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What changed in Verisign's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Verisign's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+185 added−185 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-17)

Top changes in Verisign's 2023 10-K

185 paragraphs added · 185 removed · 159 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur services allow individuals and organizations to establish their online identities, while providing the secure, always-on access they need to communicate and transact reliably with online audiences. 3 Table of Contents We are the exclusive registry of domain names within the .com, .net, and .name generic top-level domains (“gTLDs”), among others, under agreements with ICANN and also, with respect to the .com gTLD, the U.S.
Biggest changeAs the registry 3 Table of Contents or service provider for these top-level domains, our services allow individuals and organizations to establish their online identities, while providing the secure, always-on access they need to communicate and transact reliably with online audiences.
Additionally, we continue to file patent applications with respect to certain of our technologies in the U.S. Patent and Trademark Office and internationally. Patents may not be awarded with respect to these applications and even if such patents are awarded, such patents may not provide sufficient protection of our technologies.
Additionally, we continue to file patent applications with respect to certain of our technologies in the U.S. Patent and Trademark Office and internationally. Patents may not be awarded with respect to these applications and even if such patents are awarded, they may not provide sufficient protection of our technologies.
To the extent any of our patents are considered “standard essential patents,” we may be required to license such patents to our competitors on reasonable and non-discriminatory terms or otherwise be limited in our ability to assert such patents.
To the extent any of our patents are considered “standard essential patents,” we may be required to license such patents to our competitors on fair, reasonable and non-discriminatory terms or otherwise be limited in our ability to assert such patents.
Among our competitors operating gTLD and ccTLD registries are China Internet Network Information Center (CNNIC), DENIC, Nominet, Identity Digital, Public Interest Registry (PIR), CentralNic, Google, .xyz, GoDaddy, and Radix.
Among our competitors operating gTLD and ccTLD registries are China Internet Network Information Center (CNNIC), DENIC eG, Nominet, Identity Digital, Public Interest Registry (PIR), CentralNic, Google, .xyz, GoDaddy, and Radix.
ITEM 1. BUSINESS Overview We are a global provider of domain name registry services and internet infrastructure, enabling internet navigation for many of the world’s most recognized domain names.
ITEM 1. BUSINESS Overview 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.
We attribute our strong retention rates to our passion and focus on the Company’s mission and values, continual development of talent, and the delivery of competitive and equitable reward programs.
We attribute our strong retention rates to our passion for and focus on the Company’s mission and values, our continual development of talent, and our delivery of competitive and equitable reward programs.
DOC approval of changes to or the renewal of the . com Registry Agreement was limited by Amendment 35 to only the following circumstances: (1) changes to the pricing provisions (other than as approved in Amendment 35), (2) changes to the vertical integration provisions (other than the clarification approved in Amendment 35), (3) changes to the security, stability 6 Table of Contents and resiliency posture as reflected in the functional or performance specifications (including the service level agreements), (4) changes to the conditions for renewal or termination of the .com Registry Agreement, or (5) changes to the Whois service (except as mandated by ICANN through Temporary or Consensus Policies).
DOC approval of changes to or the renewal of the . com Registry Agreement was limited by Amendment 35 to only the following circumstances: (1) changes to the pricing provisions (other than as approved in Amendment 35), (2) changes to the vertical integration provisions (other than the clarification approved in Amendment 35), (3) changes to the security, stability and resiliency posture as reflected in the functional or performance specifications (including the service level agreements), (4) changes to the conditions for renewal or termination of the .com Registry Agreement, or (5) changes to the Whois service (except as mandated by ICANN through Temporary or Consensus Policies).
Our progress is evident through our October 2022 employee 7 Table of Contents survey results where participants indicated that they understand how to support an inclusive work environment and that Verisign demonstrates a visible commitment to diversity.
Our progress is evident through our October 2023 employee survey results where participants 7 Table of Contents indicated that they understand how to support an inclusive work environment and that Verisign demonstrates a visible commitment to diversity.
This list may be updated from time to time on our investor relations website. https://facebook.com/Verisign https://twitter.com/Verisign https://linkedIn.com/company/Verisign https://youTube.com/user/Verisign https://verisign.com https://blog.Verisign.com The contents of these websites are not intended to be incorporated by reference into this Form 10-K or in any other report or document we file.
This list may be updated from time to time on our investor relations website. https://verisign.com https://blog.verisign.com https://facebook.com/verisign https://x.com/verisign https://linkedin.com/company/verisign https://youTube.com/user/verisign https://dnib.com The contents of these websites are not intended to be incorporated by reference into this Form 10-K or in any other report or document we file.
We also enter into confidentiality and/or intellectual property assignment agreements with our employees, consultants and current and potential affiliates, customers and business partners. We also control access to and distribution of proprietary documentation and other confidential information. We have been issued numerous patents in the U.S. and abroad, covering a wide range of our technologies.
We also enter into confidentiality and/or intellectual property assignment agreements with our employees, consultants, customers and business partners. We also control access to and distribution of proprietary documentation and other confidential information. We have been issued numerous patents in the U.S. and abroad, covering a wide range of our technologies.
The domain name base may also reflect compensated or uncompensated judicial or administrative actions to add or remove from the active zone an immaterial number of domain names. These files and the related summary data are updated at least once per day. The update times may vary each day.
The domain name base may also reflect compensated or uncompensated judicial or administrative actions to keep in or remove from the active zone an immaterial number of domain names. These files and the related summary data are updated at least once per day. The update times may vary each day.
Other regulations, or changes to regulations, may also significantly impact our business operations, including changes to the Digital Services Act or Network and Information Security Directive, in the European Union, or the Communications Decency Act, in the United States, or the Personal Information Protection Law, in China. .com Generic Top-Level Domain Our operation of the . com gTLD is subject to the terms of a registry agreement with ICANN (as amended, the “. com Registry Agreement”).
Other regulations, or changes to regulations, may also significantly impact our business operations, including, for example, changes to the Network and Information Security Directive, in the European Union, or the Communications Decency Act, in the United States, or the Personal Information Protection Law, in China. .com Generic Top-Level Domain Our operation of the . com gTLD is subject to the terms of a registry agreement with ICANN (as amended, the “. com Registry Agreement”).
In addition to the gTLD and ccTLD registries we operate or for which we provide back-end registry services, there are numerous other operational gTLD registries, ASCII ccTLD registries, IDN ccTLD registries, and IDN gTLD registries.
In addition to the registries we operate or for which we provide technical or back-end services, there are numerous other operational gTLD registries, ASCII ccTLD registries, IDN ccTLD registries, and IDN gTLD registries.
Marketing, Sales and Distribution We seek to expand our business through focused marketing campaigns and programs that target growth in the .com and .net domain name base, both domestically and internationally. We provide tools to be used by both registrars and end users to enable them to find relevant domain names.
Marketing, Sales and Distribution We seek to expand our business through focused marketing campaigns and programs that target growth in .com , .net and .cc domain names, both domestically and internationally. We provide tools to be used by both registrars and end users to enable them to find relevant domain names.
Unlike other gTLDs, the prices we charge for .com , .net and .name domain name registrations are controlled by pricing provisions in our agreements with ICANN and our prices may be increased only according to those provisions. Retail pricing for these domain name registrations is established by registrars.
Unlike other gTLDs, the prices we charge for .com , .net and .name domain name registrations are subject to restrictions in our agreements with ICANN and our prices may be increased only according to those restrictions. Retail pricing for these domain name registrations is established by registrars.
As was the case with prior amendments, Amendment 35 is not intended to confer federal antitrust immunity on the Company with respect to the . com Registry Agreement. Finally, Amendment 35 clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the . com gTLD.
As was the case with prior amendments, 6 Table of Contents Amendment 35 is not intended to confer federal antitrust immunity on the Company with respect to the . com Registry Agreement. Finally, Amendment 35 clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the . com gTLD.
McPherson 48 Executive Vice President, Engineering, Operations and Chief Security Officer Thomas C. Indelicarto 59 Executive Vice President, General Counsel and Secretary D. James Bidzos has served as Executive Chairman since August 2009 and Chief Executive Officer since August 2011. He served as President from August 2011 to February 2020.
McPherson 49 Executive Vice President, Engineering, Operations and Chief Security Officer Thomas C. Indelicarto 60 Executive Vice President, General Counsel and Secretary D. James Bidzos has served as Executive Chairman since August 2009 and Chief Executive Officer since August 2011. He served as President from August 2011 to February 2020.
As of December 31, 2022, approximately 28% of our global workforce was female, and approximately 43% of our U.S. employees were ethnically and racially diverse. No U.S.-based employees are represented under collective bargaining agreements. Based on periodic monitoring, we believe that our employee turnover is relatively low compared to competitive benchmarks and historical trends.
As of December 31, 2023, approximately 30% of our global workforce was female, and approximately 44% of our U.S. employees were ethnically and racially diverse. No U.S.-based employees are represented under collective bargaining agreements. Based on periodic monitoring, we believe that our employee turnover is relatively low compared to competitive benchmarks and historical trends.
The following table shows a comparison of our consolidated employee headcount, by function: As of December 31, 2022 2021 2020 Employee headcount by function: Cost of revenues 242 235 235 Research and development 255 250 260 Selling, general and administrative 420 419 414 Total 917 904 909 Intellectual Property We rely on a combination of copyrighted software, trademarks, service marks, patents, trade secrets, know-how, restrictions on disclosure, and other methods to protect our proprietary assets.
The following table shows a comparison of our consolidated employee headcount, by function: As of December 31, 2023 2022 2021 Employee headcount by function: Cost of revenues 247 242 235 Research and development 244 255 250 Selling, general and administrative 417 420 419 Total 908 917 904 Intellectual Property We rely on a combination of copyrighted software, trademarks, service marks, patents, trade secrets, know-how, restrictions on disclosure, and other methods to protect our proprietary assets.
In our most recent survey in October of 2022, approximately 85% of our employee population participated. The survey results indicated that our employees remain highly engaged and connected with our mission and values. Another engagement indicator is that the average tenure of our employees is approximately 9 years.
In our most recent survey in October 2023, approximately 93% of our employee population participated. The survey results indicated that our employees remain highly engaged and connected with our mission and values. Another engagement indicator is that the average tenure of our employees is approximately 10 years.
The applications to renew the licenses for .com and .net are currently under review by the Ministry of Industry and Information Technology. Additionally, in many jurisdictions in which we operate, including California, the European Union, the United Kingdom, China and elsewhere, strict new data security and data privacy regulations have been, or are being, adopted.
