What changed in this filing

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Item 1. Business

2023-02-17 compared with 2022-02-18 · 105 added, 106 removed, 207 unchanged (50% of the section changed)

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We operate the authoritative directory of and/or the back-end systems for all .com, .net, .cc, .gov, .edu and .name domain names, among others.

Our services allow individuals and organizations to establish their online identities, while providing the secure, always-on access they need to communicate and transact reliably with large-scale online audiences.

We are the exclusive registry of domain names within the .com, .net, and .name generic top-level domains (“gTLDs”), among others, under agreements with ICANN and also, with respect to the .com agreement, the U.S.

Department of Commerce (“DOC”).

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Our global constellation of DNS servers provides internet protocol (“IP”) address information in response to queries, enabling the use of browsers, email systems, and other systems on the internet.

In addition, we own and maintain our shared registration system that allows ICANN-accredited registrars to enter new second-level domain names into Verisign operated central directories and to submit modifications, transfers, re-registrations, and deletions for existing second-level domain names (“Shared Registration System”).

In addition to our registry agreements with ICANN, we have agreements to operate the registries for the .tv and .cc country code top-level domains (“ccTLDs”) for Tuvalu and Cocos (Keeling) Islands, respectively, and to operate the technical systems for the .gov and .edu sponsored TLDs.

These TLDs are also supported by our global constellation of DNS servers and Shared Registration System.

We did not participate in the Tuvalu government’s rebid of the contract to operate .tv , and we anticipate transitioning the operation of the .tv registry during 2022.

We will continue to operate .tv until the transition.

We also provide internationalized domain name (“IDN”) services that enable internet users to access domain names in characters representing their local language.

Our gTLDs and ccTLDs can support standards-compliant domain name registrations in over 100 different native languages and scripts.

In addition, we own and maintain our shared registration system that allows registrars to enter new second-level domain names into Verisign-operated central directories and to submit modifications, transfers, re-registrations, and deletions for existing second-level domain names (“Shared Registration System”).

In addition to our registry agreements with ICANN, we have an agreement with Cocos (Keeling) Islands to operate the country code top-level domain (“ccTLD”) registry for .cc , and other agreements to operate the technical systems for the .gov and .edu sponsored gTLDs.

These gTLDs and ccTLDs are also supported by our global constellation of DNS servers and Shared Registration System.

On November 15, 2022, we transitioned the operation of the .tv ccTLD to another service provider.

We also anticipate transitioning the operation of the .gov registry to another operator during 2023, but will continue to operate it until such transition.

We also perform the Root Zone Maintainer function under an agreement with ICANN for the core of the internet’s DNS and operate two of the 13 root zone servers that contain authoritative data for the top of the DNS hierarchy.

Domain names can be registered for between one and 10 years.

The fees charged for .com , .net and .name may only be increased according to adjustments prescribed in our agreements with ICANN over the applicable term.

Revenues for .cc and .tv domain names and our IDN gTLDs are based on a similar fee system and registration system, although the fees charged are not subject to the same pricing restrictions as those for .

com , as established in the Cooperative Agreement and the .

com Registry Agreement, and for .

name , as established in those respective Registry Agreements.

Unlike other gTLDs, the prices we charge for .com , .net and .name domain name registrations are controlled by pricing provisions in our agreements with ICANN and our prices may be increased only according to those provisions.

Retail pricing for these domain name registrations is established by registrars.

For .com and .name domain name registrations, we pay ICANN on a quarterly basis $0.25 for each annual domain name registration.

For .net domain name registrations, we remit to ICANN a $0.75 fee per annual .

net domain name registration that is collected from registrars.

Revenues for .cc domain names and our IDN gTLDs are based on prices that are not subject to the same pricing restrictions as those for .

The fees received from operating the .

gov TLD are based on the terms of Verisign’s agreement with the U.S.

The fees from our performance of the technical operations for other TLDs, are based on the terms of Verisign’s agreements with those respective registry operators .

gov g TLD are based on the terms of our agreement with the U.S.

