Verisign: 3Q26 Review: Another Record for New Registrations and Guidance Raise; Renewal Mix and EPS Miss in Focus; Maintain Neutral

Verisign raised FY26 domain base growth guidance for the third time this year to 6.5%-7.0% YoY (prior 5.2%-6.0%), with new registrations setting a second consecutive record at 13.1M (+23.2% YoY). 3Q26 revenue of $443.0M (+5.7% YoY) beat the Street's $439.8M, while operating income of $296.5M missed, reflecting a $7.5M pre-tax loss on assets held for sale (excluding it, $304.0M at a 68.6% margin). The preliminary renewal rate fell to 74.3% from 75.4% a year ago, and management flagged a possible further slight dip in 4Q. FCF of $260.7M (-14.0% YoY) missed the Street's $278.3M. J.P. Morgan maintains its Neutral rating and Dec-27 price target of $316, based on DCF (9% WACC, 2% terminal growth), implying about 21x 2027E EV/EBITDA.