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Date

Thursday, Feb. 5, 2026 at 4:30 p.m. ET

Call participants

  • Executive chairman and chief executive officer — James (Jim) Bidzos
  • Chief financial officer — John Callis
  • Vice president, investor relations — David Atchley

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Takeaways

  • Revenue -- $1.7 billion for fiscal 2025 (ended Dec. 31, 2025), up 6.4% year over year.
  • Quarterly revenue -- $425 million in fiscal Q4, an increase of 7.5% from the same period in 2024.
  • Operating income -- $1.1 billion for fiscal 2025, representing year-over-year growth of 5.9%.
  • Free cash flow -- $1.1 billion for fiscal 2025; fiscal Q4 free cash flow was $285 million, up from $222 million a year ago.
  • EPS -- Full-year earnings per share were $8.81, up 10.1%.
  • Net income -- Fiscal Q4 net income was $206 million compared to $213 million in the prior quarter and $191 million in the prior year's fiscal Q4.
  • Operating expenses -- $140 million in fiscal Q4, up from $135 million in fiscal Q3 and $132 million in fiscal Q4 2024, with the majority of the sequential increase due to an impairment charge on real estate held for sale.
  • Cash and equivalents -- $581 million at quarter end.
  • Shareholder returns -- $1.1 billion returned to shareholders through repurchases and quarterly dividends in fiscal 2025.
  • Domain name base -- .com and .net domain name base ended at 173.5 million, a year-over-year increase of 4.5 million names or 2.6%.
  • New registrations -- 41.7 million new names during fiscal 2025, the highest since 2021; fiscal Q4 new registrations totaled 10.7 million, up from 9.5 million in fiscal Q4 2024.
  • Fiscal Q4 net registrations added -- 1.6 million names added in the fourth quarter.
  • Renewal rate -- Preliminary fiscal Q4 renewal rate was 75%, up from 74% the previous year.
  • Dividend increase -- Quarterly cash dividend set at $0.81 per share, up 5.2%, payable Feb. 27, 2026.
  • 2026 guidance: Revenue -- Expected between $1.7 billion and $1.7 billion.
  • 2026 guidance: Operating income -- Expected range of $1.2 billion to $1.2 billion; margin to align with long-term trends.
  • 2026 guidance: Interest expense/non-operating income net -- Projected between $57 million and $67 million, reflecting lower interest income and cash balances.
  • 2026 guidance: Capital expenditures -- Projected $55 million-$65 million, above typical range due to end-of-life equipment replacement, capacity expansion tied to AI-driven demand and supply constraints, and corporate headquarters projects.
  • 2026 guidance: Tax rate -- GAAP effective tax rate expected to be 22%-25%, slightly higher due to increased foreign taxes.
  • 2026 domain name base growth -- Forecasted at 1.5%-3.5%.
  • Share repurchase program -- $1.1 billion available and no expiration.
  • AI impact -- Jim Bidzos stated, "AI is benefiting us, as we've said, in several different ways," citing higher infrastructure utilization and increased DNS queries from AI-related activity.
  • Strategic direction -- The company is evaluating new security and functionality services, with further details to be announced in the coming months.
  • ICANN GTLD program -- The company is reviewing participation in the April round of new generic top-level domains with interest in opportunities aligned with its core infrastructure role.
  • Dividend policy -- Management intends to continue quarterly dividends, subject to board approval and market conditions.