The fees from our performance of the technical operations for back-end registry services for other gTLDs are based on the terms of our agreements with those respective registry operators .

Operations Infrastructure

Our operations infrastructure consists of secure data centers in Dulles, Virginia;

Our main operations infrastructure consists of secure data centers in Dulles, Virginia;

Ashburn, Virginia;

New Castle, Delaware;

and Fribourg, Switzerland as well as more than 100 other sites around the world.

Our domain name servers refer requestors to the associated authoritative name servers for second level domains under our TLDs, thus enabling DNS resolution for every .com and .net domain name on the internet and for domain names under a large number of other TLDs.

Our servers process hundreds of billions of queries daily.

Our operations infrastructure operates 24 hours a day, supporting the security, integrity and availability of our services.

and New Castle, Delaware;

as well as more than 200 other points of presence around the world.

Our domain name servers refer requestors to the associated authoritative name servers for second level domains under the gTLDs and ccTLDs we operate, thus enabling DNS resolution for .com and .net domain names and for domain names in a number of other gTLDs and ccTLDs that we manage, or for which we provide back-end registry services.

Our servers process hundreds of billions of transactions daily.

Our operations infrastructure operates continuously, supporting the security, integrity and availability of our services, which are critical for our business and internet users.

The performance and availability of our infrastructure are critical for our business.

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We operate a large number of high-speed servers globally to support localized transaction volume and performance demands.

In conjunction with our proprietary software, processes and procedures, this global constellation of servers offers rapid failover, global and local load balancing, and threshold monitoring on critical servers.

In conjunction with our proprietary software, processes and procedures, this purpose-built global constellation of servers offers rapid failover, global and local load balancing, and threshold monitoring on critical servers.

• Networking:

We deploy and maintain a redundant and diverse global network, maintain high-speed, redundant connections to numerous internet service providers, and maintain peering relationships globally to ensure that our critical services are readily accessible to end users at all times.

We deploy and maintain a redundant and diverse global network, maintain high-speed, redundant connections to numerous internet service providers, and maintain network interconnection relationships globally to ensure that our critical services are readily accessible to end users.

• Security and Availability:

We incorporate architectural concepts such as protected domains, restricted nodes, and distributed access control in our system architecture.

In addition, we employ firewalls and intrusion detection software, as well as proprietary security mechanisms at many points across our infrastructure.

In addition, we employ firewalls and intrusion detection software, endpoint and network detection and response systems as well as proprietary security mechanisms at many points across our infrastructure.

We perform continuous internal vulnerability testing and periodic controls audits, and also contract with third-party security organizations to perform periodic penetration tests and security risk assessments on our systems.

We have engineered resiliency and diversity into how we host classes of products throughout our set of interconnected sites to reduce the risk of unknown vendor defects and zero-day security vulnerabilities.

This includes different physical security silos, which themselves are separated into bulkheads, and in which servers are located.

Corporate networks are in their own physical silo.

Thus, the corporate networks to which personnel directly connect are separated from the silos that house production services;

administration of production gear from corporate systems must go through internal, fortified intermediaries;

and account credentials used within the corporate networks are not used within the production silos.

• Data Integrity:

We employ both phased and systemic integrity validation operations via a number of proprietary mechanisms on all internal DNS publication operations.

We continuously expand our infrastructure to meet demands to support normal and peak system load and attack volumes based on what we have experienced historically, as well as to address projected internet attack trends.

We use several proprietary systemic integrity checks and validations to ensure data correctness when updating and publishing the DNS records for the gTLDs and ccTLDs we operate.

We continuously enhance our infrastructure and capabilities to meet demands to support normal and peak system load and attack volumes based on what we have experienced historically, as well as to address projected internet attack trends.

Call Centers and Service Desk:

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Support is available for customers 24 hours a day.

Throughout the COVID-19 pandemic, our support teams have continued servicing our customers while working remotely.

Operations Support and Monitoring:

Through our network operations center, we have an extensive monitoring capability that enables us to track the status and performance of our critical systems, network and services.

