Record quarter, .web match plan, and more: Verisign analysis
Verisign noted a stellar second quarter of the year.
Verisign (NASDAQ: VRSN) released earnings this afternoon that show that .com continues to boom.
Revenue was up 6.0% year over year, and the overall growth metrics were more stunning. The firm also discussed .web and its future security product.
Record fresh registrations and domain base growth
The firm processed a record 12.7 million fresh .com and .net registrations in Q2, resulting in a record quarterly growth of 3.05 million in the domain base following accounting for deletions. Fresh registrations were up a whopping 21% year over year.
Almost all of that was .com growth, as .com surged by 3 million domains under management.
The firm stated that the US and EMEA drove the growth, and these tend to have higher quality registrations and renewals than other regions.
Verisign cited a number of factors for the growth, counting registrars focusing on client buyout, its updated marketing programs with the channel, and how AI is making site creation easier.
The firm acknowledged there might be some pull-forward demand as people renew domains ahead of prices go up on November 1, but stated this is probably immaterial. It also stated that, given how it recognizes revenue over time and registrants renew their domains at different times, it expects regarding half of the revenue recognition from the price increase to hit in 2027, and most of the remainder in 2028. (Verisign can increase the price again in late 2027.)
The cherry on the top: the Q1 renewal rate was the highest in 20 years. (Final renewal rates aren’t available until the following quarter ends.)
Higher guidance for the year
The record results pushed Verisign to up its full-year guidance.
It now expects the .com/.net domain base to increase between 5.2% and 6.0% in 2026. Previously, it guided to 3.1% to 4.3% growth.
Revenue guidance increased from between $1.730 billion and $1.745 billion to between $1.745 billion and $1.755 billion.
Operating income guidance increased from between $1.170 billion and $1.185 billion to between $1.185 billion and $1.195 billion.
Essentially, last quarter’s top guidance has now become the bottom guidance.
.Web launch plans
Yesterday, Verisign disclosed that it finally got the .web top level domain following a decade of delays.
The firm is going through a 90-day mandatory testing period, which will be followed by the 30-day trademark sunrise.
Following that, it will run a limited registration period. During this time, people with existing .com domains will be able to register the matching .web.
Verisign didn’t disclose the pricing for the match and whether it would be higher than the general availability pricing. But this could be a significant revenue driver, as many registrars will promote this match since they will gain revenue from it, too.
.Web will come with premiums for the best domains, and I would bet that those trying to match high-quality .com domains will have to pay premiums even if they register them during the matching period.
As for the cost of resolving all outstanding challenges to .web, Verisign’s 10Q stated that the costs were not material.
Fresh Product
Last quarter, the firm stated it would begin rolling out a series of blog posts regarding a fresh product in May. That was delayed as the firm focused on the .web delegation. It now promises that details will be revealed in the coming months.
CEO Jim Bidzos provided a bit more color regarding the fresh product:
I can say that the products are very security focused, that they benefit from our high-assurance, high-performance infrastructure, and that they also benefit from our long history in public key infrastructure and DNS security. They’re designed to provide a high level of performance and reliability at global scale, as our DNS resolution does. We believe today’s increasing reliance on online services, especially those that are AI-related, with the evolving threat environment, will demand greater and deeper deployment of security technology and practices, which will come with performance, security, and scalability challenges. Our infrastructure will address those challenges and more.
Share in Verisign are largely unchanged in early following hours trading.