In China, we are required to maintain licenses for . com, . net, and .cc under regulations issued by the Ministry of Industry and Information Technology. Additionally, in many jurisdictions in which we operate, including California, the European Union, the United Kingdom, China and elsewhere, strict data security and data privacy regulations have been, or are being, adopted.
We have marketing and sales offices in several countries around the world.
We have marketing and sales offices and account management teams in several countries around the world.
Information About Our Executive Officers The following table sets forth information regarding our executive officers as of February 17, 2023: Name Age Position D. James Bidzos 67 Executive Chairman and Chief Executive Officer Todd B. Strubbe 59 President and Chief Operating Officer George E. Kilguss, III 62 Executive Vice President, Chief Financial Officer Danny R.
Information About Our Executive Officers The following table sets forth information regarding our executive officers as of February 15, 2024: Name Age Position D. James Bidzos 68 Executive Chairman and Chief Executive Officer Todd B. Strubbe 60 President and Chief Operating Officer George E. Kilguss, III 63 Executive Vice President, Chief Financial Officer Danny R.
Strategic talent reviews and succession planning occur on a regular basis. Our management training is designed to increase capability in the areas of communication, engagement, coaching, conflict management, and business skills, while fostering an ethical, supportive work environment free from bias and harassment. We sponsor skill development for all employees through our online learning and development platform.
Strategic talent reviews and succession planning occur on a regular basis. We designed our management training to increase capability in the areas of communication, engagement, coaching, conflict management, and business skills, while fostering an ethical, supportive work environment free from bias and harassment.
In addition, we own and maintain our shared registration system that allows registrars to enter new second-level domain names into Verisign-operated central directories and to submit modifications, transfers, re-registrations, and deletions for existing second-level domain names (“Shared Registration System”).
In addition, we own and maintain our shared registration system that allows registrars to enter new second-level domain names into Verisign-operated central directories and to submit modifications, transfers, re-registrations, and deletions for existing second-level domain names (“Shared Registration System”). Domain names in the registries we operate can be registered for between one and 10 years.
We enable 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 . com and . net top-level domains (“TLDs”), which support the majority of global e-commerce.
We help 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 . com and . net top-level domains (“TLDs”), which support the majority of global e-commerce.
Our domain name servers refer requestors to the associated authoritative name servers for second level domains under the gTLDs and ccTLDs we operate, thus enabling DNS resolution for .com and .net domain names and for domain names in a number of other gTLDs and ccTLDs that we manage, or for which we provide back-end registry services.
Our domain name servers refer requestors to the associated authoritative name servers for second level domains in the registries we operate or support, thus enabling DNS resolution for .com and .net domain names and for domain names in the other registries that we operate, or for which we provide technical or back-end services.
Their dedication to these principles forms the backbone that enables Verisign to provide secure, stable, and resilient global connectivity. We recognize the importance of talent and culture in driving an environment that fosters high performance, inclusion, and integrity in all aspects of our work.
Their dedication to these principles forms the backbone that enables Verisign to provide for the security, stability, and resiliency of the DNS and the internet. We recognize the importance of talent and culture in driving an environment that fosters high performance, inclusion, and integrity in all aspects of our work.
In 2022, we continued to build on our strong foundation through roundtable discussions to support open dialogue, training sessions for all employees on the importance of a diverse and inclusive workplace, and growing our employee resource group representation. Verisign continues to partner with organizations that are dedicated to resisting and reversing historical injustice.
In 2023, we reinforced our strong foundation of equity and inclusion through roundtable discussions to support open dialogue, training sessions on the importance of a diverse and inclusive workplace and growing our employee resource group representation. As part of our commitment to diversity, Verisign continues to partner with organizations that are dedicated to resisting and reversing historical injustice.
The current term of this agreement is six years and must be renewed or extended by July 1, 2023.
The .net Registry Agreement was renewed on June 29, 2023. The current term of this agreement is six years and must be renewed or extended by July 1, 2029.
Competition We face competition in the domain name registry space from other gTLD and ccTLD registries that are competing for the business of entities and individuals that are seeking to obtain a domain name registration.
Under certain circumstances, we may also acquire or license technology from third parties. Competition We face competition in the domain name registry space from other gTLD and ccTLD registries that are competing for the business of entities and individuals that are seeking to obtain a domain name registration.
As of December 31, 2022, we had 917 employees, of which 914 were full-time. 853 employees (representing approximately 93% of our total workforce) were based in the U.S., and 64 employees (representing approximately 7% of our total workforce) were based outside the U.S.
As of December 31, 2023, we had 908 employees, of which 907 were full-time. 846 employees (representing approximately 93% of our total workforce) were based in the U.S., and 62 employees (representing approximately 7% of our total workforce) were based outside the U.S.
The fees from our performance of the technical operations for back-end registry services for other gTLDs are based on the terms of our agreements with those respective registry operators .
The fees for our performance of technical or back-end services for .edu and certain other gTLDs are based on the terms of our agreements with those respective businesses .
Revenues for .cc domain names and our IDN gTLDs are based on prices that are not subject to the same pricing restrictions as those for . com , . net and . name . The fees received from operating the . gov g TLD are based on the terms of our agreement with the U.S. government.
Revenues for .cc domain names and our IDN gTLDs are based on prices that are not subject to the same pricing restrictions as those for the . com , . net and . name gTLDs.
To the extent end-users navigate using search engines or social media, as opposed to direct navigation via domain names, or transact on e-commerce platforms, we face competition from search engines such as Google, Bing, Yahoo!, and Baidu, social media networks such as Facebook and WeChat, e-commerce platforms such as Amazon, eBay and Taobao, and microblogging tools such as Twitter.
To the extent end-users establish their online identity using social media, as opposed to domain names, or transact on e-commerce platforms, we face competition from social media networks such as Facebook, Instagram, TikTok, and WeChat, e-commerce platforms such as Amazon, Etsy, eBay, and Taobao, and microblogging tools such as X (formerly Twitter).
Operations Support and Monitoring: Through our network operations center, we have an extensive monitoring capability that enables us to track the status and performance of our critical systems, network and services. Our network operations center monitors our systems continuously.
Our support teams are staffed with trained technical customer support personnel. Support is available for customers 24 hours a day. Operations Support and Monitoring: Through our network operations center, we have an extensive monitoring capability that enables us to track the status and performance of our critical systems, network and services. Our network operations center monitors our systems continuously.
We also publish the root zone file, as the Root Zone Maintainer, under the Root Zone Maintainer Service Agreement (“RZMA”) with ICANN. The RZMA will expire on October 19, 2024, with an automatic renewal, unless earlier terminated.
We also publish the root zone file, as the Root Zone Maintainer, under the Root Zone Maintainer Service Agreement (“RZMA”) with ICANN. The current term of the RZMA ends on October 19, 2024 and is subject to an automatic renewal for another eight-year term, unless earlier modified or terminated.
We take steps to enforce and police Verisign’s trademarks.
We take steps to enforce and monitor potential infringement of Verisign’s trademarks.
We have engineered resiliency and diversity into how we host classes of products throughout our set of interconnected sites to reduce the risk of unknown vendor defects and zero-day security vulnerabilities. • Data Integrity: We use several proprietary systemic integrity checks and validations to ensure data correctness when updating and publishing the DNS records for the gTLDs and ccTLDs we operate. 4 Table of Contents We continuously enhance our infrastructure and capabilities to meet demands to support normal and peak system load and attack volumes based on what we have experienced historically, as well as to address projected internet attack trends.
We have engineered resiliency and diversity into how we host classes of products throughout our set of interconnected sites to reduce the risk of unknown vendor defects and zero-day security vulnerabilities. • Data Integrity: We use several proprietary systemic integrity checks and validations to ensure data correctness when updating and publishing the DNS records for the registries we operate.
We expect that most of the future enhancements to our existing services and our new services will be the result of internal development efforts in collaboration with suppliers, other vendors, customers, and the technology community. Under certain circumstances, we may also acquire or license technology from third parties.
We actively investigate and incubate new concepts and evaluate new business ideas through our innovation pipeline. We expect that most of the future enhancements to our existing services and our new services will be the result of internal development efforts in collaboration with suppliers, other vendors, customers, and the technology community.
In addition, we host a series of instructor-led and on-demand learning sessions designed to build our team’s skills and knowledge required for the future. Our managers regularly hold conversations with employees about career management, coaching, and other development opportunities to help encourage and drive the growth of our talent.
Our learning opportunities are a blend of on-the-job experiences, instructor-led and on-demand learning sessions that meet the unique development needs of our workforce. Our managers regularly hold conversations with employees about career management, coaching, and other development opportunities to help encourage and drive the growth of our talent.
New technologies and the expansion of existing technologies may increase competitive pressure. Our industry is characterized by collaborative relationships involving our competitors. In the past, certain of our competitors have consolidated.
Furthermore, we face competition from providers of web and mobile applications that allow end-users to locate and access content. Alternative namespaces, new technologies and the expansion of existing technologies may increase competitive pressure. Our industry is characterized by collaborative relationships involving our competitors. In the past, certain of our competitors have consolidated.
We also perform the Root Zone Maintainer function under an agreement with ICANN for the core of the internet’s DNS and operate two of the 13 root zone servers that contain authoritative data for the top of the DNS hierarchy. Domain names can be registered for between one and 10 years.
Under separate agreements, we provide technical or back-end services for . edu and for certain other gTLDs. We also perform the Root Zone Maintainer function under an agreement with ICANN for the core of the internet’s DNS and operate two of the thirteen root zone servers that contain authoritative data for the top of the DNS hierarchy.
Diversity, Equity and Inclusion (DEI): We are a diverse organization, and we believe that drives stronger performance, better decision making, and an inclusive culture where differences are valued. We continue to focus on the hiring, retention, and advancement of women and underrepresented populations.
Diversity, Equity and Inclusion (DEI): We are a diverse organization, and we believe that drives stronger performance, better decision making, and an inclusive culture where differences are valued. We strive to create an environment where employees feel a sense of belonging and feel empowered to bring their diverse skills, perspectives and talents to bear.
Our future success will depend, in large part, on our ability to continue to maintain and enhance our current technologies and services and to develop new ones. We actively investigate and incubate new concepts and evaluate new business ideas through our innovation pipeline.
