. The average price of those other TLDs is much higher than comms. Even with this price increase. it is true.

Then, Alexei, to your second point, just wanted to mention. So and I think we addressed this maybe on the last call as far as the revenue recognition, I said on the last call that expect about 50% of the .com price increase to flow through in revenue in 2027, Most of the rest of that in 2028. I do not know if that was the second part of your question, but I just wanted to touch on that.

Thank you, David. Yeah. I just wanted to confirm that has not changed and final question, Jim. So at high level, what is the unit for informed? Is it going to be per OCFP query or maybe per certificate? And what milestones between now and first half of next year would you point to that would validate that the product-market fit? I think the best way to answer that question is to ask you to follow our microsite, VeriSignInformed.com.

We are posting blogs that provide additional information. We are very engaged in a number of standards bodies both the American National Standards Institute, the C2PA creators, forum. There are standards engagement, and we are engaged with a variety of, service providers. And we will be providing updates on that website. I would say right now, there is we announced also that we are opening the beta phase. So I think you will start seeing things roll out on that website So the high level plan, as I mentioned, is pricing by the end of the year, pricing structure, and availability of the service in the first half of 27. But all of those updates will be rolling out. There are also a number of seminars that we are doing jointly, with Forrester and some other folks. We have already done 1. We will be doing some other public events. So there will be a steady rollout of information that I think will give you the complete picture. I think it is a bit early for me to predict exactly how that will play out or what the milestones will be. We are we are certainly seeing substantial, interest and activity that this is. You know, security is only becoming more important, so the interest is high. And I think we are seeing this. I think we are seeing an understanding and an appreciation for what the synergy that comes from our high assurance infrastructure in providing this service globally at the level of performance that we can, we have seen have some people rethinking this. Understanding that something that perhaps they did not think was actually practically available as a practical matter is. So we will see how that plays out. But, follow the microsite, and I think you will and, obviously, we will update you every quarter. Thank you, Jim.

Thank you. Thank you. This concludes today's question and answer session. I would now like to turn the call back to David Atchley for any closing remarks.

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