AI Takeaway
VRSN reported solid Q2 FY2026 operating growth, with revenue up 6.0% to $434.6M and net income up 4.4% to $216.5M, supported by a larger .com/.net domain base and prior .com pricing actions, while maintaining a 68.2% operating margin. Source: 10-Q Item 2 MD&A, pp.13-16
Revenue
$434.6M
++6.03% YoY
Operating Income
$296.3M
++5.56% YoY
Filed · Source: SEC EDGAR 10-Q filing
Verisign (VRSN) reported Q2 FY2026 revenue of $434.6M, up 6.0% year over year. The company posted net income of $216.5M, up 4.4% from a year earlier.
Revenue increased 6% year over year to $434.6M in Q2 FY2026, which management attributed primarily to growth in the .com and .net domain name base and prior .com price increases. The domain name base reached 179.1 million registrations as of June 30, 2026, up 5.1% year over year and up 3.0 million sequentially from March 31, 2026.
Source: Source: 10-Q Item 2 MD&A, pp.13-15
VRSN processed 12.7 million new .com and .net registrations in Q2 FY2026, compared with 10.4 million in the prior-year period. The final renewal rate for the first quarter of 2026 was 76.3%, up from 75.5% in the first quarter of 2025; management cited registrar customer-acquisition efforts, marketing programs, and evolving AI tools for website and content creation as positive contributors to domain-base trends.
Source: Source: 10-Q Item 2 MD&A, pp.13-15
VRSN announced that the annual wholesale fee for each new and renewal .com registration will increase from $10.26 to $10.97, effective November 1, 2026. Under the renewed .com Registry Agreement, VRSN remains the sole .com registry operator through November 30, 2030 and may raise prices by up to 7% in each of the final four years of the applicable six-year period.
Source: Source: 10-Q Item 2 MD&A, p.14
Operating income rose 5.6% year over year to $296.3M, while operating margin was 68.2%, versus 68.5% a year earlier. SG&A expense increased 11.8% to $60.8M, primarily reflecting a $3.1M increase in stock-based compensation expense associated with higher projected achievement levels for certain performance-based RSU grants.
Source: Source: 10-Q Item 2 MD&A, pp.13, 16
During Q2 FY2026, VRSN repurchased 0.7 million shares for $196.8M; $666.0M remained under the authorization at June 30, 2026. Subsequent to quarter-end, the Board authorized total repurchase capacity of up to $1.50B, and the company issued $550.0M of 2026 Notes on June 26, 2026 before using the proceeds and cash on hand to redeem the $550.0M of 2017 Notes on July 20, 2026.
Source: Source: 10-Q Item 2 MD&A, pp.13, 17
VRSN's revenue is primarily derived from registrations in the .com and .net registries. Management states that demand may be negatively affected by economic conditions, competition from ccTLDs and other gTLDs, alternatives for establishing an online presence, and changes in how consumers and businesses use the internet.
Source: Source: 10-Q Item 2 MD&A, pp.13-15
Revenue depends materially on new domain registrations, renewals of existing registrations, and the domain name base. Management notes that registrant behavior, including how registrants manage domain investments for resale or advertising-related revenue, may reduce demand for new registrations and renewals.
Source: Source: 10-Q Item 2 MD&A, pp.13-15
The fees VRSN receives for .com and .net registrations are governed by agreements with ICANN, which limit allowable increases. Although VRSN can raise .com prices by up to 7% in specified years and .net prices by up to 10% annually through June 30, 2029, its ability to use price increases to offset weaker volume growth is contractually constrained.
Source: Source: 10-Q Item 2 MD&A, p.14
At June 30, 2026, VRSN reported total liabilities of $4.06B and stockholders' equity of negative $2.25B. While management states that existing liquidity, operating cash generation, and financing capacity should be sufficient for at least the next 12 months, ongoing dividends, repurchases, and debt servicing require continued access to cash flow and financing.
