# Verisign (VRSN) — Company Analysis

## Company & Research Metadata

- **Company:** VeriSign, Inc.
- **Ticker:** VRSN
- **Exchange:** NASDAQ
- **Sector / Industry:** Information technology / internet infrastructure and domain-name registry
- **Template version:** 2.9
- **Research date:** 2026-11-09
- **Valuation / score price snapshot:** $308.67, regular-session close of 2026-11-06
- **Valuation refresh date:** 2026-11-09 (initial valuation)
- **Tracking tier:** On the Radar
- **Owned:** No position recorded in `portfolio/holdings.md`
- **Primary operating period reviewed:** Q3 FY2026, quarter ended 2026-09-30
- **Historical period reviewed:** FY2023–FY2025 and Q1–Q3/9M FY2026
- **Latest investor presentation reviewed:** Q3 FY2026 earnings materials, 2026-10-22
- **Latest earnings call reviewed:** Q3 FY2026 webcast and independently paraphrased transcript, 2026-10-22
- **Latest post-earnings management commentary reviewed:** Q3 2026 management commentary and analyst Q&A, 2026-10-22

## What's Changed Since Previous Review

**Initial analysis — no previous review available.**

**Current review:** 2026-11-09  
**Previous review:** None  
**Update trigger:** Initial fundamental research and valuation following Q3 FY2026 earnings

| Area | Previous view | Current view | Investment impact |
|---|---|---|---|
| Registry economics | No canonical VRSN review on file | Exclusive .com registry operator, substantial renewal base and exceptionally high operating margins | Very durable economic franchise, subject to contract limitations |
| Domain demand | No canonical review | 182.5M .com/.net domains, +6.1% year over year; 13.1M new registrations in Q3 | Supports growth, but renewal mix deserves scrutiny |
| Pricing | No canonical review | .com wholesale fee increased from $10.26 to $10.97 effective 2026-11-01 | Supports 2027–2028 revenue recognition over renewal cycles |
| Cash generation | No canonical review | FY2025 FCF $1,068.3M; 9M FY2026 FCF $738.7M; low capex | Quality is strong, though 2026 operating cash flow declined year over year |
| Valuation | No canonical review | Bear/base/bull $162/$262/$352; weighted fair value ~$260 | $308.67 reference price implies ~15.8% downside to weighted value |

**Thesis:** Initial. The business is unusually durable and capital-light, but the analyzed price discounts many years of pricing power and steady cash-flow growth.

## Investment Snapshot

| Metric | Current view |
|---|---|
| Price snapshot | $308.67 (2026-11-06 regular-session close) |
| Bear / Base / Bull fair value | $162 / $262 / $352 |
| Scenario probabilities | 20% / 60% / 20% |
| Probability-weighted fair value | $260 |
| Quality Score / Tier | 90.1 / A |
| Risk level | Medium, with material contractual/pricing and valuation sensitivity |
| Valuation confidence | 72/100 (Medium) |
| Tracking / Ownership | On the Radar / No position recorded |
| Research-date investment rating | **Hold** |

**Decision rationale:** Verisign offers high renewal-driven cash flow and substantial wholesale-registry advantages, but a roughly 33× trailing-earnings valuation at $308.67 offers little margin of safety. This is the approved research-date **Hold** judgment; FolioFacts separately computes live price-dependent classifications using the shared methodology.

## Investment Thesis

Verisign is the registry operator behind .com and .net rather than a retail registrar. Every domain registration or renewal processed through participating registrars creates a wholesale registry payment. Existing web addresses are important digital identities for customers, so an established domain can be considerably more durable than an ordinary discretionary technology purchase.

The investment attraction is not exciting new products. It is an entrenched registry base, regulated-but-valuable pricing rights, low incremental capital requirements, and cash generation that can support dividends and share retirement. New .com/.net registrations and allowable price increases together can compound revenue even if the addressable market grows slowly. The investment debate is whether faster 2026 domain growth survives first-renewal cohorts and whether the share price has already fully discounted that resilience.

