VERISIGN INCCA

Previous 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.

Current wording

As of September 30, 2024, we had 169.6 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 $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.

Current wording

•We recorded revenues of $390.6 million and $1,162.0 million during the three and nine months ended September 30, 2024, each of which represents an increase of 4% compared to the same periods in 2023.

Previous 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.

Current wording

•We recorded operating income of $269.3 million and $794.4 million during the three and nine months ended September 30, 2024, which represents an increase of 6% and 7%, respectively, compared to the same periods in 2023.

Previous 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.

Current wording

•As of September 30, 2024, we had 169.6 million.com and.netregistrations in the domain name base, which represents a 2.5% decrease from September 30, 2023, and a net decrease of 1.1 million domain name registrations from June 30, 2024.

Previous 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.

Current wording

•During the three months ended September 30, 2024, we processed 9.3 million new domain name registrations for.comand.net compared to 9.9 million for the same period in 2023.

Previous 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.

Current wording

•The final . com and . netrenewal rate for the second quarter of 2024 was 72.7% compared to 73.4% for the second 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 $417.7 million during the six months ended June 30, 2024, compared to $404.3 million for the same period in 2023.

Current wording

•We generated cash flows from operating activities of $671.1 million during the nine months ended September 30, 2024, compared to $649.6 million for the same period in 2023.

Previous wording

renewal . com domain name registration from $9.59 to $10.26, effective September 1, 2024. Under the.net Registry Agreement which renewed in June 2023, we are permitted to increase the price of.netdomain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029. We increased the annual registry-level wholesale fee for each new and renewal.net domain name registration from $9.02 to $9.92 effective February 1, 2023 and from $9.92 to $10.91 effective February 1, 2024. All fees paid to us for.com and.net registrations are in U.S. dollars.

Current wording

Under the . com Registry Agreement, we are permitted to increase the price of a.com domain name registration by up to 7% in each of the final four years of each six-year period beginning on October 26, 2018. We increased the annual registry-level wholesale fee for each new and renewal . com domain name registration from $8.97 to $9.59 effective September 1, 2023, and from $9.59 to $10.26 effective September 1, 2024. Under the.net Registry Agreement, which renewed in June 2023, we are permitted to increase the price of.netdomain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029. We increased the annual registry-level wholesale fee for each new and renewal.net domain name registration from $9.02 to $9.92 effective February 1, 2023 and from $9.92 to $10.91 effective February 1, 2024. All fees paid to us for.com and.net registrations are in U.S. dollars.

Previous 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.

Current wording

Revenues increased during the three and nine months ended September 30, 2024, as compared to the same periods last year, primarily due to the . com and . net price increases, 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

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.

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 nine months ended September 30, 2024, compared to the same periods of the prior year, due to the lower demand noted above.

Previous wording

Cost of revenues decreased during the six months ended June 30, 2024, compared to the same period last year, due to decreases in depreciation expenses and telecommunication expenses. Depreciation expenses decreased by $3.9 million due to a decrease in capital expenditures in recent periods. Telecommunication expenses decreased by $2.5 million primarily due to savings on renewals of colocation agreements.

Current wording

Cost of revenues decreased during the nine months ended September 30, 2024, compared to the same period last year, due to decreases in depreciation expenses and telecommunication expenses, partially offset by a combination of individually insignificant factors. Depreciation expenses decreased by $5.7 million due to a decrease in capital expenditures in recent periods. Telecommunication expenses decreased by $3.3 million primarily due to savings on renewals of colocation agreements.

Previous 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.

Current wording

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

Previous wording

Selling, general and administrative expenses remained consistent during the three and six months ended June 30, 2024, compared to the same periods last year.

Current wording

Selling, general and administrative expenses remained consistent during the three and nine months ended September 30, 2024, compared to the same periods last year.

Previous wording

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

Current wording

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

Previous 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.

Current wording

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. During the three months ended September 30, 2024, we repurchased 1.7 million shares of our common stock for an aggregate cost of $300.9 million. As of September 30, 2024, there was approximately $1.28 billion remaining available for future share repurchases under the share repurchase program.

Previous wording

As of June 30, 2024, we had $750.0 million principal amount outstanding of 2.70% senior unsecured notes due 2031, $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027, and $500.0 million principal amount outstanding of 5.25% senior unsecured notes due 2025. As of June 30, 2024, there were no borrowings outstanding under our $200.0 million credit facility that will expire in 2028.

Current wording

As of September 30, 2024, we had $750.0 million principal amount outstanding of 2.70% senior unsecured notes due 2031, $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027, and $500.0 million principal amount outstanding of 5.25% senior unsecured notes due April 2025 (“2025 Senior Notes”). Under existing market conditions, we intend to refinance all of our 2025 Senior Notes through the issuance of new long-term debt. As of September 30, 2024, we had no outstanding borrowings and $200.0 million in borrowing capacity under our credit facility which matures in 2028. If a suitable refinancing arrangement is not available due to a change in market conditions, we intend to utilize the credit facility to repay $200.0 million of the 2025 Senior Notes.

Previous wording

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

Current wording

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

Previous 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.

Current wording

Net cash provided by operating activities increased during the nine months ended September 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 and . net price increases. 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 state income tax payments and a higher installment payment for the transition tax on our accumulated foreign earnings resulting from the 2017 Tax Cuts and Jobs Act.

Previous 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.

Current wording

We had net cash inflows from investing activities in the nine months ended September 30, 2024, compared to net cash outflows from investing activities during 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 and a decrease in purchases of property and equipment due to the purchase of a building in 2023.

Previous 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.

Current wording

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