Our network operations center monitors our systems 24 hours a day and has continued to be staffed by employees working remotely during the COVID-19 pandemic.

Our network operations center monitors our systems continuously.

Disaster Recovery Plans:

We have disaster recovery and business continuity capabilities that are designed to deal with the loss of entire data centers and other facilities.

We maintain data centers with mirrored services that allow failover with no data loss and no loss of function or capacity, as well as a tertiary facility in Switzerland.

We maintain data centers with mirrored services that allow failover with no data loss and no loss of function or capacity.

Our critical data services (including domain name registration and global resolution) use advanced storage systems that provide data protection through techniques such as synchronous mirroring and remote replication.

We periodically operate services at an alternate data center during maintenance windows to ensure the availability of our data centers for disaster recovery.

We periodically operate services at alternate data centers during maintenance windows to ensure the availability of our data centers for disaster recovery.

Marketing, Sales and Distribution

We seek to expand our business through focused marketing campaigns and programs that target growth in the .com and .net domain name base, both domestically and in foreign markets.

We seek to expand our business through focused marketing campaigns and programs that target growth in the .com and .net domain name base, both domestically and internationally.

We provide tools to be used by both registrars and end users to enable them to find relevant domain names.

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Under certain circumstances, we may also acquire or license technology from third parties.

The markets for our services are dynamic, characterized by ongoing technological developments, shifting channel dynamics, frequent new product introductions, and evolving industry standards.

The constantly changing nature of these markets and the continued evolution of security threats will require us to continually improve the performance, features, and reliability of our services, and to introduce both new and enhanced products and services.

We face competition in the domain name registry space from other gTLD and ccTLD registries that are competing for the business of entities and individuals that are seeking to obtain a domain name registration.

In addition to the gTLD and ccTLD registries we operate or for which we provide back-end registry services, there are over 1,100 other operational gTLD registries, over 250 ASCII ccTLD registries, more than 50 IDN ccTLD registries, and over 90 IDN gTLD registries.

In addition to the gTLD and ccTLD registries we operate or for which we provide back-end registry services, there are numerous other operational gTLD registries, ASCII ccTLD registries, IDN ccTLD registries, and IDN gTLD registries.

Under our agreements with ICANN, we are subject to certain restrictions in the operation of .com , .net and .name on pricing, bundling, marketing, methods of distribution, introduction of new registry services, and use of registrars, that do not apply to ccTLDs and other gTLDs and therefore may create a competitive disadvantage.

Among our competitors operating gTLD and ccTLD registries are China Internet Network Information Center (CNNIC), DENIC, Nominet, Public Interest Registry (PIR), Donuts, GoDaddy, and Radix.

Among our competitors operating gTLD and ccTLD registries are China Internet Network Information Center (CNNIC), DENIC, Nominet, Identity Digital, Public Interest Registry (PIR), CentralNic, Google, .xyz, GoDaddy, and Radix.

To the extent end-users navigate using search engines or social media, as opposed to direct navigation via domain names, or transact on e-commerce platforms, we face competition from search engines such as Google, Bing, Yahoo!, and Baidu, social media networks such as Facebook and WeChat, e-commerce platforms such as Amazon, eBay and Taobao, and microblogging tools such as Twitter.

In addition, we face competition from these social media and e-commerce platforms if they are used by businesses and individuals to establish an online presence rather than through the use of a domain name.

Furthermore, to the extent end-users increase the use of mobile applications to locate and access content, we face competition from providers of such web and mobile applications.

Furthermore, we face competition from providers of web and mobile applications that allow end-users to locate and access content.

New technologies and the expansion of existing technologies may increase competitive pressure.

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Industry Regulation

The internet is governed under a multi-stakeholder model comprising civil society, the private sector, including for-profit and not-for-profit organizations such as ICANN, governments, including the U.S.