We also invest in R&D that benefits the DNS and internet community in which we operate more broadly. Our future success will depend, in large part, on our ability to continue to maintain and enhance our current technologies and services and to develop new ones.
Services We operate the authoritative directory of and/or the back-end systems for all .com, .net, .cc, .gov, .edu and .name domain names, among others.
We also operate the authoritative directory for all . cc domain names (country code top-level domain, or “ccTLD”). We operate the technical or back-end systems for . edu and certain other gTLDs.
Department of Commerce (“DOC”). We are also the exclusive registry of domain names within certain transliterations of .com and .net in a number of different native languages and scripts (“IDN gTLDs”). As a registry, we maintain the authoritative directory of all second-level domain names (e.g., example.com and example.net) in these gTLDs and IDN gTLDs.
Services We operate the authoritative directory, for all .com, .net, and .name domain names (generic top-level domains, “gTLDs”), as well as for certain transliterations of . com and . net in number of different native languages and scripts (internationalized generic top-level domains, “IDN gTLDs”).
Certain policies can be adopted as Consensus or Temporary Policies, which we are obligated to follow under our agreements with ICANN. For example, in response to the General Data Protection Regulation, ICANN issued a Temporary Policy modifying public access to information from Whois services.
Certain policies can be adopted as Consensus or Temporary Policies, which we are obligated to follow under our agreements with ICANN. We are also subject to country-level laws and regulations in the United States and in international locations.
Research and Development We believe that timely development of new and enhanced services, including monitoring and visualization, registry provisioning platforms, navigation and resolution services, data services, value added services, and new and enhanced ways to ensure the security, stability, and resiliency of our services, is necessary to remain competitive in the marketplace.
Research and Development We believe that timely development of new and enhanced capabilities for our DNS registration and resolution infrastructure and of new and enhanced ways to ensure the security, stability, and resiliency of our services, are vital to protect our business in an ever-increasing cyberthreat environment, to adapt to evolving internet protocols and standards, and to remain competitive in the marketplace.
The team agreements created the foundation for employees to create work schedules that align with corporate and individual needs as well as provide employees the flexibility to manage work-life balance. Our managers received training on managing in a hybrid environment. The training focused on leading with inclusive practices, effective communication, empathy, and accountability.
We support a hybrid work posture where our employees operate under team agreements that set the foundation for operating norms and allows employees to create work schedules that align with corporate and individual needs. This provides employees more flexibility to manage a healthy work-life balance. Our offices continue to be utilized to enhance collaboration, networking, and strategic discussion.
Removed
In addition to our registry agreements with ICANN, we have an agreement with Cocos (Keeling) Islands to operate the country code top-level domain (“ccTLD”) registry for .cc , and other agreements to operate the technical systems for the .gov and .edu sponsored gTLDs.
Added
We operate the .com, .net, and .name gTLDs and the IDN gTLDs under registry agreements with ICANN and also, with respect to the .com gTLD, a Cooperative Agreement with the U.S. Department of Commerce (“DOC”). We operate the . cc ccTLD under an agreement with Cocos (Keeling) Islands.
Removed
These gTLDs and ccTLDs are also supported by our global constellation of DNS servers and Shared Registration System. On November 15, 2022, we transitioned the operation of the .tv ccTLD to another service provider. We also anticipate transitioning the operation of the .gov registry to another operator during 2023, but will continue to operate it until such transition.
Added
We continuously seek to enhance our infrastructure and capabilities to support both normal and peak system load plus attack volumes based on historical experience, as well as to address projected internet attack trends. 4 Table of Contents Call Centers and Service Desk: We provide customer support services over the phone, by email and through web-based self-help systems.
Removed
Call Centers and Service Desk: We provide customer support services over the phone, by email and through web-based self-help systems. Our support teams are staffed with trained technical customer support agents. Support is available for customers 24 hours a day.
Added
We believe that employee development is anchored in acquiring skills and work experiences that meet the needs of the business and the individual. We focus on leadership capability development and provide learning opportunities that enhance technical and soft skills to equip our workforce for current and future growth opportunities.
Removed
In addition, we face competition from these social media and e-commerce platforms if they are used by businesses and individuals to establish an online presence rather than through the use of a domain name. Furthermore, we face competition from providers of web and mobile applications that allow end-users to locate and access content.
Added
Employee Health, Safety and Well-being: We are committed to maintaining a safe and healthy environment for our employees. We have a robust physical safety and security program, including a life safety program which trains employees on appropriate emergency responses.
Removed
We are also subject to country-level laws and regulations in the United States and in international locations. In China, we are required to maintain licenses for . com, . net, and .cc under regulations issued by the Ministry of Industry and Information Technology.
Added
We also offer a holistic wellness experience for our employees through our internal employee wellness program, called Mindful Connections, that supports employees across three pillars: physical, emotional, and financial.
Removed
In 2022, these strategies enabled us to hire a significant number of female and racially or ethnically diverse employees. Hybrid Work Posture: After shifting to remote work during the COVID 19 pandemic, we are now transitioning to a hybrid work posture.
Removed
Over the latter half of 2022, we piloted our new hybrid work posture with a focus on how work gets done versus where it gets done. Leaders met with their teams to develop team agreements that summarized the operating norms and protocols their teams need to use in this new hybrid environment.
Removed
Our offices remain a place for collaboration, networking, and strategic discussion. We continue to provide our employees with the equipment and resources that they require to accomplish their work regardless of location.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn such an event, we could face material liability and exposure from litigation and investigations, fail to meet service level agreements, or be at risk for loss of various security and standards-based compliance certifications needed for operation of our businesses, and customers could be reluctant to use our services, any of which could also adversely affect our reputation and harm our business or cause financial losses that are either not insured against or not fully covered through any insurance. 12 Table of Contents We face risks from the operation of the root server system and our performance of the Root Zone Maintainer functions under the RZMA.
Biggest changeAny such outcomes could also adversely affect our reputation and harm our business or cause financial losses that are either not insured against or not fully covered through any insurance. 12 Table of Contents We face risks from the operation of the root server system and our performance of the Root Zone Maintainer functions under the RZMA.
In addition to this contractual right, we are entitled to increase the annual fee of each .com domain name registration or renewal by up to 7% due to the imposition of any new specifications or policies adopted by ICANN pursuant to the procedures set forth in its bylaws and due process (“Consensus Policies”) or documented extraordinary expense resulting from an attack or threat of attack on the security and stability of the DNS (an “Extraordinary Expense”).
In addition to this contractual right, we are entitled to increase the annual fee of each .com domain name registration or renewal by up to 7% due to the imposition of any new specifications or policies adopted by ICANN pursuant to the procedures set forth in its bylaws and due process (“Consensus Policies”) or to a documented extraordinary expense resulting from an attack or threat of attack on the security and stability of the DNS (an “Extraordinary Expense”).
In addition, our new gTLDs may face additional universal acceptance and usability challenges and it is possible that resolution of domain names within some of these new gTLDs may be blocked within certain state or organizational environments, challenging universal resolvability of these strings and their general acceptance and usability.
In addition, our new gTLDs may face additional universal acceptance and usability challenges and it is possible that resolution of domain names within some of these new gTLDs may be blocked within certain state or organizational environments, challenging universal resolvability of these domain names and their general acceptance and usability.
Some of the software and protocols used in our business are in the public domain or may otherwise become publicly available, which means that such software and protocols are or may become equally available to our competitors. We rely on the strength of our Verisign brand to help differentiate Verisign in the marketing of our products.
Some of the software and protocols used in our business are in the public domain or may otherwise become publicly available, which means that such software and protocols are or may become equally available to our competitors. We rely on the strength of our Verisign brand to help differentiate our products.
Factors that may affect acceptance or adoption of our services in these locations include: • regional internet infrastructure development, expansion, penetration and adoption, and the development, maturity and depth of our sales channels; • acceptance and adoption of substitute products and services that enable online presence without a domain name, including social media, e-commerce platforms, website builders and mobile applications; 17 Table of Contents • increased acceptance and adoption of other substitute products and services, including ccTLDs or other gTLDs; • public perception of the security of our products and services; • the use of mobile applications as the primary engagement mechanism for navigating the internet; and • government regulations affecting the internet, internet access and availability, domain name registrations or the provision of registry services, data security, privacy, or data localization, e-commerce or telecommunications.
Factors that may affect acceptance or adoption of our services in these locations include: • regional internet infrastructure development, expansion, penetration and adoption, and the development, maturity and depth of our sales channels; • acceptance and adoption of substitute products and services that enable online presence without a domain name, including social media, e-commerce platforms, website builders and mobile applications; • increased acceptance and adoption of other substitute products and services, including ccTLDs or other gTLDs; • public perception of the security of our products and services; • the use of mobile applications as the primary engagement mechanism for navigating the internet; and • government regulations affecting the internet, internet access and availability, domain name registrations or the provision of registry services, data security, privacy, or data localization, e-commerce or telecommunications.
A failure to seek and obtain a price increase due to a Consensus Policy or Extraordinary Expense, when available, could negatively affect our operating results. We also have the right under the Cooperative Agreement to seek the removal of these pricing restrictions on the .com gTLD if we demonstrate to the DOC that market conditions no longer warrant these restrictions.
A failure to seek and obtain a price increase due to a Consensus Policy or Extraordinary Expense, when applicable, could negatively affect our operating results. We also have the right under the Cooperative Agreement to seek the removal of these pricing restrictions on the .com gTLD if we demonstrate to the DOC that market conditions no longer warrant these restrictions.
Under the terms of the .com Registry Agreement, we may increase the annual fee of each .com domain name registration or renewal by up to 7% over the previous year in each of the final four years of each six-year period. We can provide no assurance that we will exercise such right to increase the annual fee.
Under the terms of the .com Registry Agreement, we may increase the annual fee of each .com domain name registration or renewal by up to 7% over the previous year in each of the final four years of each six-year period. We can provide no assurances that we will exercise such right to increase the annual fee.
New technologies that encourage internet users to expand the use of third-level domains or alternate identifiers, such as identifiers from social networking, e-commerce platforms and microblogging sites, could also negatively impact the demand for domain names in the gTLDs we operate.
New technologies that encourage internet users to expand the use of third-level domains or alternative identifiers, such as identifiers from social networking, e-commerce platforms and microblogging sites, could also negatively impact the demand for domain names in the gTLDs we operate.
