Thank you, operator. Welcome to Verisign's third quarter 2026 earnings call.

Joining me are Jim Bidzos, Executive Chairman, President and CEO; and John Calys, Executive Vice President and CFO. This call and presentation are being webcast from the Investor Relations website, which is available under About Verisign on verisign.com.

There, you will also find our earnings release. At the end of this call, the presentation will be available on that site, and within a few hours, the replay of the call will be posted.

Financial results in our earnings release are unaudited, and our remarks include forward-looking statements that are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Form 10-K and 10-Q. Verisign does not plan to update financial performance or guidance during the quarter.

The financial results in today's call and the matters we will be discussing today include GAAP results and free cash flow, a non-GAAP measure used by Verisign. GAAP to non-GAAP reconciliation information is appended to the slide presentation, which can be found on the Investor Relations section of our website, available after this call.

Jim and John will provide some prepared remarks, and afterward, we will open the call for your questions. With that, I would like to turn the call over to Jim.

Thank you, David. Good afternoon to everyone, and thank you for joining us.

We're pleased to report that Verisign delivered strong results in the third quarter of 2026, both operationally and financially. The combined .com and .net domain name base now totals 182.5 million names, up 6.1% year-over-year, with a record 13.1 million new registrations processed during the third quarter.

On the financial side, revenue is up 5.7% year-over-year. We have returned $1.14 billion to our shareholders in the last 12 months through share repurchases and dividends.

As announced in today's earnings release, Verisign's Board of Directors approved a cash dividend of 81 cents per share of Verisign's outstanding common stock to shareholders of record as of the close of business on November 17, 2026, payable on November 24, 2026. Verisign intends to continue to pay a cash dividend on a quarterly basis.

At quarter end, $1.36 billion remained authorized for share repurchases. Verisign's performance in the third quarter shows continued robust demand for domain names.

During the quarter, the domain name base for .com and .net grew by 3.4 million from the prior quarter end. New registrations for the third quarter totaled 13.1 million.

This compares with 12.7 million new registrations last quarter and 10.6 million for the third quarter of last year. The renewal rate for the third quarter of 2026 is expected to be 74.3%, compared to 75.4% a year ago.

The primary driver of this year-over-year decrease in renewal rates relates to the mix of first-time and previously renewed names, with a higher percentage of first-time renewing names due to last year's strength in new registrations. As in recent quarters, the US and EMEA were the regions in which we saw the strongest growth during the third quarter.

The factors driving the solid domain name base trends the past several quarters further accelerated during the third quarter. Registrars have successfully engaged with our marketing programs and are focused on customer acquisition, plus AI tools are making content and website creation faster and easier.

The ongoing strength in new registrations attests to the vital role that domain names play in discovering content and establishing digital credibility. With the trends we've observed in the first three quarters of 2026 and our expectations for the rest of the year, we're increasing and narrowing our guidance for domain name base growth to be between 6.5% and 7% for 2026.

As a reminder, you can monitor the progression of the domain name base on our website, which is updated daily. As we stated last quarter.web is delegated into the root zone, and we're actively preparing for its launch.

We have been communicating to our registrars that the required 30-day sunrise period is planned to begin in mid-December. In mid-January, we are planning to begin a limited registration period, or LRP, which could run into early April 2027.

At that point, we expect to open .web for general availability. During the LRP, most registrants of a .com domain name will have an opportunity to register an exact match .web domain name.

We're in the process of finalizing pricing, and we'll be communicating our pricing plans to registrars over the next few weeks. As we shared last quarter, the .web registry agreement allows for pricing flexibility, including premium names, which we intend to use.

The agreement also gives us more flexibility in marketing and in engaging with our registrars than we have in .com and .net. We're looking forward to launching .web and adding it to our portfolio of trusted domain names alongside .com and .net.

Now, I'd like to turn the call over to John. I'll return when John has completed his financial report with closing remarks, including more information on Verisign Informed, our high-assurance validation service we announced earlier this month.

John?

Thank you, Jim, and good afternoon, everybody. For the quarter ended September 30, 2026, the company generated revenue of $443 million, up 5.7% from the same quarter a year ago.

