12 unchanged sentences
We are a global provider of critical internet infrastructure and domain name registry services, enabling internet navigation for many of the world’s most recognized domain names.
−Removed: We help enable the security, stability, and resiliency of the Domain Name System and the internet by providing root zone maintainer services, operating two of the 13 global internet root servers, and providing registration services and authoritative resolution for the .
+Added: We help enable the security, stability, and resiliency of the Domain Name System 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 generic top-level domains (“gTLDs”), which support the majority of global e-commerce.
−Removed: As of September 30, 2023, we had 173.9 million .com and .net registrations in the domain name base.
+Added: As of March 31, 2024, we had 172.5 million .com and .net registrations 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.
−Removed: Growth in the number of domain name registrations under our management may be hindered 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.
+Added: 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.
Business Highlights and Trends
−Removed: • We recorded revenues of $376.3 million and $1,112.7 million during the three and nine months ended September 30, 2023, an increase of 5% compared to the same periods in 2022.
−Removed: • We recorded operating income of $254.3 million and $744.3 million during the three and nine months ended September 30, 2023, an increase of 7% compared to the same periods in 2022.
−Removed: • As of September 30, 2023, we had 173.9 million .com and .net registrations in the domain name base, which represents a 0.1% decrease from September 30, 2022, and a net decrease of 0.5 million domain name registrations from June 30, 2023.
−Removed: • During the three months ended September 30, 2022 and 2023, we processed 9.9 million new domain name registrations for .com and .net .
+Added: • We recorded revenues of $384.3 million during the three months ended March 31, 2024, which represents an increase of 5% compared to the same period in 2023.
+Added: • We recorded operating income of $258.9 million during the three months ended March 31, 2024, which represents an increase of 7% compared to the same period in 2023.
+Added: • As of March 31, 2024, we had 172.5 million .com and .net registrations in the domain name base, which represents a 1.3% decrease from March 31, 2023, and a net decrease of 0.3 million domain name registrations from December 31, 2023.
+Added: • During the three months ended March 31, 2024, we processed 9.5 million new domain name registrations for .com and .net compared to 10.3 million for the same period in 2023.
• The final .
−Removed: net renewal rate for the second quarter of 2023 was 73.4% compared to 73.8% for the second quarter of 2022.
+Added: net renewal rate for the fourth quarter of 2023 was 73.2% compared to 73.3% for the fourth quarter of 2022.
Renewal rates are not fully measurable until 45 days after the end of the quarter.
−Removed: • Effective July 27, 2023, our Board of Directors authorized the repurchase of our common stock in the amount of $1.14 billion, in addition to the $356.1 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $1.50 billion under the program.
−Removed: • During the three months ended September 30, 2023, we repurchased 1.1 million shares of our common stock for an aggregate cost of $219.9 million.
−Removed: As of September 30, 2023, there was approximately $1.34 billion remaining available for future share repurchases under our share repurchase program.
−Removed: • We generated cash flows from operating activities of $649.6 million during the nine months ended September 30, 2023, compared to $614.2 million for the same period in 2022.
−Removed: • On July 27, 2023, we announced that we will increase the annual registry-level wholesale fee for each new and renewal .
−Removed: net domain name registration from $9.92 to $10.91, effective February 1, 2024.
+Added: • During the three months ended March 31, 2024, we repurchased 1.3 million shares of our common stock for an aggregate cost of $260.4 million.
+Added: As of March 31, 2024, there was $859.6 million remaining for future share repurchases under the share repurchase program.
+Added: • We generated cash flows from operating activities of $257.3 million during the three months ended March 31, 2024, compared to $259.0 million for the same period in 2023.
Pursuant to our agreements with ICANN, we make available files containing all active domain names registered in the .com and .net registries.
8 unchanged sentences
The following table presents information regarding our results of operations as a percentage of revenues:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 2022 2023 2022
+Added: Three Months Ended March 31,
Revenues 100.0 % 100.0 %
11 unchanged sentences
Our revenues are primarily derived from registrations for domain names in the .com and .net domain name registries.
−Removed: We also derive revenues from operating domain name registries and technical systems for several other gTLDs and ccTLDs, all of which are not significant in relation to our consolidated revenues.
+Added: We also derive revenues from operating domain name registries and technical systems for several other gTLDs and one ccTLD, all of which are not significant in relation to our consolidated revenues.
For domain names registered in the .
