What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-15 · 135 added, 93 removed, 671 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, 2024, 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 13, 2025 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.

48 unchanged sentences

Deferred revenues 973.5 931.1

Current senior notes 299.8 —

Total current liabilities 1,531.1 1,188.5

Long-term deferred revenues 330.7 315.0

Senior notes 1,790.2 1,787.9

Long-term senior notes 1,492.5 1,790.2

Long-term tax and other liabilities 10.1 36.3

31 unchanged sentences

Interest expense ( 75.3 ) ( 75.3 ) ( 75.3 )

Non-operating income (loss), net 51.2 12.4 ( 1.3 )

Non-operating income, net 39.0 51.2 12.4

Income before income taxes 1,021.9 976.5 880.2

Income tax (expense) benefit ( 158.9 ) ( 206.4 ) 2.6

Income tax expense ( 236.2 ) ( 158.9 ) ( 206.4 )

Net income 785.7 817.6 673.8

53 unchanged sentences

Purchases of property and equipment ( 28.1 ) ( 45.8 ) ( 27.4 )

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

Net cash provided by (used in) investing activities 286.3 ( 97.4 ) 355.7

Cash flows from financing activities:

1 unchanged sentence

Proceeds from employee stock purchase plan 12.3 12.3 12.3

Repayment of borrowings — — ( 750.0 )

Proceeds from borrowings, net of issuance costs — — 741.1

Payment of excise tax on repurchases of common stock ( 8.2 ) — —

Other financing activities — ( 0.7 ) —

23 unchanged sentences

Actual results may differ from these estimates under different assumptions or conditions.

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.

Significant Accounting Policies

9 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.

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, net.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of 35 to 47 years for buildings, 10 years for building improvements and three years to five years for computer equipment, software, office equipment, and furniture and fixtures.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of 35 to 47 years for buildings, 10 years for building improvements and three years to six years for computer equipment, software, office equipment, and furniture and fixtures.

Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or associated lease terms.

2 unchanged sentences

The Company capitalized $ 6.7 million and $ 7.2 million of costs related to internally developed software during 2024 and 2023, respectively.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Goodwill and Other Long-lived Assets

4 unchanged sentences

Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset, or asset group, to estimated undiscounted future cash flows expected to be generated by the asset, or asset group.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset, or asset group, to estimated

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2024, 2023 AND 2022

undiscounted future cash flows expected to be generated by the asset, or asset group.

An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value.

7 unchanged sentences

The Company’s subsidiaries’ financial statements are remeasured into U.S.

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

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

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

4 unchanged sentences

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.

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

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 2024 and 2022.

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, 2024, Verisign held foreign currency forward contracts in notional amounts totaling $ 44.8 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.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

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

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, DNS resolution and Whois and Registration Data Access Protocol 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.

1 unchanged sentence

These fees are then recognized ratably over the renewal or extension term.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2024, 2023 AND 2022

Costs Incurred to Obtain a Contract

5 unchanged sentences

The Company records a valuation allowance to reduce deferred tax assets to an amount whose realization is more likely than not.

The Company does not consider various minimum taxes imposed in certain jurisdictions for purposes of evaluating whether a deferred tax asset will be realized.

For every tax-paying component and within each tax jurisdiction, all deferred tax liabilities and assets are offset and presented as a single net noncurrent asset or liability.

1 unchanged sentence

income tax effect of future global intangible low-taxed income inclusions in the period in which they arise.

The Company’s income taxes payable is reduced by the tax benefits from restricted stock unit (“RSU”) vestings equal to the fair market value of the stock at the vesting date.

The Company’s income taxes payable are reduced by the tax benefits from restricted stock unit (“RSU”) vestings equal to the fair market value of the stock at the vesting date.

If the income tax benefit at the vesting date differs from the income tax benefit recorded based on the grant date fair value of the RSUs, the excess or shortfall of the tax benefit is recognized within income tax expense.

17 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.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Earnings per Share

1 unchanged sentence

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

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2024, 2023 AND 2022

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.

Adoption of New Accounting Standards

The Company adopted Accounting Standards Update (“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.

This guidance has been applied retrospectively.

The adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.

Refer to Note 7, “Segment Information,” for segment reporting disclosures.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“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.

This guidance will be effective for our 2025 Form 10-K.

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

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires additional disclosure of certain costs and expenses within the notes to the financial statements.

This guidance will be effective for our 2027 Form 10-K.

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

VERISIGN, INC.

