Verisign's Q2 2026 revenue rose 6.0% to $434.6M as record 12.7M new .com/.net registrations lifted the domain base 5.1%; diluted EPS rose 7.7% to $2.38, with buybacks adding about 3 points, and full-year guidance was raised again.
Revenue
$435M
+6.0% YoY
Net income
$217M
+4.4% YoY
Diluted EPS
$2.38
+7.7% YoY
Operating margin
68.2%
How VRSN compares with Information Technology peers
Figure
VRSN
Peer median
Rank
Revenue growth (YoY)
+6.0%
+22.1%
56th of 63
Operating margin
68.2%
21.9%
2nd of 63
EPS growth (YoY)
+7.7%
+35.5%
45th of 56
Rank 1 = fastest revenue growth, highest operating margin, fastest EPS growth. Peers are the other Information Technology companies with a 2026 report on this site, each at its latest period we've analyzed; fiscal calendars differ, so periods are not always the same months.
Verisign, the company that runs the .com and .net domain registries, grew second-quarter 2026 revenue 6.0% to $434.6 million, and the reason is volume: new .com and .net registrations jumped to 12.7 million from 10.4 million a year earlier, lifting the domain name base 5.1% to 179.1 million names. Net income rose a slower 4.4% to $216.5 million, because interest income fell and the tax rate ticked up. Diluted EPS rose 7.7% to $2.38, and share buybacks supplied about 3 points of that growth.
At a glance
12.7 million new registrations (vs 10.4 million): about 22% more names were signed up than a year ago. Registration fees are recognised over the life of each registration, so most of this demand still has to show up in revenue.
Diluted share count down 3.1% (91.1M vs 94.0M): each remaining share owns a larger slice of profit. That explains about 40% of the quarter's EPS growth.
Full-year guidance raised a second time: revenue is now guided to $1.745–1.755 billion (April: $1.73–1.745 billion), and domain base growth to 5.2–6.0% (April: 3.1–4.3%).
The quarter in numbers
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$434.6M
$409.9M
+6.0%
Operating income
$296.3M
$280.7M
+5.6%
Operating margin
68.2%
68.5%
-0.3 pts
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Operating margin is the share of revenue left after running the business, before interest and tax. The renewal rate is the share of expiring names whose owners paid to keep them. It lags a quarter because Verisign only measures it 45 days after a quarter ends.
For the first half, revenue was $863.5 million (+6%), operating income $589.9 million (+7%), and diluted EPS $4.71 against $4.31 (+9.3%).
How the business makes money, and what moved
Verisign is paid a fixed wholesale fee for each .com or .net registration or renewal. Registrars such as GoDaddy collect that fee from customers and pass it on. The fee is set under agreements with ICANN, the body that coordinates internet names, and those agreements cap price rises. Verisign can raise the .com price by up to 7% in each of the last four years of every six-year period, and the .net price by up to 10% a year. Revenue therefore comes down to three things: how many names exist, how many owners renew, and the price.
The 10-Q says revenue rose "primarily due to an increase in the domain name base... and the .com price increases." The last .com increase, from $9.59 to $10.26, took effect in September 2024. It still counts in this quarter because registrations can run for several years and revenue is booked gradually across the term. The filing does not split growth between price and volume. Still, the base grew 5.1% and revenue grew 6.0%, so volume did most of the work this quarter. A year ago it was the other way around: the base was roughly flat and pricing drove growth.
Verisign says the base grew because "the positive domain name base trends that began in 2025 continued into 2026 with higher new registrations and renewal rates." It credits registrars' focus on winning customers, its own marketing programs, and "the evolution of AI tools used in content and website creation." That last point matters: if AI tools make it cheaper to spin up a website, more people may register a name for one. The base added a net 3.05 million names in the quarter alone.
Revenue grew in the U.S. (+6% to $287.7M), EMEA (+10% to $75.9M) and Asia-Pacific (+4% to $47.5M). The "Other" region, which includes Canada and Latin America, fell 6% to $23.5M. The filing notes that these regions follow where registrars are domiciled, not where customers are, so shifts can reflect registrar reorganisations.