### What the Market May Be Mispricing

1. Domain registrations and renewals may provide more durable cash-flow compounding than the relatively modest reported revenue growth initially suggests.
2. The accelerated 2026 registration pace may overstate sustainable volume growth; first-time renewing names have materially lower retention than established domains.
3. Contractual pricing limitations and a valuation dependent on long-run discount rates may deserve a larger margin of safety than the headline operating margin implies.

## Business Overview

Verisign provides registration and authoritative resolution infrastructure for .com and .net, and operates other registry and DNS services of smaller scale. Registrars such as GoDaddy and Namecheap are the direct paying customers for wholesale registrations. They own end-customer marketing and retail pricing. Verisign records fees largely over the relevant registration term, and related cash collections can differ from revenue recognition because of deferred revenue.

| Business / offering | Role and economics | Investment relevance |
|---|---|---|
| .com | Core global generic top-level domain registry; wholesale registration and renewal fees | Dominant economic engine; contract extends to November 2030 with presumptive renewal provisions |
| .net | Established generic domain registry | Smaller adjacent domain base, with a separate announced March 2027 wholesale price increase |
| Other registry/DNS services | Registry technology and authoritative DNS infrastructure | Supports operating scale and reliability; currently much smaller than .com/.net |
| .web | Newly secured generic TLD, with early rollout planned for late 2026 and general availability potentially April 2027 | More flexible marketing/pricing, but commercial demand remains unproven |
| Verisign Informed | High-assurance validation and credential-status services in beta | Potential adjacency to DNS reliability, without established material revenue |

For .com, a wholesale price adjustment from $10.26 to $10.97 began November 1, 2026; for .net, management announced an increase from $10.91 to $12.00 effective March 1, 2027. The fee increase is not equivalent to instant recognized revenue: management expects roughly half of the .com increase to flow through 2027 revenue, with most of the remainder in 2028.

### Business Takeaway

Verisign's most valuable product is high-reliability registry access to a large installed base of digital identities. Its stable registry infrastructure supports exceptional margins, while direct customer acquisition costs largely sit with retail registrars. Pricing rights are valuable but contractual, not unlimited.

## Industry, TAM & Market Share

The relevant market is the global stock of registered domain names and the flow of registrations and renewals, rather than all internet spending. Demand responds to business formation, e-commerce, content creation, online identity and registrar promotions. Internet identifiers are embedded in global infrastructure and can be costly for established operators to replace, but domain registrations can fall during economic slowdowns and when promotional or speculative cohorts expire.

The .com/.net base finished 2023 near 172.7M names, fell to approximately 169M at the end of 2024, recovered to 173.5M at year-end 2025, and reached 182.5M on September 30, 2026. Those figures demonstrate that an excellent renewal business can still undergo periods of negative net volume growth. The 2026 AI-website-creation tailwind is plausible but not yet a guarantee of persistent high-single-digit domain expansion.

### Market-Share Analysis

A directly comparable, current global TLD market-share series for all major registry operators was not assembled under uniform definitions. It would be misleading to use .com's large absolute domain count as a calculated percentage of a mixed market containing country-code names and different pricing regimes.

#### Competitive Scale / Position

| Company / Platform | Primary Position | Relative Scale | Growth Direction | Investment Relevance |
|---|---|---|---|---|
| Verisign .com/.net | Established mass-market registry | 182.5M names | +6.1% YoY in Q3 2026 | Very large entrenched renewal base |
| Identity Digital and other gTLD operators | Alternative generic top-level domains | Fragmented extension portfolios; not directly comparable in this research | Not quantified on consistent basis | Can attract new registrations but rarely duplicate .com's ubiquity |
| Country-code registries, including .de and .uk | Important local identity alternatives | Deep regional adoption; distinct governance | Not quantified on consistent basis | Compete for domain registration choice in local markets |
| Retail registrars and web-platform offerings | Distribution layer and alternatives to dedicated websites | Direct end-customer contact, not equivalent registry substitutes | Distinct business models | Retail marketing and product bundling influence Verisign demand |

### Industry Takeaway

The industry benefits from the continuing need for persistent web identities, but .com's existing installed base, not an unlimited TAM expansion thesis, supports the valuation. The strong 2026 new-registration cycle should be normalized.