Summary

Management highlighted increasing adoption of new marketing programs tailored for the registrar channel, which they describe as providing flexibility and incentivizing higher-quality domain registrations. The company reported ongoing improvements in both first-time and overall renewal rates across .com and .net domains, with momentum supported by favorable trends in all major geographic regions. While .net has declined in recent years, targeted programs are now designed to improve retention and performance within that segment. Leadership clarified that the business model depends on channel partners whose strategies and structures are evolving, reinforcing caution in forecasting renewal trends. Operating income margin for fiscal 2026 is anticipated to normalize relative to historical averages, as cost headwinds from AI-driven infrastructure requirements and supply constraints impact capital expenditures. Although the board has authority to increase .com prices, management reiterated their policy not to provide advance guidance; the earliest such announcement could be in April for an October 2026 change. Interest expense is expected to rise in 2026 due to lower interest income and reduced cash balances, while foreign taxes are contributing to a higher effective tax rate. Management also indicated an ongoing review of potential participation in the upcoming ICANN GTLD program, contingent on infrastructure strategic fit.

  • Management attributes higher DNS activity in part to AI workloads, noting that increased AI-driven traffic is contributing to infrastructure utilization and relevance.
  • Channel partner flexibility and ongoing R&D are regarded as central to future growth and potential new product offerings.
  • While fiscal Q4 included a property impairment charge, the core expense base remains closely managed, with explicit explanation for sequential increases.
  • The geographic diversification of domain growth—across US, EMEA, and APAC—was confirmed by management as a trend persisting through the reporting period.
  • Operational focus remains on core registry and infrastructure stewardship, with no intention to broaden commercial activities beyond closely aligned security services.

Industry glossary

  • Domain name system (DNS): The hierarchical, distributed database system that translates domain names into IP addresses for internet routing.
  • gTLD (generic top-level domain): A type of top-level domain in the DNS, such as .com, .net, or new domains introduced by ICANN, not restricted by country.
  • ICANN: The Internet Corporation for Assigned Names and Numbers, the nonprofit organization managing internet domain names and root DNS infrastructure.
  • Registrar channel: Intermediaries authorized to sell domain name registrations to end users on behalf of the registry operator.
  • Renewal rate: The percentage of expiring domain names that are renewed by the registrant for an additional term.

Full Conference Call Transcript

Jim Bidzos: Thank you, David. Afternoon to everyone, and thank you for joining us. 2025 marked another solid year for VeriSign as we continue to deliver on our mission by extending our 100% service delivery for the .com and NetDNS to an unparalleled twenty-eight years even as utilization of our services increased significantly. New registrations during 2025 totaled 41,700,000 names, the largest we have seen since 2021. During the year, the domain name base grew by 4,500,000 names or 2.6%, leading to a 2025 ending .com.net domain name base of 173,500,000 names. Our revenue grew 6.4% year over year while EPS grew by 10.1%. In 2025, we returned $1,100,000,000 to shareholders through share repurchases and quarterly dividends which were initiated in 2025.

The positive domain name-based trends we saw developing in late 2024 gained strength and continued throughout 2025. During the year, we saw sustained strength in new registrations, renewal rates, and domain name-based growth across our three main regions: The US, EMEA, and APAC. It is clear to us that end users are seeing value in domain names and the domain name system as evidenced by our strong domain name metrics and the increasing utilization of our infrastructure. Net registrations added during the fourth quarter were 1,580,000 names driven by the strength of new registrations of 10,700,000, which is up from 9,500,000 in Q4 2024 and a preliminary Q4 renewal rate of 75%, compared to 74% a year ago.

We continued to see solid demand for our domain names during the fourth quarter and ongoing registrar engagement with our programs. As we look to 2026, we're encouraged by the continued strength as we exited 2025 and register our feedback on our 2026 marketing efforts. For 2026, we expect a domain name-based growth rate of between 1.5-3.5%. As a reminder, you can monitor the progression of the domain name base, which is updated daily on our website. Our financial and liquidity position remains stable with $581,000,000 in cash, cash equivalents, and marketable securities at the end of the quarter. There was $1,080,000,000 remaining available at the end of the quarter under the current share repurchase program, which has no expiration.