Source: Source: 10-Q Item 2 MD&A, pp.17-18; 10-Q Balance Sheet (XBRL)
VRSN attributes revenue by the domicile of its registrars, which may differ from where registrars operate or where registrants are located. Management notes that reported geographic revenue growth can be affected by registrar reincorporations, relocations, acquisitions, and reseller affiliation changes.
Source: Source: 10-Q Item 2 MD&A, p.15
Reported EPS of $2.38 versus the $2.43 analyst consensus — a -2.0% miss for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $434.6M | $409.9M | +6.03% |
Cost of Revenue | $50M | $49.1M | +1.83% |
Operating Income | $296.3M | $280.7M | +5.56% |
Net Income | $216.5M | $207.4M | +4.39% |
R&D Expense | $27.5M | $25.7M | +7.00% |
SG&A Expense | $60.8M | $54.4M | +11.76% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $1.8B | $1.41B | +28.06% |
Current Assets | $1.12B | $682.3M | +64.49% |
Total Liabilities | $4.06B | $3.4B | +19.26% |
Current Liabilities | $1.9B | $1.26B | +50.77% |
Stockholders' Equity | $-2.25B | $-1.99B | -13.06% |
Cash & Equivalents | $840.9M | $314.3M | +167.55% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $504M | $493.8M | +2.07% |
Investing Cash FlowYTD | $56M | $104.6M | -46.46% |
Financing Cash FlowYTD | $-27.6M | $-491M | +94.38% |
Dividends Paid | $73.6M | $72.1M | +2.08% |
Share Buybacks | $201.4M | $166.8M | +20.74% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 68.2% | 68.5% | -0.30% |
Net Margin | 49.8% | — | — |
ROE | -9.6% | — | — |
ROA | 12.0% | — | — |
Current Ratio | $0.591 | — | — |
Debt to Equity | $-1.8 | — | — |
Expected release date, analyst estimates & what to watch
VeriSign delivered solid Q1 FY2026 results with revenue up 6.6% YoY to $428.9M and operating margin expanding to 68.5%, though the company's deeply negative stockholders' equity and current ratio well below 1.0x reflect its aggressive capital return program.
VeriSign delivered solid FY2025 results with revenue growing 6.4% to $1.66B and operating cash flow surging 20.9% to $1.09B, while maintaining an exceptional ~68% operating margin despite a deeply negative stockholders' equity driven by aggressive share buybacks.
Other companies in Internet Services & Infrastructure
Verisign reported Q2 FY2026 revenue of $434.6M, up 6.0% from $409.9M a year earlier. Management attributed the increase primarily to a larger .com/.net domain name base and prior .com pricing increases; the domain base reached 179.1 million registrations, up 5.1% year over year. Source: 10-Q Item 2 MD&A, pp.14-15
Net income rose 4.4% year over year to $216.5M, while operating income increased 5.6% to $296.3M and operating margin remained 68.2%. New .com/.net registrations increased to 12.7 million from 10.4 million, and the first-quarter renewal rate improved to 76.3% from 75.5%. Source: 10-Q Item 2 MD&A, pp.13-16
The supplied Q2 FY2026 filing does not provide Wall Street revenue, EPS, or earnings estimates, so whether VRSN beat consensus cannot be determined from this filing. The company reported revenue of $434.6M and net income of $216.5M for the quarter. Source: 10-Q Item 2 MD&A, pp.13-15
VRSN had $840.9M of cash and cash equivalents plus $193.2M of marketable securities at June 30, 2026, and generated $504.0M of operating cash flow in the first six months of 2026. However, it reported total liabilities of $4.06B, negative stockholders' equity of $2.25B, and a 0.59x current ratio; management said available liquidity and operating cash generation should be sufficient for at least the next 12 months. Source: 10-Q Item 2 MD&A, pp.17-18; 10-Q Balance Sheet (XBRL)
Management identified risks to .com and .net demand from economic conditions, competition from alternative domain extensions and online-presence services, and changing internet practices and registrant behavior. Because registrations and renewal rates drive revenue, a decline in either could adversely affect growth. Source: 10-Q Item 2 MD&A, pp.13-15