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August 1, 2025 • 3 min read
When a company holds a foundational piece of the internet, its financial health is worth a closer look. VeriSign, the exclusive registry operator for the .com and .net top-level domains, recently released its second-quarter financial results. Let's dive into their latest 10-Q filing to see how this internet stalwart is performing.
VeriSign’s business model is straightforward: it collects a small, recurring fee for every .com and .net domain name registered or renewed globally. This generates a predictable and growing stream of revenue.
In the second quarter of 2025, VeriSign reported revenues of $409.9 million, a solid 6% increase from the $387.1 million recorded in the same period last year. For the first half of the year, revenues climbed 5% to $812.2 million.
Interestingly, this growth isn't coming from a massive expansion in the number of domains. The total .com and .net domain name base was 170.5 million at the end of June 2025, nearly identical to the 170.6 million a year prior. So, where did the extra revenue come from? A key factor was a price increase for .net domain name renewals, which went from $9.92 to $10.91 in February 2024. This highlights VeriSign's significant pricing power, a direct result of its unique market position.
VeriSign isn't just growing; it's extraordinarily profitable. The company’s lean cost structure allows it to convert a huge portion of its revenue directly into profit. For Q2 2025, VeriSign posted an operating income of $280.7 million, translating to a remarkable operating margin of 68.5%.
After accounting for interest and taxes, the company's net income stood at $207.4 million, representing a net profit margin of over 50%. In other words, for every dollar of revenue, more than 50 cents became pure profit.
To see how VeriSign’s revenue breaks down into costs and ultimately profit, this flow diagram illustrates the journey for the second quarter of 2025:
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As the graph shows, the actual costs to run the registry—the "Cost of revenues"—are minimal, at just 12% of total revenue. This operational efficiency is the engine behind VeriSign's impressive financial results.
What does a mature, highly profitable company do with all its cash? It returns it to its owners. VeriSign has a long history of aggressive share buybacks, and this quarter was no different. The company spent $408.5 million on repurchasing its own stock in the first six months of 2025.
These consistent buybacks are the reason for an oddity on VeriSign's balance sheet: a "Total stockholders' deficit" of nearly $2.0 billion. This isn't a sign of distress; rather, it reflects a long-term strategy of buying back shares at a value greater than the cumulative net income earned, effectively concentrating ownership among the remaining shareholders.
In a notable shift, VeriSign has also started paying dividends. In the first half of 2025, the company distributed $72.1 million in dividends to its shareholders, a new development compared to the same period last year when no dividends were paid.
VeriSign's Q2 2025 filing paints a picture of a stable, mature, and highly lucrative business. Its command over essential internet real estate provides a deep competitive moat, allowing for steady, price-driven revenue growth even in a saturated market. While the total number of domains remains flat, the company's ability to generate cash and its commitment to returning that cash to shareholders through buybacks and now dividends remain central to its financial story.
Last updated: August 1, 2025