The Contract That Is the MoatWide moat

VeriSign (VRSN) — moat facet

The competitive advantage is a clause: seven percent a year, in four years out of six, available on a calendar rather than won in a market.

The clause is short enough to quote and it is worth more than most companies' entire strategy: VeriSign may increase the maximum price of a .com registration by up to 7% over the previous year in each of the final four years of each six-year period.1

The .com price ladderSept 2021$9.59— frozenSept 2024$10.26Nov 2026$10.972027-2029threesteps left30 Nov2030 renew7% permitted in each of the final four years of every six-year period.
A growth engine you can read off a calendar four years in advance.

Read it slowly. The increase is not negotiated with anyone. It is not contingent on inflation, on cost, on demand, or on a competitor's price. It is available on a calendar. The current six-year period began on 26 October 2024, which means increases are available in each of 2026, 2027, 2028 and 2029. The first arrived on 1 November 2026: the wholesale fee went from $10.26 to $10.97.2 If VeriSign takes all four, the price reaches roughly $13.42.

The contract does more than set prices. It grants the right to operate .com at all, on a term that must be renewed or extended by 30 November 2030 and that carries a presumptive right of renewal — ICANN may terminate or refuse only in prescribed circumstances. .net runs on a similar agreement, renewed in June 2023 through July 2029, with terms that are in one respect better: VeriSign may raise .net prices by up to 10% every year, not four years in six.

Layered on top of the .com agreement is a Cooperative Agreement with the U.S. Department of Commerce, most recently amended in 2018 and automatically renewed on the same terms on 30 November 2024. Standard renewals need no further DOC approval, but changes to pricing do. That is the seam in the whole structure: the escalator that produces most of VeriSign's growth exists because a federal agency agreed to it in 2018 and can decline to agree again.

What the contract does not do is protect VeriSign from competition for new names. Anyone can start a registry — more than 1,600 applications were filed in ICANN's 2026 round.3 What no one can do is start a second .com.

What the contract also does is decide who collects. Registrars pay VeriSign the wholesale fee and set the retail price themselves; VeriSign is barred from selling directly, from bundling, and from most of the marketing a supplier in its position would attempt.4 So the escalator is the only lever it has, and even that one is shared: raising the price requires no negotiation with any customer, but changing the terms of the escalator requires the agreement of a federal agency. There is a reason management talks about the domain name base and the renewal rate rather than about strategy. Those are the two variables left.

Moat trajectory: Holding steady

Seven percent in four years out of six is the same clause it has been since 2018, and the six-year period that began in October 2024 is running exactly to plan. There is no version of this that widens; the ceiling does not rise. There is a version that narrows, and it starts with a Department of Commerce that decides differently.

The number that tests this moat
Moat Explorer calc
Operating margin, latest quarter
68.2% in Q2 2026 ($296.3M on $434.6M)

The contract's pricing clause shows up as margin; a fall below the mid-60s would mean costs are catching the price ladder.