As announced in today's earnings release, VeriSign's Board of Directors declared a cash dividend of $0.81 per share of VeriSign's outstanding common stock to stockholders of record as of the close of business on 02/19/2026, payable on 02/27/2026. This quarterly amount is an increase of 5.2%, which is consistent with the increase in net income we saw during 2025. VeriSign intends to continue to pay a cash dividend on a quarterly basis subject to market conditions and approval by VeriSign's board of directors. Now I'd like to turn the call over to John. I'll return when John has completed his financial report with closing remarks.

John Callis: Thank you, Jim, and good afternoon, everyone. For the year ended 12/31/2025, the company generated revenues of $1,660,000,000, up 6.4% year over year. Operating income totaled $1,120,000,000 in 2025, up 5.9% from the previous year. Full year EPS was $8.81, and 2025 free cash flow was $1,070,000,000. For the quarter ended December 31, 2025, the company generated revenue of $425,000,000, up 7.5% from the same quarter a year ago. Operating expense in Q4 2025 totaled $140,000,000, which compares to $135,000,000 last quarter and $132,000,000 for 2024. During the fourth quarter, we recorded an impairment charge on real estate we intend to sell, which accounted for a majority of the sequential quarter increase in operating expenses.

Net income in the fourth quarter totaled $206,000,000 compared to $213,000,000 last quarter and $191,000,000 in 2024. Fourth quarter diluted earnings per share was $2.23 compared to $2.27 last quarter and $2 for the same quarter of 2024. Net income reflects a higher income tax expense booked during the fourth quarter, primarily due to foreign-based income taxes. Operating cash flow for 2025 was $290,000,000 and free cash flow was $285,000,000 compared with $232,000,000 and $222,000,000 respectively in the year-ago quarter. The increase in our free cash flow is partly due to higher quarterly earnings, increased cash from working capital, and lower cash tax payments. I will now discuss our full year 2026 guidance.

Revenue is expected to be between $1,715,000,000 and $1,735,000,000. Operating income is expected to be between $1,160,000,000 and $1,180,000,000. The midpoint of our revenue range and operating income range reflect an expected operating margin more consistent with our long-term trend as compared with the level we saw during 2025. Interest expense and non-operating income net, which includes interest income estimates, is expected to be an expense of between $57,000,000 and $67,000,000 as our expectations for interest income are lower due to lower short-term rates and lower cash balances. Capital expenditures are expected to be between $55,000,000 and $65,000,000, which is higher than our typical range primarily for two reasons.

First, we have a larger amount of end-of-life equipment that we are replacing in 2026 along with planned capacity expansion, both of which are facing significantly higher costs largely attributable to intense AI industry-driven demand and supply constraints. Additionally, we are planning a few capital improvement projects to our corporate headquarters. The GAAP effective tax rate is expected to be between 22-25% as we are seeing a slight increase in foreign taxes. In summary, VeriSign continues to demonstrate sound financial discipline during the fourth quarter and throughout 2025. And as you can see from our guidance, we expect continued solid financial performance during 2026. I will now turn the call back to Jim for his closing remarks.

Jim Bidzos: Thank you, John. We're pleased with the progress we made during 2025 and look to delivering on our mission during 2026. I've said over the years that while we divested what we considered non-core businesses, we would continue seeking and evaluating ways to offer enhanced functionality or security services that are consistent with our mission. We've continued this evaluation, and we now believe we have strong candidates for new services that can help reduce known and unknown vulnerabilities and contribute significantly to information trust. These potential new services are strongly aligned with our core mission, leverage our long history of pioneering DNS and security technology, and can be offered to new or existing customers throughout our channel.

We'll share more in the coming months. Thanks for your attention today. This concludes our prepared remarks, and now we'll open the call for your questions.

David Atchley: Operator, we're ready for the first question.

Operator: Thank you. If you are using a speakerphone, please make sure your mute function is off to allow your signal to reach our equipment. Once your question has been stated, please mute your line. We will take our first question from Rob Oliver with Baird.