A failure in the operation of our Shared Registration System could also impact our ability to provide up-to-date information in our resolution systems, which could result in breaches of our service level agreements pertaining to our resolution services and impact the resolution of domain names on the internet.
A failure in the operation of our Shared Registration System could also impact our ability to provide up-to-date information in our globally distributed resolution systems, which could result in breaches of our service level agreements pertaining to our resolution services and impact the resolution of domain names on the internet.
If the providers that our connections depend upon do not protect, maintain, improve, and reinvest in their networks or present inconsistent, incorrect, or invalid data regarding DNS responses through their networks, our business could be harmed.
If the providers that our connections depend upon do not protect, maintain, improve, and reinvest in their networks or present inconsistent, incorrect, or invalid data regarding routing information or DNS responses through their networks, our business could be harmed.
The systemic dependencies introduced by RPKI and the relying parties of the RPKI system, including network service providers, are outside of our control, and systems that depend upon the RPKI may be only as secure as the weakest elements of the RPKI system.
The systemic dependencies introduced by the RPKI system and by the relying parties of the RPKI system, including internet service providers, are outside of our control, and systems that depend upon the RPKI may be only as secure as the weakest elements of the RPKI system.
Despite our precautions, it may be possible for an external party to copy or otherwise obtain and use our intellectual property without authorization. Furthermore, the laws of other countries may not protect our proprietary rights in those countries to the same extent U.S. law protects these rights in the U.S.
Despite our precautions, it may be possible for an external party to copy or otherwise obtain and use our intellectual property without authorization. Furthermore, the laws of other countries may not protect our proprietary rights in those countries to the same 18 Table of Contents extent U.S. law protects these rights in the U.S.
Any of these problems or outages could create potential liability and exposure, including from a failure to meet our service level agreements, and could decrease customer satisfaction, harming our business, or resulting in adverse publicity and damage to our reputation or call into question our ability to preserve the security and stability of the internet.
Any of these scenarios could create potential liability and exposure, including from a failure to meet our service level agreements, and could decrease customer satisfaction, harming our business, or resulting in adverse publicity and damage to our reputation or call into question our ability to preserve the security and stability of the internet.
Additionally, each of the .com and .net Registry Agreements provide that if certain terms of these agreements are not similar to such terms generally in effect in the registry agreements of the five largest gTLDs, then a renewal of these agreements would be upon terms reasonably necessary to render such terms to be similar to the registry agreements for those other gTLDs.
Additionally, each of the .com and .net Registry Agreements provide that if certain terms of these agreements are not similar to such terms generally in effect in the registry agreements of the five largest gTLDs, then a renewal of these agreements would be upon terms reasonably necessary to render such terms to be similar to the registry 13 Table of Contents agreements for those other gTLDs.
For example, following the invalidation of the U.S.-EU Safe Harbor by the European Court of Justice (“EUCJ”) in 2015, the European Union and United States agreed to an alternative framework for data transferred from the European Union to the United States, called Privacy Shield. In 2018, Privacy Shield was also invalidated by the EUCJ.
For example, following the invalidation of the U.S.-EU Safe Harbor by the European Court of Justice (“EUCJ”) in 2015, the European Union and United States agreed to an alternative framework for data transferred from the European Union to the United States, called Privacy Shield. In 2018, Privacy Shield 14 Table of Contents was also invalidated by the EUCJ.
Violations of laws, regulations or internal policies and procedures by our employees, contractors or agents could result in financial reporting problems, investigations, fines, penalties, or prohibition on 14 Table of Contents the importation or exportation of our products and services and could have a material adverse effect on our business.
Violations of laws, regulations or internal policies and procedures by our employees, contractors or agents could result in financial reporting problems, investigations, fines, penalties, or prohibition on the importation or exportation of our products and services and could have a material adverse effect on our business.
Our . com and . net Registry Agreements contain “presumptive” rights of renewal upon the expiration of their current terms on November 30, 2024 and June 30, 2023, respectively.
Our . com and . net Registry Agreements contain “presumptive” rights of renewal upon the expiration of their current terms on November 30, 2024 and June 30, 2029, respectively.
To the extent any of our patents are considered “standards essential patents,” in some cases we 18 Table of Contents may be required to license such patents to our competitors on reasonable and non-discriminatory terms or otherwise be limited in our ability to assert such patents.
To the extent any of our patents are considered “standards essential patents,” in some cases we may be required to license such patents to our competitors on reasonable and non-discriminatory terms or otherwise be limited in our ability to assert such patents.
These problems could also result in adverse publicity, decrease the public’s trust in the security of e-commerce, or call into question our ability to preserve the security and stability of the internet. We retain certain customer and employee information in our data centers and various domain name registration systems.
These problems could also result in adverse publicity, decrease the public’s trust in the security of e-commerce and other forms of online presence, or call into question our ability to preserve the security and stability of the internet. We retain certain customer and employee information in our data centers and various domain name registration systems.
In addition, we are subject to social engineering attacks including phishing, spear phishing, whaling, vishing, smishing, and domain spoofing, which are designed to entice people to divulge sensitive information or take actions that, if successful, could pose a material risk to our operations. The number of such attacks is increasing. Social engineering attacks have occurred in concert with ransomware attacks.
In addition, we are subject to social engineering attacks including phishing, spear phishing, whaling, vishing, smishing, and domain spoofing, which are designed to entice people to divulge sensitive information or take actions that, if successful, could pose a material risk to our operations. The number of such attacks is increasing.
ICANN could impose requirements on us through changes to these IETF standards, or new standards, that are inconsistent with our current or future plans, that impose substantial 15 Table of Contents costs on our business, that subject the Company to additional legal risks, or that affect our competitive position.
ICANN could impose requirements on us through changes to these IETF standards, or new standards, that are inconsistent with our current or future plans, that impose substantial costs on our business, that subject the Company to additional legal risks, or that affect our competitive position.
These data centers are vulnerable to damage or interruption, including from natural disasters, such as fires, earthquakes, hurricanes, and floods, power loss, hardware or system failures, physical or electronic break-ins, human error or interference. We are also updating our network architecture in several of our new and existing data centers.
These data centers are vulnerable to damage or interruption, including from natural disasters, such as fires, earthquakes, hurricanes, and floods, power loss, hardware or system failures, physical or electronic break-ins, human error or interference. We are also regularly updating and enhancing our network architecture in several of our new and existing data centers and globally distributed resolution systems.
In addition, we must ensure that our employees stay focused on cybersecurity threats especially in our hybrid work environment, or our ability to effectively manage cybersecurity risks could be impacted.
In addition, we must ensure that our employees stay focused on protecting the Company against cybersecurity threats especially in our hybrid work environment, or our ability to effectively manage cybersecurity risks could be impacted.
While we strive to remediate known vulnerabilities on a timely basis, such vulnerabilities could be exploited before our remediation is effective and if so, could cause systems and service interruptions, data loss and other damages.
While we strive to remediate known vulnerabilities on a timely basis, such vulnerabilities could be exploited before a vulnerability has been disclosed or before our remediation is effective and if so, could cause systems and service interruptions, data loss and other damages.
These and future government actions impacting our ability to operate in China may cause our management’s attention to be diverted, our reputation to be damaged, or our business in China to be adversely affected. Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our income taxes.
These and future government actions could impact our ability to operate in China and may cause our management’s attention to be diverted, our reputation to be damaged, or our business in China to be adversely affected. 15 Table of Contents Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our income taxes.
To the extent we increase our prices, there could be a decrease in the demand and/or renewal rates for .com or .net domain names. If we fail to expand our services into developing and emerging economies in international locations, our business may not grow. We seek to serve new, developing, and emerging economies in international locations to grow our business.
To the extent we increase our prices, there could be a decrease in the demand and/or renewal rates for .com or .net domain names. 17 Table of Contents If we fail to expand our services into developing and emerging economies in international locations, our business may not grow.
Although we carry insurance, we do not carry insurance or designated financial reserves for such interruptions. In addition, our services depend on the secure and efficient operation of the internet connections to and from customers to our Shared Registration System residing in our secure data centers.
We do not carry insurance or designated financial reserves for such interruptions. In addition, our services depend on the secure and efficient operation of the internet connections to and from customers to our Shared Registration System residing in our secure data centers as well as our globally distributed resolution systems.
Escalating political tensions between the United States and China in particular may pose additional risks to our business in China. In 2020 and 2021, the U.S. government announced restrictions on trading with certain Chinese companies. The Chinese government subsequently announced actions that, if implemented, could impose additional restrictions on the Chinese operations of non-Chinese companies.
Political tensions between the United States and China in particular may pose additional risks to our business in China. The U.S. government has imposed restrictions on certain Chinese companies and on trading in certain technologies. The Chinese government has announced actions that, if implemented, could impose additional restrictions on the operations of non-Chinese companies in China.
If we make errors in the publication of the root zone, we may be subject to material claims challenging the RZMA or our performance under it, including tort claims, and we may not have immunity from, or sufficient indemnification or insurance for, such claims.
If we make errors in the publication of the root zone or experience operational issues that impact the timeliness of updates to the root zone data, we may be subject to material claims challenging the RZMA or our performance under it, including tort claims, and we may not have immunity from, or sufficient indemnification or insurance for, such claims.
If our data center facilities or the updated network architecture do not operate as expected, including the ability to quickly switch over between sites, we could experience service interruptions or outages.
If our data center facilities or the updated network architectures, hardware or software upgrades, or security controls do not operate as expected, including the ability to quickly switch over between sites, we could experience service interruptions or outages.
Such undertakings, including our efforts to acquire the .web gTLD, may be unsuccessful and costly. In addition, competing technologies developed by others or the emergence of new industry standards may adversely affect our competitive position or render our services or technologies noncompetitive or obsolete.
Such undertakings, including our efforts to acquire the .web gTLD, may be unsuccessful and costly. In addition, competing technologies developed by others or the emergence of new industry standards may adversely affect our competitive position or render our services or technologies noncompetitive or obsolete. Finally, consolidation within our industry has occurred and is likely to continue to occur.
In addition, proceedings that we initially view as immaterial could prove to be material. Adverse outcomes in lawsuits, audits and investigations, could result in significant monetary damages, including indemnification payments, or injunctive relief that could adversely affect our ability to conduct our business, and may have a material adverse effect on our financial condition, results of operations and cash flows.
Adverse outcomes in 16 Table of Contents lawsuits, audits and investigations, could result in significant monetary damages, including indemnification payments, or injunctive relief that could adversely affect our ability to conduct our business, and may have a material adverse effect on our financial condition, results of operations and cash flows.
