VALUATION HIGHLIGHTS

1. Domain Names constitute 100% of the Trefis price estimate for VeriSign's stock.

WHAT HAS CHANGED?

Q2 2022 Earnings

VeriSign reported net sales of $352 million in Q2 '22, up from $329 million in Q2 '21. Expenses grew slightly slower than the growth in revenue, and operating income rose from 213 million to 236 million over this period. Combined with a roughly unchanged effective tax rate and lower outstanding share count over this period, EPS rose to $1.54 from $1.31.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of VeriSign's value that present opportunities for upside or downside to the current Trefis price estimate for VeriSign:

.com & .net domain names

• Number of .com and .net domain registrations: With more and more businesses getting listed on the internet, .com and .net domain registrations have continued to grow from 127.2 million in 2013 to 173 million in 2021, and we expect it to reach to around 230 million through the forecast period. However, if the growth rate exceeds our expectations and the registration count reaches nearly 280 million, there could be an 15% upside to the Trefis price estimate for VeriSign's stock. On the other hand, the increase in domain name prices could reduce the demand for .com and .net domain names. There could be a downside of nearly 10% to the Trefis price estimate for VeriSign's stock if the registration count grows slower than expected and reaches only 200 million by the end of the Trefis forecast period.

For additional details, select a driver above or select a division from the interactive Trefis split for VeriSign at the top of the page.

BUSINESS SUMMARY

Historically, VeriSign had two main businesses - Domain Names & SSL and Authentication Services. The company sold its SSL and Authentication Services business to Symantec in May 2010 for $1.28 billion.

Domain Names:

Within this business, VeriSign controls the rights to the exclusive registry of .com and .net Internet domain names. VeriSign collects a fixed fee each time individuals or businesses register a new .com or .net domain name, or renew the registration of an existing domain name.

SOURCES OF VALUE

The source of value for the Domain Name division comes from the following:

Large Market for .com and .net Domain Names

The total domain name base for .com and .net stood at 173 million at the end of 2021. For 2022, we expect a total of around 185 million .com and .net domain names. VeriSign charges $7.70 for .com and .net currently.

Icann (The Internet Corporation for Assigned Names and Numbers) recently approved a 7% increase in pricing, this should reflect in the company's pricing policies in the coming quarters.

KEY TRENDS

Growth of the Internet

There were 252 million domain name registrations across all top level domains by the end of 2012. By the end of 2019, the number grew to just over 360 million domain names.

At the end of 2021, the total stood at almost 450 million.