## Customer Economics

Verisign's direct customers are registrars, but its true unit of economic value is each registered domain-year. Annual new registrations and renewals generate wholesale revenue; customers avoid the disruption of migrating an established brand and linked digital identity to another domain. Registrars set the retail fee, and Verisign does not control their pricing or promotions.

At the Q3 call, management reported first-time renewal rates around the mid-40% range and previously renewed domains around the mid-80% range. It estimated the preliminary aggregate Q3 renewal rate at 74.3%, against 75.4% for the comparable finalized prior-year period. The rising mix of recently registered names can push headline renewals lower without a deterioration in established-domain retention. It also means new registrations cannot be valued as if each were equally sticky.

### Customer-Economics Takeaway

Incremental registry names are highly attractive economically after the shared infrastructure cost. The main uncertainty is cohort quality, not conventional enterprise customer-acquisition cost or SaaS-style net revenue retention.

## Competitive Landscape & Moat

### Competitive Landscape

| Competitor | Market Share | Positioning | Advantages vs. Company | Disadvantages vs. Company | Current Direction |
|---|---|---|---|---|---|
| Identity Digital and other gTLD registries | N/D, not comparable | Alternative generic extensions | More extension choice, differing pricing flexibility | Much smaller installed bases for individual alternatives | Fragmented competition |
| National country-code registry operators | N/D, not comparable | Country-specific domain namespaces | Strong local identity and national recognition | Limited direct substitution for globally established .com brands | Mature regional alternatives |
| Hosted website, social identity and AI-agent platforms | N/A, substitutes not registries | Alternative ways to reach customers | Can reduce need for standalone websites | Often still depend on DNS/domains or lack ownership portability | Growing substitutes |

### Moat Assessment

The moat comes from exclusivity under registry contracts, installed-base switching costs and unusually reliable DNS infrastructure. A registrar cannot replicate the .com authoritative registry simply by competing on retail pricing. Verisign reports decades of uninterrupted .com/.net DNS availability and is responsible for infrastructure on which a large volume of internet traffic depends. The downside of regulatory exclusivity is reliance on renewal and wholesale-price permissions controlled by external authorities.

**Moat direction:** Stable.

### Competitive Takeaway

The material threat is less a competing vendor taking over .com registrations and more domain demand migrating to other identifiers, weak promotional-cohort renewals, or contractual price regulation that transfers economics away from shareholders.

## Financial Profile

### Historical Financials

Amounts in USD millions except gross/operating/FCF margins, revenue growth and diluted shares (millions). FCF is reported CFO less capital expenditures for property and equipment; quarterly FCF is derived by differencing reported cumulative cash flows. `N/D` means a balance-sheet value was not populated from a verified matched-period source. Completed fiscal years are annual totals; 2026 rows are standalone quarters or nine-month cumulative amounts—not TTM data.

| Period | Revenue | Growth | Gross Margin | Operating Margin | FCF | FCF Margin | SBC | Diluted Shares | Cash | Debt |
|---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---:|
| FY2023 | $1,493.1M | 4.4% | 86.8% | 67.0% | $808.0M | 54.1% | $59.7M | 103.5M | N/D | N/D |
| FY2024 | $1,557.4M | 4.3% | 87.7% | 68.0% | $874.5M | 56.2% | $61.1M | 98.2M | N/D | N/D |
| FY2025 | $1,656.6M | 6.4% | 88.2% | 67.7% | $1,068.3M | 64.5% | $69.7M | 93.8M | $580.5M | $1,788.2M |
| Q1 FY2026 | $428.9M | 6.6% | 88.5% | 68.5% | $265.2M (derived) | 61.8% | $19.1M | 91.7M | N/D | N/D |
| Q2 FY2026 | $434.6M | 6.0% | 88.5% | 68.2% | $212.8M (derived) | 49.0% | $19.4M | 91.1M | N/D | N/D |
| Q3 FY2026 | $443.0M | 5.7% | 88.8% | 66.9% | $260.7M (derived) | 58.8% | $20.3M | 90.4M | $476.1M | $1,785.9M |
| 9M FY2026 | $1,306.5M | 6.1% | 88.6% | 67.8% | $738.7M | 56.5% | $58.8M | 91.1M | $476.1M | $1,785.9M |

