What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-15 compared with 2023-02-17 · 114 added, 99 removed, 650 unchanged (25% of the section changed)

15 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 17, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

25 unchanged sentences

federal, state, and foreign income tax provision.

We involved domestic and international tax

professionals with specialized skills and knowledge in various tax jurisdictions who assisted in evaluating the Company’s analyses over the application of complex tax regulations in those jurisdictions.

We involved domestic and international tax professionals with specialized skills and knowledge in various tax jurisdictions who assisted in evaluating the Company’s analyses over the application of complex tax regulations in those jurisdictions.

We have served as the Company’s auditor since 1995.

88 unchanged sentences

Net income 817.6 673.8 784.8

Other comprehensive income (loss) 0.1 — ( 0.1 )

Other comprehensive income 0.1 0.1 —

Comprehensive income $ 817.7 $ 673.9 $ 784.8

17 unchanged sentences

Issuance of common stock under stock plans 12.3 12.3 12.4

Excise tax on repurchase of common stock ( 8.2 ) — —

Balance, end of period 11,808.0 12,644.5 13,620.1

5 unchanged sentences

Beginning balance ( 2.7 ) ( 2.8 ) ( 2.8 )

Other comprehensive income (loss) 0.1 — ( 0.1 )

Other comprehensive income 0.1 0.1 —

Balance, end of period ( 2.6 ) ( 2.7 ) ( 2.8 )

11 unchanged sentences

Stock-based compensation expense 59.7 58.6 53.4

Amortization of discount on investments in debt securities ( 27.8 ) ( 7.7 ) ( 0.4 )

Other, net 3.3 3.8 6.4

1 unchanged sentence

Other assets ( 1.5 ) 9.5 ( 14.0 )

Accounts payable and accrued liabilities ( 0.1 ) 15.6 2.2

Other liabilities ( 2.2 ) ( 13.3 ) 1.4

Deferred revenues 27.0 65.7 90.5

Net deferred income taxes and other long-term tax liabilities ( 19.4 ) ( 177.0 ) ( 192.2 )

Net deferred income taxes ( 66.4 ) ( 6.2 ) ( 162.8 )

Net cash provided by operating activities 853.8 831.1 807.2

3 unchanged sentences

Purchases of property and equipment ( 45.8 ) ( 27.4 ) ( 53.0 )

Proceeds from sale of business — — 20.8

Net cash provided by (used in) investing activities 355.7 ( 269.2 ) ( 72.3 )

Net cash (used in) provided by investing activities ( 97.4 ) 355.7 ( 269.2 )

Cash flows from financing activities:

3 unchanged sentences

Proceeds from borrowings, net of issuance costs — — 741.1

Other financing activities ( 0.7 ) — —

Net cash used in financing activities ( 889.8 ) ( 1,035.8 ) ( 719.1 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 0.1 ) ( 0.8 ) ( 0.7 )

Net increase (decrease) in cash, cash equivalents and restricted cash 150.2 ( 181.8 ) ( 107.0 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 133.5 ) 150.2 ( 181.8 )

Cash, cash equivalents, and restricted cash at beginning of period 379.0 228.8 410.6

12 unchanged sentences

The Company has one reportable segment.

The Company enables the security, stability, and resiliency of key internet infrastructure and services, including providing Root Zone Maintainer services, operating two of the 13 global internet root servers, and providing registration services and authoritative resolution for the .

The Company helps enable the security, stability, and resiliency of the Domain Name System (“DNS”) and the internet by providing Root Zone Maintainer services, operating two of the thirteen global internet root servers, and providing registration services and authoritative resolution for the .

net top-level domains, which support the majority of global e-commerce.

18 unchanged sentences

The Company classifies its marketable securities as current based on their nature and availability for use in current operations.

The Company amortizes the discount on debt securities purchased below par value over the term of the instrument, and recognizes the amounts as interest income included in Non-operating income (loss), net.

Property and Equipment

25 unchanged sentences

dollars using a combination of current and historical exchange rates and any remeasurement gains and losses are included in Non-operating income (loss), net.

Remeasurement gains and losses were not significant in each of the last three years.

The Company recognized net remeasurement gains of $ 14.7 million in 2023.

Net remeasurement gains and losses were not significant in 2022 and 2021.

Verisign maintains a foreign currency risk management program designed to mitigate foreign exchange risks associated with the monetary assets and liabilities that are denominated in currencies other than the U.S.

1 unchanged sentence

The Company does not enter into foreign currency transactions for trading or speculative purposes, nor does it hedge foreign currency exposures in a manner that entirely offsets the effects of changes in exchange rates.

