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What changed in Verisign's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Verisign's 2023 and 2024 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 2024 report.

+185 added−189 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in Verisign's 2024 10-K

185 paragraphs added · 189 removed · 163 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

39 edited+4 added−14 removed65 unchanged
Biggest changeDiversity, 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.
Biggest changeWe 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. These principles are integrated into our operating model and are foundational to our ability to attract, retain, and develop top talent and allow us to drive stronger overall performance and decision making.
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.
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 through our registrars. We provide tools to be used by both registrars and end users to enable them to find relevant domain names.
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”).
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 a number of different native languages and scripts (internationalized generic top-level domains, “IDN gTLDs”).
Our ability to participate and benefit from such collaborative arrangements or consolidations may be limited and such collaborative arrangements and consolidations could harm our competitive position and adversely impact our business. 5 Table of Contents Industry Regulation The DNS is governed under a multi-stakeholder model comprising civil society, the private sector, including for-profit and not-for-profit organizations such as ICANN, governments, including the U.S. government, academia, non-governmental organizations, and international organizations.
Our ability to participate and benefit from such collaborative arrangements or consolidations may be limited and such collaborative arrangements and consolidations could harm our competitive position and adversely impact our business. 5 Table of Contents Industry Regulation The DNS is governed under a multi-stakeholder model comprised of civil society, the private sector, including for-profit and not-for-profit organizations such as ICANN, governments, including the U.S. government, academia, non-governmental organizations, and international organizations.
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.
We attribute our strong retention rates to our employees’ 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.
Amendment 3 to the . com Registry Agreement permits an increase to the Maximum Price (as defined in the .com Registry Agreement) of .com domain name registrations by up to 7% over the previous year in each of the final four years of each six-year period. The first such six-year period began on October 26, 2018.
The . com Registry Agreement permits an increase to the Maximum Price (as defined in the .com Registry Agreement) of .com domain name registrations by up to 7% over the previous year in each of the final four years of each six-year period. The first such six-year period began on October 26, 2018.
The current term of the .com Registry Agreement is six years and must be renewed or extended by November 30, 2024. Although the .com Registry Agreement contains a “presumptive” right of renewal, ICANN could terminate or refuse to renew the Registry Agreement in certain prescribed circumstances.
The current term of the .com Registry Agreement is six years and must be renewed or extended by November 30, 2030. Although the .com Registry Agreement contains a “presumptive” right of renewal, ICANN could terminate or refuse to renew the Registry Agreement in certain prescribed circumstances.
Our critical data services (including domain name registration and global resolution) use advanced storage systems that provide data protection through techniques such as synchronous mirroring and remote replication. We periodically operate services at alternate data centers during maintenance windows to ensure the availability of our data centers for disaster recovery.
Our critical data services (including domain name registration) use advanced storage systems and techniques such as synchronous mirroring and remote replication to our global resolution sites to provide data protection. We periodically operate services at alternate data centers during maintenance windows to ensure the availability of our data centers for disaster recovery.
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).
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, which are described above), (2) changes to the vertical integration provisions, (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).
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.
As of December 31, 2024, approximately 30% of our global workforce was female, and approximately 45% 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.
Bidzos served as Vice Chairman of RSA Security Inc., an internet identity and access management solution provider, from March 1999 to May 2002, and Executive Vice President from July 1996 to February 1999. Prior thereto, he served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986 to February 1999. Todd B.
Mr. Bidzos served as Vice Chairman of RSA Security Inc., an internet identity and access management solution provider, from March 1999 to May 2002, and Executive Vice President from July 1996 to February 1999. Prior thereto, he served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986 to February 1999. George E.
Employee Engagement: In order to deliver on our mission, it is essential to have an engaged workforce that exhibits our values, which include: being stewards of the internet, being passionate about technology, respecting others, exhibiting integrity, taking responsibility, and holding ourselves to a higher standard.
Employee Engagement: In order to deliver on our mission, we believe it is important to have a diverse and engaged workforce that exhibits our values, which include: being stewards of the internet, being passionate about technology, respecting others, exhibiting integrity, taking responsibility, and holding ourselves to a higher standard.
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.
The following table shows a comparison of our consolidated employee headcount, by function: As of December 31, 2024 2023 2022 Employee headcount by function: Cost of revenues 256 247 242 Research and development 246 244 255 Selling, general and administrative 430 417 420 Total 932 908 917 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.
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 also publish the root zone file, as the Root Zone Maintainer, under the Root Zone Maintainer Service Agreement (“RZMA”) with ICANN. The RZMA was renewed on October 20, 2024 and the current term of the RZMA ends on October 20, 2032. The RZMA is subject to an automatic eight-year renewal, unless earlier modified or terminated.