These economies are rapidly evolving and may not grow or even if they do grow, our services may not be widely used or accepted there. Accordingly, the demand for our services in these locations is uncertain.
We seek to serve new, developing, and emerging economies in international locations to grow our business. These economies are rapidly evolving and may not grow or even if they do grow, our services may not be widely used or accepted there. Accordingly, the demand for our services in these locations is uncertain.
We depend on the uninterrupted operation of our various systems, secure data centers, and other computer and communication networks. Our systems and operations are vulnerable to damage or interruption from power loss, transmission cable cuts and other telecommunications failures, damage or interruption caused by fire, earthquake, and other natural disasters, intentional acts of vandalism, terrorist attacks, unintentional mistakes, or errors.
Our systems and operations are vulnerable to damage or interruption from power loss, transmission cable cuts and other telecommunications failures, damage or interruption caused by fire, earthquake, and other natural disasters, intentional acts of vandalism, terrorist attacks, unintentional mistakes, or errors.
The severity and duration of a these economic conditions, as well as the timing, strength, and sustainability of any recovery, are unknown and are not within the Company’s control.
The overall economic impact, severity and duration of these conditions, as well as the timing, strength, and sustainability of any recovery, are not known at this time, and are not within the Company’s control.
For example, the government of China has indicated that it will issue, and has issued, new regulations, and has begun to enforce existing regulations, that impose additional costs on, and risks to, our provision of registry services in China and could impact the demand for domain name registrations in China.
For example, the government of China has indicated that it will issue, and has issued, new regulations, and it has begun to enforce existing regulations differently, including by directing certain implementation models for registry services, that impose additional costs on, and risks to, our provision of registry services in China.
Contractual, Regulatory, Legal and Compliance Risk Factors Any loss or modification of our right to operate the . com and . net gTLDs could have a material adverse impact on our business and result in loss of revenues.
See the “Competition” section in Part I, Item 1 of this Form 10-K for further information. Contractual, Regulatory, Legal and Compliance Risk Factors Any loss or modification of our right to operate the . com and . net gTLDs could have a material adverse impact on our business and result in loss of revenues.
However, we can provide no assurances whether we will seek the removal of these restrictions, or whether the DOC would approve the removal of these restrictions. 13 Table of Contents Our .com Registry Agreement, including its pricing provisions, has faced, and could face in the future, challenges, including possible legal challenges, or challenges under ICANN’s accountability mechanisms, from ICANN, registrars, registrants, and others, and any adverse outcome from these challenges could have a material adverse effect on our business.
Our .com Registry Agreement, including its pricing provisions, has faced, and could face in the future, challenges, including possible legal challenges, or challenges under ICANN’s accountability mechanisms, from ICANN, registrars, registrants, and others, and any adverse outcome from these challenges could have a material adverse effect on our business.
Registries, including us, and China-based registrars are also required by some of these regulations to obtain a government-issued license for each gTLD or ccTLD operating in China.
These regulations are impacting the demand for domain name registrations in China. These regulations require registries, including us, and China-based registrars, to obtain a government-issued license for each gTLD or ccTLD operating in China.
In addition, such claims, lawsuits, audits and investigations could involve significant expense and diversion of management’s attention and resources from other matters. Strategic, Business and Operating Risk Factors Deterioration of economic conditions could materially harm our business.
In addition, such claims, lawsuits, audits and investigations could involve significant expense and diversion of management’s attention and resources from other matters.
See the “Competition” section in Part I, Item 1 of this Form 10-K for further information. The evolution of technologies or internet practices and behaviors, the adoption of substitute technologies, or wholesale price increases of domain names in the gTLDs we operate may materially and negatively impact the demand for the domain names for which we are the registry operator.
Strategic, Business and Operating Risk Factors The evolution of technologies or internet practices and behaviors, the adoption of substitute technologies, or wholesale price increases of domain names in the gTLDs we operate may materially and negatively impact the demand for the domain names for which we are the registry operator.
We have been designated as the registry operator for certain new gTLDs, including certain IDN gTLDs. Our new gTLDs may not be as or more successful than the new gTLDs obtained by our competitors.
Our new gTLDs may not be as or more successful than the new gTLDs obtained by our competitors.
Any failure to obtain or renew the required licenses, or to comply with any license requirements or any updates thereto, by us or our China-based registrars could impact our current and future business in China.
Any failure to obtain or renew the required licenses, or to comply with any license requirements or any updates thereto, or any failure to comply with these regulations or directives, by us or our China-based registrars, could result in significant harm to our business in China including the suspension of some or all of our registry services in China.
The Organization for Economic Cooperation and Development (“OECD”) continues to issue guidance that will provide a long-term, multilateral proposal on the taxation of the digital economy. Similarly, some international tax jurisdictions, independent of the OECD, have enacted or may enact new tax regimes aimed at income resulting from digital services.
The Organization for Economic Cooperation and Development (“OECD”) continues to issue guidance that will provide a long-term, multilateral proposal on the taxation of the digital economy. Certain countries have enacted and other countries may enact legislation based on the OECD’s guidance that could impact the taxation of the digital economy.
Our business is, and could continue to be, adversely affected by the deterioration in national or global economic conditions, including high inflation rates, increasing interest rates, disruption in the supply chain, and currency fluctuations, resulting from the continuing economic effects of the COVID-19 pandemic, war and civil unrest, and other political and economic developments.
Economic and Competition Risk Factors Deterioration of economic conditions, particularly in China, continues to negatively impact our business. Our business is, and will likely continue to be, adversely affected by the deterioration in global economic conditions, including high inflation, interest rates, and currency fluctuations, as well as impacts from war, civil unrest, and other political and economic developments.
Finally, consolidation within our 16 Table of Contents industry has occurred and is likely to continue to occur. Our ability to participate and benefit from such consolidations may be limited and consolidation within our industry among our competitors could harm our competitive position and adversely impact our business.
Our ability to participate and benefit from such consolidations may be limited and consolidation within our industry among our competitors could harm our competitive position and adversely impact our business. We have been designated as the registry operator for certain new gTLDs, including certain IDN gTLDs.
Added
Recent advances in artificial intelligence have increased the sophistication of these types of attacks as attackers are able to create more personalized and targeted communications using information derived from people’s relationships, online behavior and preferences. Social engineering attacks have occurred in concert with ransomware attacks.
Added
We depend on the uninterrupted operation of our various systems, secure data centers, points of presence around the world and other computer and communication networks.
Added
In such an event, we could face material liability and exposure from litigation and investigations, fail to meet service level agreements, or be at risk of losing various security and standards-based compliance certifications needed for operation of our businesses, and customers could be reluctant to use our services.
Added
In particular, these conditions are negatively impacting our business in China, where demand for our services has substantially declined due to worsening economic conditions within China and from Chinese regulatory mandates that make it more difficult to register a domain name or establish an online presence using a domain name.
Added
However, we can provide no assurances whether we will seek the removal of these restrictions, or whether the DOC would approve the removal of these restrictions.
Added
Similarly, some international tax jurisdictions, independent of the OECD, have enacted or may enact new tax regimes aimed at income resulting from digital services.
Added
In addition, proceedings that we initially view as immaterial could prove to be material.
Added
To the extent that alternative namespaces introduce user confusion about the relationship between identical or similar-looking identifiers in these namespaces and domain names in the DNS, demand for domain names and user confidence in the value of domain names as unique identifiers could also be negatively impacted.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2022, we owned each of our significant properties, which include our corporate headquarters facility in Reston, Virginia, and data center facilities in New Castle, Delaware and Dulles, Virginia. We also lease a number of smaller office and data center locations around the world.
Biggest changeITEM 2. PROPERTIES As of December 31, 2023, we owned each of our significant properties, which include our current and future corporate headquarters facilities in Reston, Virginia, and data center facilities in New Castle, Delaware and Dulles, Virginia. We also lease a number of smaller office and data center locations around the world.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are also involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, in our opinion, will have a material adverse effect on our financial condition, results of operations, or cash flows. We cannot assure you that we will prevail in any litigation.
Biggest changeIn view of the outcome of the first IRP, the prior imposition of sanctions on Afilias, and the ICANN Board’s decision of April 30, 2023 we believe that Afilias’ continued attempts to obtain the rights to . web are improper and without merit and undertaken for the purpose of delaying the delegation of . web to NDC and its eventual assignment to Verisign. 20 Table of Contents We are also involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, in our opinion, will have a material adverse effect on our financial condition, results of operations, or cash flows.
Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of management attention. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 Table of Contents PART II
We cannot assure you that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of management attention. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 21 Table of Contents PART II
Afilias alleges that the agreement between Verisign and Nu Dotco, LLC (“NDC”) pertaining to .web violated ICANN’s new gTLD Applicant Guidebook. As a result, Afilias claims that ICANN had a duty to disqualify NDC’s bid and award the .web gTLD to Afilias.
Afilias alleged that the agreement between Verisign and Nu Dotco, LLC (“NDC”) pertaining to . web violated ICANN’s policies. ICANN paused the processing of NDC’s . web application during the IRP proceeding.
Furthermore, as expected, the IRP panel’s ruling recommended that ICANN’s Board of Directors consider the objections made regarding the .web auction and then make a decision on the delegation of .web .
On May 20, 2021, the IRP panel dismissed Afilias’ claims pertaining to the invalidation of the . web auction and it recommended that ICANN’s Board of Directors review the objections about the . web auction and thereafter make a decision on the delegation of . web .
Removed
Afilias also claims that ICANN would violate its bylaws pertaining to competition by awarding the .web gTLD to Verisign. Afilias amended its IRP request on March 21, 2019 in part to oppose Verisign’s and NDC’s participation in the IRP.
Added
Further, the IRP panel rejected a subsequent application for reconsideration filed by Afilias, imposing monetary sanctions and concluding that the application was frivolous. Thereafter, ICANN’s Board considered the objections raised pertaining to the . web auction pursuant to a lengthy and detailed process.
Removed
A hearing was held on Verisign’s and NDC’s applications for participation and, on February 12, 2020, the IRP panel permitted Verisign and NDC to participate in aspects of the IRP. In early August 2020, the IRP panel held a hearing on Afilias’ claims. The IRP panel issued its final decision on May 20, 2021.
Added
On April 30, 2023, the Board concluded without objection that Verisign and NDC did not violate any ICANN’s policies and it directed that the processing of NDC’s . web application be resumed.