1 unchanged sentence
Individual customers, called registrants, contract directly with registrars or their resellers, and the registrars, who are our direct customers, in turn register the domain names with Verisign.
−Removed: Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the Department of Commerce (“DOC”).
+Added: Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the Department of Commerce.
New registrations and the renewal rate for existing registrations are impacted by continued growth in online advertising, e-commerce, and the number of internet users, as well as marketing activities carried out by us and our registrars.
We also offer promotional incentive-based discount programs to registrars based upon market conditions and the business environment in which the registrars operate.
−Removed: com Registry Agreement, we are permitted to increase the price of a .com domain name by up to 7% in each of the final four years of each six-year period beginning on October 26, 2018.
+Added: 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 .
−Removed: com domain name registration from $8.39 to $8.97 effective September 1, 2022, and from $8.97 to $9.59, effective September 1, 2023.
−Removed: Effective February 1, 2023, we increased the annual registry-level wholesale fee for each new and renewal .net domain name registration from $9.02 to $9.92.
−Removed: In June 2023, we entered into a renewal of the .
−Removed: net Registry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the .net registry through June 30, 2029.
−Removed: We have the contractual right to increase the fees for .
−Removed: net domain name registrations by up to 10% each year during
−Removed: the term of our agreement with ICANN, through June 30, 2029.
−Removed: On July 27, 2023, we announced that we will increase the annual registry-level wholesale fee for each new and renewal .
−Removed: net domain name registration from $9.92 to $10.91, effective February 1, 2024.
+Added: com domain name registration from $8.97 to $9.59 effective September 1, 2023.
+Added: On February 8, 2024, we announced that we will increase the annual registry-level wholesale fee for each new and
+Added: com domain name registration from $9.59 to $10.26, effective September 1, 2024.
+Added: Under the .net Registry Agreement which renewed in June 2023, we are permitted to increase the price of .net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029.
+Added: 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.
A comparison of revenues is presented below:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % Change 2022 2023 % Change 2022
+Added: Three Months Ended March 31,
+Added: 2024 % Change 2023
(Dollars in millions)
1 unchanged sentence
The following table compares the .com and .net domain name registrations in the domain name base:
−Removed: September 30, 2023 % Change September 30, 2022
+Added: March 31, 2024 % Change March 31, 2023
.com and .net domain name registrations in the domain name base
172.5 million (1)% 174.8 million
−Removed: Revenues increased during the three and nine months ended September 30, 2023, as compared to the same periods last year, primarily due to an increase in revenues from the operation of the registry for the .
+Added: Revenues increased during the three months ended March 31, 2024, as compared to the same periods last year, primarily due to an increase in revenues from the operation of the registry for the .
com gTLD supported by the price increases that became effective September 1, 2023 and 2022.
−Removed: This increase in revenue was partially offset by the elimination of revenue from the operation of the .
−Removed: tv ccTLD which was transitioned to another service provider in the fourth quarter of 2022.
Demand for domain names has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars.
−Removed: However, competitive pressure from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, ongoing changes in internet practices and behaviors of consumers and business, as well as the motivation of existing domain name registrants managing their investment in domain names, such as for resale at increased prices or for revenue generation through website advertising, and global economic uncertainty, has limited the demand for domain names and may do so in the remainder of 2023 and beyond.
−Removed: While the core value proposition for domain names remains strong, softness in demand primarily in China has recently limited the overall growth in our domain name base.
+Added: However, competitive pressure from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, ongoing changes in internet practices and behaviors of consumers and business, as well as the motivation of existing domain name registrants managing their investment in domain names, such as for resale at increased prices or for revenue generation through website advertising, and global economic conditions, has limited the demand for domain names and may continue to do so in the future.
+Added: While the core value proposition for domain names remains strong, softness in demand primarily in China has recently led to a decline in our domain name base.
Geographic revenues
3 unchanged sentences
The following table presents a comparison of our geographic revenues:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % Change 2022 2023 % Change 2022
+Added: Three Months Ended March 31,
+Added: 2024 % Change 2023
(Dollars in millions)
7 unchanged sentences
Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers.
−Removed: Several such changes benefited revenues in the U.S.
−Removed: and negatively impacted revenues in EMEA during the three and nine months ended September 30, 2023.
Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.
−Removed: The majority of our revenue growth was generated from registrars based in the U.S.
−Removed: and certain other countries, while revenues from registrars based in China declined in both the three and nine months ended September 30, 2023 compared to the same periods of the prior year due to the lower demand noted above.
