The Name Nobody Can MoveWide moat

VeriSign (VRSN) — moat facet

The registrant can change registrar in an afternoon and it costs VeriSign nothing, because the thing that cannot be moved is the name itself.

A .com registration costs about ten dollars a year and is one of the least movable assets a business owns.

.com and .net renewal rate72.2%Q3 202475.5%Q1 202575.4%Q3 202576.3%Q1 2026Not fully measurable until 45 days after quarter-end, so every print lags a quarter.
Roughly three names in four are renewed, and the quarter that lapses was never attached to anything.

The confusion comes from the fact that the registrant can switch registrars whenever they like — GoDaddy to Namecheap to Cloudflare, an afternoon's work, no penalty. That switch changes nothing about VeriSign, which is paid the same wholesale fee whoever collects it. The thing that cannot be switched is the name. Move from example.com to example.io and you have changed every email address in the company, every link anyone has ever made to you, your search rankings, your printed materials, the thing your customers type from memory, and the address in your app store listing. There is no migration path. There is only a new name and a period of being unreachable at the old one.

VeriSign measures this precisely and reports it every quarter. The final .com and .net renewal rate for the first quarter of 2026 was 76.3%, against 75.5% a year earlier.1 That number looks low until you understand what makes up the quarter that lapses: speculative registrations bought in bulk on the chance of resale, expired promotional first-year registrations at a dollar, names attached to nothing. Names attached to a live business renew at rates far closer to certainty, which is why the reported rate moves with speculative activity rather than with commercial demand.

The demonstration came in 2023 and 2024. The domain name base fell for six consecutive quarters, from 173.4 million at the end of 2021 to 169.0 million at the end of 2024 — a decline driven by Chinese demand collapsing, U.S. registrars deliberately chasing revenue per customer instead of customer count, and very cheap new gTLDs taking the marginal registration.2 Over exactly that stretch, revenue rose from $1,327.6 million to $1,557.4 million, up 17.3%.3

That is the clearest statement of the moat available. VeriSign lost 2.5% of its units over three years and grew revenue by a sixth, because the price is set by contract and the customers who mattered did not leave. A business selling something genuinely optional cannot do that.

The base has since re-accelerated to 179.1 million, up 5.1%, on a record 12.7 million new registrations in a single quarter.4 Both directions are informative: the switching costs held the floor when demand was bad, and did nothing to create the recovery when it improved. This is a moat that protects revenue. It does not generate growth.

Moat trajectory: Widening

The renewal rate has moved from 72.2% at the 2024 trough to 76.3%, new registrations hit a record 12.7 million in a quarter, and the base is back to 179.1 million after three years of decline. The names in the base are stickier than they were two years ago, which is precisely what this facet measures.

The number that tests this moat
Reported
.com and .net renewal rate
76.3% in the first quarter of 2026

Against 75.5% a year earlier. This is the only operating figure that tests whether the switching-cost argument is true: roughly three names in four are renewed each year, and the quarter that lapses is overwhelmingly speculative inventory rather than live business addresses. Renewal rates are not fully measurable until 45 days after quarter-end, so the figure always lags a quarter.