Removed
Consistent with Verisign’s position, the IRP panel dismissed Afilias’ claims for relief seeking to invalidate the .web auction and to award the .web gTLD to Afilias, concluding that such issues were beyond the IRP panel’s jurisdiction.
Added
Before . web could be awarded to NDC, Afilias filed another IRP on July 14, 2023, and as a result, ICANN’s processing of NDC’s . web application remains paused. Similar to the first IRP, Afilias again seeks to invalidate the . web auction and have . web awarded to Afilias.
Removed
With respect to ICANN, the final decision said that certain actions and/or inaction by ICANN in response to Afilias’ objections did violate aspects of ICANN's bylaws related to transparency and fairness. On June 19, 2021, Afilias filed an application to the IRP panel requesting that it interpret certain terms of, and make certain amendments to, the final decision.
Added
Verisign and NDC intend to seek to participate in this new IRP at the appropriate time.
Removed
The IRP panel denied that application in its entirety on December 21, 2021 finding that it was “frivolous” and sanctioning Afilias by directing it to pay ICANN’s attorney fees.
Removed
On January 16, 2022, ICANN’s Board directed its Board Accountability Mechanisms Committee (“BAMC”) to review the IRP panel’s final decision and to provide the Board with its findings to consider and recommendations to act upon regarding the award and delegation of .web .
Removed
On May 19, 2022, the BAMC requested that the parties submit detailed summaries of their claims along with supporting materials. All parties submitted the requested materials by August 29, 2022. It is expected that after the BAMC makes its findings and recommendations, the ICANN Board will determine the final disposition of .web .

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare Repurchases The following table presents the share repurchase activity during the three months ended December 31, 2022: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)(2) (Shares in thousands) October 1 – 31, 2022 429 $178.98 429 $ 993.8 million November 1 – 30, 2022 339 $191.75 339 $ 928.8 million December 1 – 31, 2022 350 $200.08 350 $ 858.8 million 1,118 1,118 (1) Effective February 10, 2022, our Board of Directors authorized the repurchase of our common stock in the amount of $705.4 million, in addition to the $294.6 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.
Biggest changeShare Repurchases The following table presents the share repurchase activity during the three months ended December 31, 2023: Total Number of Shares Purchased (3) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (3) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)(2) (Shares in thousands) October 1 – 31, 2023 381 $206.20 381 $ 1,264.3 million November 1 – 30, 2023 361 $206.49 361 $ 1,189.9 million December 1 – 31, 2023 331 $211.31 331 $ 1,120.0 million 1,072 1,072 (1) 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.
The graph assumes that $100 (and the reinvestment of any dividends thereafter) was invested in our common stock, the S&P 500 Index and the S&P 500 Information Technology Index on December 31, 2017, and calculates the return annually through December 31, 2022.
The graph assumes that $100 (and the reinvestment of any dividends thereafter) was invested in our common stock, the S&P 500 Index and the S&P 500 Information Technology Index on December 31, 2018, and calculates the return annually through December 31, 2023.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol VRSN. On February 10, 2023, there were 323 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol VRSN. On February 9, 2024, there were 302 holders of record of our common stock.
Purchases made under the program could be effected through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions. 20 Table of Contents Performance Graph The information contained in the Performance Graph shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
(3) Amounts in the table above may not sum due to rounding. 22 Table of Contents Performance Graph The information contained in the Performance Graph shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 VeriSign, Inc. $ 100 $ 130 $ 168 $ 189 $ 222 $ 180 S&P 500 Index $ 100 $ 96 $ 126 $ 149 $ 191 $ 157 S&P 500 Information Technology Index $ 100 $ 100 $ 150 $ 216 $ 290 $ 208 ITEM 6. [Reserved] 21 Table of Contents
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 VeriSign, Inc. $ 100 $ 130 $ 146 $ 171 $ 139 $ 139 S&P 500 Index $ 100 $ 131 $ 156 $ 200 $ 164 $ 207 S&P 500 Information Technology Index $ 100 $ 150 $ 216 $ 291 $ 209 $ 330 ITEM 6. [Reserved] 23 Table of Contents
Removed
(2) 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. The share repurchase program has no expiration date.
Added
The share repurchase 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. (2) Amounts presented are exclusive of the excise tax on share repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

47 edited+8 added−10 removed24 unchanged
Biggest changeAs of December 31, 2022, there was $858.8 million remaining for future share repurchases under the share repurchase program. • We generated cash flows from operating activities of $831.1 million in 2022, which represents an increase of 3% as compared to 2021. 22 Table of Contents • On February 9, 2023, we announced that we will increase the annual registry-level wholesale fee for each new and renewal .com domain name registration from $8.97 to $9.59, effective September 1, 2023.
Biggest changeAs of December 31, 2023, there was $1.12 billion remaining for future share repurchases under the share repurchase program. • We generated cash flows from operating activities of $853.8 million in 2023, which represents an increase of 3% as compared to 2022. 24 Table of Contents • During 2023, we recognized $69.3 million of income tax benefits related to a step-up in tax basis of certain non-U.S. intellectual property, recognition of previously unrecognized income tax benefits as the related statutes of limitations lapsed, and a beneficial change in certain state income apportionment rules. • On June 29, 2023, we renewed the . net Registry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the . net registry through June 30, 2029. • On February 8, 2024, we announced that we will increase the annual registry-level wholesale fee for each new and renewal . com domain name registration from $9.59 to $10.26, effective September 1, 2024.
Overview We are a global provider of domain name registry services and internet infrastructure, enabling internet navigation for many of the world’s most recognized domain names.
Overview 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.
As of December 31, 2022, all of our debt securities have contractual maturities of less than one year. Our cash and cash equivalents are readily accessible. For additional information on our investment portfolio, see Note 2, “Financial Instruments,” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
As of December 31, 2023, all of our debt securities have contractual maturities of less than one year. Our cash and cash equivalents are readily accessible. For additional information on our investment portfolio, see Note 2, “Financial Instruments,” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
In recent years, our stock repurchase program has more than offset the dilutive effect of RSU grants to employees; however, we may reduce the level of our stock repurchases in the future as we may use our available cash for other purposes.
In recent years, our stock repurchase program has more than offset the dilutive effect of RSU grants to employees; however, we may reduce the level of our stock repurchases in the future if and as we use our available cash for other purposes.
You should also carefully review the risks described in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2023.
You should also carefully review the risks described in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2024.
Results of Operations The following table presents information regarding our results of operations as a percentage of revenues: Year Ended December 31, 2022 2021 2020 Revenues 100.0 % 100.0 % 100.0 % Costs and expenses: Cost of revenues 14.1 14.5 14.2 Research and development 6.0 6.1 5.9 Selling, general and administrative 13.7 14.1 14.7 Total costs and expenses 33.8 34.7 34.8 Operating income 66.2 65.3 65.2 Interest expense (5.3) (6.3) (7.1) Non-operating income (loss), net 0.9 (0.1) 1.2 Income before income taxes 61.8 58.9 59.3 Income tax (expense) benefit (14.5) 0.2 5.1 Net income 47.3 % 59.1 % 64.4 % Revenues Our revenues are primarily derived from registrations for domain names in the .com and .net domain name registries.
Results of Operations The following table presents information regarding our results of operations as a percentage of revenues: Year Ended December 31, 2023 2022 2021 Revenues 100.0 % 100.0 % 100.0 % Costs and expenses: Cost of revenues 13.2 14.1 14.5 Research and development 6.1 6.0 6.1 Selling, general and administrative 13.7 13.7 14.1 Total costs and expenses 33.0 33.8 34.7 Operating income 67.0 66.2 65.3 Interest expense (5.0) (5.3) (6.3) Non-operating income (loss), net 3.4 0.9 (0.1) Income before income taxes 65.4 61.8 58.9 Income tax (expense) benefit (10.6) (14.5) 0.2 Net income 54.8 % 47.3 % 59.1 % 25 Table of Contents Revenues Our revenues are primarily derived from registrations for domain names in the .com and .net domain name registries.
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.
Cash flows from investing activities The cash flows from investing activities primarily relate to purchases, maturities and sales of marketable securities, and purchases of property and equipment.
Income tax expense (benefit) Year Ended December 31, 2022 2021 2020 (Dollars in millions) Income tax expense (benefit) 206.4 $ (2.6) $ (64.7) Effective tax rate 23 % — % (9) % 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. taxes on foreign earnings, net of foreign tax credits, offset by a lower foreign effective tax rate.
Income tax expense (benefit) Year Ended December 31, 2023 2022 2021 (Dollars in millions) Income tax expense (benefit) $ 158.9 $ 206.4 $ (2.6) Effective tax rate 16 % 23 % — % 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. taxes on foreign earnings, net of foreign tax credits, offset by a lower foreign effective tax rate.
As of December 31, 2022, there were a total of 0.6 million unvested RSUs which represent potential dilution of less than 1.0%. This maximum potential dilution will only result if all outstanding RSUs vest and are settled.
As of December 31, 2023, there were a total of 0.7 million unvested RSUs which represent potential dilution of less than 1.0%. This maximum potential dilution will only result if all outstanding RSUs vest and are settled.
This section of this Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Significant judgment or interpretation of these laws and regulations is often required in determining our worldwide provision for income taxes, including, for example, the calculations of taxable income in each jurisdiction, deferred taxes, and the availability and amount of deductions and tax credits. We have recognized $234.6 million of deferred tax assets, net as of December 31, 2022.
Significant judgment or interpretation of these laws and regulations is often required in determining our worldwide provision for income taxes, including, for example, the calculations of taxable income in each jurisdiction, deferred taxes, and the availability and amount of deductions and tax credits. We have recognized $301.0 million of deferred tax assets, net as of December 31, 2023.
As of December 31, 2022, we had $750.0 million principal amount outstanding of the 2.70% senior unsecured notes due 2031, $550.0 million principal amount outstanding of the 4.75% senior unsecured notes due 2027, $500.0 million principal amount outstanding of the 5.25% senior unsecured notes due 2025.
As of December 31, 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.
Our income tax expense was $206.4 million for the year ended December 31, 2022. The final taxes payable are also dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from various tax examinations.
Our income tax expense was $158.9 million for the year ended December 31, 2023. The final taxes payable are also dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from various tax examinations.