Operating expense in Q3 2026 totaled $147 million, which compared to $138 million last quarter and $135 million for the third quarter a year ago. During the third quarter of 2026, the company recognized a pretax operating loss of $7.5 million related to certain assets held for sale, which accounted for the majority of the sequential increase in operating expenses.

Operating income totaled $296 million, up $12 million, or 4.2%, from the previous year and flat sequentially. Net income for the third quarter totaled $213 million, compared to $217 million last quarter and $213 million for the same quarter a year ago.

This resulted in diluted earnings per share of $2.35 for the third quarter this year, compared to $2.38 last quarter and $2.27 for the third quarter last year. The previously mentioned loss to adjust the carrying value of certain assets held for sale decreased EPS by 6 cents in the current period.

Operating cash flow for the third quarter of 2026 was $268 million, and free cash flow was $261 million, compared with $308 million and $303 million, respectively, in the year-ago quarter. The year-over-year decrease is primarily related to higher cash taxes and payments to employees and vendors, partially offset by higher cash collected from customers in the third quarter this year.

Our financial and liquidity position remains stable, with $476 million in cash, cash equivalents, and marketable securities at the end of the quarter. I will now discuss our updated full year 2026 guidance.

Revenue is now expected to be between $1.755 billion and $1.760 billion. Operating income is now expected to be between $1.188 billion and $1.192 billion, which reflects the $7.5 million expense booked during the third quarter, as mentioned before.

Interest expense and non-operating income, net, is still expected to be an expense between $59 million and $65 million. Capital expenditures are still expected to be between $55 million and $65 million.

The GAAP effective tax rate is still expected to be between 22% and 25%. Now, I'll turn the call back to Jim for his closing remarks.

Thank you, John. We're pleased with the results of our core DNS business in Q3.

We believe that our record of more than 29 years of uninterrupted .com and .net DNS global availability contributes to our domain growth by establishing and maintaining .com and .net as highly reliable and trusted TLDs, now processing approximately 800 billion DNS queries per day on average, returning cryptographically protected answers within milliseconds. With this unparalleled record of availability, reliability, and performance, we use the term high-assurance to describe our services.

Very soon.web will join our family of trusted TLDs, and it will allow us to offer more choice to customers, and they will benefit from Verisign's rigorous attention to availability and reliability. We're very pleased to be on track to bring .web to market in just a few months.

As many of we have recently announced another new product. On October 5th, we announced Verisign Informed, or VI, a security service to support the use of critically important and widely used digital credentials.

There are many use cases for these credentials: authorized network access by users in corporate networks, secure email, secure software distribution, including app updates, and on billions of financial chip cards worldwide. Web certificates are used to establish a secure link when connecting to a website.

Like any credential, there are many reasons certificates may need to be revoked before their expiration date. Gaps in that process will result in stale trust.

At its core, VI answers the question: Has this certificate been revoked? It's easy to see how vital the answer to this question is in today's world.

VI allows trust decisions to be made with the most current information at global scale, and runs on our high-assurance infrastructure built with the same know-how and proprietary high-performance architecture that enables Verisign's DNS to provide cryptographically protected responses in milliseconds to billions of DNS queries per day. Our microsite, verisigninformed.com, contains several blogs and tech reports introducing VI and offering descriptions and measurements in risk reduction that VI can provide.

Three points I believe are of interest to investors. First, VI is fully operational in our infrastructure today.

All financial data from 2024 up to and including our guidance through 2026 includes all VI expense. Second, pricing is being finalized now and should be completed by year-end, with production service delivery expected during one half 2027.

Third, VI can be provisioned and operated like domains, through our existing registrar channel, through existing PKI service providers and other application vendors, or even through a self-service facility. Provisioning and delivering the service are nearly identical to those of our core offerings.

I'll close by saying that we have always seen ourselves as a critical infrastructure service provider that prioritizes security, stability, and resiliency. That focus has delivered profitable growth for the company, and our focus will not change.

We've established a record of disciplined capital allocation over many years that has delivered a compounding benefit through share repurchases, now diversified with the dividend. We achieved our goal of earning investment-grade status in 2021, and we intend to maintain it.