25 unchanged sentences

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

The fair value of the Company’s foreign currency forward contracts is based on foreign currency rates quoted by banks or foreign currency dealers and other public data sources.

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.

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

As of December 31, 2024, the Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable whose carrying values approximated their face values.

The aggregate fair value of the Company’s current and long-term senior notes is $ 1.69 billion as of December 31, 2024 and 2023.

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

4 unchanged sentences

(In millions)

Prepaid registry fees $ 23.8 $ 24.3

Prepaid expenses $ 30.8 $ 23.3

Taxes receivable 7.3 1.9

Prepaid registry fees 24.3 23.8

Accounts receivable, net 5.6 6.3

Taxes receivable 2.2 7.3

Other 1.0 1.2

16 unchanged sentences

Total property and equipment, net $ 224.5 $ 233.2

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.

8 unchanged sentences

Deposits to Acquire Intangible Assets

The Company’s Deposit to acquire intangible assets represents the $ 145.0 million paid for the future assignment to the Company of contractual rights to the .web gTLD, pending resolution of objections by other applicants, and approval from ICANN.

Upon assignment of the contractual rights, the Company will record the total investment as an indefinite-lived intangible asset.

The Company’s Deposits to acquire intangible assets represents the $ 145.0 million paid for the future assignment to the Company of contractual rights to the .web gTLD, pending resolution of objections by other applicants, and approval from ICANN.

Other Long-Term Assets

2 unchanged sentences

(In millions)

Long-term prepaid registry fees $ 8.3 $ 9.1

Long-term prepaid expenses $ 13.5 $ 4.8

Operating lease right-of-use asset 9.3 7.4

Long-term prepaid registry fees 8.2 8.3

Restricted cash 5.4 5.4

Long-term prepaid expenses 4.8 6.6

Other 3.0 3.1

Total other long-term assets $ 39.4 $ 29.0

Long-term prepaid expenses as of December 31, 2024 reflect longer-term contracts for software licenses and maintenance entered into during 2024.

The prepaid registry fees in the tables above primarily 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

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2024, 2023 AND 2022

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.

registration term.

The amount of prepaid registry fees as of December 31, 2024 reflects amortization of $ 39.5 million during 2024 which was recorded in Cost of Revenues.

4 unchanged sentences

Accounts payable and accrued expenses $ 10.6 $ 12.5

Customer deposits 77.2 72.0

Accrued employee compensation 66.9 61.2

Taxes payable 65.8 49.5

Customer deposits 64.6 77.2

Interest payable 19.5 19.5

Accrued registry fees 12.6 12.3

Unrealized loss on foreign currency forward contracts 10.7 0.1

Customer incentives payable 8.9 6.5

Current operating lease liabilities 5.2 5.1

Foreign currency forward contracts 1.1 10.7

Other accrued liabilities 2.6 2.9

Total accounts payable and accrued liabilities $ 257.8 $ 257.4

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.

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

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 year.

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

The liability related to the unrealized loss on foreign currency forward contracts as of December 31, 2023 was remeasured and paid upon settlement of the forward contract in 2024.

Long-term Tax and Other Liabilities

5 unchanged sentences

Long-term tax and other liabilities $ 10.1 $ 36.3

Long-term tax liabilities include accruals for unrecognized tax benefits and the long-term portion of the U.S.

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

Long-term tax liabilities as of December 31, 2024 reflects a $ 24.3 million reclassification to current liabilities of the final installment of the transition tax liability on accumulated foreign earnings resulting from the 2017 Tax Cuts and Jobs Act.

VERISIGN, INC.

8 unchanged sentences

Senior notes due 2031 June 8, 2021 June 15, 2031 2.70 % 750.0 750.0

Principal amount of senior notes 1,800.0 1,800.0

unamortized issuance costs ( 7.7 ) ( 9.8 )

Total senior notes

1,792.3 1,790.2

current portion of senior notes due 2025

Total long-term senior notes

$ 1,492.5 $ 1,790.2

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

2 unchanged sentences

Each of the senior notes issuances is redeemable, in whole or in part, at the Company’s option at times and redemption prices specified in the indentures.

Current and long-term senior notes as of December 31, 2024 reflect the classification of $ 299.8 million of the Company’s $ 500.0 million senior notes due April 1, 2025 (“2025 Senior Notes”), net of unamortized debt issuance costs, as current liabilities, and the remaining $ 200.0 million as long-term liabilities.

