Full Transcript: VeriSign Q2 2026 Earnings Call

VeriSign (NASDAQ: VRSN ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

034 billion in cash and equivalents. 195 billion. VeriSign emphasized the strong performance in domain registrations, noting a 14% and 21% increase in the first and second quarters, respectively, with AI contributing to demand. The company successfully extended its record of 100% service availability to 29 years and highlighted the role of AI in enhancing domain name demand and operational efficiency.

web TLD, with flexibility in pricing and marketing, and expects to make it available either late this year or early next year. The company plans to implement security features benefiting from its high-assurance infrastructure to address AI-driven security challenges. CapEx guidance remains unchanged despite price pressures, with expectations of elevated costs in the future due to market conditions. Full Transcript John And free cash flow was 213 million, compared with 202 million and 109 million respectively, in the year-ago quarter.

Our financial and liquidity position remains stable with 1,034,000,000 in cash, cash equivalents, and marketable securities at the end of the quarter. 1% senior notes maturing in 2031. 75% senior notes due in 2027, thereby reducing our liquidity from quarter end. I will now discuss our updated full-year 2026 guidance which, as Jim mentioned earlier, does not anticipate meaningful revenue or expense related to dot web at this time.

Revenue is now expected to be between 1,745,000,000 and 1,755,000,000. Operating income is now expected to be between 1,185,000,000 and 1,195,000,000. Interest expense and non-operating net is narrowed and expected to be an expense between 59 and 65 million, reflecting the impacts related to the refinancing I mentioned earlier. Capital expenditures are still expected to be between 55 and 65 million.

The GAAP effective tax rate is still expected to be between 22 and 25%. I will now turn the call back to Jim for his closing remarks. Jim Thanks, John. While we're very pleased that web is now delegated, we'd like to focus on the very solid trends we're seeing in our business.

In 2026 we extended our record of 100% service availability to 29 years. We saw strength in all metrics, in particular with new registrations and solid financial performance. We returned more than 100% of our free cash flow to the investing public. We've seen strong execution of our marketing programs, which are better suited to our evolving channel.

These programs are a great investment as they contribute significantly to our long-term growth and profitability. Importantly, the first-time renewal rate has stayed in a tight range in the mid-40% range for several quarters. Names registered in the first half of last year are renewing at rates consistent with our longer-term first-time renewal rate. Our programs are carefully designed to produce these results.

Now, as we look at the significant increase in new registrations — for example, up 14% year over year in the first quarter and up 21% year over year in the second quarter — we're encouraged that the factors that are driving the new registration strength, including our programs, have been producing quality names. This should translate to long-term profitable growth for this company. And as a reminder, once a name renews at least once, it becomes part of our previously renewed base. The previously renewed rate is in the mid-80% range.

Additionally, we're benefiting from some factors that include AI. AI has made finding a good domain name, building a website, and getting online faster and easier. This includes leveraging AI-enabled tools we've made available to our registrar partners. Our record-high domain name base and record-high new registrations are contributing to the ever-increasing reliance on VeriSign's high-assurance critical internet infrastructure.

We've seen a substantial increase in the number of DNS transactions to our servers. Operating the high-assurance infrastructure remains our priority and is at the core of VeriSign. We also believe that our uptime record is a significant contributor to the growth of our domains and that reliability will allow individuals and businesses to register web domain names with confidence. Thanks for your attention today.

This concludes our prepared remarks and now we'll open the call for your questions. Operator, we're ready for the first question. OPERATOR (Operator) If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once your question has been stated, please mute your line.

Our first question comes from Rob Oliver with Baird. Rob Oliver, Analyst at Baird Great. Good afternoon. Thanks.

I had a couple of questions. Jim, I'll just start with you. I appreciate some of the color you provided around the really strong domain trends, and I was wondering if you could just add a bit more. I know some of what's at work here is you guys have really sharpened your marketing programs and your efforts, and I think that's really showing in not just the registrations but also in those first-time renewal rates in terms of the quality.

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