VERISIGN INCCA

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties, including, among other things, statements regarding our expectations about the sufficiency of our existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our borrowing capacity under the unsecured revolving credit facility. Forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. You should also carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2024. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties, including, among other things, statements regarding our expectations about the sufficiency of our existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our borrowing capacity under the unsecured revolving credit facility. Forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part I, Item 1A of the 2023 Form 10-K. You should also carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2024. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.

Previous wording

As of March 31, 2024, we had 172.5 million.com and.netregistrations in the domain name base. The number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by us and our registrars. The number of domain name registrations under our management may be negatively impacted by certain factors, including overall economic conditions, competition from country code top-level domains (“ccTLDs”), other gTLDs, services that offer alternatives for an online presence, such as social media, and ongoing changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how they will manage their investment in domain names, can negatively impact our business and the demand for new domain name registrations and renewals.

Current wording

As of June 30, 2024, we had 170.6 million.com and.netregistrations in the domain name base. The number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by us and our registrars. The number of domain name registrations under our management may be negatively impacted by certain factors, including overall economic conditions, competition from country code top-level domains (“ccTLDs”), other gTLDs, services that offer alternatives for an online presence, such as social media, and ongoing changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how they will manage their investment in domain names, can negatively impact our business and the demand for new domain name registrations and renewals.

Previous wording

•We recorded revenues of $384.3 million during the three months ended March 31, 2024, which represents an increase of 5% compared to the same period in 2023.

Current wording

•We recorded revenues of $387.1 million and $771.4 million during the three and six months ended June 30, 2024, which represents an increase of 4% and 5%, respectively, compared to the same periods in 2023.

Previous wording

•We recorded operating income of $258.9 million during the three months ended March 31, 2024, which represents an increase of 7% compared to the same period in 2023.

Current wording

•We recorded operating income of $266.2 million and $525.1 million during the three and six months ended June 30, 2024, which represents an increase of 7% compared to the same periods in 2023.

Previous wording

•As of March 31, 2024, we had 172.5 million.com and.netregistrations in the domain name base, which represents a 1.3% decrease from March 31, 2023, and a net decrease of 0.3 million domain name registrations from December 31, 2023.

Current wording

•As of June 30, 2024, we had 170.6 million.com and.netregistrations in the domain name base, which represents a 2.2% decrease from June 30, 2023, and a net decrease of 1.8 million domain name registrations from March 31, 2024.

Previous wording

•During the three months ended March 31, 2024, we processed 9.5 million new domain name registrations for.comand.net compared to 10.3 million for the same period in 2023.

Current wording

•During the three months ended June 30, 2024, we processed 9.2 million new domain name registrations for.comand.net compared to 10.2 million for the same period in 2023.

Previous wording

•The final . com and . netrenewal rate for the fourth quarter of 2023 was 73.2% compared to 73.3% for the fourth quarter of 2022. Renewal rates are not fully measurable until 45 days after the end of the quarter.

Current wording

•The final . com and . netrenewal rate for the first quarter of 2024 was 74.1% compared to 75.5% for the first quarter of 2023. Renewal rates are not fully measurable until 45 days after the end of the quarter.

Previous wording

•We generated cash flows from operating activities of $257.3 million during the three months ended March 31, 2024, compared to $259.0 million for the same period in 2023.

Current wording

•We generated cash flows from operating activities of $417.7 million during the six months ended June 30, 2024, compared to $404.3 million for the same period in 2023.

Previous wording

Revenues increased during the three months ended March 31, 2024, as compared to the same periods last year, primarily due to an increase in revenues from the operation of the registry for the . com gTLD supported by the price increases that became effective September 1, 2023 and 2022.

Current wording

Revenues increased during the three and six months ended June 30, 2024, as compared to the same periods last year, primarily due to the . com price increases that became effective September 1, 2023 and 2022 and the . net price increases that became effective February 1, 2024 and 2023, partially offset by a decline in the.comand.net domain name base, and the elimination of revenue from the operation of the . gov gTLD, which was transitioned to another service provider in the fourth quarter of 2023.

