VeriSign, the internet address registry, saw a substantial 11.1% rally in April, standing out amidst market turbulence. This surge came on the heels of its robust Q1 earnings report, where revenue and earnings per share exceeded expectations. The company’s strategic move to introduce its first-ever dividend also contributed to the positive market response.
As the world’s registry for .com and .net domain names, VeriSign’s revenue growth is intricately tied to the expansion of internet addresses. Despite a slight decline in domain names year over year, the company managed to add nearly 0.78 million names in the first quarter alone, reaching a total of 169.8 million domain names. This growth trajectory has been supported by price increases implemented in the previous year.
Moreover, VeriSign revised its full-year guidance, adjusting its domain name growth outlook from an anticipated decline to a projected growth range. The company now envisions a positive shift in the domain name base, with revenue and operating income guidance also raised for the year. Notably, VeriSign’s decision to initiate quarterly dividends, starting at $0.77 per share, marks a strategic shift in its capital allocation strategy, moving from share repurchases to dividend payouts.
In a savvy investment move, Warren Buffett’s Berkshire Hathaway bolstered its stake in VeriSign towards the end of last year. This decision has proven fruitful, with VeriSign’s stock already surging by 37% in 2025, surpassing market performance. However, the timing of VeriSign’s dividend announcement hints at a potentially inflated valuation, reflecting a shift in shareholder return strategies at the current stock price level.
VeriSign’s market position as a high-quality, quasi-monopoly entity remains unchallenged. While the stock may not be considered cheap at present valuations, the company’s consistent growth and strategic dividend policy underscore its resilience in the evolving digital landscape. The recent market rally and strategic moves by VeriSign indicate a positive outlook for the company’s future performance and investor returns.
