The 31% Customer VeriSign Says It Does Not NeedWide moat

VeriSign (VRSN) — moat facet

The only concentration disclosure in this collection where the company argues its own dependence away — and is probably right.

The most unusual sentence in VeriSign's financial statements is the one that follows the concentration disclosure.

Largest customer's share of revenue (%)32%202332%202431%2025VeriSign 10-K FY2025 (approximate shares); the customer is not named
A third of revenue from one customer, three years running, which the filing says it could lose without material effect.

"The Company's largest customer accounted for approximately 31% of revenues in 2025, and approximately 32% of revenues in 2024 and 2023. The Company does not believe that the loss of this customer would have a material adverse effect on the Company's business because, in that event, end-users of this customer would transfer to the Company's other existing customers."1

VeriSign does not name the customer. It does not have to: GoDaddy manages over 91 million domain names worldwide, which is the only figure in the industry large enough to make 31% arithmetic work.2

The claim is testable, and the test has effectively already been run. When registrars have failed or exited over the past three decades, ICANN's bulk transfer procedures have moved their portfolios to other accredited registrars, and VeriSign's revenue has not moved at all, because the fee follows the name rather than the reseller. The registrant experiences a change of billing address. VeriSign experiences nothing.

What makes the disclosure remarkable is the direction of the argument. Every other company in this collection discloses concentration as a risk to be mitigated. VeriSign discloses it as an artefact of a distribution model in which the customer is a conduit.

The honest limit: the claim assumes an orderly transfer. A registrar failing chaotically, with names lapsing during the disruption, would cost something. It has not happened at a scale that would test it.

Moat trajectory: Holding steady

Thirty-one, thirty-two, thirty-two percent across three years. The concentration is neither growing nor shrinking, and the argument that it does not matter has not been tested and has not been contradicted.

The number that tests this moat
Reported
Largest-customer share, three years running
31%, 32%, 32%

For 2025, 2024 and 2023 respectively. The concentration is neither growing nor shrinking, and VeriSign names no one. The claim that it does not matter rests on ICANN bulk-transfer procedures moving a failed registrar’s portfolio to other accredited registrars while the fee follows the name. It has never been tested at this scale. Watch news about a large registrar’s finances, not VeriSign’s reporting.

Source: VeriSign Form 10-K, FY2025 ↗
References
  1. ReportedThe largest customer accounted for approximately 31% of revenues in 2025 and 32% in 2024 and 2023, and VeriSign does not believe its loss would be material because end-users would transfer to other existing customers.
    VeriSign, Inc., Form 10-K FY2025 — Item 8, consolidated financial statements and notes. Net income $825.7M (2024 $785.7M, 2023 $817.6M); diluted EPS $8.81 ($8.00, $7.90) on 93.8 million diluted shares (98.2, 103.5); income before income taxes $1,068.5M; income tax expense $242.8M. Balance sheet at 31 December 2025: cash and cash equivalents $307.9M, marketable securities $272.6M, property and equipment net $213.7M, goodwill $52.5M, deferred tax assets $233.2M, deposits to acquire intangible assets $145.2M, total assets $1,325.9M; accounts payable and accrued liabilities $298.0M, deferred revenues $1,035.1M current and $349.4M long-term, long-term senior notes $1,788.2M, total current liabilities $1,333.1M — a total stockholders' deficit with an accumulated deficit above $11.3 billion. Net cash provided by operating activities $1,091.1M; the deferred revenues balance increased $80.2M in 2025 ($58.1M in 2024, $27.0M in 2023) and $934.7M of revenue recognised in 2025 had been in the opening deferred balance. Major customers note: the largest customer accounted for approximately 31% of revenues in 2025 and approximately 32% in 2024 and 2023, and the Company does not believe the loss of this customer would have a material adverse effect because end-users would transfer to its other existing customers. Dividends of $0.77 per share were declared in each of the three quarters from the second quarter of 2025, totalling $2.31 per share and $215.2M, accounted for as a reduction of additional paid-in capital; a dividend of $0.81 per share was declared on 3 February 2026. — FY2025 · publ. 2026-02-05 · source ↗
  2. Third-party estimateGoDaddy manages over 91 million domain names, the largest registrar portfolio in the industry.
    Industry tally of the largest domain registrars, 2026 — GoDaddy is the largest domain registrar in the world, managing over 91 million domain names globally, well ahead of Namecheap and GMO Internet Group. — 2026 · publ. 2026-01-01 · source ↗
Sources
Generated September 23, 2026