+Added: The majority of our revenue growth was generated from registrars based in the U.S., EMEA and certain other countries, while revenues from registrars based in China declined in the three months ended March 31, 2024 compared to the same period of the prior year due to the lower demand noted above.
Cost of revenues
1 unchanged sentence
A comparison of cost of revenues is presented below:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % Change 2022 2023 % Change 2022
+Added: Three Months Ended March 31,
+Added: 2024 % Change 2023
(Dollars in millions)
Cost of revenues $ 49.1 (2)% $ 49.9
−Removed: Cost of revenues decreased slightly during the three months ended September 30, 2023, compared to the same period last year, due to a combination of individually insignificant factors.
−Removed: Cost of revenues decreased slightly during the nine months ended September 30, 2023, compared to the same period last year, due to a decrease in registry fees that was partially offset by an increase in compensation and benefit expenses.
−Removed: Registry fees decreased by $3.7 million due to the transition of the operation of the registry for the .tv ccTLD to another service provider in the fourth quarter of 2022.
−Removed: Compensation and benefit expenses increased by $3.1 million due to salary increases and an increase in average headcount.
+Added: Cost of revenues decreased slightly during the three months ended March 31, 2024, compared to the same period last year, due to a combination of individually insignificant factors.
Research and development
1 unchanged sentence
A comparison of research and development expenses is presented below:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % Change 2022 2023 % Change 2022
+Added: Three Months Ended March 31,
+Added: 2024 % Change 2023
(Dollars in millions)
Research and development $ 24.8 3% $ 24.2
−Removed: Research and development expenses increased slightly during the three months ended September 30, 2023, compared to the same period last year, due to a combination of individually insignificant factors.
−Removed: Research and development expenses increased during the nine months ended September 30, 2023, compared to the same period last year, primarily due to a $2.3 million decrease in capitalized labor as a result of a shift in work from capital projects to certain non-capital projects and maintenance of existing software products.
+Added: Research and development expenses increased slightly during the three months ended March 31, 2024, compared to the same period last year, due to a combination of individually insignificant factors.
Selling, general and administrative
1 unchanged sentence
A comparison of selling, general and administrative expenses is presented below:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % Change 2022 2023 % Change 2022
+Added: Three Months Ended March 31,
+Added: 2024 % Change 2023
(Dollars in millions)
Selling, general and administrative $ 51.5 5% $ 49.0
−Removed: Selling, general and administrative expenses increased during the three months ended September 30, 2023, compared to the same period last year, due to a combination of individually insignificant factors.
−Removed: Selling, general and administrative expenses increased during the nine months ended September 30, 2023, compared to the same period last year, due to increases in compensation and benefit expenses and other individually insignificant factors.
−Removed: Compensation and benefit expenses increased by $3.9 million due to salary increases and an increase in average headcount.
+Added: Selling, general and administrative expenses increased during the three months ended March 31, 2024, compared to the same period last year, due to a combination of individually insignificant factors.
Interest expense
−Removed: Interest expense remained consistent during the three and nine months ended September 30, 2023 compared to the same periods last year.
+Added: Interest expense remained consistent during the three months ended March 31, 2024 compared to the same period last year.
Non-operating income, net
−Removed: See Note 8, “Non-operating Income, Net” of our Notes to Consolidated Financial Statements in Item 1 of this Form 10-Q.
+Added: Non-operating income, net increased during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in interest income driven by higher interest rates on our investments in debt securities.
Income tax expense
The following table presents Income tax expense and the effective tax rate:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 2022 2023 2022
+Added: Three Months Ended March 31,
(Dollars in millions)
2 unchanged sentences
The effective tax rate for each of the periods in the table above differed from the statutory federal rate of 21%, due to state income taxes and U.S.
−Removed: taxes on foreign earnings, net of foreign tax credits, offset by a lower foreign effective tax rate.
+Added: taxes on foreign earnings, net of foreign tax credits, partially offset by a lower foreign effective tax rate.
Liquidity and Capital Resources
The following table presents our principal sources of liquidity:
−Removed: September 30, December 31,
+Added: March 31, December 31,
(In millions)
6 unchanged sentences
Treasury bills purchased with original maturities of three months or less.
−Removed: As of September 30, 2023, all of our debt securities have contractual maturities of less than one year.
+Added: As of March 31, 2024, all of our debt securities have contractual maturities of less than one year.