Rob Oliver: Great. Good afternoon. Jim, on the last quarterly call, you talked at some length about your view on AI and its impact on the domain base and that it actually was driving some benefit. Clearly, there's a lot of concern in the market around the open web and AI's impact on the web structure. So can you talk a little bit about, you know, give us an update on what you're seeing there, how much you think an uptick in activity on AI is contributing to some of this domain resurgence, and what you're seeing among the domain base? And then I had a couple of follow-ups.

Jim Bidzos: Okay. So the impact of AI on our business is certainly having some impact, but it's one of several components that we've talked about before. We've talked about the utility of a domain name and its value. We've talked about the domain name as a digital trust anchor. We've talked about the reliability of our services, twenty-eight years of uninterrupted service and uptime availability. All significant contributors. Internet use is growing. Traffic is expanding. We believe with confidence that a good portion of that is due to AI. And AI is benefiting us, as we've said, in several different ways.

I mean, one interesting way is that the registrars are putting AI to work and developing tools that users find easier to build a website and also to select a good domain name. But we're also seeing that AIs building LLMs are, we've all read about how they're basically scraping the Internet and collecting data. We see that in the increase in our queries. That's an indication that there's increased activity in traffic, no doubt. A portion that we difficult to measure with precision, but no doubt that a portion of that is AI. And that just means a greater dependence on the DNS.

AIs are going to have to, especially agentic AIs, obviously, conducting multiple tasks for people are going to have to navigate. They're gonna have to refresh data, collect current data. They're going to be using the DNS to do that. So increased dependence on it, increased value and utility of domain names, the established governance structure that exists for the DNS, a secure trusted anchor that's supported across most of the world's countries, in a well-governed system by ICANN, I think, is just proving its value as the load on this infrastructure grows.

And AI is undoubtedly a huge part of that, and I think it's probably safe to say that it's gonna continue to grow well into the foreseeable future.

Rob Oliver: Great. Really helpful. And then I wanted to pivot to the marketing programs. You know, you called out, you know, going back to '24 when you guys made the call that you were going to pursue some new strategic marketing programs. Those have definitely had an impact and are playing out really nicely. I was wondering if you could just address where in particular you're seeing that impact? Is it across the board? Is it more nontraditional channels? And then are there any tweaks you guys are making to the marketing programs coming into '26?

Jim Bidzos: Sure. Let me first say this. I think we can sort of break this into two pieces. One is the registrar channel, of course, who engage with these programs and actually make the sales. First, I'll say that over the years, that channel has evolved. Their business models have evolved. There have been some that have gone public, some that have gone private, some that have changed management, some that have changed business strategies. And so, it took us a little while, but in 2024, we began to adjust and develop programs that met their needs far better. We're kind of a slow, careful, deliberate company. Our priority is our infrastructure and its secure operation, but give us credit.

We did catch up. And I think one of the most significant changes that we made was simply giving this evolving changing channel the flexibility to choose from a basket of programs that we began to provide. That allowed them to engage in the ones that are most effective for them. We also included some aspects of the program that sort of incentivized, shall we say, registrations in the categories that tend to have stronger renewal rates. And so, I think all of that is paying off.

Rob Oliver: Great. Really helpful. And then last quick one for me. I couldn't resist since you threw out the teaser at the end there, Jim. You know, you mentioned how you think AI is going to drive, you know, sort of increased dependence on that sort of trusted secure, anchored DNS system that you guys play a critical role in. You mentioned some new services. I know we're going to get more information in the future. But just in the interest of, you know, trying to mitigate any surprises on any conference calls nowadays, any color around that would be helpful.

You know, there are many folks like, a bit around long enough to remember when you guys sold VeriSign Security Solutions. Thank you. I'm just curious for any more color you can provide around what those additional services might be.

