VeriSign Inc.

02/05/2026 | Press release | Distributed by Public on 02/05/2026 15:41

Annual Report for Fiscal Year Ending 12/31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are based on current expectations and assumptions and involve risks, uncertainties, and other important factors, including, among other things, statements regarding the Company's quarterly dividend and our expectations about the sufficiency of our existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our borrowing capacity under the unsecured revolving credit facility. In some cases, you can identify forward-looking statements by terms such as "assumes," "could," "estimates," "forecasts," "may," "plans," "potential," "predicts," "projects," "should," "targets," "will," "would," "seeks," "expects," "anticipates," "intends," "believes" and similar language intended to identify forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled "Risk Factors" in Part I, Item 1A of this Form 10-K. You should also carefully review the risks described in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2026. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-K. We undertake no obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Overview
We are a global provider of critical internet infrastructure and domain name registry services, enabling internet navigation for many of the world's most recognized domain names. We help enable the security, stability, and resiliency of the DNS and the internet by providing Root Zone Maintainer Services, operating two of the thirteen global internet root servers, and providing registration services and authoritative resolution for the .comand .netTLDs, which support the majority of global e-commerce.
As of December 31, 2025, we had 173.5 million .comand .netregistrations in the domain name base. The number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by us and our registrars. The number of domain name registrations under our management may be negatively impacted by certain factors, including overall economic conditions, competition from ccTLDs, other gTLDs, services that offer alternatives for an online presence, and ongoing changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how they will manage their investment in domain names, can negatively impact our business and the demand for new domain name registrations and renewals.
2025 Business Highlights and Trends
•We recorded revenues of $1,656.6 million in 2025, which represents an increase of 6% as compared to 2024.
•We recorded operating income of $1,121.0 million during 2025, which represents an increase of 6% as compared to 2024.
•We finished 2025 with 173.5 million .com and .netregistrations in the domain name base, which represents a 2.6% increase from December 31, 2024.
•During 2025, we processed 41.7 million new domain name registrations for .comand .netcompared to 37.4 million in 2024.
•The final .comand .net renewal rate for the third quarter of 2025 was 75.4% compared to 72.2% for the same quarter of 2024. Renewal rates are not fully measurable until 45 days after the end of the quarter.
•We repurchased 3.4 million shares of our common stock for an aggregate cost of $858.6 million in 2025. As of December 31, 2025, there was $1.08 billion remaining for future share repurchases under the share repurchase program.
•We generated cash flows from operating activities of $1,091.1 million in 2025, which represents an increase of 21% as compared to 2024.
•On February 3, 2026, our Board of Directors approved a 5.2% increase in the quarterly cash dividend to $0.81 per share of the Company's outstanding common stock to stockholders of record as of the close of business on February 19, 2026, payable on February 27, 2026.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates those estimates. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. We believe the following critical accounting estimates and policies have the most significant impact on our consolidated financial statements:
Income taxes
We operate in multiple tax jurisdictions in the United States and internationally. Tax laws and regulations in these jurisdictions are complex, interrelated, and periodically changing. Significant judgment or interpretation of these laws and regulations is often required in determining our worldwide provision for income taxes, including, for example, the calculations of taxable income in each jurisdiction, deferred taxes, and the availability and amount of deductions and tax credits. We have recognized $233.2 million of deferred tax assets, net as of December 31, 2025. Our income tax expense was $242.8 million for the year ended December 31, 2025. The final taxes payable are also dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from various tax examinations. See Note 11, "Income Taxes" of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.
Results of Operations
The following table presents information regarding our results of operations as a percentage of revenues:
Year Ended December 31,
2025 2024 2023
Revenues 100.0 % 100.0 % 100.0 %
Costs and expenses:
Cost of revenues 11.8 12.3 13.2
Research and development 6.3 6.2 6.1
Selling, general and administrative 14.2 13.6 13.7
Total costs and expenses 32.3 32.1 33.0
Operating income 67.7 67.9 67.0
Interest expense (4.6) (4.8) (5.0)
Non-operating income, net 1.4 2.5 3.4
Income before income taxes 64.5 65.6 65.4
Income tax expense (14.7) (15.2) (10.6)
Net income 49.8 % 50.4 % 54.8 %
Revenues
Our revenues are primarily derived from registrations for domain names in the.comand .netdomain name registries. We also derive revenues from operating domain name registries and technical systems for several other gTLDs and one ccTLD, all of which are not significant in relation to our consolidated revenues. For domain names registered in the .comand .netregistries, we receive a fee from registrars per annual registration that is determined pursuant to our agreements with ICANN. Individual customers, called registrants, contract directly with registrars or their resellers, and the registrars, who are our direct customers, in
turn register the domain names with Verisign. Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the DOC. New registrations and the renewal rate for existing registrations are impacted by continued growth in online advertising, e-commerce, and the number of internet users, as well as marketing activities carried out by us and our registrars. We also offer promotional incentive-based discount programs to registrars based upon market conditions and the business environment in which the registrars operate.