Our cash and cash equivalents are readily accessible.
1 unchanged sentence
Effective July 27, 2023, our Board of Directors authorized the repurchase of our common stock in the amount of $1.14 billion, in addition to the $356.1 million that remained available for repurchases under the share repurchase program, for a total repurchase authorization of up to $1.50 billion under the program.
−Removed: During the three months ended September 30, 2023, we repurchased 1.1 million shares of our common stock for an aggregate cost of $219.9 million.
−Removed: As of September 30, 2023, there was approximately $1.34 billion remaining available for future share repurchases under our share repurchase program.
−Removed: As of September 30, 2023, 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.
−Removed: As of September 30, 2023, there were no borrowings outstanding under our $200.0 million credit facility that will expire in 2024.
+Added: During the three months ended March 31, 2024, we repurchased 1.3 million shares of our common stock for an aggregate cost of $260.4 million.
+Added: As of March 31, 2024, there was approximately $859.6 million remaining available for future share repurchases under the share repurchase program.
+Added: As of March 31, 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.
+Added: As of March 31, 2024, there were no borrowings outstanding under our $200.0 million credit facility that will expire in 2028.
We believe existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our ability to arrange for additional financing should be sufficient to meet our working capital, capital expenditure requirements, and to service our debt for the next 12 months and beyond.
1 unchanged sentence
Our cash requirements have not changed materially since the 2023 Form 10-K.
−Removed: In summary, our cash flows for the nine months ended September 30, 2023 and 2022 were as follows:
−Removed: Nine Months Ended September 30,
+Added: In summary, our cash flows for the three months ended March 31, 2024 and 2023 were as follows:
+Added: Three Months Ended March 31,
(In millions)
Net cash provided by operating activities $ 257.3 $ 259.0
−Removed: Net cash (used in) provided by investing activities (201.5) 546.0
+Added: Net cash provided by investing activities 496.4 409.8
Net cash used in financing activities (261.6) (222.5)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (0.4) (0.2)
−Removed: Net (decrease) increase in cash, cash equivalents, and restricted cash $ (216.0) $ 337.1
+Added: Net increase in cash, cash equivalents, and restricted cash $ 491.7 $ 446.1
Cash flows from operating activities
1 unchanged sentence
Our primary uses of cash from operating activities are for personnel-related expenditures, and other general operating expenses, as well as payments related to taxes, interest and facilities.
−Removed: Net cash provided by operating activities increased during the nine months ended September 30, 2023, compared to the same period last year, primarily due to increases in cash received from customers and cash received from interest on investments, partially offset by increases in cash paid for income taxes and cash paid to employees and vendors.
+Added: Net cash provided by operating activities decreased slightly during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in cash paid to employees and vendors, partially offset by an increase in cash received from customers.
+Added: Cash paid to employees and vendors increased primarily due to the timing of payments and an increase in operating expenses.
Cash received from customers increased primarily due to the .
−Removed: com price increase that became effective on September 1, 2022 and September 1, 2023, changes in customer deposit balances, and the .
+Added: com price increase that became effective on September 1, 2023 and the .
net price increase that became effective on February 1, 2024.
−Removed: Cash received from interest on investments increased due to higher interest rates on our investments in debt securities.
−Removed: Cash paid for income taxes increased primarily due to comparatively higher taxable income and higher transition tax payments on accumulated foreign earnings resulting from the 2017 Tax Cuts and Jobs Act.
−Removed: Cash paid to employees and vendors increased primarily due to an increase in operating expenses.
Cash flows from investing activities
The changes in cash flows from investing activities primarily relate to purchases, maturities and sales of marketable securities, and purchases of property and equipment.
−Removed: We had net cash outflows from investing activities in the nine months ended September 30, 2023, compared to net cash inflows from investing activities during the same period last year, primarily due to a decrease in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities and an increase in purchases of property and equipment, primarily related to the purchase of a building to be used as our future corporate headquarters.
+Added: Net cash provided by investing activities increased during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities.
Cash flows from financing activities
The changes in cash flows from financing activities primarily relate to share repurchases and proceeds from our employee stock purchase plan.
−Removed: Net cash used in financing activities decreased during the nine months ended September 30, 2023, compared to the same period last year, primarily due to a decrease in share repurchases.
+Added: Net cash used in financing activities increased during the three months ended March 31, 2024, compared to the same period last year, primarily due to an increase in share repurchases.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.