Net cash provided by operating activities increased in 2022 compared to 2021 primarily due to increases in cash received from customers and interest on investments and a decrease in cash paid for interest , partially offset by an increase in cash paid for income taxes.
Net cash provided by operating activities increased in 2023 compared to 2022 primarily due to increases in cash received from customers and interest on investments, partially offset by an increase in cash paid for income taxes and cash paid to employees.
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. 2022 Business Highlights and Trends • We recorded revenues of $1,424.9 million in 2022, which represents an increase of 7% compared to 2021. • We recorded operating income of $943.1 million during 2022, which represents an increase of 9% as compared to 2021. • We finished 2022 with 173.8 million .com and .net registrations in the domain name base, which represents a 0.2% increase from December 31, 2021. • During 2022, we processed 39.9 million new domain name registrations for . com and . net compared to 44.6 million in 2021. • The final .com and .net renewal rate for the third quarter of 2022 was 73.7% compared to 75.0% for the same quarter of 2021.
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. 2023 Business Highlights and Trends • We recorded revenues of $1,493.1 million in 2023, which represents an increase of 5% compared to 2022. • We recorded operating income of $1,000.6 million during 2023, which represents an increase of 6% as compared to 2022. • We finished 2023 with 172.7 million .com and .net registrations in the domain name base, which represents a 0.6% decrease from December 31, 2022. • During 2023, we processed 39.4 million new domain name registrations for . com and . net compared to 39.9 million in 2022. • The final .com and .net renewal rate for the third quarter of 2023 was 73.5% compared to 73.7% for the same quarter of 2022.
As of December 31, 2022, we had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $236.2 million, net of valuation allowances, but before the offset of certain deferred tax liabilities.
As of December 31, 2023, we had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $301.9 million, net of valuation allowances, but before the offset of certain deferred tax liabilities.
We increased the annual registry-level wholesale fee for each new and renewal . com domain name registration from $7.85 to $8.39 effective September 1, 2021, and from $8.39 to $8.97 effective September 1, 2022.
We increased the annual registry-level wholesale fee for each new and renewal . 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.
The following table presents a comparison of the Company’s geographic revenues: Year Ended December 31, 2022 % Change 2021 % Change 2020 (Dollars in millions) U.S $ 937.6 10 % $ 851.3 6 % $ 804.7 EMEA 226.0 (2) % 231.7 8 % 214.2 China 106.0 4 % 101.7 (11) % 113.7 Other 155.3 9 % 142.9 8 % 132.5 Total revenues $ 1,424.9 7 % $ 1,327.6 5 % $ 1,265.1 Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located.
The following table presents a comparison of the Company’s geographic revenues: Year Ended December 31, 2023 % Change 2022 % Change 2021 (Dollars in millions) U.S $ 994.7 6 % $ 937.6 10 % $ 851.3 EMEA 228.2 1 % 226.0 (2) % 231.7 China 91.6 (14) % 106.0 4 % 101.7 Other 178.6 15 % 155.3 9 % 142.9 Total revenues $ 1,493.1 5 % $ 1,424.9 7 % $ 1,327.6 Revenues in the table above are attributed to the country of domicile and the respective regions in which our registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located.
On February 9, 2023, we announced that we will increase the annual registry-level wholesale fee for each new and renewal .com domain name registration from $8.97 to $9.59, effective September 1, 2023.
On February 8, 2024, we announced that we will increase the annual registry-level wholesale fee for each new and renewal . com domain name registration from $9.59 to $10.26, effective September 1, 2024. 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.
A comparison of revenues is presented below: Year Ended December 31, 2022 % Change 2021 % Change 2020 (Dollars in millions) Revenues $ 1,424.9 7 % $ 1,327.6 5 % $ 1,265.1 The following table compares the . com and .net domain name registrations in the domain name base: As of December 31, 2022 % Change 2021 % Change 2020 .com and .net domain name registrations in the domain name base 173.8 million — % 173.4 million 5 % 165.2 million Revenues increased by $97.3 million in 2022 compared to 2021, primarily due to an increase in revenues from the operation of the registry for the . com gTLD driven by the price increases that became effective September 1, 2022 and 2021, and to a lesser extent, an increase in the domain name base for . com .
A comparison of revenues is presented below: Year Ended December 31, 2023 % Change 2022 % Change 2021 (Dollars in millions) Revenues $ 1,493.1 5 % $ 1,424.9 7 % $ 1,327.6 The following table compares the . com and .net domain name registrations in the domain name base: As of December 31, 2023 % Change 2022 % Change 2021 .com and .net domain name registrations in the domain name base 172.7 million (1) % 173.8 million — % 173.4 million Revenues increased in 2023 compared to 2022, primarily due to an increase in revenues from the operation of the registries for the . com and . net gTLDs driven by the . com price increases that became effective September 1, 2023 and 2022 and the . net price increase that became effective February 1, 2023.
A comparison of selling, general and administrative expenses is presented below: Year Ended December 31, 2022 % Change 2021 % Change 2020 (Dollars in millions) Selling, general and administrative $ 195.4 4 % $ 188.4 1 % $ 186.0 Selling, general and administrative expenses increased by $7.0 million in 2022 compared to 2021 primarily due to increases in stock-based compensation expenses, equipment and software expenses, compensation and benefits expenses, and several other individually insignificant factors, partially offset by an increase in overhead expenses allocated to other cost types.
A comparison of selling, general and administrative expenses is presented below: Year Ended December 31, 2023 % Change 2022 % Change 2021 (Dollars in millions) Selling, general and administrative $ 204.2 4 % $ 195.4 4 % $ 188.4 Selling, general and administrative expenses increased in 2023 compared to 2022 primarily due to increases in compensation and benefits expenses and several other individually insignificant factors, partially offset by an increase in overhead expenses allocated to other cost types.
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, 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.
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 continue to do so in the future. 24 Table of Contents Geographic revenues We generate revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries, including Canada, Japan and Singapore.
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.
Renewal rates are not fully measurable until 45 days after the end of the quarter. • We repurchased 5.5 million shares of our common stock for an aggregate cost of $1.03 billion in 2022.
Renewal rates are not fully measurable until 45 days after the end of the quarter. • We repurchased 4.2 million shares of our common stock for an aggregate cost of $882.8 million in 2023.
We enable 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 . com and . net top-level domains, which support the majority of global e-commerce.
We help enable the security, stability, and resiliency of the 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 . com and . net TLDs, which support the majority of global e-commerce.
As of December 31, 2022, we had approximately 173.8 million . com and . net registrations in the domain name base.
As of December 31, 2023, we had 172.7 million . com and . net registrations in the domain name base.
We had net cash inflows from investing activities in 2022, compared to net cash outflows in 2021, primarily due to an increase in proceeds from maturities and sales of marketable securities, net of purchases of marketable securities, and a decrease in purchases of property and equipment.
We had net cash outflows from investing activities in 2023, compared to net cash inflows from investing activities in 2022, 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.
In 2022, we repurchased 5.5 million shares of our common stock at an average stock price of $187.07 for an aggregate cost of $1.03 billion under our share repurchase program. In 2021, we repurchased 3.3 million shares of our common stock at an average stock price of $215.16 for an aggregate cost of $700.0 million.
In 2023, we repurchased 4.2 million shares of our common stock at an average stock price of $210.28 for an aggregate cost of $882.8 million under our share repurchase program. In 2022, we repurchased 5.5 million shares of our common stock at an average stock price of $187.07 for an aggregate cost of $1.03 billion.
Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenues in the U.S. benefited from several such changes during 2022, while revenues in EMEA were negatively impacted. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.
Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Several such changes benefited revenues in the U.S. and negatively impacted revenues in EMEA during the year ended December 31, 2023.
A comparison of cost of revenues is presented below: Year Ended December 31, 2022 % Change 2021 % Change 2020 (Dollars in millions) Cost of revenues $ 200.7 5 % $ 191.9 7 % $ 180.2 Cost of revenues increased by $8.8 million in 2022 compared to 2021 primarily due to a increases in compensation and benefits expenses, telecommunications expenses, allocated overhead expenses and several other individually insignificant factors.
A comparison of cost of revenues is presented below: Year Ended December 31, 2023 % Change 2022 % Change 2021 (Dollars in millions) Cost of revenues $ 197.3 (2) % $ 200.7 5 % $ 191.9 Cost of revenues decreased in 2023 compared to 2022 primarily due to decreases in registry fees, depreciation expenses, and telecommunication expenses, partially offset by increases in compensation and benefits expenses and allocated overhead expenses.
In summary, our cash flows for 2022, 2021, and 2020 were as follows: Year Ended December 31, 2022 2021 2020 (In millions) Net cash provided by operating activities $ 831.1 $ 807.2 $ 730.2 Net cash provided by (used in) investing activities 355.7 (269.2) (72.3) Net cash used in financing activities (1,035.8) (719.1) (764.9) Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.8) (0.7) — Net increase (decrease) in cash, cash equivalents and restricted cash $ 150.2 $ (181.8) $ (107.0) Cash flows from operating activities Our largest source of operating cash flows is cash collections from our customers.
These items are detailed in Note 11, “Commitments and Contingencies” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. 29 Table of Contents In summary, our cash flows for 2023, 2022, and 2021 were as follows: Year Ended December 31, 2023 2022 2021 (In millions) Net cash provided by operating activities $ 853.8 $ 831.1 $ 807.2 Net cash (used in) provided by investing activities (97.4) 355.7 (269.2) 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 (decrease) increase in cash, cash equivalents and restricted cash $ (133.5) $ 150.2 $ (181.8) Cash flows from operating activities Our largest source of operating cash flows is cash collections from our customers.
Interest expense Interest expense decreased by $8.0 million in 2022 compared to 2021 primarily due to the lower interest rate on our 2031 Notes compared to the 2023 Notes which were redeemed in June 2021. Non-operating income (loss), net See Note 9, “Non-operating Income (Loss), Net” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
Interest expense Interest expense remained consistent during 2023 compared to 2022. Non-operating income (loss), net See Note 9, “Non-operating Income (Loss), Net” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
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.
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. For domain names registered in the .com and .net registries, we receive a fee from registrars per annual registration that is determined pursuant to our agreements with ICANN.
Cash flows from financing activities The changes in cash flows from financing activities primarily relate to share repurchases, proceeds from borrowings, repayment of borrowings, and our employee stock purchase plan.
Cash flows from financing activities The cash flows from financing activities primarily relate to share repurchases and proceeds from our employee stock purchase plan. Net cash used in financing activities decreased in 2023 compared to 2022 primarily due a decrease in share repurchases.