The DNS is governed under a multi-stakeholder model comprising civil society, the private sector, including for-profit and not-for-profit organizations such as ICANN, governments, including the U.S.

government, academia, non-governmental organizations, and international organizations.

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Certain policies can be adopted as Consensus or Temporary Policies, which we are obligated to follow under our agreements with ICANN.

For example, in response to the General Data Protection Regulation, ICANN issued a Temporary Policy modifying public access to information from the Whois services delivered by registrars and registries.

For example, in response to the General Data Protection Regulation, ICANN issued a Temporary Policy modifying public access to information from Whois services.

We are also subject to country-level laws and regulations in the United States and in international locations.

In China, we are required to maintain licenses for .

net, .tv and .cc under regulations issued by the Ministry of Industry and Information Technology.

The licenses for .com and .net must be renewed in 2022.

net, and .cc under regulations issued by the Ministry of Industry and Information Technology.

The applications to renew the licenses for .com and .net are currently under review by the Ministry of Industry and Information Technology.

Additionally, in many jurisdictions in which we operate, including California, the European Union, the United Kingdom, China and elsewhere, strict new data security and data privacy regulations have been, or are being, adopted.

Because we do not possess extensive personal information, we have not yet experienced significant impacts from these regulations.

Because we do not possess extensive personal registrant information, we have not yet experienced significant impacts from these regulations.

However, compliance costs and other business impacts could become significant if we begin to receive personal registrant information in our .

net TLDs and as regulatory enforcement increases, as courts interpret these regulations, and as new laws and regulations continue to be adopted.

Other regulations, or changes to regulations, may also impact our business operations, including changes to the Digital Services Act or Network and Information Security Directive, in the European Union, or the Communications Decency Act, in the United States.

.com Top-Level Domain

net gTLDs, as regulatory enforcement increases, as courts interpret these regulations, and as new laws and regulations are adopted.

Other regulations, or changes to regulations, may also significantly impact our business operations, including changes to the Digital Services Act or Network and Information Security Directive, in the European Union, or the Communications Decency Act, in the United States, or the Personal Information Protection Law, in China.

.com Generic Top-Level Domain

Our operation of the .

com TLD is subject to the terms of a registry agreement with ICANN (as amended, the “.

com gTLD is subject to the terms of a registry agreement with ICANN (as amended, the “.

com Registry Agreement”).

The current term of the .com Registry Agreement is six years and must be renewed or extended by November 30, 2024.

Although the .com Registry Agreement contains a “presumptive” right of renewal, ICANN could terminate or refuse to renew the Registry Agreement.

Although the .com Registry Agreement contains a “presumptive” right of renewal, ICANN could terminate or refuse to renew the Registry Agreement in certain prescribed circumstances.

See “Risk Factors - Any loss or modification of our right to operate the .

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Other significant terms within the .

com Registry Agreement include performance specifications and service level agreements for the availability of our DNS resolution services, our shared registration system, and our Whois services.

com Registry Agreement include performance specifications and service level agreements, including by example, for the availability of our DNS resolution services, our Shared Registration System, and our Whois services.

com Registry Agreement contains marketing limitations, including limitations on our ability to bundle products and the manner in which we provide marketing support to ICANN-accredited registrars.

We are also required under the .

com Registry Agreement to provide ICANN-accredited registrars with access to our systems to register or take other actions related to domain names.

com Registry Agreement to provide ICANN-accredited registrars with nondiscriminatory access to our systems to register or take other actions related to domain names.

In order to introduce new Registry Services or make material changes to existing Registry Services, we must follow prescribed procedures which permit ICANN to review and approve such services.

The .com Registry Agreement requires that on a quarterly basis we pay $0.25 to ICANN for each annual term of a domain name registered or renewed during such quarter.

Amendment 3 to the .

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The first such six-year period began on October 26, 2018.

Amendment 3 also clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .com TLD and also clarified that our ability to increase prices by 7% over the previous year due to new ICANN Consensus Policies or documented extraordinary expense may occur only in years where we do not otherwise take the price increases described above.