In November 2024, we renewed the .comRegistry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the .comregistry through November 30, 2030. Under the .comRegistry Agreement, we are permitted to increase the price of a .comdomain name registration by up to 7% in each of the final four years of each six-year period. The current such six-year period began on October 26, 2024. We increased the annual registry-level wholesale fee for each new and renewal .comdomain name registration from $9.59 to $10.26 effective September 1, 2024. Under the .netRegistry Agreement, we are permitted to increase the price of .netdomain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029. We increased the annual registry-level wholesale fee for each new and renewal .netdomain name registration from $9.92 to $10.91 effective February 1, 2024. All fees paid to us for .comand .netregistrations are in U.S. dollars.
A comparison of revenues is presented below:
Year Ended December 31,
2025 %
Change 		2024 %
Change 		2023
(Dollars in millions)
Revenues $ 1,656.6 6 % $ 1,557.4 4 % $ 1,493.1
The following table compares the .comand .netdomain name registrations in the domain name base:
As of December 31,
2025 %
Change 		2024 %
Change 		2023
.comand .netdomain name registrations in the domain name base
173.5 million 3 % 169.0 million (2) % 172.7 million
Revenues increased in 2025 compared to 2024, primarily due to the .comand .netprice increases and an increase in the domain name base.
Demand for .comand .netdomain names has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars. However, the demand for .comand .netdomain names may be limited by competitive pressure from other TLDs and alternatives for an online presence. Additionally, changes in internet practices, consumer behavior, and global economic conditions, as well as the motivation of existing domain name registrants managing their investment in domain names, such as for resale at increased prices or for revenue generation through website advertising, may impact demand for .comand .netdomain names. Our domain name base increased during 2025 compared to 2024, with higher new registrations and renewal rates, as business conditions improved following a period of decline during 2024 and as registrars focus more on customer acquisition and have continued to engage with our marketing programs.
Geographic revenues
We generate revenues in the U.S.; Europe, the Middle East and Africa ("EMEA"); Australia, China, Japan, Singapore, and other Asia Pacific countries ("APAC"); and certain other countries, including Canada and Latin American countries.
The following table presents a comparison of the Company's geographic revenues:
Year Ended December 31,
2025 %
Change 		2024 %
Change 		2023
(Dollars in millions)
U.S $ 1,093.1 6 % $ 1,035.5 4 % $ 994.7
EMEA 279.4 12 % 249.6 9 % 228.2
APAC
184.6 5 % 175.7 1 % 174.8
Other 99.5 3 % 96.6 1 % 95.4
Total revenues $ 1,656.6 6 % $ 1,557.4 4 % $ 1,493.1
Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region. While revenues increased in all regions during 2025 compared to 2024, the majority of our revenue growth was generated from registrars based in the U.S. and EMEA.
Cost of revenues
Cost of revenues consists primarily of salaries and employee benefits expenses for our personnel who manage the operational systems, depreciation expenses, operational costs associated with the delivery of our services, fees paid to ICANN, customer support and training, costs of facilities and computer equipment used in these activities, telecommunications expense and allocations of indirect costs such as corporate overhead.
A comparison of cost of revenues is presented below:
Year Ended December 31,
2025 %
Change 		2024 %
Change 		2023
(Dollars in millions)
Cost of revenues $ 196.3 3 % $ 191.4 (3) % $ 197.3
Cost of revenues increased in 2025 compared to 2024 primarily due to increases in compensation and benefits expenses and a combination of other individually insignificant factors, partially offset by a decrease in depreciation expenses. Compensation and benefits expenses increased by $5.0 million primarily due to annual salary increases, an increase in bonus expenses, and an increase in average headcount. Depreciation expenses decreased by $4.4 million due to a decrease in capital expenditures in recent periods.
Research and development
Research and development expenses consist primarily of costs related to research and development personnel, including salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment, support services used in our service and technology development, and allocations of indirect costs such as corporate overhead.
A comparison of research and development expenses is presented below:
Year Ended December 31,
2025 %
Change 		2024 %
Change 		2023
(Dollars in millions)
Research and development $ 103.6 7 % $ 96.7 6 % $ 91.0
Research and development expenses increased in 2025 compared to 2024 primarily due to an increase in compensation and benefit expenses and a combination of several other individually insignificant factors. Compensation and benefits expenses increased by $5.1 million primarily due to annual salary increases and an increase in bonus expenses.