Source: VeriSign Q2 2026 results, 23 July 2026 ↗
Aspects of the moat
DIG DEEPER 01
The Renewal Rate Is the Whole Thesis
76.3% is the only number in this company that measures whether anyone actually wants what it sells.
DIG DEEPER 02
Three Years the Base Fell and Revenue Didn't
Units fell 2.5% over three years and revenue rose 17.3% — pricing power stated as arithmetic rather than asserted.
DIG DEEPER 03
Ten Dollars Against Everything Built On It
Nobody abandons a .com to save ten dollars, because the cost of abandoning it is a rebrand.
DIG DEEPER 04
Defaults Persist
ICANN ran the experiment: a thousand alternatives in fourteen years, and .com and .net still hold 45% of every domain name on earth.
⚠ Threats to the moat
⚠ THREAT 01
Switching Costs Do Not Stop Deletion
The customer who leaves does not switch to a competitor. The name simply stops existing.
⚠ THREAT 02
Nothing Here Creates Growth
Switching costs held the floor through the decline and had nothing to do with the recovery. This moat defends revenue; it has never created any.
References
  1. ReportedThe final .com and .net renewal rate for the first quarter of 2026 was 76.3%, against 75.5% a year earlier.
    VeriSign, Inc., Reports Second Quarter 2026 Results — Form 8-K Exhibit 99.1, 23 July 2026. Revenue $435 million, up 6.0% year over year; operating income $296 million against $281 million; net income $217 million and diluted EPS $2.38 against $207 million and $2.21. Cash, cash equivalents and marketable securities $1.03 billion, up $454 million from year-end 2025; deferred revenues $1.45 billion at 30 June 2026, up $64 million from year-end. Cash flow from operations $232 million. On 26 June 2026 VeriSign issued $550 million of 5.10% Senior Notes due 2031 and on 20 July 2026 used the proceeds with cash on hand to redeem $550 million of 4.75% Senior Notes due 2027. 0.7 million shares repurchased for $197 million; an additional $884 million authorised effective 23 July 2026 bringing the total authorisation to $1.50 billion; a quarterly dividend of $0.81 per share declared on 20 July 2026. The domain name base ended at 179.1 million .com and .net registrations, a 5.1% increase year over year and a net increase of 3.05 million in the quarter; a record 12.7 million new registrations were processed against 10.4 million; the final first-quarter 2026 renewal rate was 76.3% against 75.5%. CEO Jim Bidzos: the record of 100% availability for the .com and .net domain name resolution system was extended to 29 years, and more than 100% of free cash flow was returned to the investing public through dividends and share repurchases. The .web top-level domain has been delegated into the DNS root zone with VeriSign as the designated registry operator. — Q2 2026 · publ. 2026-07-23 · source ↗
  2. ReportedThe .com and .net base fell for six consecutive quarters through the third quarter of 2024 as U.S. registrars prioritised revenue per customer over acquisition and low-cost new gTLDs took share.
    Domain Name Wire — price increases boost revenue at Verisign as domain registrations continue to slide. The .com and .net base fell for a sixth consecutive quarter to 169.6 million at the end of the third quarter of 2024, down 2.5% year over year, with U.S. registrars prioritising revenue per customer over customer acquisition and very low-cost new gTLDs taking share; the third-quarter 2024 renewal rate was approximately 72.3%. — Q3 2024 · publ. 2024-10-25 · source ↗
  3. ReportedRevenue rose from $1,327.6M in 2021 to $1,557.4M in 2024 while the domain name base fell from 173.4 million to 169.0 million.
    VeriSign, Inc., Form 10-K for the fiscal year ended 31 December 2023 (SEC, CIK 1014473). The .com and .net domain name base was 172.7 million at 31 December 2023 (−1%) against 173.8 million in 2022 and 173.4 million in 2021. Geographic revenues on the then-current basis: U.S. $994.7M (+6%), EMEA $228.2M (+1%), China $91.6M (−14%) against $106.0M in 2022 and $101.7M in 2021, other $178.6M (+15%); total revenues $1,493.1M against $1,424.9M in 2022 and $1,327.6M in 2021. — FY2023 · publ. 2024-02-15 · source ↗
  4. ReportedThe base reached 179.1 million at 30 June 2026, up 5.1%, on a record 12.7 million new registrations in the quarter.
    VeriSign, Inc., Reports Second Quarter 2026 Results — Form 8-K Exhibit 99.1, 23 July 2026. Revenue $435 million, up 6.0% year over year; operating income $296 million against $281 million; net income $217 million and diluted EPS $2.38 against $207 million and $2.21. Cash, cash equivalents and marketable securities $1.03 billion, up $454 million from year-end 2025; deferred revenues $1.45 billion at 30 June 2026, up $64 million from year-end. Cash flow from operations $232 million. On 26 June 2026 VeriSign issued $550 million of 5.10% Senior Notes due 2031 and on 20 July 2026 used the proceeds with cash on hand to redeem $550 million of 4.75% Senior Notes due 2027. 0.7 million shares repurchased for $197 million; an additional $884 million authorised effective 23 July 2026 bringing the total authorisation to $1.50 billion; a quarterly dividend of $0.81 per share declared on 20 July 2026. The domain name base ended at 179.1 million .com and .net registrations, a 5.1% increase year over year and a net increase of 3.05 million in the quarter; a record 12.7 million new registrations were processed against 10.4 million; the final first-quarter 2026 renewal rate was 76.3% against 75.5%. CEO Jim Bidzos: the record of 100% availability for the .com and .net domain name resolution system was extended to 29 years, and more than 100% of free cash flow was returned to the investing public through dividends and share repurchases. The .web top-level domain has been delegated into the DNS root zone with VeriSign as the designated registry operator. — Q2 2026 · publ. 2026-07-23 · source ↗
Sources
Generated September 23, 2026