VeriSign’s third quarter was marked by continued growth in its core domain name business and positive market reaction, with revenue and earnings per share both surpassing Wall Street’s expectations. Management attributed this performance to the success of revamped marketing programs and stronger registrar engagement, particularly in the U.S. and EMEA regions. CEO Jim Bidzos emphasized improvements in both new domain registrations and renewal rates, stating the company’s adjustments to its channel programs produced “enhanced pace of growth in new registrations.” The team also called out a 1.4% year-over-year increase in the domain name base, driven by higher volumes and improved renewal activity.
Is now the time to buy VRSN? Find out in our full research report (it’s free for active Edge members).
VeriSign (VRSN) Q3 CY2025 Highlights:
- Revenue: $419.1 million vs analyst estimates of $416.8 million (7.3% year-on-year growth, 0.5% beat)
- Adjusted EPS: $2.27 vs analyst estimates of $2.25 (0.9% beat)
- Operating Margin: 67.8%, down from 68.9% in the same quarter last year
- Billings: $423.7 million at quarter end, up 5.7% year on year
- Market Capitalization: $21.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From VeriSign’s Q3 Earnings Call
- Robert Oliver (Baird) asked about the balance between macroeconomic factors and company-driven marketing improvements. CEO Jim Bidzos emphasized, “We improved our programs and made them more adaptable for our channel,” attributing stronger growth primarily to internal execution.
- Oliver (Baird) inquired about the impact of Google AdSense changes on VeriSign’s domain base. Bidzos responded that the company’s exposure is now minimal, as “this isn’t a new trend” and VeriSign’s business model is less reliant on advertising-focused domains.
- Oliver (Baird) also sought insight into AI’s influence on domain registrations and DNS activity. Bidzos stated, “AI is having a positive impact on registrations as well as on the utilization of our DNS resolution services.”
- Ygal Arounian (Citi) probed the specifics of marketing program changes, including discounting and spending patterns. CFO John Calys clarified that marketing costs are accounted for as reductions in revenue, and that incentive compensation and legal expenses drove SG&A higher.
- Arounian (Citi) asked about updates on the .web domain and new top-level domain processes. Bidzos said no major changes had occurred, but highlighted a final legal hearing for .web in November 2025 and noted that ICANN’s new domain allocation process is expected to start in Q2 2026.
Catalysts in Upcoming Quarters
Looking forward, our analysts will be watching (1) whether marketing program refinements continue to yield higher renewal rates and quality domain registrations; (2) the pace and impact of AI-driven demand on DNS transaction volumes; and (3) legal and regulatory developments related to new top-level domains, particularly the outcome of the .web hearing and ICANN’s 2026 allocation process. Shifts in macroeconomic conditions and competition from alternative internet identity solutions will also be important to monitor.
VeriSign currently trades at $230.07, down from $250.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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