What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-04-27 · 73 added, 31 removed, 226 unchanged (32% of the section changed)

34 unchanged sentences

Issued shares:

354.7 at March 31, 2023 and 354.5 at December 31, 2022;

354.8 at June 30, 2023 and 354.5 at December 31, 2022;

Outstanding shares:

104.3 at March 31, 2023 and 105.3 at December 31, 2022

103.4 at June 30, 2023 and 105.3 at December 31, 2022

12,225.1 12,644.5

7 unchanged sentences

(In millions, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Revenues $ 372.0 $ 351.9 $ 736.4 $ 698.8

10 unchanged sentences

Net income 185.7 167.3 364.4 324.8

Other comprehensive loss — ( 0.2 )

Other comprehensive (loss) income ( 0.7 ) 0.1 ( 0.7 ) ( 0.1 )

Comprehensive income $ 185.0 $ 167.4 $ 363.7 $ 324.7

9 unchanged sentences

(In millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Total stockholders’ deficit, beginning of period $ ( 1,593.8 ) $ ( 1,285.1 ) $ ( 1,562.2 ) $ ( 1,260.5 )

12 unchanged sentences

Beginning balance ( 2.7 ) ( 3.0 ) ( 2.7 ) ( 2.8 )

Other comprehensive loss — ( 0.2 )

Other comprehensive (loss) income ( 0.7 ) 0.1 ( 0.7 ) ( 0.1 )

Balance, end of period ( 3.4 ) ( 2.9 ) ( 3.4 ) ( 2.9 )

4 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

8 unchanged sentences

Deferred revenues 41.5 28.2

Net deferred income taxes and other long-term tax liabilities 2.5 1.2

Net deferred income taxes 3.0 0.1

Net cash provided by operating activities 404.3 352.0

9 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 0.2 ) ( 0.7 )

Net increase in cash, cash equivalents, and restricted cash 446.1 535.1

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 29.8 ) 382.8

Cash, cash equivalents, and restricted cash at beginning of period 379.0 228.8

13 unchanged sentences

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes contained in Verisign’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the SEC on February 17, 2023.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Such reclassifications have no effect on net income as previously reported.

Financial Instruments

1 unchanged sentence

The following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value categorization of the financial instruments measured at fair value on a recurring basis:

March 31, December 31,

June 30, December 31,

(In millions)

11 unchanged sentences

The gross and net unrealized gains and losses included in the fair value of the debt securities were not significant for the periods presented.

All of the debt securities held as of March 31, 2023 are scheduled to mature in less than one year.

All of the debt securities held as of June 30, 2023 are scheduled to mature in less than one year.

Fair Value Measurements

6 unchanged sentences

The Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable.

As of March 31, 2023, the carrying value of these financial instruments approximated their fair value.

The aggregate fair value of the Company’s senior notes is $ 1.69 billion and $ 1.65 billion as of March 31, 2023 and December 31, 2022, respectively.

As of June 30, 2023, the carrying value of these financial instruments approximated their fair value.

The aggregate fair value of the Company’s senior notes is $ 1.66 billion and $ 1.65 billion as of June 30, 2023 and December 31, 2022, respectively.

The fair values of these debt instruments are based on available market information from public data sources and are classified as Level 2.

Selected Balance Sheet Items

Other Current Assets

Other current assets consist of the following:

June 30, December 31,

(In millions)

Prepaid expenses $ 29.0 $ 24.5

Prepaid registry fees 24.9 24.3

Accounts receivable, net 5.3 6.2

Taxes receivable 1.6 1.9

Other 1.0 1.4

Total other current assets $ 61.8 $ 58.3

Other Long-Term Assets

Other long-term assets consist of the following:

June 30, December 31,

(In millions)

Long-term prepaid registry fees $ 8.7 $ 9.1

Operating lease right-of-use asset 5.6 7.2

Restricted cash 5.3 5.4

Long-term prepaid expenses 5.2 6.6

Other 3.1 2.3

Total other long-term assets $ 27.9 $ 30.6

The prepaid registry fees in the tables above relate to the fees the Company pays to ICANN for each annual term of .

com domain name registrations and renewals which are deferred and amortized over the domain name registration term.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following:

March 31, December 31,

June 30, December 31,

(In millions)

1 unchanged sentence

Customer deposits 68.9 72.0

Taxes payable 71.8 37.4

Accrued employee compensation 44.5 59.0

Taxes payable 32.0 37.4

Interest payable 19.5 19.5

3 unchanged sentences

Total accounts payable and accrued liabilities $ 202.2 $ 226.5

The balance of customer deposits varies from period to period due to the timing of payments from certain large customers.

Accrued employee compensation primarily consists of liabilities for employee leave, salaries, payroll taxes, employee contributions to the employee stock purchase plan, and incentive compensation.