The nine-month balance sheet is at the September 30 reporting date, not the sum of quarterly balances. Gross margin is calculated as revenue less cost of revenue, divided by revenue. The 2026 Q1 diluted-share figure is the quarter's weighted average, not period-end outstanding shares.

#### Cash Conversion, SBC and Capital Returns

| Metric | FY2025 | 9M FY2026 |
|---|---:|---:|
| Operating cash flow | $1,091.1M | $772.3M |
| Capex | $22.8M | $33.6M |
| Free cash flow | $1,068.3M | $738.7M |
| SBC | $69.7M | $58.8M |
| SBC / FCF (matching period) | 6.5% | 8.0% |
| Repurchases | $881.6M | $620.0M |
| Dividends paid | $215.2M | $220.8M |

SBC/FCF is an analytical ratio of the matching period and not a separate FolioFacts financial-history input; FolioFacts derives the displayed ratio from period-matched figures. No TTM FCF or SBC series is used.

### Financial Takeaways

Q3 2026 revenue of $443.0M grew 5.7% year over year and operating income of $296.5M grew 4.3%, with operating margin near 66.9%. Net income was essentially flat at $212.6M, while diluted EPS rose to $2.35 due partly to lower share count. A $7.5M pretax loss on assets held for sale affected the quarter.

Full-year guidance following Q3 calls for 6.5%–7.0% domain-base growth, $1.755B–$1.760B revenue, $1.188B–$1.192B operating income and $55M–$65M capex. The domain-base growth guidance improved, but operating leverage did not expand in Q3. Nine-month 2026 FCF declined year over year, even as earnings increased; cash taxes, payment timing and operating expenses deserve monitoring.

As of September 30, 2026 Verisign held about $476M of cash and marketable securities against ~$1.79B senior notes, or ~$1.31B of net debt. Its ~$1.46B deferred revenue liability reflects services still to be delivered, not conventional interest-bearing financing. Negative book equity arises importantly from cumulative buybacks, not from an inability to produce cash.

**Financial direction:** Mixed — strong domain/revenue expansion, exceptionally high margins, but lower year-to-date operating cash generation and significant shareholder distributions.

## Management & Capital Allocation

CEO Jim Bidzos and CFO John Calys oversee a franchise where uptime and restraint are as important as new-product execution. Management has historically returned much of the business's free cash flow through repurchases, supporting per-share earnings growth; 2025 also included a regular dividend, and the November 2026 approved quarterly dividend was $0.81 per share (annualized $3.24, ~1.05% yield at the research-date close).

Buybacks can create value at attractive prices but are less obviously compelling when the stock trades above conservative intrinsic value. During 9M FY2026, dividends plus repurchases exceeded FCF; this is possible for a strong balance sheet but should not become the default use of capital. The .web operating rights are represented by roughly $171M of acquired intangible assets, making execution discipline important.

### Management Takeaway

Management has maintained strong registry reliability and cash returns. Capital allocation looks broadly sound, but aggressive repurchases during expensive periods and uncertain .web/Informed commercialization warrant discipline.

## Valuation

### Current Valuation

| Metric | Value |
|---|---:|
| Price Snapshot | $308.67, 2026-11-06 regular-session close |
| Market Capitalization | Approximately $27.7B |
| Enterprise Value | Approximately $29.0B (equity value plus reported net funded debt) |
| Trailing GAAP P/E | Approximately 33.2× |
| Market cap / FY2025 revenue | Approximately 16.7× |
| Market cap / FY2025 FCF | Approximately 25.9× |

The earnings multiple and price snapshot are dated research references, not live feeds. The P/FCF reference uses completed FY2025 cash flow; it is not a quarterly or TTM historical-series input.