The program may entail the use of forward or option contracts, which are usually placed and adjusted monthly.

These foreign currency forward contracts are derivatives and are recorded at fair market value.

The program may entail the use of forward or option contracts, which are derivatives and are recorded at fair market value.

The Company records gains and losses on foreign currency forward contracts in Non-operating income (loss), net.

Gains and losses related to foreign currency forward contracts were not significant in each of the last three years.

The Company recognized a $ 9.8 million loss related to foreign currency forward contracts in 2023.

Gains and losses related to foreign currency forward contracts were not significant in 2022 and 2021.

The liability related to the unrealized loss on foreign currency forward contracts is included in Accounts payable and accrued liabilities on our Consolidated Balance Sheet as of December 31, 2023.

As of December 31, 2023, Verisign held foreign currency forward contracts in notional amounts totaling $ 215.7 million to mitigate the impact of exchange rate fluctuations associated with certain assets and liabilities held in foreign currencies.

11 unchanged sentences

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

Each domain name registration or renewal is considered a separate optional purchase and represents a single performance obligation, which is to allow its registration and maintain that registration (by allowing updates, Domain Name System (“DNS”) resolution and Whois services, which allow users to find information about registered domain names) through the registration term.

These services are provided continuously throughout each registration term, and as such, revenues

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2023, 2022 AND 2021

from the initial registration or renewal of domain names are deferred and recognized ratably over the registration term.

resolution and Whois services, which allow users to find information about registered domain names) through the registration term.

These services are provided continuously throughout each registration term, and as such, revenues from the initial registration or renewal of domain names are deferred and recognized ratably over the registration term.

Fees for renewals and advance extensions to the existing term are deferred until the new incremental period commences.

30 unchanged sentences

The determination of the fair value of stock-based payment awards using the Monte Carlo simulation model or the Black-Scholes option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables.

Earnings per Share

The Company computes basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the period.

Diluted earnings per share gives effect to dilutive potential common shares, including unvested RSUs and ESPP offerings, using the treasury stock method.

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2023, 2022 AND 2021

Earnings per Share

The Company computes basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the period.

Diluted earnings per share gives effect to dilutive potential common shares, including unvested RSUs and ESPP offerings, using the treasury stock method.

Fair Value of Financial Instruments

16 unchanged sentences

The Company does not believe that any such matter currently being reviewed will have a material adverse effect on its financial condition, results of operations, or cash flows.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires additional disclosure of significant segment expenses on an annual and interim basis.

This guidance will be applied retrospectively and will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.This guidance will be effective for the annual periods beginning the year ended December 31, 2025.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Financial Instruments

14 unchanged sentences

Total $ 931.8 $ 985.8

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

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 December 31, 2022 have contractual maturities of less than one year.

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

Fair Value Measurements

The fair value of the Company’s investments in money market funds approximates their face value.

Such instruments are classified as Level 1 and are included in Cash and cash equivalents.

Such instruments are included in Cash and cash equivalents.

The fair value of the debt securities consisting of U.S.

Treasury bills is based on their quoted market prices and are classified as Level 1.

Treasury bills is based on their quoted market prices.

Debt securities purchased with original maturities in excess of three months are included in Marketable securities.

The fair value of all of these financial instruments are classified as Level 1 in the fair value hierarchy.

As of December 31, 2023, the Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable whose carrying values approximated their fair values.

6 unchanged sentences

(In millions)

Prepaid expenses $ 24.5 $ 24.8

Prepaid registry fees $ 23.8 $ 24.3

Accounts receivable, net 6.2 5.3

Prepaid expenses 23.3 24.5

Taxes receivable 7.3 1.9

Accounts receivable, net 6.3 6.2

Other 1.2 1.4

Total other current assets $ 61.9 $ 58.3

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Property and Equipment, Net

11 unchanged sentences

Total property and equipment, net $ 233.2 $ 232.0

In July 2023, the Company purchased a building in Reston, Virginia to be used as its future corporate headquarters for $ 19.8 million.

Based on a valuation of the property, $ 13.0 million of the total purchase price was allocated to the building which is included in capital work in progress in the table above due to ongoing construction.

The remaining $ 6.8 million was allocated to land.

Substantially all of the Company’s property and equipment were held in the U.S.

for both periods presented.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

The following table presents the detail of goodwill:

14 unchanged sentences

Operating lease right-of-use asset 7.4 7.2

Long-term prepaid expenses 6.6 11.0

Restricted cash 5.4 5.4

Long-term prepaid expenses 4.8 6.6

Other 3.1 2.3

Total other long-term assets $ 29.0 $ 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.

