Verisign Q3 2026 Earnings: Revenue Rises 5.7% as Domain Base Expands

Verisign (NASDAQ: VRSN) reported Q3 2026 revenue of $443.0 million, up 5.7% year over year, while diluted EPS increased to $2.35 from $2.27. Operating income rose, but net income was nearly unchanged and quarterly operating cash flow declined. The .com and .net domain base expanded 6.1% to 182.5 million registrations.

Core Financial Results

Revenue growth exceeded operating income growth because total costs and expenses rose 8.7%, faster than the 5.7% increase in revenue. As a result, operating margin declined by approximately 0.9 percentage points to 66.9%.

The quarter also included a $7.5 million pre-tax operating loss related to assets held for sale, which reduced diluted EPS by $0.06. Higher interest expense and income tax expense, together with lower non-operating income, contributed to net income remaining essentially flat.

Business and Domain Registration Performance

Verisign ended the quarter with 182.5 million .com and .net registrations, up 6.1% from a year earlier. The domain base recorded a net increase of 3.36 million registrations during Q3.

New .com and .net registrations reached 13.1 million, compared with 10.6 million in Q3 2025, an increase of approximately 23.6%. This operating expansion accompanied the quarter’s revenue growth, although Verisign did not provide separate revenue figures for individual domain products.

The latest finalized renewal rate applies to Q2 2026 rather than Q3. It was 75.2%, compared with 75.5% a year earlier. Verisign noted that renewal rates cannot be fully measured until 45 days after a quarter ends.

Profitability, Cash Flow, and the Balance Sheet

Selling, general and administrative expense increased to $70.2 million from $60.6 million and accounted for most of the $11.7 million rise in total quarterly costs and expenses. Combined with the loss on assets held for sale, this prevented operating income from keeping pace with revenue growth.

Operating cash flow declined to $268 million for the quarter. For the first nine months of 2026, operating cash flow was $772.3 million, down from $801.5 million in the comparable 2025 period, with changes in other operating assets and liabilities becoming less favorable.

Cash, cash equivalents, and marketable securities totaled approximately $476 million at September 30, down $104 million from year-end 2025. Meanwhile, deferred revenue increased by $79 million to $1.46 billion, and long-term senior notes remained near $1.79 billion.

Capital returns were substantial. Verisign repurchased 0.7 million shares for $189 million during Q3, bringing nine-month repurchases to $620 million. Nine-month dividend payments totaled $220.8 million, contributing to a net financing cash outflow of $841 million. The board also approved a cash dividend of $0.81 per share, payable November 24, 2026, to shareholders of record on November 17.

A Smaller Share Count Lifted EPS Despite Flat Net Income

Diluted EPS increased approximately 3.5% even though net income was nearly unchanged. The main mathematical difference was the lower diluted share count, which declined to 90.4 million from 93.6 million, or approximately 3.4%.

The reduced share count reflects Verisign’s continuing repurchase activity. At September 30, the company had $1.36 billion remaining under its share repurchase authorization, which has no expiration date. The repurchases increased per-share earnings but also represented a significant use of cash.

Management’s View

Executive Chairman, President, and CEO Jim Bidzos emphasized the 6.1% year-over-year expansion in the domain name base. He also said the rollout of the .web top-level domain remained on track and that Verisign had opened a limited beta for Verisign Informed, its high-assurance validation service.

Verisign did not disclose a quantitative revenue or earnings contribution from either initiative in the supplied results.

Recent Insider Transactions

Aggregate insider data for the latest six-month period showed 5,435 shares purchased across eight transactions and 78,800 shares sold across 32 transactions, resulting in net sales of 73,365 shares. The latest 10 reported transactions were all direct sales: eight by CEO Demetrios James Bidzos and two by Thomas C. Indelicarto.

The disclosed values for these 10 transactions totaled approximately $8.07 million. The supplied information did not state the reasons for the sales, so they do not by themselves establish management’s view of Verisign’s outlook.

Risks Investors Need to Monitor

• Costs are growing faster than revenue. Total quarterly costs and expenses increased 8.7%, compared with 5.7% revenue growth, reducing operating margin by approximately 0.9 percentage points.
• Cash generation has weakened. Quarterly operating cash flow fell 13.0%, while cash and marketable securities declined by $104 million from year-end amid substantial repurchases and dividend payments.
• Renewal trends remain important. The latest finalized renewal rate decreased to 75.2% from 75.5%. Continued domain-base growth depends on the balance between new registrations, renewals, and expirations.
• The core business depends on .com and .net registry rights. A loss or modification of Verisign’s operating rights, or changes to the pricing provisions of the .com Registry Agreement, could affect revenue and profitability.

Summary

Verisign’s Q3 2026 revenue growth was supported by a larger .com and .net domain base and higher new registrations. However, faster expense growth, an asset-related operating loss, and lower cash generation limited the financial conversion of that growth. The next key indicators are renewal trends, expense control, cash flow, and the progress of the .web and Verisign Informed initiatives.