Selling, general and administrative
Selling, general and administrative expenses consist primarily of salaries and other personnel-related expenses for our executive, administrative, legal, finance, information technology, human resources, sales, and marketing personnel, travel and related expenses, trade shows, costs of computer and communications equipment and support services, consulting and professional service fees, costs of marketing programs, costs of facilities, management information systems, support services, and certain tax and license fees, offset by allocations of indirect costs such as facilities and shared services expenses to other cost types.
A comparison of selling, general and administrative expenses is presented below:
Year Ended December 31,
2025 %
Change 		2024 %
Change 		2023
(Dollars in millions)
Selling, general and administrative $ 235.7 12 % $ 211.1 3 % $ 204.2
Selling, general and administrative expenses increased in 2025 compared to 2024 primarily due to increases in compensation and benefits expenses, stock-based compensation expenses, equipment and software expenses, and legal expenses. Compensation and benefits expenses increased by $9.7 million primarily due to an increase in bonus expenses, higher expenses for certain employee health-insurance related benefits, annual salary increases, and an increase in average headcount. Stock-based compensation expense increased by $7.2 million primarily due to an increase in the total projected achievement levels on certain performance-based RSU grants and an increase in the value of RSU grants awarded in 2025. Equipment and software expenses increased by $4.5 million primarily due to increases in expenses related to network security and other software services. Legal expenses increased by $4.2 million due to an increase in litigation expenses and other external legal costs.
Interest expense
Interest expense increased slightly during 2025 compared to 2024 primarily due to the period of overlap between the issuance of $500.0 million of senior unsecured notes due June 2032 ("2032 Notes") and repayment of $500.0 million aggregate principal amount of outstanding senior unsecured notes due April 2025 ("2025 Notes").
Non-operating income, net
The following table presents the components of non-operating income, net:
Year Ended December 31,
2025 2024 2023
(In millions)
Interest income $ 26.5 $ 37.4 $ 46.1
Other, net (2.0) 1.6 5.1
Total non-operating income, net $ 24.5 $ 39.0 $ 51.2
Interest income is earned primarily from the Company's surplus cash balances and marketable securities. The decrease in interest income in 2025 primarily reflects the lower amounts invested in debt securities in 2025 and slightly lower interest rates on our investments in debt securities compared to 2024. Other, net, reflects net gains and losses from the Company's foreign currency exposure and related hedges.
Income tax expense
Year Ended December 31,
2025 2024 2023
(Dollars in millions)
Income tax expense
$ 242.8 $ 236.2 $ 158.9
Effective tax rate 22.7 % 23.1 % 16.3 %
The effective tax rate for each of the periods in the table above differed from the statutory federal rate of 21%, due to state income taxes and U.S. taxes on foreign earnings, net of foreign tax credits, offset by a lower foreign effective tax rate.
House Resolution 1, commonly referred to as the One Big Beautiful Bill Act, was enacted into law on July 4, 2025 (the "Act"). The tax regulations included in the Act did not have a material impact on our effective tax rate for 2025 and we do not expect it to have a material impact in future years.
As of December 31, 2025, we had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $234.2 million, net of valuation allowances, but before the offset of certain deferred tax liabilities. With the exception of a portion of deferred tax assets related to intellectual property, certain state and foreign net operating loss and foreign tax credit carryforwards, we believe it is more likely than not that the tax effects of the deferred tax liabilities, together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets.
Liquidity and Capital Resources
The following table presents our principal sources of liquidity:
As of December 31,
2025 2024
(In millions)
Cash and cash equivalents $ 307.9 $ 206.7
Marketable securities 272.6 393.2
Total $ 580.5 $ 599.9
The marketable securities primarily consist of debt securities issued by the U.S. Treasury meeting the criteria of our investment policy, which is focused on the preservation of our capital through investment in investment grade securities. The cash equivalents consist of amounts invested in money market funds, time deposits and U.S. Treasury bills purchased with original maturities of three months or less. As of December 31, 2025, all of our debt securities have contractual maturities of less than one year. Our cash and cash equivalents are readily accessible. For additional information on our investment portfolio, see Note 2, "Financial Instruments," of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
Effective July 24, 2025, our Board of Directors authorized the repurchase of our common stock in the amount of $913.1 million, in addition to the $586.9 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $1.50 billion under the program. In 2025, we repurchased 3.4 million shares of our common stock at an average stock price of $252.42 for an aggregate cost of $858.6 million under our share repurchase program. In 2024, we repurchased 6.6 million shares of our common stock at an average stock price of $183.84 for an aggregate cost of $1.21 billion. As of December 31, 2025, there was approximately $1.08 billion remaining available for future share repurchases under the share repurchase program.
