The AI Boom’s Unexpected Winner: Why the .Com Era Is Far From Over

The Hook: The “Dead Web” Fallacy

There is a prevailing narrative among market skeptics that the era of the traditional website is nearing its end. As generative AI and social platforms become the primary interfaces for information, the domain name is often dismissed as a legacy artifact of the Web 2.0 era. The theory suggests that if users no longer navigate via URLs, the underlying infrastructure loses its relevance.

However, the 2025 fiscal results from Verisign, a mature infrastructure incumbent, provide a definitive rebuttal to this “dead web” theory. The company reported a 6.4% year-over-year revenue increase and a robust 10.1% growth in EPS. Far from becoming obsolete, the domain name system (DNS) is seeing its highest utilization in years.

In 2025, Verisign recorded 41.7 million new registrations, the highest volume the company has seen since 2021. This resurgence indicates that as the internet expands, the demand for stable, unique digital addresses is accelerating rather than tapering off. The company ended the year with 173.5 million domain names in its base, anchored by the enduring dominance of .com and .net.

The AI Paradox: Bots Need the DNS Too

The relationship between artificial intelligence and domain growth is a fascinating paradox. While AI may change how humans interact with search engines, it has transformed Large Language Models (LLMs) and “agentic AIs” into the internet’s most prolific new “power users.” These autonomous agents rely on the DNS to navigate the web, refresh data, and verify sources.

Verisign CEO Jim Bidzos has highlighted that this AI activity is clearly visible in the empirical data, specifically through significantly increased DNS queries. AI is not bypassing the web; it is utilizing the DNS as a “digital trust anchor” to navigate a vast sea of information. As these agents perform increasingly complex, multi-step tasks, their dependence on a stable and well-governed navigation system becomes absolute.

“AIs are going to have to, especially agentic AIs, obviously conducting multiple tasks for people, are going to have to navigate. They’re going to have to refresh data, collect current data. They’re going to be using the DNS to do that. So increased dependence on it, increased value and utility of domain names.”

The Hidden Cost of the Boom: AI vs. Infrastructure

Maintaining the backbone of the internet in the AI age is becoming increasingly capital-intensive. Verisign’s 2026 guidance projects Capital Expenditures (CapEx) between $55 million and $65 million, a figure that sits above its traditional spending range. This increase is a direct reflection of the hardware pressures created by the very technology driving the company’s growth.

This CapEx spike is driven by two primary factors: the high cost of replacing end-of-life equipment amid “intense AI industry-driven demand and supply constraints” for specialized hardware, and planned capital improvement projects for Verisign’s corporate headquarters. For an infrastructure strategist, this highlights how AI is squeezing the supply chain for the entire tech sector. Even a mature utility like the DNS must pay a “growth tax” to secure the hardware required to maintain global capacity.

28 Years of Perfection: The Unseen Streak

In an era defined by frequent cloud outages and platform volatility, Verisign has maintained a 100% operational availability record for the .com and .net DNS for 28 consecutive years. This streak has been preserved despite a massive increase in system load driven by modern automated traffic. This “boring” reliability has become a primary competitive moat in a world of digital instability.

While newer layers of the internet stack are prone to downtime, the DNS remains the only truly stable layer left. For businesses and AI developers, this 28-year record represents a level of certainty that newer platforms cannot replicate. Reliability is no longer just a metric; it is the ultimate strategic advantage for an incumbent tasked with global stewardship.

A Strategic Pivot: From “One-Size” to a “Basket of Programs”

Verisign’s growth is also the product of a sophisticated shift in its registrar channel strategy. Beginning in 2024, the company moved away from rigid marketing structures, opting instead for a “basket of programs” that offers registrars greater flexibility. This shift acknowledges the diverse business models within the channel, which includes both large public entities and nimble private firms.

Crucially, these programs were not just about volume; they were designed to incentivize registrations in categories that demonstrate high renewal rates. This focus on “quality of growth” ensures that the 41.7 million new registrations contribute to a sustainable, long-term domain base. By aligning its incentives with partner needs, Verisign has optimized its path to market in a highly fragmented ecosystem.

The “Teaser”: New Frontiers in Information Trust

Looking toward 2026, Verisign is signaling a return to security-adjacent functionality, leveraging its R&D in IETF standards. CEO Jim Bidzos recently teased “strong candidates for new services” aimed at reducing both known and unknown vulnerabilities. This move marks a pivot from the company’s post-2015 strategy of focusing exclusively on core DNS operations.

This evolution is a natural extension of Verisign’s stewardship role. In an increasingly “synthetic” world, the traditional boundary between “addressing” (where a site is) and “securing” (what a site is) is rapidly disappearing. Verisign’s move back into security services suggests that the company sees a commercial and strategic opportunity in verifying the integrity of the information that its infrastructure helps deliver.

Conclusion: The Trust Anchor in a Synthetic World

As the internet becomes more synthetic—saturated with AI-generated content and autonomous agents—the value of a “well-governed system” becomes paramount. The DNS is far from a relic; it is the fundamental infrastructure that prevents the AI-driven web from collapsing into a mapless void. Without a stable DNS, agentic AIs lose their ability to navigate, and human users lose their anchor of trust.

The 2025 results prove that the domain name is evolving into a critical trust anchor for the machine-to-machine age. As digital infrastructure becomes more complex, the most valuable assets are those that provide absolute certainty. Do you view a domain name as just an address, or as the only stable trust anchor left in an increasingly automated and synthetic world?