We have the contractual right to increase the fees for . net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2023.
We have the contractual right to increase the fees for . net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029. Effective February 1, 2024, we increased the annual registry-level wholesale fee for each new and renewal . net domain name registration from $9.92 to $10.91.
As of December 31, 2022, there were no borrowings outstanding under our $200.0 million unsecured revolving credit facility that will expire in 2024.
In December 2023, we entered into a new $200.0 million unsecured revolving credit facility which takes the place of our prior unsecured revolving credit facility. As of December 31, 2023, there were no borrowings outstanding under this credit facility, which will expire in 2028.
As of December 31, 2022, there was approximately $858.8 million remaining available for future share repurchases under the share repurchase program which has no expiration date.
As of December 31, 2023, there was approximately $1.12 billion remaining available for future share repurchases under the share repurchase program.
Capitalized labor decreased by $1.5 million due to a shift in work from capital projects to certain non-capital projects and 25 Table of Contents maintenance of existing software products. Allocated overhead expenses increased by $1.3 million primarily due to an increase in total allocable expenses.
Capitalized labor decreased by $2.9 million due to a shift in work from capital projects to certain non-capital projects and maintenance of existing software products.
Cash received from customers increased primarily due to the impact of the . com price increases that were effective on each of September 1, 2021 and September 1, 2022. Cash received from interest on investments increased due to higher interest 27 Table of Contents rates on our investments in debt securities.
Cash received from customers increased primarily due to the impact of the . com price increases that were effective on September 1, 2022 and September 1, 2023, changes in customer deposit balances, and the .net price increase that became effective on February 1, 2023.
These items are detailed in Note 11, “Commitments and Contingencies” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
See Note 10, “Income Taxes” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.
A comparison of research and development expenses is presented below: Year Ended December 31, 2022 % Change 2021 % Change 2020 (Dollars in millions) Research and development $ 85.7 6 % $ 80.5 8 % $ 74.7 Research and development expenses increased by $5.2 million in 2022 compared to 2021 primarily due to a decrease in capitalized labor, an increase in allocated overhead expenses and a combination of several other individually insignificant factors.
Research and development Research and development expenses consist primarily of costs related to research and development personnel, including salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment, support services used in our service and technology development, and allocations of indirect costs such as corporate overhead. 27 Table of Contents A comparison of research and development expenses is presented below: Year Ended December 31, 2023 % Change 2022 % Change 2021 (Dollars in millions) Research and development $ 91.0 6 % $ 85.7 6 % $ 80.5 Research and development expenses increased in 2023 compared to 2022 primarily due to a decrease in capitalized labor and a combination of several other individually insignificant factors.
For domain names registered in the .com and .net registries we 23 Table of Contents receive a fee from registrars per annual registration that is determined pursuant to our agreements with ICANN. 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.
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.
Compensation and benefits expenses increased by $1.4 million due to increased employee salaries expenses and insurances related benefits expenses. Overhead expenses allocated to other cost types increased by $3.1 million due to an increase in the total allocable expenses.
Compensation and benefits expenses increased by $5.4 million due to salary increases and an increase in average headcount. Among other individually insignificant factors, expenses related to travel, contractors and professional services and equipment and software, cumulatively increased by $4.7 million. Overhead expenses allocated to other cost types increased by $3.0 million due to an increase in total allocable expenses.
With the exception of deferred tax assets related to certain state and foreign net operating loss and foreign tax credit carryforwards, we believe 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. 26 Table of Contents Liquidity and Capital Resources The following table presents our principal sources of liquidity: As of December 31, 2022 2021 (In millions) Cash and cash equivalents $ 373.6 $ 223.5 Marketable securities 606.8 982.3 Total $ 980.4 $ 1,205.8 The marketable securities consist primarily of debt securities issued by the U.S.
With the exception of 28 Table of Contents deferred tax assets related to intellectual property, certain state and foreign net operating loss and foreign tax credit carryforwards, we believe 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.
Demand for domain names has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars.
The increase in revenue was partially offset by the elimination of revenue from the operation of the .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.
Compensation and benefits expenses increased by $2.3 million as a result of an increase in expenses related to employee salaries. Telecommunications expenses increased by $1.9 million due to an increase in network costs supporting our operations. Allocated overhead expenses increased by $1.9 million primarily due to an increase in total allocable expenses.
Telecommunication expenses decreased by $2.5 million primarily due to savings on renewals of colocation agreements. Compensation and benefits expenses increased by $3.9 million due to salary increases and an increase in average headcount. Allocated overhead expenses increased by $2.4 million due to an increase in total allocable expenses.
Removed
See Note 10, “Income Taxes” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of the $165.5 million deferred tax asset and corresponding income tax benefit recognized in the fourth quarter of 2021.
Added
In June 2023, we entered into a renewal of the .net Registry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the .net registry through June 30, 2029.
Removed
On July 28, 2022, we announced that we will increase 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. All fees paid to us for .com and .net registrations are in U.S. dollars.
Added
All fees paid to us for .com and .net registrations are in U.S. dollars.
Removed
As discussed in prior periods, we believe that the effects of the COVID-19 pandemic initially led to an increase in the demand for domain names, particularly as businesses and entrepreneurs sought to establish or expand their presence online in the beginning of the pandemic. This increased demand appears to have subsided in 2022.
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. 26 Table of Contents Geographic revenues We generate revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries, including Canada, Japan and Singapore.
Removed
Additionally, revenues from the operation of the . tv registry increased by $6.6 million in 2022 primarily due to the recognition of the remaining deferred revenue as the operation of the . tv registry was transitioned to a new operator in November 2022 and upon completion of the transition, we had no remaining performance obligations to our customers.
Added
Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region. The majority of our revenue growth was generated from registrars based in the U.S. and certain other countries, while revenues from registrars based in China declined during 2023 compared to 2022 due to the lower demand noted above.
Removed
During 2022, revenues increased in all regions except EMEA, which declined due to the factors described above.
Added
Registry fees decreased by $4.3 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. Depreciation expenses decreased by $2.7 million due to a decrease in capital expenditures in recent periods, particularly in 2022.
Removed
Research and development Research and development expenses consist primarily of costs related to research and development personnel, including salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment, support services used in our service and technology development, and allocations of indirect costs such as corporate overhead.
Added
During 2023, we recognized $69.3 million of income tax benefits related to a step-up in tax basis of certain non-U.S. intellectual property, recognition of previously unrecognized income tax benefits as the related statutes of limitations lapsed, and a beneficial change in certain state income apportionment rules.
Removed
Stock-based compensation expenses increased by $3.3 million due to higher projected achievement levels on certain performance-based RSU grants and increases in the total value of RSUs granted in 2022. Equipment and software expenses increased by $3.1 million due to expenses related to network security and other software services.
Added
Liquidity and Capital Resources The following table presents our principal sources of liquidity: As of December 31, 2023 2022 (In millions) Cash and cash equivalents $ 240.1 $ 373.6 Marketable securities 686.3 606.8 Total $ 926.4 $ 980.4 The marketable securities primarily consist of debt securities issued by the U.S.
Removed
During 2021, we completed a transfer of intellectual property between certain non-U.S. subsidiaries. This intellectual property did not have any book value, however the transfer created an amortizable tax basis that resulted in the recognition of a $165.5 million deferred tax asset and a corresponding income tax benefit.
Added
Cash received from interest on investments increased due to higher interest rates on our investments in debt securities. 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. Cash paid to employees increased primarily due to salary increases.
Removed
Cash paid for interest decreased due to the lower interest rate on our 2031 Notes compared to the 2023 Notes which were refinanced in the second quarter of 2021. Cash paid for income taxes increased primarily due to comparatively higher U.S. federal, state, and foreign income taxes.
Removed
Net cash used in financing activities increased in 2022 compared to 2021, primarily due an increase in share repurchases, partially offset by the net impact of the redemption of our 2023 Senior Notes and the issuance of the 2031 Senior Notes during 2021.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed4 unchanged
Biggest changeGains or losses on the foreign currency forward contracts would be largely offset by the remeasurement of our foreign currency denominated assets and liabilities, resulting in an insignificant net impact to income.
Biggest changeGains or losses on the foreign currency forward contracts would be largely offset by the remeasurement of our foreign currency denominated assets and liabilities, resulting in an insignificant net impact to income. Net gains and losses from the Company’s foreign currency exposure and related hedges are included in Non-operating income (loss), net on the Consolidated Statements of Comprehensive Income.
A hypothetical uniform 10% strengthening or weakening in the value of the U.S. dollar relative to the foreign currencies in which our revenues and expenses are denominated would not result in a significant impact to our financial statements. 28 Table of Contents Market Risk Management The fair market values of our senior notes are subject to interest rate risk.
A hypothetical uniform 10% strengthening or weakening in the value of the U.S. dollar relative to the foreign currencies in which our revenues and expenses are denominated would not result in a significant impact to our financial statements. Market Risk Management The fair market values of our senior notes are subject to interest rate risk.
Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 31, 2022, the aggregate fair value of the senior notes issued in 2015, 2017 and 2021 was $1.65 billion, based on available market information from public data sources. 29 Table of Contents
Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 31, 2023, the aggregate fair value of the senior notes issued in 2015, 2017 and 2021 was $1.69 billion, based on available market information from public data sources. 31 Table of Contents
As of December 31, 2022, we held foreign currency forward contracts in notional amounts totaling $32.0 million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies.
As of December 31, 2023, we held foreign currency forward contracts in notional amounts totaling $215.7 million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies.
Foreign Exchange Risk Management We conduct business in several countries and transact in multiple foreign currencies. The functional currency for all of our international subsidiaries is the U.S. dollar.
A hypothetical change in interest rates by 100 basis points would not have a significant impact on the fair value of our investments. 30 Table of Contents Foreign Exchange Risk Management We conduct business in several countries and transact in multiple foreign currencies. The functional currency for all of our international subsidiaries is the U.S. dollar.
As of December 31, 2022, we had $776.1 million of fixed income securities, which consisted of U.S. Treasury bills with maturities of less than one year. A hypothetical change in interest rates by 100 basis points would not have a significant impact on the fair value of our investments.
As of December 31, 2023, we had $744.9 million of fixed income securities, which consisted of U.S. Treasury bills with maturities of less than one year.

Other VRSN 10-K year-over-year comparisons