The amount of prepaid registry fees as of December 31, 2022 reflects amortization of $ 39.5 million during 2022 which was recorded in Cost of Revenues.

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2023, 2022 AND 2021

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.

The amount of prepaid registry fees as of December 31, 2023 reflects amortization of $ 39.5 million during 2023 which was recorded in Cost of Revenues.

Accounts Payable and Accrued Liabilities

8 unchanged sentences

Accrued registry fees 12.3 12.7

Unrealized loss on foreign currency forward contracts 10.7 0.1

Customer incentives payable 6.5 7.1

Current operating lease liabilities 5.1 5.5

Other accrued liabilities 2.9 3.4

Total accounts payable and accrued liabilities $ 257.4 $ 226.5

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

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.

Long-term Tax and Other Liabilities

7 unchanged sentences

income taxes payable on the Company’s accumulated foreign earnings (“Transition Tax”) resulting from the 2017 Tax Cuts and Jobs Act.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

The following table summarizes information related to our Senior notes:

8 unchanged sentences

Total Senior notes $ 1,790.2 $ 1,787.9

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

The 2031 Notes were issued at 99.712 % of par value.

3 unchanged sentences

2023 Credit Facility

On December 12, 2019, the Company entered into a credit agreement for a $ 200.0 million committed unsecured revolving credit facility (the “2019 Credit Facility”).

The 2019 Credit Facility includes a financial covenant requiring that the Company’s leverage ratio not exceed 4.0 to 1.0.

On December 6, 2023, the Company entered into a credit agreement for a $ 200.0 million committed unsecured revolving credit facility (the “2023 Credit Facility”) which takes the place of its prior unsecured revolving credit facility.

The 2023 Credit Facility includes a financial covenant requiring that the Company’s leverage ratio not exceed 4.0 to 1.0, which may be increased subject to certain conditions defined in the 2023 Credit Facility Agreement.

As of December 31, 2023, there were no borrowings outstanding under the 2023 Credit Facility, and the Company was in compliance with the financial covenants.

The 2019 Credit Facility was amended in December 2021 to address the LIBOR transition.

The 2023 Credit Facility expires on December 6, 2028 , at which time any outstanding borrowings are due.

4 unchanged sentences

Treasury stock includes shares repurchased under stock repurchase programs and shares withheld in lieu of the tax withholding due upon vesting of RSUs.

Effective February 10, 2022, the Company’s Board of Directors (“Board”) authorized the repurchase of its common stock in the amount of approximately $ 705.4 million, in addition to the $ 294.6 million that remained available for repurchases under the share repurchase program.

Effective October 27, 2022, our Board of Directors authorized the repurchase of our common stock in the amount of $ 803.0 million, in addition to the $ 197.0 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $ 1.00 billion under the program.

Effective July 27, 2023, the Company’s Board of Directors authorized the repurchase of its common stock in the amount of approximately $ 1.14 billion, in addition to the $ 356.1 million that remained available for repurchases under the share repurchase program, for a total authorization of up to $ 1.50 billion under the program.

The program has no expiration date.

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

As of December 31, 2022 there was approximately $ 858.8 million remaining available for repurchases under the program.

As of December 31, 2023, there was approximately $ 1.12 billion remaining available for repurchases under the program.

The summary of the Company’s common stock repurchases for 2023, 2022 and 2021 are as follows:

6 unchanged sentences

Total costs $ 901.4 $ 1,048.1 $ 722.6

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Since inception, the Company has repurchased 253.6 million shares of its common stock for an aggregate cost of $ 13.65 billion, which is recorded as a reduction of Additional paid-in capital.

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 2023, the Company included 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 Consolidated Balance Sheet as of December 31, 2023.

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

Accumulated Other Comprehensive Loss

1 unchanged sentence

There were no significant changes to accumulated other comprehensive loss balances for the periods presented.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

Calculation of Earnings per Share

7 unchanged sentences

Shares used to compute diluted earnings per share 103.5 108.0 112.2

The calculation of diluted weighted average shares outstanding excludes performance-based RSUs granted by the Company for which the relevant performance criteria have not been achieved.

The calculation of diluted weighted average shares outstanding excludes performance-based RSUs granted by the Company for which the relevant performance criteria have not been achieved and any awards that are antidilutive.

The number of potential shares excluded from the calculation was not significant in any period presented.

15 unchanged sentences

Revenues for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Major Customers

Our largest customer accounted for approximately 32 %, 33 %, and 34 % of revenues in 2022, 2021, and 2020, respectively.

Our largest customer accounted for approximately 32 % of revenues in 2023 and 2022 and approximately 33 % of revenues in 2021.