VeriSign 2025 Full Year and Q4 Earnings Briefing

Executive Summary

VeriSign, Inc. reported a strong financial and operational performance for the full year 2025, characterized by significant growth in the domain name base and a return to high-volume new registrations. The company achieved a record 28 years of 100% service delivery for the .com and .net DNS while navigating increased infrastructure utilization.

Critical Takeaways:

• Financial Growth: Full-year revenue reached $1.66 billion (up 6.4% YOY), with earnings per share (EPS) of $8.81 (up 10.1% YOY).
• Domain Base Expansion: The domain name base grew by 4.5 million names to 173.5 million, marking a 2.6% increase. New registrations totaled 41.7 million, the highest volume since 2021.
• AI Integration: Artificial intelligence is driving growth by increasing DNS queries, enhancing registrar tools for domain selection, and creating a greater dependence on the DNS as AI agents navigate the internet.
• Shareholder Returns: VeriSign returned $1.1 billion to shareholders through repurchases and dividends. The Board declared a 5.2% increase in the quarterly dividend to $0.81 per share.
• 2026 Outlook: Guidance projects continued growth with a domain base increase of 1.5% to 3.5% and revenue between $1.715 billion and $1.735 billion.

Financial Performance Overview

VeriSign’s 2025 financial results demonstrate stable growth and disciplined operational management.

Full Year 2025 Key Metrics

Q4 2025 Specifics

• Revenue: $425 million, a 7.5% increase over Q4 2024.
• Operating Expenses: Totaled $140 million. The sequential increase was primarily due to an impairment charge on real estate intended for sale.
• Net Income: $206 million, compared to $191 million in Q4 2024. The results reflect higher income tax expenses, largely attributed to foreign-based income taxes.
• Liquidity: The company ended the year with $581 million in cash, cash equivalents, and marketable securities.

Operational Metrics and Domain Growth

The domain name base experienced a resurgence in 2025, driven by sustained demand across all major geographic regions (US, EMEA, and APAC).

• Registration Volume: 41.7 million new registrations were recorded for the year. Q4 specifically saw 10.7 million new registrations, up from 9.5 million in the prior year’s quarter.
• Domain Base: Ended 2025 at 173.5 million names.
• Renewal Rates: The preliminary Q4 renewal rate was 75%, an improvement from 74% in Q4 2024.
• Service Reliability: VeriSign maintained its 28-year record of 100% availability for .com and .net DNS.

“The positive domain name based trends we saw developing in late 2024 gained strength and continued throughout 2025… It is clear to us that end users are seeing value in domain names and the domain name system.” — Jim Bidzos, CEO

Strategic Growth Drivers

The Role of Artificial Intelligence

Management highlighted AI as a multi-faceted contributor to the business:

• Increased Utilization: AI “scraping” for LLMs and the activity of agentic AIs have significantly increased DNS queries and traffic.
• Registrar Tools: AI is being utilized by registrars to help users select domain names and build websites more efficiently, lowering the barrier to entry for new registrants.
• Digital Trust: VeriSign positions the DNS as a “digital trust anchor” that becomes more critical as AI-driven tasks require reliable navigation of the internet.

Marketing and Channel Evolution

The “basket of programs” approach initiated in 2024 has allowed registrars greater flexibility.

• Incentivization: Programs have been adjusted to incentivize registrations in categories with higher historical renewal rates.
• Channel Flexibility: Management credits the alignment of marketing programs with the evolving business models of registrars for the improved domain metrics.

2026 Guidance and Capital Expenditure

VeriSign provided a forward-looking outlook for 2026, projecting continued momentum.

2026 Financial Projections

• Revenue: $1.715 billion – $1.735 billion.
• Operating Income: $1.160 billion – $1.180 billion.
• Domain Name Base Growth: 1.5% to 3.5%.
• Effective Tax Rate: 22% to 25%.

Capital Expenditure (CapEx) Increases

CapEx is expected to rise to between $55 million and $65 million in 2026. This is higher than the typical range due to:

• Equipment Replacement: A significant amount of end-of-life equipment requires replacement.
• Supply Constraints: Costs are rising due to intense AI industry-driven demand for hardware and associated supply constraints.
• Facility Improvements: Planned capital projects for the corporate headquarters.

Future Initiatives and Security Services

CEO Jim Bidzos teased the introduction of new services aimed at enhancing information trust and reducing vulnerabilities.

• Focus: These services will leverage VeriSign’s history in DNS and security technology.
• Alignment: The new offerings are intended to be consistent with the core mission of security and stability and will be offered through the existing registrar channel.
• Pricing Strategy: Under the current agreement, VeriSign has the right to raise .com prices by 7% annually during the final four years of each six-year period. The first potential increase could occur in October 2026, which would require a public announcement by April 2026.

Shareholder Value and Capital Allocation

The company continues to prioritize returning capital to shareholders:

• Share Repurchases: $1.08 billion remains available under the current repurchase program, which has no expiration date.
• Dividends: Following the initiation of dividends in Q2 2025, the Board increased the quarterly dividend to $0.81 per share, payable in February 2026.

“VeriSign continues to demonstrate sound financial discipline during the fourth quarter and throughout 2025. And as you can see from our guidance, we expect continued solid financial performance during 2026.” — John Callis, CFO