Under existing market conditions, the Company intends to refinance all of its 2025 Senior Notes through the issuance of new long-term debt.

As of December 31, 2024, the Company has $ 200.0 million in borrowing capacity under its credit facility discussed below.

If a suitable refinancing arrangement is not available due to a change in market conditions, the Company intends to utilize the credit facility to repay $ 200.0 million of the 2025 Senior Notes.

2023 Credit Facility

12 unchanged sentences

As of December 31, 2024, there was approximately $ 1.02 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:

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2024, 2023 AND 2022

The summary of the Company’s common stock repurchases are as follows:

2024 2023 2022

5 unchanged sentences

Total costs $ 1,225.6 $ 901.4 $ 1,048.1

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2023, 2022 AND 2021

Since inception, the Company has repurchased 260.2 million shares of its common stock for an aggregate cost of $ 14.88 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.

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

Accumulated Other Comprehensive Loss

12 unchanged sentences

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

Segment Information

The Company has one reportable segment that includes all the operations of the business.

The segment’s chief operating decision maker is the Executive Chairman, President, and Chief Executive Officer .

The chief operating decision maker assesses performance and decides how to allocate resources based on revenues, operating income and net income as reported on the Consolidated Statement of Comprehensive Income.

Revenues, operating income and net income are used to evaluate budget versus actual results and the overall return generated by the segment assets.

The analysis of these financial results, among other metrics, is used to assess performance and drives employee incentive compensation, as well as executive compensation.

VERISIGN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2024, 2023 AND 2022

The following table presents information about segment revenues, significant expenses and profits:

Year Ended December 31,

2024 2023 2022

(In millions)

Revenues $ 1,557.4 $ 1,493.1 $ 1,424.9

Costs and expenses:

Compensation and benefits expenses 224.7 214.5 200.8

Stock-based compensation expenses 61.1 59.7 58.6

Equipment and software expenses 45.6 42.1 40.2

Registry fee expenses 45.3 44.1 48.5

Depreciation expenses 36.9 44.1 46.9

Other segment items 85.6 88.0 86.8

Total costs and expenses 499.2 492.5 481.8

Operating Income 1,058.2 1,000.6 943.1

Interest expense ( 75.3 ) ( 75.3 ) ( 75.3 )

Non-operating income, net 39.0 51.2 12.4

Income tax expense ( 236.2 ) ( 158.9 ) ( 206.4 )

Net income $ 785.7 $ 817.6 $ 673.8

Other segment items that are a part of our segment net income include professional services expenses, telecommunication expenses, legal expenses, occupancy expenses, marketing expenses, and travel expenses.

The Company generates revenues in the U.S.;

Europe, the Middle East and Africa (“EMEA”);

and certain other countries, including, but not limited to Canada, Japan and Singapore.

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

Australia, China, Japan, Singapore, and other Asia Pacific countries (“APAC”);

and certain other countries, including Canada and Latin American countries.

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

Year Ended December 31,

3 unchanged sentences

EMEA 249.6 228.2 226.0

China 91.6 106.0 101.7

175.7 174.8 167.7

Other 96.6 95.4 93.6

4 unchanged sentences

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

Major Customers

Our largest customer accounted for approximately 32 % of revenues in 2024, 2023, and 2022.

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.

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2024, 2023 AND 2022

Major Customers

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

Deferred Revenues

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Total stock-based compensation $ 62.1 $ 60.8 $ 60.2

The income tax benefit that was included within Income tax (expense) benefit related to these stock-based compensation expenses for 2023, 2022, and 2021 was $ 11.7 million, $ 13.8 million, and $ 12.4 million, respectively.

The income tax benefit that was included within Income tax expense related to these stock-based compensation expenses for 2024, 2023, and 2022 was $ 12.4 million, $ 11.7 million, and $ 13.8 million, respectively.

RSUs Information

5 unchanged sentences

Vested and settled ( 0.3 ) $ 206.27

( 0.1 ) $ 203.74

Unvested at end of period

1 unchanged sentence

The unvested RSUs as of December 31, 2024 include 0.2 million PSUs.

The number of shares received upon vesting of these PSUs may range from less than 0.1 million to 0.4 million depending on the level of performance achieved and whether any market conditions are satisfied.

The number of shares received upon vesting of these PSUs may range from 0.1 million to 0.4 million depending on the level of performance achieved and whether any market conditions are satisfied.

The closing price of Verisign’s stock was $ 206.96 on December 31, 2024.