The Company does not believe that the loss of this customer would have a material adverse effect on the Company’s business because, in that event, end-users of this customer would transfer to the Company’s other existing customers.

5 unchanged sentences

The long-term deferred revenues amounts will be recognized in revenues over several years and in some cases up to ten years.

The Company transitioned the operation of the .

tv registry to a new operator in November 2022.

Upon completion of the transition, the Company had no remaining performance obligations related

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

As a result, the Company recognized the remaining $ 8.4 million of deferred revenues in the fourth quarter of 2022.

Employee Benefits and Stock-based Compensation

21 unchanged sentences

As of December 31, 2023, 2.8 million shares of the Company’s common stock remain reserved for future issuance under this plan.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Stock-based Compensation

10 unchanged sentences

Total stock-based compensation $ 60.8 $ 60.2 $ 55.1

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

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

14 unchanged sentences

Vested and settled ( 0.3 ) $ 205.66

Unvested at end of period

The RSUs in the table above include PSUs.

6 unchanged sentences

As of December 31, 2023, total unrecognized compensation cost related to unvested RSUs was $ 97.7 million which is expected to be recognized over a weighted-average period of 2.4 years.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Non-operating Income (Loss), Net

5 unchanged sentences

Loss on extinguishment of debt — — ( 2.1 )

Gain on sale of business — — 6.4

Transition services income — — 2.1

Other, net 5.1 ( 2.5 ) 0.2

1 unchanged sentence

Interest income is earned principally from the Company’s surplus cash balances and marketable securities.

The increase in interest income in 2022 reflects higher interest rates on our investments in debt securities.

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

The redemption of the 2023 senior notes in 2021 resulted in a loss on debt extinguishment of $ 2.1 million related to the unamortized debt issuance costs on the notes.

Gain on sale of business and transition services income in 2020 relates to the sale of the Company’s security services customer contracts.

Other, net in 2022 includes primarily foreign currency related losses.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

Other non-operating income, net in 2023 reflects net gains and losses from the Company’s foreign currency exposure and related hedges.

Income before income taxes is categorized geographically as follows:

9 unchanged sentences

(In millions)

Current expense (benefit):

Current expense:

Federal $ 159.1 $ 145.1 $ 97.5

8 unchanged sentences

Total income tax expense (benefit) $ 158.9 $ 206.4 $ ( 2.6 )

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

The Company's state current expense was lower in 2023 due to a beneficial change in certain state income apportionment rules, which became effective starting in 2023.

The new apportionment rules required the Company to write down certain of its deferred tax assets resulting in a net state deferred expense in 2023.

The difference between income tax expense (benefit) and the amount resulting from applying the federal statutory rate of 21 % to Income before income taxes is attributable to the following:

3 unchanged sentences

Income tax expense at federal statutory rate $ 205.1 $ 184.8 $ 164.3

intellectual property ( 118.0 ) — ( 165.5 )

Change in valuation allowance 66.1 0.1 0.1

State taxes, net of federal benefit 28.5 29.2 25.5

1 unchanged sentence

operations ( 15.5 ) ( 9.5 ) ( 23.3 )

Stock-based compensation 4.7 1.3 ( 8.6 )

Remeasurement of unrecognized tax benefits ( 8.3 ) ( 1.5 ) ( 5.1 )

Intercompany non-U.S.

intellectual property transfer — ( 165.5 ) —

Other 1.0 3.3 1.4

1 unchanged sentence

$ 158.9 $ 206.4 $ ( 2.6 )

During the fourth quarter of 2023, due to a change in local tax systems, the Company recognized amortizable tax basis related to a portion of its non-U.S.

intellectual property based on a fair value of approximately $ 1.80 billion.

This intellectual property had no book value, resulting in the recognition of a $ 118.0 million deferred tax asset and a corresponding income tax benefit in 2023.

During the fourth quarter of 2021, as part of a legal entity reorganization, the Company completed an internal transfer of certain of its non-U.S.

1 unchanged sentence

This transfer created amortizable tax basis for the receiving entity based on the $ 1.20 billion fair value of the intellectual property, which resulted in the recognition of a $ 165.5 million deferred tax asset and a corresponding income tax benefit.

During 2020, the Company recognized an income tax benefit as a result of the remeasurement of certain previously unrecognized income tax benefits.

The majority of these income tax benefits related to the worthless stock deduction taken in 2013.

These remeasurements were based on written confirmations from the IRS, indicating no examination adjustments would be proposed related to the worthless stock deduction or certain

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

other matters reviewed as part of the audit of the Company’s federal income tax returns for 2010 through 2014, and the lapse of statutes of limitations related to other unrecognized income tax benefits.