Jim Bidzos: Okay. Well, thanks for all those questions. I guess what I can say is this. Yes. We did divest kind of ending in 2015 a number of services that proved to be maybe even more distraction for us than real benefit, and sort of complicated matters in our core mission. We focused exclusively on our core missions starting in 2015. However, I've said consistently, maybe not every earnings call, not every year, but sporadically throughout the last ten years that we don't stop looking for ways to enhance things. Let me start by saying that we are constantly doing R&D. We are constantly improving our own infrastructure. We are supporting IETF standards. We're working to bring innovations and new technologies.

A lot of them are made available at no cost if they in our sort of stewardship role as stewards of .com and .net. The two of the 13 roots that we run managing the root zone, in all of these areas, we see ourselves as having stewardship responsibilities. And so, we're always looking to enhance security and stability. That's literally what we're about. If we find things that may be of interest to a broader community, either in a stewardship role or as a commercial product, they'd have to meet a number of different tests. We're not gonna become a sales organization. We're staying in our wheelhouse.

And I think, given the increased load on the Internet, given the increased usage, given further dependence on the Internet itself and all of the infrastructure that it sits on, including ours, if there are small enhancements that we've made that we think could add value and benefit folks, either in functionality or particularly in security and stability, at some level, some of those look as if they may have value to folks through our channel, and that's what I was alluding to. So we'll have more to say about that in a few months.

Rob Oliver: Great. Very helpful. Thank you, Jim. Appreciate it.

Jim Bidzos: Thank you.

Operator: We will take our next question from James Michael, Sherman Lewis with Citi.

James Michael: Hi there. Good afternoon. Thank you for taking my questions. Two, if I may. First, on the 2026 domain guidance, can you unpack your assumptions on a macro or operational, that could drive domain growth to the low or the high end of the guide? And the high end implies, you know, continued acceleration in domain growth.

Jim Bidzos: Yeah. So our guidance really reflects what we've seen trend-wise over the last year. We've been encouraged by the trends. I think each of our major regions showed growth during the year. And we monitor those trends. We also meet and talk regularly with our channel to see what trends they're seeing and to hear what their plans are. So, you know, we think our range encompasses the most likely outcome and our best estimate at the time. And as the year progresses, we'll continue to update on that.

James Michael: Helpful. Thank you. Any expectations, then for, maybe the ICANN auction? You know, in contact with a .com domain growth acceleration we've seen, but also some emerging TLDs that have begun to scale faster. Just any insights into your approach here would be helpful.

Jim Bidzos: Okay. I'm sorry. I missed quite catch the last part of that. The first part was about the upcoming ICANN auction you said?

James Michael: Yes.

Jim Bidzos: Ah, okay. You mean their next round of new generic top-level domains? There may be auctions where they may have for domain names, but it isn't an open auction. It's an application process. I think that's what you're referring to. Right? The one that opens in April.

James Michael: Yes. Absolutely.

Jim Bidzos: Oh, okay. Yes. So they're opening a round of new GTLDs like they did roughly fifteen years ago. And are you asking us what our participation will be, or did you want some general comments on how we view ICANN's new round? I apologize. Some of your question broke up just a little bit.

James Michael: Yes. Apologies for breaking up. I'm curious how you're thinking about new TLDs and your portfolio here.

Jim Bidzos: Well, we're studying. ICANN hasn't opened the round yet, but we are studying it. We're looking for any opportunities that may present themselves. I think we would be an interested party if there were something specific that would contribute to our strategic role as a critical infrastructure provider. Think of it that way. We do, of course, have .com and .net, and there is .web as well from the last round that we have an interest in. But nothing more really to say about that now other than the round opens up in April. There is a process that could include auctions depending on contention. And then there's a lot of process behind that to launch a new GTLD.

But yes, we're familiar with it. We're studying it, and we don't have anything to say with respect to how we may view our own applications at this point. Perfect. And all of them will be visible shortly after the round opens. There will be a period in time in which everyone's applications will be public and visible.

James Michael: Great. Thank you.

Jim Bidzos: Sure.

Operator: Thank you. And we will take our last question from Alexey Gagalev with JPMorgan.