Accrued employee incentive compensation as of December 31, 2022 was paid during the six months ended June 30, 2023.

Taxes payable reflects amounts accrued for the income tax provision and payments made during the period.

This balance fluctuates from period to period due to the timing of income tax payments in the Company’s major tax jurisdictions.

Accrued employee compensation primarily consists of liabilities for employee leave, salaries, payroll taxes, employee contributions to the employee stock purchase plan, and incentive compensation.

Accrued employee incentive compensation as of December 31, 2022 was paid during the three months ended March 31, 2023.

Interest payable varies at each period-end based on the payment due dates for each Senior Note issuance.

Long-term Tax and Other Liabilities

Long-term tax and other liabilities consist of the following:

June 30, December 31,

(In millions)

Long-term tax liabilities $ 42.1 $ 60.5

Long-term operating lease liabilities 1.2 1.6

Long-term tax and other liabilities $ 43.3 $ 62.1

Long-term tax liabilities as of June 30, 2023 reflects a $ 19.3 million reclassification to current liabilities of the next installment of the transition tax liability on accumulated foreign earnings resulting from the 2017 Tax Cuts and Jobs Act.

Share Repurchases

2 unchanged sentences

Purchases made under the program could be effected through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions.

As of March 31, 2023 there was approximately $ 638.8 million remaining available for repurchases under the program.

As of June 30, 2023 there was approximately $ 418.9 million remaining available for repurchases under the program.

Effective July 27, 2023, the Company’s Board of Directors authorized the repurchase of its 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.

The Company’s share repurchases are as following.

Amounts may not add up due to rounding:

Three Months Ended March 31, 2023

Shares Total Costs Average Price

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Shares Total Costs Average Price Shares Total Costs Average Price

(In millions, except average price amounts)

4 unchanged sentences

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

In the first quarter of 2023, the Company reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheet as of March 31, 2023.

In the first half of 2023, the Company reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in Accounts payable and accrued liabilities on our Condensed Consolidated Balance Sheet as of June 30, 2023.

The share repurchase and authorization amounts disclosed in this Form 10-Q exclude the excise tax.

1 unchanged sentence

The following table presents the computation of weighted-average shares used in the calculation of basic and diluted earnings per share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(In millions)

9 unchanged sentences

The following table presents our revenues disaggregated by geography, based on the billing addresses of our customers:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(In millions)

10 unchanged sentences

As payments for domain name registrations and renewals are due in advance of our performance, we record these amounts as deferred revenues.

The increase in the deferred revenues balance for the three months ended March 31, 2023 was primarily driven by amounts billed in the three months ended March 31, 2023 for domain name registrations and renewals to be recognized as revenues in future periods, offset by refunds for domain name renewals deleted during the 45-day grace period, and $ 324.5 million of revenues recognized that were included in the deferred revenues balance at the beginning of the period.

The balance of deferred revenues as of March 31, 2023 represents our aggregate remaining performance obligations.

The increase in the deferred revenues balance for the six months ended June 30, 2023 was primarily driven by amounts billed in the six months ended June 30, 2023 for domain name registrations and renewals to be recognized as revenues in future periods, offset by refunds for domain name renewals deleted during the 45-day grace period, and $ 576.6 million of revenues recognized that were included in the deferred revenues balance at the beginning of the period.

The balance of deferred revenues as of June 30, 2023 represents our aggregate remaining performance obligations.

Amounts included in current deferred revenues are all expected to be recognized in revenues within 12 months, except for a portion of deferred revenues that relates to domain name renewals that are deleted in the 45-day grace period following the transaction.

3 unchanged sentences

The following table presents the classification of stock-based compensation:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(In millions)

6 unchanged sentences

The following table presents the nature of the Company’s total stock-based compensation:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(In millions)

1 unchanged sentence

Performance-based RSUs 3.2 2.5 5.3 5.7

ESPP 1.1 1.0 2.2 2.1

Total stock-based compensation $ 15.9 $ 14.2 $ 30.0 $ 28.7

1 unchanged sentence

Non-operating income, net, primarily consists of interest income from the Company’s surplus cash balances and marketable securities.

Interest income was $ 10.7 million and $ 0.3 million during the three months ended March 31, 2023 and 2022, respectively.

The increase in interest income in the first quarter of 2023 reflects higher interest rates on the Company’s investments in debt securities.

Interest income was $ 11.5 million and $ 22.2 million during the three and six months ended June 30, 2023, respectively, compared to $ 1.5 million and $ 1.8 million during the same periods in 2022.

The increase in interest income in the first half of 2023 reflects higher interest rates on the Company’s investments in debt securities.

The following table presents Income tax expense and the effective tax rate:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

(Dollars in millions)

4 unchanged sentences

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-Q

Item 1. Financial Statements