We believe our new services, carefully selected for alignment with our risk tolerance and core competencies, represent a carefully measured way to continue to deliver for both our customers and shareholders. Thanks for your attention today.

This concludes our prepared remarks. Now, we'll open the call for your questions.

Operator, we're ready for the first question.

Great. Good afternoon.

Thank you for taking my questions. First one, Jim, it's a two-parter for you.

The gross domain adds continue to be stunningly strong, up 24% year-over-year. You guys added another over 13 million this quarter.

I was wondering if you could just touch on and remind us or update us on what you're seeing in terms of the drivers of that. I know clearly AI, but are you also seeing digital provenance or other things like that playing into that?

The follow-up question I have is regarding trends you're seeing in first-year renewals. You guys have been clear with us about the fact that that renewal rate would be impacted by this large bolus of new domains that you have, but it sounds as if those first-year renewals have been coming in pretty strong.

I wanted to understand what you're seeing in terms of the stickiness, the quality of those first-year renewal trends. Thank you.

All right. Let me address your first question first.

Some of the drivers that we're seeing in new registrations, which is, as you pointed out, at 13.1 million during the quarter, is a record for us. Q2 was a record for us.

Key drivers that we see are what I've referred to before as a synergistic convergence of demand for domain names from businesses, new business starts, but also our marketing programs and an AI tailwind. We are hearing from some registrars that AI is a factor.

AI clearly makes it easier to find a domain name, develop a website, and maintain a website. We're seeing that content creators want their content found by AI, and a domain name is one of the primary ways to have that content available.

I think what we've been saying historically for a number of years, that the well-governed DNS is going to continue its value, the decades of investment in infrastructure like ours, governance by ICANN, strengthening and ensuring that a domain name is a unique, trusted, secure global identifier, I think is really demonstrating its value in a world where people still get online for the fundamental purpose of being found and conducting commerce. I think all that just really works together to drive that growth.

I think your second question, John, I'll let you address that about renewal rates.

Good afternoon, Rob. Through the third quarter, what we've seen with our first-time renewal rates is they've remained fairly steady in the mid-40% range.

The previously renewed rates have been the same. They've remained fairly steady in the mid-80% range.

We haven't seen a great deal of movement either direction in those. As Jim mentioned, with the strong new registrations, the mix of first-time renewing names is growing in proportion to the total base, and that does result, just from math, in the renewal rate going down.

We are going to be watching very closely next year because this year's registrations have been very strong, and we'll be looking to see if there's any trends in the first-time renewal rates, but nothing of significance to report to you right now.

Great. Thanks, John.

Jim, I just had one follow-up for you, and then I'll seed the floor. Loved to get your take on just the timing of .web.

It strikes me you guys might be in a unique position here relative to the timing of this pretty strong, generic TLD, which is coming out ahead and by a period of time of many of the new TLDs that will come out as part of the auction. Wanted to get a sense from you of if that's right, if that early access to the market is a benefit to you guys and any other way you can help us think about that timing or frame that opportunity.

Thank you.

Yes, thanks, Rob. Certainly you made some factual statements about the timing, that's true.

I think the strength of .web is what it's always been. It is a short, generic, relevant TLD operating in our infrastructure, our high-assurance infrastructure.

I'm kind of looking beyond the short-term period. I do understand and I do agree there's an opportunity.

There will be another round, but it's a ways down the road, and there's an opportunity here with .web. I think the strength of running on our reliable infrastructure with its track record, providing more choice to our customers with a short, relevant TLD is going to be a value proposition that will continue beyond this opportunity that we may have in the short term.

I think the flexibility that we have in marketing and all of the things that come with a pure generic TLD that's not regulated the way .com and .net are, all those things play well. I think the enduring value of a domain name plays well.

Certainly, the timing is good. We waited a long time.

It would have been nice to have it sooner, but I think there's always room for a secure, reliable domain name that gives people more choice, and that's how we view it. We see .web as another member of the trusted family of .com and .net that's provided 29 years of 100% availability.

I think that value is going to continue to be enduring the longer that record gets.