How it's calculated: Operating income / revenue, Q2 2026
Source: VeriSign, Inc. second-quarter 2026 results (Form 8-K Exhibit 99.1) ↗
Aspects of the moat
DIG DEEPER 01
Presumptive Renewal, and the Four Words That Qualify It
Thirty years of renewals have made a presumption feel like a property right, and a parity clause quietly ties .com's terms to registries drafted under…
DIG DEEPER 02
Seven Percent, in Four Years Out of Six
$9.59 to $10.26 to $10.97, heading toward roughly $13.42 — the most forecastable revenue line in this collection, and none of it required a decision.
DIG DEEPER 03
The Department of Commerce Sits on the Other Side
A federal agency holds a veto over the single most important number in a $26.8 billion company, and it changes hands with administrations.
DIG DEEPER 04
.net, .cc and the Contracts Nobody Reads
.net has better contractual terms than .com and a fifteenth of the economics; the root and .edu pay nothing and are why .com is hard to take away.
⚠ Threats to the moat
⚠ THREAT 01
The Renewal Has Never Failed, Which Is the Whole Evidence Base
The renewal has never failed, which is the entire evidence base for assuming it never will, priced at approximately nothing.
⚠ THREAT 02
A Ceiling Is Still a Ceiling
A monopolist who cannot price to value, cannot tier, and cannot charge more for a name worth a billion queries a month is a monopolist on a leash.
References
  1. ReportedThe .com Registry Agreement permits an increase to the Maximum Price of up to 7% over the previous year in each of the final four years of each six-year period; the current period began 26 October 2024; the term must be renewed or extended by 30 November 2030 with ICANN able to terminate or refuse in prescribed circumstances; .net was renewed in June 2023, runs to July 2029 and permits 10% a year; the Cooperative Agreement with the DOC was amended in 2018 and renewed automatically on 30 November 2024.
    VeriSign, Inc., Form 10-K for the fiscal year ended 31 December 2025 (SEC, CIK 1014473) — Item 1, Business. VeriSign operates the .com and .net registries under registry agreements with ICANN, and .com additionally under a Cooperative Agreement with the U.S. Department of Commerce (most recently amended by Amendment 35 on 26 October 2018, automatically renewed on the same terms on 30 November 2024 for a successive six-year term, renewing again on 30 November 2030 unless the DOC gives notice). The .com Registry Agreement runs a six-year term that must be renewed or extended by 30 November 2030 and contains a presumptive right of renewal, with ICANN able to terminate or refuse in certain prescribed circumstances; it permits an increase to the Maximum Price of up to 7% over the previous year in each of the final four years of each six-year period, the current period having begun on 26 October 2024. The .net Registry Agreement was renewed on 29 June 2023, runs to 1 July 2029 and permits increases of up to 10% each year. VeriSign remits $0.2575 to ICANN quarterly for each annual .com registration and $0.25 for each .name registration. It also operates .cc under an agreement with the Cocos (Keeling) Islands, operates .name and internationalised gTLDs, provides back-end services for .edu, performs the Root Zone Maintainer function for ICANN and operates two of the thirteen global internet root servers. Retail pricing is established by registrars; VeriSign must provide ICANN-accredited registrars with non-discriminatory access, faces marketing and bundling limits, must submit new Registry Services for ICANN review, and is subject to vertical-integration restrictions that apply solely to .com — obligations it states do not apply to ccTLDs and other gTLDs and may create a competitive disadvantage. Named registry competitors include CentralNic, China Internet Network Information Center (CNNIC), DENIC eG, GoDaddy, Google, Identity Digital, Nominet, Public Interest Registry, Radix and .xyz. Employee headcount 928 (256 cost of revenues, 240 research and development, 432 selling, general and administrative). — FY2025 · publ. 2026-02-05 · source ↗
  2. ReportedThe .com wholesale fee rose 7% from $10.26 to $10.97 effective 1 November 2026.
    Domain Name Wire — Verisign raising wholesale .com prices. Effective 1 November 2026 the annual registry fee rises 7% from $10.26 to $10.97, the first change since September 2024 and the first of four increases available in the six-year pricing period that began on 26 October 2024; taking all four would lift the price to roughly $13.42. — 2026 · publ. 2026-04-23 · source ↗
  3. ReportedMore than 1,600 applications were filed in ICANN's 2026 new gTLD round.
    ICANN — the New gTLD Program 2026 Round application submission window closed on 12 August 2026 with more than 1,600 primary applications received, of which more than 1,100 included applications for replacement strings; final totals are confirmed on payment of the evaluation fee. — 2026 · publ. 2026-08-13 · source ↗
  4. ReportedRetail pricing is set by registrars, and the .com Registry Agreement bars VeriSign from selling directly, limits bundling and constrains how it may provide marketing support to ICANN-accredited registrars.
    VeriSign, Inc., Form 10-K for the fiscal year ended 31 December 2025 (SEC, CIK 1014473) — Item 1, Business. VeriSign operates the .com and .net registries under registry agreements with ICANN, and .com additionally under a Cooperative Agreement with the U.S. Department of Commerce (most recently amended by Amendment 35 on 26 October 2018, automatically renewed on the same terms on 30 November 2024 for a successive six-year term, renewing again on 30 November 2030 unless the DOC gives notice). The .com Registry Agreement runs a six-year term that must be renewed or extended by 30 November 2030 and contains a presumptive right of renewal, with ICANN able to terminate or refuse in certain prescribed circumstances; it permits an increase to the Maximum Price of up to 7% over the previous year in each of the final four years of each six-year period, the current period having begun on 26 October 2024. The .net Registry Agreement was renewed on 29 June 2023, runs to 1 July 2029 and permits increases of up to 10% each year. VeriSign remits $0.2575 to ICANN quarterly for each annual .com registration and $0.25 for each .name registration. It also operates .cc under an agreement with the Cocos (Keeling) Islands, operates .name and internationalised gTLDs, provides back-end services for .edu, performs the Root Zone Maintainer function for ICANN and operates two of the thirteen global internet root servers. Retail pricing is established by registrars; VeriSign must provide ICANN-accredited registrars with non-discriminatory access, faces marketing and bundling limits, must submit new Registry Services for ICANN review, and is subject to vertical-integration restrictions that apply solely to .com — obligations it states do not apply to ccTLDs and other gTLDs and may create a competitive disadvantage. Named registry competitors include CentralNic, China Internet Network Information Center (CNNIC), DENIC eG, GoDaddy, Google, Identity Digital, Nominet, Public Interest Registry, Radix and .xyz. Employee headcount 928 (256 cost of revenues, 240 research and development, 432 selling, general and administrative). — FY2025 · publ. 2026-02-05 · source ↗
Sources
Generated September 23, 2026