Amendment 3 also clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .com gTLD and also clarified that our ability to increase prices by 7% over the previous year due to new ICANN Consensus Policies or documented extraordinary expense may occur only in years where we do not otherwise take the price increases described above.

Our operation of the .

com TLD is also subject to the terms of a Cooperative Agreement with the DOC.

com gTLD is also subject to the terms of a Cooperative Agreement with the DOC.

The Cooperative Agreement has undergone various amendments with the most recent, Amendment 35, on October 26, 2018.

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com Registry Agreement was limited by Amendment 35 to only the following circumstances:

(1) changes to the pricing provisions (other than as approved in Amendment 35), (2) changes to the vertical integration provisions (other than the clarification approved in Amendment 35), (3) changes to the security, stability and resiliency posture as reflected in the functional or performance specifications (including the service level agreements), (4) changes to the conditions for renewal or termination of the .com Registry Agreement, or (5) changes to the Whois service (except as mandated by ICANN through Temporary or Consensus Policies).

and resiliency posture as reflected in the functional or performance specifications (including the service level agreements), (4) changes to the conditions for renewal or termination of the .com Registry Agreement, or (5) changes to the Whois service (except as mandated by ICANN through Temporary or Consensus Policies).

As was the case with prior amendments, Amendment 35 is not intended to confer federal antitrust immunity on the Company with respect to the .

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Finally, Amendment 35 clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .

com TLD, we are not permitted to acquire, directly or indirectly, control of, or a greater than 15% ownership interest in, any ICANN-accredited registrar that sells .

com gTLD, we are not permitted to acquire, directly or indirectly, control of, or a greater than 15% ownership interest in, any ICANN-accredited registrar that sells .

com domain names.

In addition, under Amendment 35, we have agreed to continue to operate the .

com TLD in a content-neutral manner and to work within ICANN processes to promote the development of content-neutral policies for the operation of the DNS.

.net Top-Level Domain

com gTLD in a content-neutral manner and to work within ICANN processes to promote the development of content-neutral policies for the operation of the DNS.

.net Generic Top-Level Domain

Our operation of the .

net TLD is subject to the terms of a registry agreement with ICANN (as amended, the “ .net Registry Agreement”).

net g TLD is subject to the terms of a registry agreement with ICANN (as amended, the “ .net Registry Agreement”).

The current term of this agreement is six years and must be renewed or extended by July 1, 2023.

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net Registry Agreement are substantially similar to the terms of the .

com Registry Agreement, except that we are entitled to raise the annual price for new and renewal .

net domain name registrations by 10% each year.

com Registry Agreement, except as to ICANN fees as described earlier and that the annual price for new and renewal .

net domain name registrations may be increased by 10% each year.

Our operation of the .

net gTLD is not subject to the terms of the Cooperative Agreement.

Root Operations

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Human Capital Management

We recognize the importance of talent and culture in driving an environment that fosters high performance.

Our employee value proposition and collaborative working environment allows us to attract a strong talent base to meet the current and future demands of our business.

We are committed to attracting, developing, and retaining the best talent, and we routinely monitor and present our progress in these areas to executive management and the Compensation Committee of our Board of Directors through a variety of workforce metrics (e.g.

workforce demographics, hiring, turnover, and promotion rates, including diversity characteristics for each of these metrics).

Our employees are mission driven and values focused.

Their dedication to these principles forms the backbone that enables Verisign to provide secure, stable, and resilient global connectivity.

We recognize the importance of talent and culture in driving an environment that fosters high performance, inclusion, and integrity in all aspects of our work.

As of December 31, 2022, we had 917 employees, of which 914 were full-time.

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No U.S.-based employees are represented under collective bargaining agreements.

Based on periodic monitoring, we believe that our employee turnover rate is relatively low compared to competitive benchmarks and historical trends.

Based on periodic monitoring, we believe that our employee turnover is relatively low compared to competitive benchmarks and historical trends.

We attribute our strong retention rates to our passion and focus on the Company’s mission and values, continual development of talent, and the delivery of competitive and equitable reward programs.