6 unchanged sentences

DECEMBER 31, 2024, 2023 AND 2022

Non-operating Income (Loss), Net

The following table presents the components of Non-operating income (loss), net:

Non-operating Income, Net

The following table presents the components of Non-operating income, net:

Year Ended December 31,

2 unchanged sentences

Interest income $ 37.4 $ 46.1 $ 14.9

Loss on extinguishment of debt — — ( 2.1 )

Other, net 1.6 5.1 ( 2.5 )

Total non-operating income (loss), net $ 51.2 $ 12.4 $ ( 1.3 )

Total non-operating income, net $ 39.0 $ 51.2 $ 12.4

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

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

The decrease in interest income in 2024 primarily reflects the lower amounts invested in debt securities in 2024 and slightly lower interest rates on the Company’s investments in debt securities compared to 2023.

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

Income before income taxes is categorized geographically as follows:

19 unchanged sentences

13.7 ( 52.6 ) ( 6.7 )

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

Total income tax expense

$ 236.2 $ 158.9 $ 206.4

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2024, 2023 AND 2022

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 Company's state current expense was lower in 2024 and 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:

The Company’s increased foreign current expense in 2024 was primarily driven by the Organization for Economic Cooperation and Development (“OECD”) Pillar 2 minimum tax adopted by Switzerland, partially offset by related foreign tax credits in the U.S.

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

Year Ended December 31,

2 unchanged sentences

Income tax expense at federal statutory rate $ 214.6 $ 205.1 $ 184.8

intellectual property ( 118.0 ) — ( 165.5 )

Change in valuation allowance 66.1 0.1 0.1

State taxes, net of federal benefit 20.4 28.5 29.2

Change in valuation allowance ( 6.5 ) 66.1 0.1

Remeasurement of unrecognized tax benefits 2.4 ( 8.3 ) ( 1.5 )

Effect of non-U.S.

operations 2.3 ( 15.5 ) ( 9.5 )

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

intellectual property — ( 118.0 ) —

Other 3.0 1.0 3.3

Total income tax expense (benefit)

Total income tax expense

$ 236.2 $ 158.9 $ 206.4

2 unchanged sentences

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.

intellectual property which had no book value.

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 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.

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 deferred tax asset related to certain non-U.S.

intellectual property previously transferred as part of a legal entity reorganization, will not be realized, and as a result, recognized a valuation allowance of $ 64.7 million in 2023.

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

18 unchanged sentences

DECEMBER 31, 2024, 2023 AND 2022

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 of December 31, 2024, the Company’s deferred tax assets included $ 32.9 million of state net operating loss carryforwards, before applying tax rates for the respective jurisdictions.

7 unchanged sentences

Increases in tax positions for prior years 0.3 0.1

Decreases in tax positions for prior years ( 2.8 ) —

Increases in tax positions for current year 0.4 5.0

25 unchanged sentences

The amounts in the table above exclude $ 4.3 million of unrecognized tax benefits, as the Company is unable to reasonably estimate the ultimate amount or time of settlement of those liabilities.

Verisign enters into certain purchase obligations with various vendors.

The Company’s significant purchase obligations include firm commitments with telecommunication carriers, other service providers and the fixed portion of registry fees related

VERISIGN, INC.

1 unchanged sentence

DECEMBER 31, 2024, 2023 AND 2022

Verisign enters into certain purchase obligations with various vendors.

The Company’s significant purchase obligations include firm commitments with telecommunication carriers, other service providers and the fixed portion of registry fees related to the operation of certain top-level domains.

to the operation of certain top-level domains.

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 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, 2030 .

Under this agreement, the Company pays ICANN on a quarterly basis, $ 0.25 for each annual term of a domain name registered or renewed during such quarter.

For each period presented, the Company paid ICANN a fee of $ 0.25 for each annual term of a domain name registered or renewed.

The Company incurred registry fees for the .

com registry of $ 38.0 million in 2024, $ 38.1 million in 2023, and $ 39.9 million in 2022.

Effective January 1, 2025, these fees increased to $0.2575 for each annual term of a domain name registered or renewed.

In connection with the .

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

The payment for 2025 is 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 2029.

1 unchanged sentence

Operating lease obligations for 2025 through 2029 are included in Purchase obligations in the table above.

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

The Transition Tax amount in the table above is the final installment of U.S.

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

2 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-K

Item 8. Financial Statements and Supplementary Data