### Comparable Company Analysis

| Company | Relevance | Public / Private | Valuation Metric 1 | Valuation Metric 2 | Growth / Margin / Risk Context |
|---|---|---|---|---|---|
| **Verisign (VRSN)** | Subject company; exclusive .com/.net registry | Public | ~33.2× trailing earnings | ~25.9× FY2025 FCF | Renewal-driven monopoly-like economics, contractual pricing limits |
| Identity Digital and other generic TLD registries | Closest direct registry competition outside .com/.net | Private / mixed | N/A | N/A | Alternate domain extensions; no comparable public standalone multiples |
| GoDaddy (GDDY) | Registry distribution/customer-channel adjacency, not equivalent registry monopoly | Public | Not normalized here | Not normalized here | Registrar customer-acquisition and software mix carry different margins |
| Tucows (TCX) | Wholesale registrar/distribution adjacency | Public | Not normalized here | Not normalized here | Distinct business mix and financial risk |
| Cloudflare (NET) | DNS/traffic infrastructure adjacency, not competing .com registry | Public | Not normalized here | Not normalized here | Subscription security/network services have different growth and capital economics |

**Comparable takeaway:** No publicly traded peer replicates Verisign's contract-protected .com registry economics. Retail registrars, web hosts, and DNS security services are useful context but poor mechanical multiple comparables; cash-flow valuation is the primary method.

### Valuation Scenarios

The approved illustrative 10-year equity-cash-flow model begins with approximately $1.0B normalized 2026 FCF and deducts an $80M annualized economic SBC cost. Initial normalized owner cash flow is therefore approximately $920M. This uses approximately 89.8M shares and after-interest cash flows, with no second net-debt subtraction. Each scenario applies a constant annual owner-cash-flow growth rate over ten years followed by terminal growth. These are analytical assumptions, not management forecasts.

| Scenario | Key Assumptions | Fair Value | Probability | Probability Rationale | Return From Price Snapshot |
|---|---|---:|---:|---|---:|
| **Bear** | Owner FCF +3.5% annually for 10 years; 9.5% discount rate; 2.5% terminal growth; lower domain expansion or weaker allowable pricing | $162 | 20% | Contract/pricing restrictions and domain churn could materially limit compounding | -47.5% |
| **Base** | Owner FCF +7.0% annually for 10 years; 8.5% discount rate; 3.0% terminal growth; steady renewals and permitted price increases | $262 | 60% | Durable registry economics, but 2026 registration spike normalizes | -15.1% |
| **Bull** | Owner FCF +8.5% annually for 10 years; 8.0% discount rate; 3.5% terminal growth; stronger registration demand and successful adjacencies | $352 | 20% | Sustained high growth and successful execution would justify additional upside | +14.0% |
| **Probability-Weighted** | 0.20 × 162 + 0.60 × 262 + 0.20 × 352 = $260 | **$260** | **100%** | Judgmental weighting to align with the approved $260 central value | **-15.8%** |

### Valuation Takeaway

- **Primary valuation method:** Ten-year after-interest owner-cash-flow DCF with SBC treated as an economic expense. Cash-flow starting point and rates are independent research assumptions.
- **Valuation refresh date / changes vs. previous valuation:** Initial 2026-11-09 analysis. No preceding canonical VRSN file exists; $162/$262/$352 and ~$260 weighted fair value preserve the previously presented scenarios.
- **Cross-check methods:** ~33.2× trailing GAAP earnings, ~25.9× completed FY2025 free cash flow, ~16.7× annual sales; no mechanistic peer average because the franchise is unusual.
- **Key valuation dependencies:** Long-run .com/.net domain growth and retention, allowed wholesale-pricing terms, normalized owner cash flow, discount rate and terminal growth; .web and Informed have little embedded standalone value.
- **Valuation confidence / Risk level:** 72/100 (Medium confidence) / Medium overall fundamental risk with significant regulation and present-value sensitivity. Cash-flow visibility is strong; the exact economic term and pricing path after contract renewal are less certain.
- **Margin-of-safety conclusion:** At $308.67, the approved **Hold** research judgment reflects excellent franchise quality but limited entry attractiveness. The earlier qualitative preferred entry zone was ~$230–$240, with roughly $210 a deeper-discount level; these are historical analytical reference points, **not** live FolioFacts trading zones. The probability-weighted fair value is $260 (~15.8% below the share price), and live rating/zone thresholds may differ under FolioFacts' formula-driven classifications.

