The Renewal Rate Is the Whole ThesisWide moat
VeriSign (VRSN) — moat facet
76.3% is the only number in this company that measures whether anyone actually wants what it sells.
The renewal rate is the closest thing VeriSign has to a customer-satisfaction score, and it is the only operating number that tests whether the switching-cost argument is true.
It was 76.3% for the first quarter of 2026, against 75.5% a year earlier, and 72.2% at the trough in the third quarter of 2024.1 The four-point swing between the trough and now is worth more than it looks: applied to a base near 179 million names it is several million registrations a year of difference, and each one carries a ten-dollar fee at nearly full margin.
What the number actually measures needs care. The base is two populations pretending to be one. The first is names attached to a functioning business — a website, email, a brand — which renew at rates approaching certainty because not renewing means going dark. The second is speculative inventory: names bought in bulk against a resale that mostly never happens, plus first-year promotional registrations sold at a dollar that were never expected to renew at ten. Almost all the variance sits in the second group.
VeriSign does not disclose the split, and the absence is the single most useful piece of missing information about the company. A reported rate rising from 72% to 76% could mean commercial registrants are more committed, or simply that registrars ran fewer dollar promotions two years ago. Renewal rates are not fully measurable until 45 days after quarter-end, which is why the figure always lags a quarter.
Four percentage points of renewal rate recovered in two years, on a base of roughly 179 million names, is several million registrations a year of difference. The direction is unambiguous even though the composition of the number is not.
The rate bottomed at 72.2% in the third quarter of 2024 and reached 76.3% in the first quarter of 2026. On a base near 179 million names each point is worth well over a million registrations a year at close to full margin. The caveat is composition: VeriSign does not disclose the split between commercial addresses and speculative inventory, and almost all the variance sits in the second.
Source: VeriSign Form 10-K FY2025 and Q2 2026 results ↗- ReportedThe renewal rate was 76.3% in the first quarter of 2026 against 75.5% a year earlier, having troughed near 72% in 2024, and is not fully measurable until 45 days after quarter-end.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 ↗