Previous wording

Demand for domain names has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars. However, competitive pressure from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, ongoing changes in internet practices and behaviors of consumers and business, as well as the motivation of existing domain name registrants managing their investment in domain names, such as for resale at increased prices or for revenue generation through website advertising, and global economic conditions, has limited the demand for domain names and may continue to do so in the future. While the core value proposition for domain names remains strong, softness in demand primarily in China has recently led to a decline in our domain name base.

Current wording

Demand for domain names has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars. However, competitive pressure from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, ongoing changes in internet practices and behaviors of consumers and business, as well as the motivation of existing domain name registrants managing their investment in domain names, such as for resale at increased prices or for revenue generation through website advertising, and global economic conditions, has limited the demand for domain names and may continue to do so in the future. While the core value proposition of a domain name remains strong, challenging economic and regulatory conditions have continued to weaken demand for domain name registrations in China, and some registrars, particularly in the U.S., have shifted their focus to increasing profitability through higher retail pricing and a decrease in marketing activities targeting new customer acquisition. The combination of these factors has negatively impacted our renewal rates and the volume of new . com and . netdomain name registrations, resulting in a decline in our domain name base.

Previous wording

Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region. The majority of our revenue growth was generated from registrars based in the U.S., EMEA and certain other countries, while revenues from registrars based in China declined in the three months ended March 31, 2024 compared to the same period of the prior year due to the lower demand noted above.

Current wording

Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region. The majority of our revenue growth was generated from registrars based in the U.S., EMEA and certain other countries, while revenues from registrars based in China declined in the three and six months ended June 30, 2024 compared to the same periods of the prior year due to the lower demand noted above.

Previous wording

Research and development expenses increased slightly during the three months ended March 31, 2024, compared to the same period last year, due to a combination of individually insignificant factors.

Current wording

Research and development expenses increased slightly during the three and six months ended June 30, 2024, compared to the same periods last year, due to a combination of individually insignificant factors.

Previous wording

Interest expense remained consistent during the three months ended March 31, 2024 compared to the same period last year.

Current wording

Interest expense remained consistent during the three and six months ended June 30, 2024 compared to the same periods last year.

Previous wording

Effective July 27, 2023, our Board of Directors authorized the repurchase of our common stock in the amount of $1.14 billion, in addition to the $356.1 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $1.50 billion under the program. During the three months ended March 31, 2024, we repurchased 1.3 million shares of our common stock for an aggregate cost of $260.4 million. As of March 31, 2024, there was approximately $859.6 million remaining available for future share repurchases under the share repurchase program.

Current wording

During the three months ended June 30, 2024, we repurchased 2.2 million shares of our common stock for an aggregate cost of $388.0 million. As of June 30, 2024, there was approximately $471.6 million remaining available for future share repurchases under the share repurchase program. Effective July 25, 2024, our Board of Directors authorized the repurchase of our common stock in the amount of $1.11 billion, in addition to the $388.0 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $1.50 billion under the program.

Previous wording

In summary, our cash flows for the three months ended March 31, 2024 and 2023 were as follows:

Current wording

In summary, our cash flows for the six months ended June 30, 2024 and 2023 were as follows:

Previous wording

Net cash provided by operating activities decreased slightly during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in cash paid to employees and vendors, partially offset by an increase in cash received from customers. Cash paid to employees and vendors increased primarily due to the timing of payments and an increase in operating expenses. Cash received from customers increased primarily due to the . com price increase that became effective on September 1, 2023 and the . net price increase that became effective on February 1, 2024.

Current wording

Net cash provided by operating activities increased during the six months ended June 30, 2024, compared to the same period last year, primarily due to an increase in cash received from customers, partially offset by increases in cash paid to employees and vendors and cash paid for income taxes. Cash received from customers increased primarily due to the . com price increase that became effective on September 1, 2023, and the . net price increase that became effective on February 1, 2024. Cash paid to employees and vendors increased primarily due to the timing of payments. Cash paid for income taxes increased primarily due to comparatively higher U.S. federal and state income taxes.

Previous wording

Net cash provided by investing activities increased during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities.

Current wording

Net cash provided by investing activities increased during the six months ended June 30, 2024, compared to the same period last year, primarily due to an increase in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities.

Previous wording

Net cash used in financing activities increased during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in share repurchases.

Current wording

Net cash used in financing activities increased during the six months ended June 30, 2024, compared to the same period last year, primarily due to an increase in share repurchases.