We regularly review our workforce policies, procedures, and training programs, as well as our overall workforce demographics, in an effort to create a work environment that is diverse, equitable, inclusive, and free from discrimination.

Key human capital areas that we focus on in managing our business include Employee Engagement and Retention, Diversity, Equity and Inclusion, Compensation and Employee Benefits, Talent Development, and Talent Acquisition.

• Employee Engagement and Retention:

We use employee feedback to monitor morale and engagement.

During 2021, we conducted several surveys to better understand our employees’ well-being during the COVID-19 pandemic and to more effectively guide our response.

These surveys included two directed to all employees, one directed only to our

onsite employees and one directed only to our leaders.

At least 85% of the applicable employee populations participated in each of these surveys.

The results indicated high satisfaction rates with our on-going response to, and communications during, the pandemic.

In addition, the survey results indicated that our employees remain highly engaged and connected with our mission and values.

Moreover, when we hire talent, they tend to stay.

The average tenure of our employees is approximately 9 years.

Employee Engagement:

In order to deliver on our mission, it is essential to have an engaged workforce that exhibits our values, which include:

being stewards of the internet, being passionate about technology, respecting others, exhibiting integrity, taking responsibility, and holding ourselves to a higher standard.

These principles are integrated into our operating model and are foundational to our ability to attract, retain, and develop top talent.

This commitment serves to create engagement and drives a collaborative and inclusive environment where our employees can thrive.

To monitor engagement levels and well-being we routinely conduct employee surveys.

In our most recent survey in October of 2022, approximately 85% of our employee population participated.

The survey results indicated that our employees remain highly engaged and connected with our mission and values.

Another engagement indicator is that the average tenure of our employees is approximately 9 years.

Diversity, Equity and Inclusion (DEI):

We are a diverse organization, and we believe that drives stronger performance, better decision making, and a culture where differences are valued.

We continue to focus on the hiring, retention, and advancement of women and underrepresented populations, and we are committed to making progress towards increasing workforce diversity.

In 2021, we conducted a diversity, equity and inclusion review of our recruiting, retention and workplace processes with the help of an outside advisor.

This resulted in the development of a comprehensive strategy and roadmap designed to assist us in building upon our strong foundation while outlining areas for improvement.

• Compensation and Employee Benefits:

We are a diverse organization, and we believe that drives stronger performance, better decision making, and an inclusive culture where differences are valued.

We continue to focus on the hiring, retention, and advancement of women and underrepresented populations.

In 2022, we continued to build on our strong foundation through roundtable discussions to support open dialogue, training sessions for all employees on the importance of a diverse and inclusive workplace, and growing our employee resource group representation.

Verisign continues to partner with organizations that are dedicated to resisting and reversing historical injustice.

Our progress is evident through our October 2022 employee

survey results where participants indicated that they understand how to support an inclusive work environment and that Verisign demonstrates a visible commitment to diversity.

Compensation, Pay Equity, and Employee Benefits:

To align with our philosophy of providing compelling total rewards, we have practices in place to deliver fair and equitable compensation for employees based on their contribution and performance.

We benchmark for market practices and regularly review our compensation and benefits against the market to confirm they remain competitive.

We also offer a broad and comprehensive set of benefits to meet the needs of our diverse workforce.

We regularly perform adverse impact analyses on base pay, annual incentives and long-term incentives to help calibrate compensation.

• Talent Development:

We benchmark and regularly review our compensation and benefits against the market to confirm they remain competitive.

We offer a broad and comprehensive set of benefits to meet the diverse needs of our workforce.

In addition, we regularly perform analyses on base pay, annual incentives, and long-term incentives to help calibrate compensation and ensure pay equity.

Talent Development and Acquisition:

We are committed to the continued development of our people.

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Our management training is designed to increase capability in the areas of communication, engagement, coaching, conflict management, and business skills, while fostering an ethical, supportive work environment free from bias and harassment.