Great. Thank you both very much.

Thank you.

Hey, good afternoon, guys. Maybe just follow up first on Rob's first question.

You're going to be adding about 11 million domains this year. That's, I think, going back as high as it's been in decades, if I'm not mistaken.

I know it's being driven by multiple factors, but if I can get you to look forward a little bit, Jim, into next year, what gets this to slow down? Feels like AI trends and agentic in particular, as that starts to pick up, especially when you guys point to things like queries and the rate of change that you're seeing in query growth, feels like this strength has a lot of runway, and just wanted to maybe get some of your thoughts to look forward into next year without getting guidance.

Sure. I guess I would point to what we see as the very long trend lines here.

The economy is built on a digital platform that continues to grow. There's constant new adoption of delivering services digitally.

There is greater reliance on digital services, cloud service providers, new entrants offering new services, more businesses converting to online, the efficiencies that come. AI is a relatively recent driver and certainly contributing to that as well.

I see a combination of that long trend line of just simply growth and adoption of online services, the ongoing move towards more digital, efficient services. AI is a boost, and the enduring value of a domain name in the very mature and trusted, because of all the security that's been built in over the last decades in the DNS, our infrastructure, I think, is an important component of that.

I just see those long trend lines, and I don't think in terms of quarters of years. Obviously, we do as we report quarterly and annually, but I think those trend lines run much longer, and I think they bode well.

I think also our carefully assessed and measured addition of Verisign Informed to our offerings, the way it leverages our infrastructure, I think the long trend line favors that as well. New advanced services, agentic AI, etc., I think we're already seeing evidence that there are security challenges that come.

We think offering tools that can close security gaps are very important. We tend to take the longer-term view, but I think you could certainly, looking out a year, I can see all of those factors coming into play.

Registrars are very engaged. They're seeking more customers.

There are a lot of factors driving their business as well. There's quite a bit of synergy in all of the factors that are driving this growth.

There may be ups and downs along the way, there always are, but I think the long trend line is really strong, and that's what we keep our eye on.

Great. Very helpful there.

I wanted to ask maybe if we could elaborate a little bit more on Verisign Informed. I guess first, can you help us understand why Verisign has the right to win in this business versus other cybersecurity providers, why enterprises or consumers are choosing Verisign, maybe particularly on the enterprise side, but on both, on what you can hit.

Then I know you talked about pricing, finalizing pricing plans, but if you could help investors think through, maybe not the actual price, but the structure, what does pricing look like? How should we be thinking about, again, not the actual number, but what it means in general and how to think about it.

Any help there would be great. Thank you.

Sure. Let me take those in reverse order.

I think with respect to pricing, we're just a few months away from having more to say about that, which I think will help people assess the opportunity. As I mentioned, we think this is a leveraged, carefully assessed core offering where the real synergy and what I think will make Verisign Informed strong -- back to the first part of your question, why Verisign Informed -- I think it's really, first of all, OCSP, the Online Certificate Status Protocol, is difficult to do as quickly as we do DNS.

Operating in our infrastructure, we're going to offer that level of performance. The key distinction here is that there are a couple of things we can do.

Number one is that at the time of making the trust decision -- and here's another important aspect -- whether that's a person-to-machine interaction or whether it's a machine-to-machine interaction, which it clearly will be with agentic AI becoming prevalent, performance, speed, and reliability matter. I think all of those aspects of our high-assurance infrastructure combined with this service, which closes these gaps -- if you don't do credential revocation, certificate revocation quickly, those gaps can be exploited.

I think if we're learning anything at this point, we can see that AI is extremely good at identifying vulnerabilities, and those usually are followed up very quickly with AI-enabled attack chains, and closing all vulnerability windows as much as possible is really important and I think going to increase in importance, and I think we just have a solid offering. With respect to why Verisign Informed, I would say it offers the sort of -- and I think if you look at some of our blogs, I would say demonstrable reduction in risk when making trust decisions that are better informed.

I think that value proposition will be of great interest to a lot of folks out there. We're seeing it already in the financial industry, and I think that will grow, in our opinion.

All right, great. Thank you so much.