During the fourth quarter of 2023, due to the change in the tax systems mentioned above, the Company determined that it is more likely than not that a portion of the aforementioned deferred tax asset will not be realized, and as a result, recognized a valuation allowance of $ 64.7 million.

The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows:

3 unchanged sentences

Intellectual property $ 266.2 $ 147.0

Deferred revenues, accruals and reserves 73.7 68.6

Deferred revenue, accruals and reserves 72.9 73.7

Research and development costs 23.6 12.0

6 unchanged sentences

Deferred tax liabilities

Property and equipment ( 0.5 ) ( 6.6 )

Other ( 1.1 ) ( 1.2 )

Total deferred tax liabilities ( 1.6 ) ( 7.8 )

( 0.9 ) ( 1.6 )

Total net deferred tax assets $ 301.0 $ 234.6

With the exception of deferred tax assets related to certain state and foreign net operating loss and foreign tax credit carryforwards, management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets.

With the exception of a portion of deferred tax assets related to intellectual property and certain state and foreign net operating loss and foreign tax credit carryforwards, management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

As part of the Tax Cuts and Jobs Act of 2017, domestic and foreign research and development expenses, including costs related to internally developed software, are required to be amortized for income tax purposes, over five and fifteen years, respectively, beginning with our 2022 tax year.

As a result, the Company recognized a deferred tax asset of $ 12.0 million in 2022.

As of December 31, 2023, the Company’s deferred tax assets included $ 38.4 million of state net operating loss carryforwards, before applying tax rates for the respective jurisdictions.

1 unchanged sentence

The state net operating loss carryforwards expire in various years from 2024 through 2034 .

The foreign tax credits will expire in 2028 .

The foreign tax credits will expire between 2028 and 2033 .

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

3 unchanged sentences

Increases in tax positions for prior years 0.1 0.1

Decreases in tax positions for prior years — ( 1.3 )

Increases in tax positions for current year 5.0 1.4

Decreases in tax positions due to settlement with taxing authorities — ( 1.2 )

Lapse in statute of limitations ( 10.6 ) ( 2.4 )

Ending balance $ 9.6 $ 15.1

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2022, 2021 AND 2020

As of December 31, 2023, approximately $ 7.1 million of unrecognized tax benefits, including penalties and interest, could affect the Company’s tax provision and effective tax rate.

4 unchanged sentences

The Company’s U.S.

federal income tax returns are currently under examination by the IRS for 2010 through 2013.

The Company’s U.S.

federal tax returns for 2019, and the years thereafter, also remain subject to examination.

federal income tax returns are not currently under examination by the IRS and only the Company’s tax returns for 2020 and years thereafter are subject to examination.

The Company’s other material tax returns are not currently under examination by their respective taxing jurisdictions.

5 unchanged sentences

income tax obligations, leases, and the interest payments and principal on the Senior Notes:

Purchase Obligations Transition Tax Operating Leases Senior Notes Total

Purchase Obligations Transition Tax Senior Notes Total

(In millions)

7 unchanged sentences

The amounts in the table above exclude $ 7.1 million of unrecognized tax benefits, as the Company is unable to reasonably estimate the ultimate amount or time of settlement of those liabilities.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Verisign enters into certain purchase obligations with various vendors.

1 unchanged sentence

Registry fees for top-level domains that we operate where the amounts are variable or passed-through to registrars have been excluded from the table above.

The Company does not have any significant purchase obligations beyond 2025.

The Company has an agreement with Internet Corporation for Assigned Names and Numbers (“ICANN”) to be the sole registry operator for domain names in the .com registry through November 30, 2024 .

4 unchanged sentences

com Registry Agreement with ICANN, the Company is required to make annual payments of $ 4.0 million to ICANN through 2025 to support efforts to maintain the security and stability of the DNS.

The payments for 2023 through 2025 are included in Purchase obligations in the table above.

The Transition Tax amounts in the table above are the remaining installments of U.S.

income taxes payable on our accumulated foreign earnings pursuant to the 2017 Tax Cuts and Jobs Act.

The payments for 2024 and 2025 are included in Purchase obligations in the table above.

Verisign leases a small portion of its office space and a portion of its data center facilities under operating leases, the longest of which extends into 2026.

Rental expenses under operating leases were not material in any period presented.

Operating lease obligations for 2024 through 2026 are included in Purchase obligations in the table above.

The Transition Tax amounts in the table above are the remaining installments of U.S.

income taxes payable on our accumulated foreign earnings pursuant to the 2017 Tax Cuts and Jobs Act.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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 8. Financial Statements and Supplementary Data