Alexey Gagalev: Hello, everyone. Maybe first question, either Jim or John, could you double click a bit more on the guidance? Obviously, I appreciate the range that you provided. Would it be possible to give a bit more granularity in your assumptions? How much domain growth I assume for .com and what sort of direction or trend are you assuming for .net?

Jim Bidzos: Yeah. Typically, don't guide the .com and .net specifically. We guide to the DMV base of the combination of those two. You know, I think, you know, over the recent years, you know, that .net has had a little bit of a decrease in its size. You know, we've obviously implemented programs, some of which target .net, and hopefully, we'll have a positive impact. Our other programs, as Jim mentioned, are some of them focused on specific use cases that we believe will drive better retention rates. You know? So we're pleased with what we saw last year. We've made some adjustments this year to those.

So we do think we have good momentum coming out of 2025 and starting the year right now. You know, I think we've talked in the past that, you know, while our renewal rates have improved here during 2025, we have mentioned that, you know, we will have a higher mix of first-time renewal rates during 2026, so that'll potentially pull down our overall renewal rate. But while I say that, you know, during 2025, both our first-time renewal rates and previous renewal rates have improved. So several positive trends throughout 2025 that seemed to gain steam as the year progressed.

And obviously, we're doing the types of things that we think are important to continue that momentum and continue to build on it.

Jim Bidzos: Yeah. And, Alexey, I would say, we do treat the zone as a combination of .com and .net, but the daily report that we get, I'm sure you're aware, does show you what has happened in each of those, and you can track that as it progresses.

Alexey Gagalev: That's helpful. Thank you, Jim and John. And maybe just to follow-up on that, so it just seems like the midpoint of the guidance being a little bit conservative considering the trend that we're seeing for .com at the moment. And I was just wondering if your assumptions, at least at the midpoint of the guide, are implying that the growth will taper off in the second half of the year. Is that the logic?

John Callis: You know, we exited what, at 2.6% growth for 2025 over '24 midpoint of 2.5. I feel like I'd be splitting hairs to explain that one-tenth of a percent. But, you know, certainly, you know, if you look at the trend of our new registrations during 2025, they might be a little bit more back second half loaded, which, like I said, will impact our first-time renewal rates. But we tend not to guide to quarterly numbers.

Jim Bidzos: The other factor, Alexey, obviously, I know you're aware of this. I just want to point it out to some who may be new and just remind everyone as well that we don't sell directly. We sell through a channel, and it's a very, very diverse channel. There are many, many registrars with different business models. They're engaged in different programs. There's been quite a bit of change in the channel. There's been some M&A activity. So I kind of feel as if, you know, we're being given those factors, I think we're being pretty precise, given all the things that we don't control in that particular channel.

So we try to tighten that range up as much as we can. And John, as John said, you know, a tenth of a percent, if we could be that close, I'm gonna feel like we pretty much hit the bull's eye.

Alexey Gagalev: I hear you, Jim. Thank you. And final question maybe if you could comment on your intention to raise prices for .com. Have you made the decision to move to raise prices this year? And when do you think you may announce that?

Jim Bidzos: So we don't guide to pricing, but for those who may be new or unfamiliar, we do have the ability to raise prices in every six-year period in the back four years, 7% each of those back four years. It requires six months' notice. The first available price increase will come to execute in October 2026. And, therefore, if we choose to some level of a price increase, the first opportunity to take advantage of that would be an announcement made in April. But we don't guide to it, but April isn't that far away.

So you won't have to wait long to see what we're doing, but I can't answer your question directly because it's our policy not to guide price increases.

Alexey Gagalev: Thank you. I appreciate the answers.

John Callis: You're welcome.

Operator: Thank you. This does conclude today's question and answer session. I would now like to turn the call back to David Atchley for final comments.

David Atchley: Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call. Thank you for your participation. This concludes our call. Have a good evening.

Operator: This does conclude today's call. Thank you for your participation. You may now disconnect.