Thank you.

Hi there. Thank you for taking my questions.

Two here, if I may. With the .com price increase coming into effect, any early color here on registrar pricing actions or customer renewal rate benefits that you're seeing that could be mitigating the first-time renewal headwinds that you talked about earlier?

Hi, Jamesmichael, this is John. We've been watching closely what our registrars are doing with pricing, and at least for the last three months since we've announced the price increase -- I think that was last April for .com -- we haven't seen a significant increase in pricing on new registrations or renewals.

Our analysis shows the price increases during that time period are in the neighborhood of 1% or even less. We haven't seen a lot of move.

In the past, when we've done price increases, we have seen some registrars in advance of the effective date raise prices or in conjunction with the effective date, but so far, that's something we haven't seen a lot of. We do continue to keep our eye on that.

I was just going to add -- oh, sorry, go ahead. Didn't mean to interrupt.

No, go ahead.

I was just going to add to that, the price increase is 71 cents, and I think given that we don't control the retail price, of course, that's set by the registrars, and it's a modest price increase that they can certainly absorb and adjust accordingly, but the impact on the retail channel where prices are unregulated is different than our pricing. We did provide, as required, six months notice of the price increase, it's not a surprise.

Yep. Understood.

Follow-up here on the ICANN next gTLD rounds. We saw the .pki moves, but there are other TLDs out there that are pretty key, including .agent.

Curious if you can elaborate on your strategic approach overall to new TLD acquisition. Thank you.

Sorry, Jamesmichael, that was a specific question about .pki?

Yeah.pki and your strategic approach to new TLDs.

PKI, of course, stands for public key infrastructure. This is something that actually Verisign's parent company, RSA, brought to market back in the '80s and '90s.

We wrote the standards, we enabled the first browsers with a full PKI suite that allowed e-commerce to flourish with security and the ability to conduct commerce. PKI has only grown since then.

It's the critical trust component of much of the commerce that's conducted on the internet. Not only that, it also includes, as I mentioned, all the different use cases: code distribution and lots of other things.

We think that we have announced Verisign Informed, that is very much a PKI-related service, and we think that there's some interesting things we're looking at and considering with .pki. We chose carefully, and that is the only TLD that we applied for, but we think it's very relevant to the security services that we provide.

Okay. Thank you so much.

Thank you.

Hello, everyone. Jim, I was wondering if you can maybe provide a bit more color and decompose 3Q net adds into gross adds versus deletions, and specifically how deletion and churn rates are performing, including any post-promo churn, how is that trending versus last year?

If I understand your question, you want commentary, Alexei, on how our new registrations relate to deletes and the trends in deletes, is that fair?

Because I'm trying to understand what are you incorporating in the guidance of 6.5% to 7%, what sort of assumptions are embedded in terms of gross adds, deletions, renewals, and mix, just trying to understand.

Yeah. Typically, we don't guide on each individual component.

That's the first thing. What I would say is we do see continued good demand for registrations, and we expect that to hold up reasonably well.

Of course, fourth quarter has the holiday season in it, and that usually creates a little bit of a seasonal downturn for us. As far as deletions go, I think it's really what we've already talked about, and that is we're going to continue to see a greater mix of first-time renewing names.

Those names renew at almost half the rate of previously renewed names, and so as the proportion of the entire base has more first-time renewing names, it's just a natural occurrence that the renewal rate will drop slightly. We are forecasting that for the fourth quarter.

Beyond that, I don't know if there's more that I can say. I don't know, Jim, if you have any additional comments.

I think your question was about trends, and I guess there are no trends that we think are significant such that we're calling them out as something substantially different than what we've done in the past. What John described, a first-time renewal rate in the 40s and a second or subsequent renewal rate in the mid-80s has held pretty constant.

Whenever we get a boost -- we saw this in 2016 when we had a large China surge, we saw first-time renewal rates just kind of fall off the edge in the year and two that followed because of the huge, sudden, and abrupt number of first-time renewing rates. I think this isn't nearly as dramatic as that, and secondly, I think the underlying drivers for these registrations is quite different.