In April 2025, we initiated a quarterly cash dividend. In 2025, we paid dividends of $215.2 million. On February 3, 2026, our Board of Directors declared a cash dividend of $0.81 per share of the Company's outstanding common stock to stockholders of record as of the close of business on February 19, 2026, payable on February 27, 2026. We intend to continue to pay a cash dividend on a quarterly basis, subject to market conditions and approval by the Board of Directors.
On March 11, 2025, we issued $500.0 million of the 2032 Notes. On March 31, 2025, we used the net proceeds from the 2032 Notes, along with cash on hand, to fund the repayment of all of our $500.0 million aggregate principal amount of outstanding 2025 Notes. As of December 31, 2025, we also had $750.0 million principal amount outstanding of 2.70% senior unsecured notes due 2031 and $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027. As of December 31, 2025, we had no outstanding borrowings and $200.0 million in borrowing capacity under our credit facility which matures in 2028.
We believe existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our ability to arrange for additional financing should be sufficient to meet our working capital, capital expenditure requirements, fund our quarterly dividend, and to service our debt for the next 12 months and beyond. We regularly assess our cash management approach and activities in view of our current and potential future needs. Our most significant future cash requirements include interest and principal payments on the senior notes issuances described above, income tax payments, purchase obligations and registry fees related to the operation of certain top-level domains. These items are detailed in Note 12, "Commitments and Contingencies" of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
In summary, our cash flows were as follows:
Year Ended December 31,
2025 2024 2023
(In millions)
Net cash provided by operating activities $ 1,091.1 $ 902.6 $ 853.8
Net cash provided by (used in) investing activities 109.1 286.3 (97.4)
Net cash used in financing activities (1,102.8) (1,221.5) (889.8)
Effect of exchange rate changes on cash, cash equivalents and restricted cash - (0.8) (0.1)
Net increase (decrease) in cash, cash equivalents and restricted cash $ 97.4 $ (33.4) $ (133.5)
Cash flows from operating activities
Our largest source of operating cash flows is cash collections from our customers. Our primary uses of cash from operating activities are for personnel-related expenditures and other general operating expenses, as well as payments related to taxes, interest and facilities.
Net cash provided by operating activities increased in 2025 compared to 2024 primarily due to an increase in cash received from customers, decreases in cash paid for income taxes and cash paid to employees and vendors, partially offset by an increase in cash paid for interest. Cash received from customers increased primarily due to the .comand .netprice increases and higher .comdomain name registrations and renewals. Cash paid for income taxes decreased primarily due to the enactment of the Act which restored the immediate deduction of research and development expenditures for U.S. federal income taxes. Cash paid to employees and vendors decreased primarily due to the timing of payments. Cash paid for interest increased due to the payment of interest on our 2032 Notes in June 2025.
Cash flows from investing activities
The changes in cash flows from investing activities primarily relate to purchases, maturities and sales of marketable securities, and purchases of property and equipment.
Net cash provided by investing activities decreased in 2025 compared to 2024 primarily due to a decrease in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities, and a decrease in purchases of property and equipment.
Cash flows from financing activities
The changes in cash flows from financing activities primarily relate to proceeds from and repayment of borrowings, share repurchases, dividend payments, payment of excise tax on share repurchases, and proceeds from our employee stock purchase plan.
Net cash used in financing activities decreased in 2025 compared to 2024 primarily due to proceeds received from the issuance of our 2032 Notes and a decrease in share repurchases, partially offset by the repayment of our 2025 Notes, dividend payments to shareholders, and an increase in the excise tax paid on share repurchases.
Dilution from RSUs
Grants of stock-based awards are key components of the compensation packages we provide to attract and retain certain of our employees and align their interests with the interests of existing stockholders. We recognize that these stock-based awards dilute existing stockholders and have sought to control the number granted while providing competitive compensation packages. As of December 31, 2025, there were a total of 0.7 million unvested RSUs which represent potential dilution of less than 1.0%. This maximum potential dilution will only result if all outstanding RSUs vest and are settled. In recent years, our stock repurchase program has more than offset the dilutive effect of RSU grants to employees; however, we may reduce the level of our stock repurchases in the future if and as we use our available cash for other purposes.
VeriSign Inc. published this content on February 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 05, 2026 at 21:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]