⚠ Growth Has to Come From PriceModerate threat

VeriSign (VRSN) — threat to the moat

Strip out price and this business has grown about one percent a year, in a market growing eight.

Strip out price and VeriSign's unit business has grown about 1% a year for five years.

Growth, by source+34.0%New gTLDs, Q2 2026 YoY+17.3%Revenue, 2021 to 2024+5.1%Base, Q2 2026 YoY-2.5%Base, 2021 to 2024The final bar is a decline, drawn at its magnitude. Price did all of the work and more.
Strip out price and this business has grown about one percent a year, in a market growing eight.

The domain name base was 173.4 million at the end of 2021. Three years later it was 169.0 million — down 2.5%, after six consecutive quarters of decline driven by a collapse in Chinese demand, U.S. registrars chasing revenue per customer instead of customer count, and very cheap new gTLDs taking share.1 Revenue over those same three years went from $1,327.6 million to $1,557.4 million, up 17.3%.2 Price did all of it and more.

That is a spectacular demonstration of pricing power, and it is also the problem. The pricing power is finite and scheduled: 7% a year, in four years out of every six, on a price the Department of Commerce must approve. There is no second lever. Meanwhile the names that are growing are not VeriSign's. At the end of the second quarter of 2026 there were 401.6 million domain registrations worldwide. New gTLDs — .xyz, .shop, .ai and roughly a thousand others — accounted for 52.9 million of them and grew 34.0% year over year, against 5.1% for .com and .net.3 Country-code domains added another 148.6 million.

The deeper question is whether people will keep needing an address at all. VeriSign's own risk factors name it: demand could fall as end-users establish identity through social media or transact through mobile apps.4 Add assistants that answer a question without ever resolving a hostname, and the mechanism by which a small business decides it needs a .com starts to look like a habit rather than a requirement.

The base has re-accelerated hard — 179.1 million at 30 June 2026, up 5.1%, on a record quarter of new registrations.5 Watch the domain name base excluding price: two consecutive years of decline while the price ladder is running would mean the toll is being levied on a shrinking road.

The number that tests this threat
Reported
Domain name base growth, 2021 to 2024
−2.5% over three years

173.4 million at the end of 2021, 169.0 million at the end of 2024, including six consecutive quarters of decline on collapsing Chinese demand, U.S. registrars cutting promotional volume, and cheap new gTLDs taking the marginal name. Revenue rose 17.3% anyway, on price. The escalator averages about 4.7% a year across the six-year cycle, which is the tolerance. The base has recovered to 179.1 million, up 5.1%. Watch for two consecutive years of decline while the price ladder is running.