I can share this -- our analysis of the new registrations that we're getting, to the extent we can identify the purpose of the websites, is that they fall into our cohort that is the best-renewing cohort, the online presence cohort. I think this sort of ties into people finding it easier with AI to develop a meaningful website and get an online presence.

I think, in the long run, we'll see basically sort of if there are any significant deviation, some regression to the mean. It's held over a very, very long period of time.

Thank you for that, Jim. You noted that registrar retail pricing has only moved about 1% or less since the April .com notice.

Do you expect a step-up closer to the effective date, and what's your best read on elasticity versus renewal impact from that 71 cents wholesale increase?

That's a tough one to answer. I think that what we're seeing with the various tailwinds and the various factors driving these new registrations, obviously, if we're seeing a benefit from it, the registrars are seeing even more because they have the freedom of pricing, and of course, they have a base of .coms that renew.

Many registrars are renewing .coms at twice the wholesale price. I think that that's a factor that just sort of argues that it might be easier to stay focused on what they're doing.

I can't speak for them, but I think that if they have found formulas that are working, perhaps they've had six months to prepare, and so maybe it's at a rate of growth that they enjoy and want to continue. I'm not sure, but it's a modest increase that I think they can absorb.

We track their retail prices, of course, and there's certainly room there, but I think they're obviously selling the domain names that we're registering, they're getting a benefit. I expect they're making decisions that drive their business, which drives ours.

Thank you, Jim. Just to clarify, are you seeing any meaningful early renewal activity ahead of the .com increase, like a cash pull-forward or renewal date shift?

How should we think about the knock-on impact to the timing of recognized revenue versus cash?

That's for John, I think.

Alexei, we have not seen a lot of early renewals at this point, we're not necessarily seeing a pull-forward of renewals to the lower price point pre-November 1st. Obviously, we watch for that, but we have not seen any significant evidence of that.

There's still another week or so before the price increase, but so I can't predict what would happen during that time, but we haven't seen anything yet.

I think I'd just add, too, that even with the price increase.com is still very, very competitively priced with respect to all of the other generic TLDs that are out there. I think that's a factor.

The average price of those other TLDs is much higher than .com, even with this price increase.

That's true. Then

Alexei, to your second point, just wanted to mention -- and I think we addressed this maybe on the last call as far as the revenue recognition -- we said last call that expect about 50% of the .com price increase to flow through in revenue in 2027, most of the rest of that in 2028. I don't know if that was the second part of your question, but I just wanted to touch on that.

Thank you, David. Just wanted to confirm that that hasn't changed.

Final question, Jim, at high level, what's the monetization unit for Informed? Is it going to be per OCSP query or maybe per certificate?

What milestones between now and first half of next year would you point to that would validate that the product-market fit?

I think the best way to answer that question is to ask you to follow our microsite, Verisign Informed. We're posting blogs that provide additional information.

We're very engaged in a number of standards bodies, both the American National Standards Institute, C2PA, Creators Forum, there are standards engagement, we're engaged with a variety of service providers, and we'll be providing updates on that website. I would say right now we announced also that we're opening the beta phase, I think you'll start seeing things roll out on that website.

The high-level plan, as I mentioned, is pricing by the end of the year, pricing structure, and availability of the service in the first half of 2027. All of those updates will be rolling out.

There are also a number of seminars that we're doing jointly with Forrester and some other folks. We've already done one.

We'll be doing some other public events. There'll be a steady rollout of information that I think will give you the complete picture.

I think it's a bit early for me to sort of predict exactly how that will play out or what the milestones will be. We're certainly seeing substantial interest and activity.

Security is only becoming more important, the interest is high. I think we're seeing an understanding and an appreciation for what the synergy that comes from our high-assurance infrastructure and providing this service globally at the level of performance that we can, we've seen has some people rethinking this, understanding that something that perhaps they didn't think was actually practically available as a practical matter is.

We'll see how that plays out, but follow the microsite, and obviously we'll update you every quarter.

Thank you, Jim.

Thank you.

Thank you, operator. Please call the Investor Relations department with any follow-up questions from this call.

Thank you for your participation. This concludes our call.

Have a good evening.