## Analyst Questions

The following rows paraphrase the complete material public Q3 FY2026 call Q&A involving Robert Oliver (Baird), Ygal Arounian (Wedbush), Jamesmichael Sherman-Lewis (Citi) and Alexei Gogolev (JPMorgan). They summarize management's responses without copying transcript wording.

| Analyst / Firm | Core Question | Management Response | Research Read-Through |
|---|---|---|---|
| Rob Oliver / Baird | What drove record new .com/.net registrations, and how should investors interpret AI and digital-provenance demand? | Bidzos pointed to new businesses, registrar marketing, and early evidence from registrars that AI-assisted website creation is increasing domain demand; he did not quantify the AI share. | Tailwinds look real, but attribution and durability remain unmeasured. |
| Rob Oliver / Baird | Are first-year domains renewing more strongly, and are recent cohorts of good quality? | Calys said first-time renewal remains approximately mid-40%, with previously renewed names around mid-80%; aggregate rate is pressured by a growing new-name mix, with no meaningful recent cohort improvement reported. | Growth quality cannot be inferred from gross adds alone; 2027 renewals are a key test. |
| Rob Oliver / Baird | Does .web's timing ahead of a broader new-TLD wave strengthen its rollout opportunity? | Bidzos viewed the early entry as helpful and stressed reliability, extension relevance and more flexible promotion and pricing, but provided no revenue forecast. | Option value exists, but commercial acceptance is not demonstrated. |
| Ygal Arounian / Wedbush | What could slow domain growth in 2027 as AI and agentic web creation expand? | Bidzos described long-run digitalization and online identity demand plus current registrar activity, while acknowledging inevitable periodic volatility and avoiding 2027 guidance. | Do not extrapolate 2026's 6%–7% domain-base growth indefinitely. |
| Ygal Arounian / Wedbush | Why can Informed win versus other security services, and what pricing structure is contemplated? | Bidzos emphasized the registry infrastructure's speed and global availability for credential-status validation; pricing structure was not finalized, with more detail expected by year-end. | Technology fit is plausible, but product-market fit and economics remain unproven. |
| Jamesmichael Sherman-Lewis / Citi | Have registrars already raised retail prices in response to the November wholesale .com price increase, and could pricing change renewals? | Calys said observed retail pricing had moved around 1% or less after advance notice. Bidzos noted $0.71 wholesale increase is modest versus registrars' independent retail prices. | Retail pricing elasticity and whether registrars absorb the fee still need observation. |
| Jamesmichael Sherman-Lewis / Citi | Why pursue .pki and how broad is the company's new generic-TLD strategy? | Bidzos linked the sole application for .pki to public-key-infrastructure knowledge and Informed's digital-trust objectives rather than a broad extension land grab. | The strategy is selective but incremental revenue remains speculative. |
| Alexei Gogolev / JPMorgan | How do gross adds, deletions and churn combine into the upgraded 6.5%–7% annual domain-base guidance? | Calys declined to guide individual drivers, expected healthy registrations but Q4 seasonality and more first-time renewal mix; Bidzos described historically stable cohort rates and a less abrupt boom than a prior China-driven spike. | More first-year names can depress aggregate renewal rates even when the longstanding base is stable. |
| Alexei Gogolev / JPMorgan | Will registrar retail prices or domain demand react substantially to the $0.71 .com wholesale price increase? | Bidzos would not forecast retailer decisions or elasticity, describing room within typical retail markups to accommodate a modest wholesale increase. | Pricing benefit is likely but demand and retail pass-through have not been quantified. |
| Alexei Gogolev / JPMorgan | Is there material early renewal pull-forward ahead of the November price increase, and when will revenue reflect higher fees? | Calys had not observed substantial early renewals. Investor relations reiterated that roughly half of the new .com price effect is expected in 2027 revenue and most of the rest in 2028. | Forecast revenue phasing separately from registration cash collection. |
| Alexei Gogolev / JPMorgan | Will Informed monetize per validation query or certificate, and what would demonstrate product-market fit before H1 2027 availability? | Bidzos did not provide a unit-pricing commitment or quantified adoption targets, instead pointing to beta, standards engagement, pricing details expected by year-end and planned H1 2027 production. | Maintain little incremental modeled value until pricing, adoption and unit economics are visible. |

