◆ What the Market Isn't Pricing In

VeriSign (VRSN) — the variant view

A balance sheet upside down on purpose, an escalator that just restarted, and a Berkshire stake compounding without a single trade.

📈 VRSN valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Three things about VeriSign are visible in the filings and largely absent from how it gets discussed.

Three things the filings show and the discussion missesBelow zerooperatinginvested capital~$115Mper 7% step,near-pure margin9.6% to 10.0%Berkshire, withouta single trade$1.45bndeferred revenuefunding it allA frozen price and a growing base is still mid-single-digit compounding at a 67.7% margin.
The downside case here is that growth stops, not that revenue falls.

The first is that the balance sheet is upside down on purpose. Total assets are $1,325.9 million — less than one year of revenue — and shareholders' equity is negative, with an accumulated deficit above $11.3 billion.1 That is not distress. Registrants pay for the year ahead, so $1.45 billion of deferred revenue arrives before any of the work is done, and the company has spent thirty years converting the resulting cash into retired stock.2 Compute return on invested capital in the ordinary way and the denominator comes out negative: current liabilities alone exceed total assets. There is no ratio to quote. The business consumes no capital, which is a strange thing to say about infrastructure that resolves hundreds of billions of queries a day.

The second is that the price ladder just restarted. The six-year pricing period began on October 26, 2024, and permits a 7% increase in each of its final four years.3 The first of those took effect on November 1, 2026: $10.26 to $10.97.4 Applied across roughly 163 million .com names, each 7% step is worth on the order of $115 million of incremental revenue at close to a 100% margin, and three more are contractually available. Very little in this collection is as forecastable as that.

The third is Berkshire Hathaway's stake, which grows while Berkshire does nothing. Berkshire has held 8,989,880 shares through each of the last three quarters without buying or selling one.5 Over the same period VeriSign retired stock: 93.9 million shares outstanding in April 2025, 90.3 million in July 2026.6 Berkshire's ownership went from about 9.6% to about 10.0% on that arithmetic alone. It is the mechanism Buffett has described for forty years, running in front of anyone who cares to check the share count.

What the market appears to price instead is the risk that the contract changes. That is the right risk to worry about — it is the subject of this company's first threat page — but it is worth being precise about what it would cost. A pricing freeze does not reduce revenue; it stops revenue growing. The base grew 5.1% last quarter.7 A frozen price and a growing base is still a business compounding at mid single digits with a 67.7% operating margin and a shrinking share count. That is the downside case.

References
  1. ReportedTotal assets were $1,325.9M at 31 December 2025 against a stockholders' deficit and an accumulated deficit above $11.3 billion.
    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. ReportedDeferred revenues were $1.45 billion at 30 June 2026, collected before the service is performed.
    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 ↗
  3. ReportedThe six-year .com pricing period began on 26 October 2024 and permits a 7% increase in each of its final four years.
    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 ↗
  4. ReportedThe .com wholesale fee rose from $10.26 to $10.97 on 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 ↗
  5. ReportedBerkshire Hathaway held 8,989,880 VeriSign shares in each of the quarters ended December 2025, March 2026 and June 2026, without buying or selling.
    Berkshire Hathaway Inc., Form 13F-HR information table for the quarter ended 30 June 2026 (SEC, CIK 1067983) — VeriSign, Inc. holdings of 972,947 shares valued at $244,754,547 and 8,016,933 shares valued at $2,016,739,665, a combined 8,989,880 shares. The same combined holding of 8,989,880 shares was reported for the quarters ended 31 December 2025 and 31 March 2026. — Q2 2026 · publ. 2026-08-14 · source ↗
  6. Reported93,900,000 shares were outstanding at 18 April 2025, against 90,300,000 at 17 July 2026.
    VeriSign, Inc., Form 10-Q for the quarter ended 31 March 2025 (SEC, CIK 1014473) — 93,900,000 shares of common stock outstanding at 18 April 2025. — Q1 2025 · publ. 2025-04-24 · source ↗
  7. ReportedThe domain name base grew 5.1% year over year in the second quarter of 2026.
    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