The Department of Commerce Sits on the Other SideNarrow moat
VeriSign (VRSN) — moat facet
A federal agency holds a veto over the single most important number in a $26.8 billion company, and it changes hands with administrations.
Every other registry in the world answers to ICANN. .com answers to ICANN and to the United States government.
VeriSign's operation of .com is subject to a Cooperative Agreement with the Department of Commerce, most recently amended in October 2018 and automatically renewed on the same terms on 30 November 2024 for a further six-year term, renewing again on 30 November 2030 unless the DOC gives notice.1 Standard renewals of the .com Registry Agreement itself do not require further DOC approval — but the DOC's prior written consent is required to change the pricing section, and for changes to certain other specified terms.
That is an unusual arrangement to find at the centre of a $26.8 billion company.4 The pricing escalator that produces most of VeriSign's growth exists because a specific amendment was agreed in 2018. A different administration with a different view of internet-infrastructure pricing does not have to litigate anything or find a competitor. It has to decline to approve.
The counterweight is inertia and the absence of an obvious better answer. Re-tendering .com would mean migrating the address records of 163 million names, most of global e-commerce among them, away from an operator with a twenty-nine-year record of never dropping a query.2 No official has yet judged the theoretical price saving worth that.
The interesting asymmetry is that the arrangement cuts against VeriSign in one respect nobody markets: obligations under the .com agreement apply to VeriSign that do not apply to ccTLDs and other gTLDs, which the company itself describes as a potential competitive disadvantage.3
The Department of Commerce renewed the Cooperative Agreement automatically on the same terms in November 2024 and the next review is 2030. Between now and then this is neither improving nor deteriorating — it is simply the largest unresolved thing about the company, sitting still.
The price can rise only as the agreement with the Department of Commerce allows. Each permitted increase goes almost straight to profit; a renegotiation that removed the increases would be the contract turning against VeriSign.
Source: Domain Name Wire (Apr 2026) ↗- ReportedThe Cooperative Agreement was most recently amended on 26 October 2018, renewed automatically on the same terms on 30 November 2024 for a successive six-year term and renews again on 30 November 2030 unless the DOC gives notice; standard renewals of the .com Registry Agreement do not require further DOC approval but the DOC's prior written approval is required to change the pricing section and certain other specified terms.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 ↗
- ReportedVeriSign has maintained 100% .com and .net resolution availability for 29 consecutive years.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 ↗
- ReportedVeriSign states that it is subject to obligations that do not apply to ccTLDs and other gTLDs and that these may create a competitive disadvantage.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 ↗
- ReportedVeriSign trades at about $297 a share, a market capitalisation near $26.8 billion on 90.3 million shares, roughly 31.8 times trailing earnings and 15.7 times trailing sales, at a dividend yield of about 1.1%.VeriSign (NASDAQ: VRSN) market data — share price about $297 and market capitalisation about $26.8 billion on 90.3 million shares outstanding; trailing price/earnings about 31.8 and price/sales about 15.7 on trailing revenue of $1.71 billion and trailing net income of $850 million; price/book not meaningful on negative shareholders' equity; dividend yield about 1.1%. — August 2026 · publ. 2026-08-27 · source ↗