### Analyst-Q&A Takeaway

The analysts' primary challenge was **growth quality**: first-renewal cohorts and the promotional/AI contribution to net domain adds. Management gave useful cohort-retention observations but no precise deletion bridge or durable 2027 growth forecast. Second, the November .com wholesale increase is supported by contract rights, but retail behavior, cash timing and recognized-revenue phasing differ. Third, .web and Informed are plausible opportunities but management supplied no validated customer-demand or revenue economics sufficient to justify a large valuation uplift. These answers reinforce the approved Hold decision and the valuation's demand and pricing sensitivities.

## Thesis Monitoring

| Driver | Current State | Positive Trigger / Catalyst | Negative Trigger / Falsifier | What It Changes |
|---|---|---|---|---|
| Domain base | 182.5M, +6.1% YoY Q3 | Several quarters of durable net additions with stable cohorts | Promotional-domain deletions exceed new additions | Long-run FCF growth assumptions |
| Renewal quality | Q3 preliminary aggregate 74.3%; first-time mid-40%, repeat mid-80% | First-year retention holds up when 2026 cohorts mature | Persistent decline in like-for-like cohort retention | Sustainable domain volume and terminal growth |
| Pricing | .com fee $10.97 from 2026-11-01; .net increase planned in 2027 | Allowed increases flow through revenue with limited volume impact | Regulatory amendments reduce pricing rights | Core cash-flow compounding |
| .web | Registry launch preparations; ~$171M intangible rights | Measurable adoption and economically valuable premium registrations | Low adoption, excessive marketing spend or cannibalization | Upside optionality, capital allocation |
| Informed | Beta launch; H1 2027 production planned | Clear unit pricing, paying enterprise users, attractive margins | Low adoption, adverse liability or security outcomes | Optional new-product valuation |
| Cash conversion | 9M FY2026 FCF $738.7M vs FY2025 $1.07B | Cash flow catches up with operating earnings | Repeated cash conversion shortfalls amid rising shareholder distributions | Owner-cash-flow starting point |
| Contract and security | .com agreement runs through 2030; infrastructure uptime critical | Stable renewal and unchanged rights | Price restrictions or material availability/security incident | Moat and required return |

## Quality & Opportunity Scorecards

### Quality Score

| Component | Score | Weight | Weighted Contribution | Evidence |
|---|---:|---:|---:|---|
| Business durability and economics | 96 | 25% | 24.00 | Recurring domain renewals, near-67% operating margins, modest capex |
| Moat and competitive position | 97 | 25% | 24.25 | Exclusive registry, entrenched address base and DNS reliability |
| Growth runway and durability | 81 | 20% | 16.20 | Pricing/volume growth available but 2026 spike may normalize |
| Financial quality and balance sheet | 88 | 15% | 13.20 | Strong recurring FCF, manageable debt, 2026 cash conversion softness |
| Management, governance and capital allocation | 83 | 15% | 12.45 | Reliable operations and share retirement, but buyback price discipline matters |
| **Quality Score** | **90.1** | **100%** | **90.10** | Price-independent business assessment |

- **Quality Tier:** A
- **Speculative override:** None

Current Opportunity Score, shared ranks, and live price zones are determined by FolioFacts, not this research source.