Source: VeriSign Form 10-K, FY2025 ↗
References
  1. ReportedThe .com and .net base fell for six consecutive quarters through the third quarter of 2024, driven by weaker Chinese demand, U.S. registrars prioritising revenue per customer over acquisition, and very low-cost new gTLDs taking share.
    Domain Name Wire — price increases boost revenue at Verisign as domain registrations continue to slide. The .com and .net base fell for a sixth consecutive quarter to 169.6 million at the end of the third quarter of 2024, down 2.5% year over year, with U.S. registrars prioritising revenue per customer over customer acquisition and very low-cost new gTLDs taking share; the third-quarter 2024 renewal rate was approximately 72.3%. — Q3 2024 · publ. 2024-10-25 · source ↗
  2. ReportedRevenue rose from $1,327.6M in 2021 to $1,557.4M in 2024 while the base fell from 173.4 million to 169.0 million.
    VeriSign, Inc., Form 10-K FY2025 — Item 7, Management's Discussion and Analysis. Revenues $1,656.6M (+6%) against $1,557.4M in 2024 (+4%) and $1,493.1M in 2023; operating income $1,121.0M (+6%). Costs as a percentage of revenues: cost of revenues 11.8% (12.3%, 13.2%), research and development 6.3% (6.2%, 6.1%), selling, general and administrative 14.2% (13.6%, 13.7%), total costs and expenses 32.3% (32.1%, 33.0%), operating income 67.7% (67.9%, 67.0%), interest expense (4.6)%, net income 49.8% (50.4%, 54.8%). The .com and .net domain name base was 173.5 million at 31 December 2025 (+3%) against 169.0 million in 2024 (−2%) and 172.7 million in 2023. VeriSign processed 41.7 million new .com and .net registrations in 2025 against 37.4 million in 2024; the final third-quarter 2025 renewal rate was 75.4% against 72.2%. The registry-level wholesale fee rose from $9.59 to $10.26 for .com effective 1 September 2024 and from $9.92 to $10.91 for .net effective 1 February 2024. Geographic revenues: U.S. $1,093.1M (+6%), EMEA $279.4M (+12%), APAC $184.6M (+5%), other $99.5M (+3%). VeriSign repurchased 3.4 million shares for $858.6M in 2025, with $1.08 billion remaining under a programme authorised to $1.50 billion effective 24 July 2025. — FY2025 · publ. 2026-02-05 · source ↗
  3. ReportedThere were 401.6 million domain registrations worldwide at the end of the second quarter of 2026, of which new gTLDs were 52.9 million growing 34.0% year over year against 5.1% for .com and .net.
    Domain Name Industry Brief Quarterly Report — 401.6 million domain name registrations across all top-level domains at the end of the second quarter of 2026, an increase of 9.1 million or 2.3% on the first quarter and 29.9 million or 8.1% year over year. The .com and .net TLDs had a combined 179.1 million registrations in the domain name base, up 3.0 million or 1.7% on the quarter. Country-code TLD registrations were 148.6 million, up 5.2 million or 3.6% year over year. New generic TLD registrations were 52.9 million, up 3.3 million or 6.7% on the quarter and 13.4 million or 34.0% year over year. — Q2 2026 · publ. 2026-07-23 · source ↗
  4. ReportedVeriSign's risk factors name social media identity and mobile applications as substitutes that could reduce demand for domain names.
    VeriSign, Inc., Form 10-K FY2025 — Item 1A, Risk Factors. Demand for domain names could be negatively impacted to the extent end-users establish their online identities using social media such as Facebook, Instagram or TikTok, or transact business through mobile applications. Local governments actively promote ccTLDs that VeriSign does not operate. The .com and .net Registry Agreements provide that if certain terms are not similar to such terms generally in effect in the registry agreements of the five largest gTLDs, a renewal would be upon terms reasonably necessary to render them similar. VeriSign is subject to obligations that do not apply to ccTLDs and other gTLDs and that may create a competitive disadvantage. The company depends on key personnel and warns that a failure to attract, retain or effectively implement succession plans could harm the business. Dividends are subject to declaration by the board and to numerous factors including results of operations, financial condition, liquidity, contractual prohibitions and other restrictions, with no assurance that any will be paid and with board discretion to decrease the level. Efforts to acquire the .web gTLD are identified as an initiative requiring significant resources and subject to regulatory scrutiny. — FY2025 · publ. 2026-02-05 · source ↗
  5. ReportedThe base reached 179.1 million at 30 June 2026, up 5.1%, on a record 12.7 million new registrations.
    VeriSign, Inc., Reports Second Quarter 2026 Results — Form 8-K Exhibit 99.1, 23 July 2026. Revenue $435 million, up 6.0% year over year; operating income $296 million against $281 million; net income $217 million and diluted EPS $2.38 against $207 million and $2.21. Cash, cash equivalents and marketable securities $1.03 billion, up $454 million from year-end 2025; deferred revenues $1.45 billion at 30 June 2026, up $64 million from year-end. Cash flow from operations $232 million. On 26 June 2026 VeriSign issued $550 million of 5.10% Senior Notes due 2031 and on 20 July 2026 used the proceeds with cash on hand to redeem $550 million of 4.75% Senior Notes due 2027. 0.7 million shares repurchased for $197 million; an additional $884 million authorised effective 23 July 2026 bringing the total authorisation to $1.50 billion; a quarterly dividend of $0.81 per share declared on 20 July 2026. The domain name base ended at 179.1 million .com and .net registrations, a 5.1% increase year over year and a net increase of 3.05 million in the quarter; a record 12.7 million new registrations were processed against 10.4 million; the final first-quarter 2026 renewal rate was 76.3% against 75.5%. CEO Jim Bidzos: the record of 100% availability for the .com and .net domain name resolution system was extended to 29 years, and more than 100% of free cash flow was returned to the investing public through dividends and share repurchases. The .web top-level domain has been delegated into the DNS root zone with VeriSign as the designated registry operator. — Q2 2026 · publ. 2026-07-23 · source ↗
Sources
Generated September 23, 2026