VeriSign Q4 Earnings Call Highlights

Key Points

• .com/.net base grew 2.6% to 173.5 million names in 2025 with 41.7 million new registrations and Q4 net adds of 1.58 million as renewals held near 75%; management said rising DNS queries — partly from AI/LLM activity — are boosting traffic and demand.
• VeriSign reported 2025 revenue of $1.66 billion (up 6.4%) and EPS of $8.81, and guided 2026 revenue of $1.715–1.735 billion and operating income of $1.16–1.18 billion while forecasting higher capex of $55–65 million mainly for capacity expansion and equipment replacements driven by AI-related demand.
• The company returned $1.1 billion to shareholders in 2025 via buybacks and dividends, with the board declaring a quarterly dividend of $0.81 (a 5.2% increase); about $1.08 billion remains available under the repurchase program and year-end cash was $581 million.

VeriSign NASDAQ: VRSN executives highlighted continued growth in its .com and .net domain name base, rising revenue and earnings, and ongoing shareholder returns during the company’s fourth-quarter and full-year 2025 earnings call. Management also discussed how it is seeing increasing internet activity—some of which it attributes to artificial intelligence—flowing through the domain name system (DNS), and teased potential new security- and functionality-oriented services it may introduce in the coming months.

Domain base grows as registrations and renewals strengthen

Executive Chairman, President and CEO Jim Bidzos said 2025 was “another solid year,” emphasizing that the company extended its record of 100% service delivery for the .com and .net DNS to 28 years, even as utilization increased.

Bidzos said new registrations totaled 41.7 million names in 2025, the highest level the company has seen since 2021. The domain name base grew by 4.5 million names, or 2.6%, ending 2025 at 173.5 million .com and .net domain names.

Fourth-quarter net registrations added were 1.58 million names. Bidzos attributed the quarterly net adds to new registrations of 10.7 million (up from 9.5 million in the fourth quarter of 2024) and a preliminary renewal rate of 75%, compared with 74% a year earlier.

Looking ahead, management guided to 2026 domain name base growth of 1.5% to 3.5%. Bidzos said the company is encouraged by the strength exiting 2025 and by registrar feedback on planned 2026 marketing efforts. He also reminded listeners that the company posts daily updates on the domain base on its website.

2025 financial results and Q4 details

Chief Financial Officer John Calys reported full-year 2025 revenue of $1.66 billion, up 6.4% year-over-year. Operating income totaled $1.12 billion, up 5.9%. Full-year earnings per share were $8.81, and free cash flow was $1.07 billion.

For the fourth quarter, revenue was $425 million, an increase of 7.5% from the same period a year ago. Calys said operating expenses in the quarter were $140 million, compared with $135 million in the prior quarter and $132 million in the fourth quarter of 2024. He noted the sequential increase was driven largely by an impairment charge related to real estate the company intends to sell.

Net income in the fourth quarter was $206 million, compared with $213 million in the prior quarter and $191 million a year earlier. Diluted EPS was $2.23, versus $2.27 in the third quarter and $2.00 in the year-ago quarter. Calys said fourth-quarter net income reflected higher income tax expense, “primarily due to foreign-based income taxes.”

Cash generation improved year-over-year in the quarter, with operating cash flow of $290 million and free cash flow of $285 million, compared with $232 million and $222 million, respectively, in the year-ago quarter. Calys attributed the increase partly to higher quarterly earnings, working-capital cash inflows, and lower cash tax payments.

Guidance calls for continued growth, with higher capex

Calys provided 2026 guidance that included:

• Revenue: $1.715 billion to $1.735 billion
• Operating income: $1.16 billion to $1.18 billion
• Interest expense and non-operating income, net: expense of $57 million to $67 million
• Capital expenditures: $55 million to $65 million
• GAAP effective tax rate: 22% to 25%

Calys said the midpoint of the revenue and operating income ranges implies an operating margin “more consistent with our long-term trend” compared with the level seen in the fourth quarter of 2025.

He also said the company expects lower interest income due to lower short-term rates and lower cash balances. On capital spending, Calys said the 2026 capex outlook is above the company’s typical range primarily because of end-of-life equipment replacements and planned capacity expansion. He added that costs are “significantly higher,” which he attributed largely to AI-industry-driven demand and supply constraints, and also cited planned capital improvement projects at the company’s corporate headquarters.

Shareholder returns and dividend increase

Bidzos said the company returned $1.1 billion to shareholders during 2025 through share repurchases and quarterly dividends, noting that dividends were initiated in the second quarter of 2025.

At year-end, Bidzos said VeriSign had $581 million in cash, cash equivalents, and marketable securities. He also said $1.08 billion remained available under the company’s share repurchase program, which has no expiration.

The company’s board declared a quarterly cash dividend of $0.81 per share to stockholders of record as of February 19, 2026, payable February 27, 2026. Bidzos said the quarterly dividend represents a 5.2% increase, which he said was consistent with the company’s net income increase during 2025. He added that VeriSign intends to continue paying a quarterly dividend, subject to market conditions and board approval.

AI, marketing programs, and potential new services

In the Q&A session, Bidzos addressed questions about AI’s impact on the business. He said AI is “certainly having some impact,” but described it as one of several factors supporting demand, alongside the utility and value of domain names, the domain name’s role as a “digital trust anchor,” and VeriSign’s long record of reliability.

Bidzos said the company has seen an increase in DNS queries, which he said indicates increased activity and traffic, and he believes “a good portion” of that growth is due to AI, including large language model training activity that scrapes the internet. He also said registrars are using AI to develop tools that make it easier for users to build websites and select domain names. Looking forward, he said “agentic” AI systems conducting multiple tasks will need to navigate and refresh data, increasing reliance on DNS.

Bidzos also discussed the company’s marketing programs, saying VeriSign adjusted its approach beginning in 2024 as registrar business models and strategies evolved. He described a “basket of programs” designed to give registrars flexibility to choose what works best for them, along with incentives geared toward registrations in categories that tend to have stronger renewal rates.

Separately, Bidzos said the company continues to evaluate opportunities to offer enhanced functionality or security services aligned with its mission. While reiterating that VeriSign is not looking to become a sales organization, he said it believes it has “strong candidates for new services” that could reduce vulnerabilities and support information trust. He said the company expects to share more “in the coming months.”

On ICANN’s next round of new generic top-level domains opening in April, Bidzos said the company is studying the process and looking for potential opportunities, but did not provide specifics on any applications. He noted VeriSign’s existing role with .com and .net and said it also has an interest in .web from the prior round.

Finally, asked about future .com pricing, Bidzos reiterated that the company does not guide on price increases. He said VeriSign has the ability to raise prices by 7% in each of the final four years of a six-year period, with a six-month notice requirement. He said the first available opportunity for a price increase would come at the end of October 2026, and that if VeriSign chose to act, an announcement could be made in April—though he did not indicate whether the company will do so.

About VeriSign NASDAQ: VRSN

VeriSign, Inc NASDAQ: VRSN is an internet infrastructure company that operates critical components of the global Domain Name System (DNS) and provides cybersecurity-related services. The company is best known as the authoritative registry operator for the .com and .net top-level domains, maintaining the central databases and zone files that enable domain name resolution for millions of websites. VeriSign's registry role is performed under contractual agreements with Internet Corporation for Assigned Names and Numbers (ICANN) and involves high-availability, highly secure operations to support continuous internet connectivity.

In addition to its registry business, VeriSign offers a suite of services designed to protect and accelerate DNS and internet traffic for enterprises and service providers.

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