## Portfolio Context

- **Tracking tier:** On the Radar
- **Owned:** No position recorded in `portfolio/holdings.md`
- **Tracking source of truth:** `ontheradar.md` (only tier; no Primary Watchlist entry)
- **Portfolio source of truth:** `portfolio/holdings.md`
- **Scoring independence:** Ownership, cost basis and position size do not change intrinsic valuation or company quality. FolioFacts independently computes opportunity score, live valuation-return and ranking.

## Investment Decision History

| Timestamp | Price | Rating | Zone Status | Buy Zone | Strong Buy Zone | Avoid Chasing Above | Base FV | P/W FV | P/W Return | Quality | Opportunity / Rank | Change / Rationale |
|---|---:|---|---|---|---|---|---:|---:|---:|---:|---|---|
| 2026-11-09 (research date) | $308.67 (2026-11-06 close) | Hold | FolioFacts only | FolioFacts only | FolioFacts only | FolioFacts only | $262 | $260 | -15.8% | 90.1 | FolioFacts only | Initial analysis: durable registry franchise but little margin of safety; proposed entry near $230–$240 |

---

**Disclaimer:** *This publication reflects my personal investment research, thoughts, and opinions only. It is intended strictly for informational and educational purposes and does not constitute personalized investment, legal, tax, or financial advice, nor does it represent a recommendation or solicitation to buy, sell, or hold any security or financial instrument.*

*I am not a registered investment adviser, broker-dealer, or financial planner. This content does not take into account your specific investment objectives, financial situation, or risk tolerance. All investments involve substantial risk, including the potential loss of all principal capital. Past performance is never indicative of future results.*

*While I endeavor to provide accurate information, all data and analysis are provided "as is" without any warranty of accuracy, completeness, or timeliness. You must conduct your own independent due diligence and/or consult with a licensed professional before making any financial decisions. I may hold long or short positions in any of the securities or assets discussed herein at any time without notice.*

## Material Sources

| Source | Type | Date / Period | What It Supports |
|---|---|---|---|
| [Verisign Q3 FY2026 earnings release](https://investor.verisign.com/news-releases/news-release-details/verisign-reports-third-quarter-2026-results) | Company IR | 2026-10-22 | Operating results, domains, repurchases, dividend |
| [Verisign Q3 FY2026 investor call](https://investor.verisign.com/events/event-details/q3-2026-verisign-earnings-conference-call) | Company IR | 2026-10-22 | Management guidance, strategic updates and analyst Q&A |
| [Verisign Q3 2026 earnings-call transcript](https://stockanalysis.com/stocks/vrsn/transcripts/714213-q3-2026/) | Third-party transcript used for independent paraphrase | 2026-10-22 | Full material analyst Q&A; no transcript quotations reproduced |
| [Verisign Q3 FY2026 Form 10-Q](https://www.sec.gov/Archives/edgar/data/1014473/000101447326000039/vrsn-20260930.htm) | SEC filing | Quarter ended 2026-09-30 | Q3/9M financial statements, balance sheet, SBC and risks |
| [Verisign Q2 FY2026 Form 10-Q](https://www.sec.gov/Archives/edgar/data/1014473/000101447326000028/vrsn-20260630.htm) | SEC filing | Quarter ended 2026-06-30 | Interim comparative financial and cash-flow detail |
| [Verisign Q1 FY2026 Form 10-Q](https://www.sec.gov/Archives/edgar/data/1014473/000101447326000020/vrsn-20260331.htm) | SEC filing | Quarter ended 2026-03-31 | Q1 comparative income, cash-flow and SBC |
| [Verisign FY2025 Form 10-K](https://www.sec.gov/Archives/edgar/data/1014473/000101447326000006/vrsn-20251231.htm) | SEC filing | FY2023–FY2025 | Annual financials, registry terms, financial risk |
| [VRSN historical close](https://stockanalysis.com/stocks/vrsn/history/) | Market data, dated reference only | 2026-11-06 | $308.67 regular-session valuation reference; no bulk pricing dataset redistributed |