Costs: margin slipped slightly despite the revenue gain
Total costs rose 7.0% to $138.3 million, a little faster than revenue, so the operating margin dipped from 68.5% to 68.2%. Most of the increase was selling, general and administrative expense, up 12% to $60.8 million. The filing attributes $3.1 million of that to stock-based compensation, because performance-linked share awards are now expected to pay out at higher levels. Research and development rose 7% to $27.5 million. Cost of revenues rose just 2%. On a 68% margin, these are small moves, and part of the extra pay cost reflects the business beating its own targets.
What the headline numbers hide
Cash conversion is strong. Operating cash flow for the first half was $504.0 million against net income of $431.0 million, 1.17 times earnings. Customers pay upfront for registrations that are recognised as revenue later, and deferred revenue rose $64.5 million in the half to $1.45 billion. Free cash flow (operating cash flow minus $26.0M of capital spending) was about $478 million, flat against about $480 million a year earlier. Two things offset each other: capex nearly doubled from $13.6 million, while cash taxes fell because 2025 included the final instalment of a one-time transition tax from the 2017 tax law.
EPS growth is part operations, part buybacks. Net income grew 4.4%. The 3.1% drop in diluted shares added about 3.2 points, which together make up the 7.7% EPS gain. Below operating income, two things held profit back. Non-operating income fell to $4.5 million from $5.5 million because Verisign had less invested in debt securities at lower yields. The effective tax rate also rose to about 23.1% from 22.4%.
Verisign returns more cash than it makes. In the first half it spent $426.8 million on buybacks and $147.8 million on dividends. That totals $574.6 million, about 120% of free cash flow. Since inception it has bought back 265.4 million shares for $16.19 billion. A further $884.2 million was authorised on July 23, bringing the total available to $1.50 billion. This policy explains the balance sheet's $2.25 billion stockholders' deficit: liabilities exceed book assets. For Verisign, that is the long-run result of returning cash rather than a sign of distress, since the business needs little capital and customers prepay.
The cash pile is temporarily inflated. Cash and marketable securities of $1.03 billion at June 30 include the proceeds of $550 million of new 5.10% notes due 2031, issued June 26. On July 20 that money plus cash on hand repaid the 4.75% notes due 2027. Debt stays at $1.8 billion after the swap, but the coupon on that $550 million rises by 0.35 points (about $2 million a year). The filing does not report a gain or loss on the early redemption for Q2.
No one-offs distort the quarter itself. There are no impairments, restructuring charges or asset sales in either year's Q2 income statement, and Verisign reports on GAAP figures without an adjusted EPS.
Takeaway: For the first time in several years, more domain names rather than higher prices are driving Verisign's growth: 12.7 million new registrations and a 5.1% larger base. Because fees are recognised over time, this volume will keep feeding revenue into 2027. Two further price rises land on top of it: .com to $10.97 from November 1, 2026, and .net to $12.00 from March 2027.
Guidance and outlook
On the July 23 earnings call, management raised full-year 2026 guidance for the second time this year. The ranges below come from call coverage, not from the 10-Q:
Full-year 2026
April guidance
July guidance
Revenue
$1.730–1.745B
$1.745–1.755B
Operating income
$1.170–1.185B
$1.185–1.195B
Domain name base growth
3.1–4.3%
5.2–6.0%
Management also guided capital expenditure of $55–65 million and a GAAP effective tax rate of 22–25%. The guidance implies second-half revenue of about $882–892 million, up only modestly from $863.5 million in the first half. That looks conservative: the November 1 .com price rise will only start to count late in the fourth quarter, and it will be recognised gradually.
Our view: The questions to watch are whether the wave of first-year registrations renews, and how fast. First-year names renew at much lower rates than established ones. That makes the Q2 renewal rate, reported with Q3 results, and especially the rates for the 2026 cohorts in 2027 the key test of whether this volume sticks. If renewals stay close to the current 76% while both price rises take effect, revenue growth could run above this year's 6%. If AI-driven or speculative sign-ups lapse after year one, base growth could drop back toward the flat levels of 2024. Either way, EPS will likely keep growing about 3 points faster than net income for as long as buybacks continue at around $200 million a quarter. The newly launched .web domain, which Verisign plans to sell through registrars later this year, is not in the guidance and is too small to matter near-term.