We sponsor continuous skill development for all employees through our online learning and development platform.

We sponsor skill development for all employees through our online learning and development platform.

In addition, we host a series of instructor-led and on-demand learning sessions designed to build our team’s skills and knowledge required for the future.

• Talent Acquisition:

We are focused on the increasingly competitive labor market, and we are working diligently to attract the best talent from a diverse range of sources.

To assist in this effort, we have broadened our sourcing strategies, refreshed our employment branding and developed targeted recruitment strategies for specialized skill sets.

In 2021, we hired 82 new employees.

During the COVID-19 pandemic, the safety and well-being of our employees has remained a key focus and priority.

Throughout 2021, approximately 94% of our employees continued in a work-from-home status.

To protect the health of our employees who work on site, we have rigorous cleaning and safety protocols for our facilities.

We also track the vaccination status of our employees in order to respond, as applicable, to any requirements or mandates by government regulation.

We adjusted employee leave and other policies with the intention of providing our workforce with flexibility it needs to manage personal challenges arising from the pandemic.

We enhanced mental health resources available to our employees, and unique individual requirements are supported to the greatest degree possible.

We also continue to provide our employees with the equipment and resources that they require to work remotely.

Finally, we monitor the physical and mental well-being of our employees through frequent leadership updates and regular management outreach.

Our managers regularly hold conversations with employees about career management, coaching, and other development opportunities to help encourage and drive the growth of our talent.

We are focused on the competitive labor market, and we are working diligently to attract the best talent from a diverse range of sources.

We continue to broaden our sourcing strategies, refresh our employment branding, and develop targeted recruitment strategies for specialized skill sets and underrepresented populations.

In 2022, these strategies enabled us to hire a significant number of female and racially or ethnically diverse employees.

Hybrid Work Posture:

After shifting to remote work during the COVID 19 pandemic, we are now transitioning to a hybrid work posture.

Over the latter half of 2022, we piloted our new hybrid work posture with a focus on how work gets done versus where it gets done.

Leaders met with their teams to develop team agreements that summarized the operating norms and protocols their teams need to use in this new hybrid environment.

The team agreements created the foundation for employees to create work schedules that align with corporate and individual needs as well as provide employees the flexibility to manage work-life balance.

Our managers received training on managing in a hybrid environment.

The training focused on leading with inclusive practices, effective communication, empathy, and accountability.

Our offices remain a place for collaboration, networking, and strategic discussion.

We continue to provide our employees with the equipment and resources that they require to accomplish their work regardless of location.

The following table shows a comparison of our consolidated employee headcount, by function:

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Cost of revenues 242 235 235

Sales and marketing 74 68 71

Research and development 255 250 260

General and administrative 345 346 328

Selling, general and administrative 420 419 414

Total 917 904 909

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Additionally, we continue to file patent applications with respect to certain of our technologies in the U.S.

Patent and Trademark Office and

internationally.

Patent and Trademark Office and internationally.

Patents may not be awarded with respect to these applications and even if such patents are awarded, such patents may not provide sufficient protection of our technologies.

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Kilguss, III 62 Executive Vice President, Chief Financial Officer

McPherson 48 Executive Vice President, Engineering, Operations and Chief Security Officer

Indelicarto 59 Executive Vice President, General Counsel and Secretary

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degree in Economics and Finance from the University of Hartford.

McPherson , has served as Executive Vice President, Engineering, Operations, and Chief Security Officer since April 2022.

From May 2010 to April 2022, he served in various roles of increasing responsibility, including as Chief Security Officer.

Prior to joining the Company, Mr.

McPherson was Chief Security Officer with Arbor Networks, a cybersecurity solutions company, and prior to that held technical leadership positions in architecture, engineering and operations with Amber Networks, a network technology company, Qwest Communications, Inc., a telecommunications company, Genuity, Inc., a technology company, MCI Communications, Inc., a telecommunications company, and the U.S.

Army Signal Corps.

Indelicarto has served as General Counsel and Secretary since November 2014.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business