Other significant terms within the . com Registry Agreement include performance specifications and service level agreements, including by example, for the availability of our DNS resolution services, our Shared Registration System, and our Whois services.
Other significant terms within the . com Registry Agreement include performance specifications and service level agreements, including for example, for the availability of our DNS resolution services, our Shared Registration System, and our Registration Data Directory services, which include our Whois and Registration Data Access Protocol services.
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.
Strategic talent reviews and succession planning occur on a regular basis. 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 opportunities that enhance technical and soft skills to equip our workforce for current and future growth.
Our operation of the . com gTLD is also subject to the terms of a Cooperative Agreement with the DOC. The Cooperative Agreement has undergone various amendments with the most recent, Amendment 35, on October 26, 2018.
The restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .com gTLD. Our operation of the . com gTLD is also subject to the terms of a Cooperative Agreement with the DOC. The Cooperative Agreement has undergone various amendments with the most recent, Amendment 35, on October 26, 2018.
From May 2010 to April 2022, he served in various roles of increasing responsibility, including as Chief Security Officer. Prior to joining the Company, Mr.
McPherson has served as Executive Vice President, Technology and Chief Security Officer since April 2022. From May 2010 to April 2022, he served in various roles of increasing responsibility, including as Chief Security Officer. Prior to joining the Company, Mr.
We rely on the strength of our Verisign brand to help differentiate ourselves in the marketing of our products and services. 8 Table of Contents Our principal intellectual property consists of, and our success is dependent upon, proprietary software used in our business and certain methodologies (many of which are patented or for which patent applications are pending) and technical expertise and proprietary know-how we use in both the design and implementation of our current and future registry services.
Our principal intellectual property consists of, and our success is dependent upon, proprietary software used in our business and certain methodologies (many of which are patented or for which patent applications are pending) and technical expertise and proprietary know-how we use in both the design and implementation of our current and future registry services.
Amendment 35 extended the term of the Cooperative Agreement until November 30, 2024, which will automatically renew on the same terms for successive six-year terms unless the DOC provides written notice of non-renewal 120 days prior to the end of the then-current term.
On November 30, 2024, the Cooperative Agreement was automatically renewed on the same terms for a successive six-year term and will automatically renew on November 30, 2030, unless the DOC provides written notice of non-renewal within 120 days prior to the end of the then-current term.
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.
As of December 31, 2024, we had 932 employees, of which 929 were full-time. 863 employees (representing approximately 93% of our total workforce) were based in the U.S., and 69 employees (representing approximately 7% of our total workforce) were based outside the U.S.
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.
Furthermore, demand for domain names could also be negatively impacted by the activities of 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.
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.
For .net domain name registrations, we remit to ICANN a $0.75 fee per annual domain name registration that is collected from registrars. 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 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.
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. 8 Table of Contents Information About Our Executive Officers The following table sets forth information regarding our executive officers as of February 13, 2025: Name Age Position D.
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”).
Other regulations, or changes to regulations, including those related to cybersecurity, may also significantly impact our business operations. .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, under Amendment 35, we have agreed to continue to operate the . com gTLD in a content-neutral manner and to work within ICANN processes to promote the development of content-neutral policies for the operation of the DNS. .net Generic Top-Level Domain Our operation of the . net g TLD is subject to the terms of a registry agreement with ICANN (as amended, the “ .net Registry Agreement”).
The Cooperative Agreement requires the mutual consent of the DOC and the Company to change its terms. In addition, under Amendment 35, we have agreed to continue to operate the . com gTLD in a content-neutral manner and to work within ICANN processes to promote the development of content-neutral policies for the operation of the DNS.
However, compliance costs and other business impacts could become significant if we begin to receive personal registrant information in our . com and . net gTLDs, as regulatory enforcement increases, as courts interpret these regulations, and as new laws and regulations are adopted.
Because we do not possess extensive personal registrant information, we have not yet experienced significant impacts from these regulations. However, compliance costs and other business impacts could become significant if we begin to receive personal registrant information in our . com and . net gTLDs.
We regularly review our workforce policies, procedures, and training programs, as well as our overall workforce demographics, in an effort to create a work environment that is diverse, equitable, inclusive, and free from discrimination.
We regularly review our workforce policies, procedures, and training programs, as well as our overall workforce demographics, in an effort to create a high performing, ethical, respectful, and collaborative work environment where employees can thrive.
For .com and .name domain name registrations, we pay ICANN on a quarterly basis $0.25 for each annual domain name registration. For .net domain name registrations, we remit to ICANN a $0.75 fee per annual . net domain name registration that is collected from registrars.
For .com domain name registrations, we pay ICANN on a quarterly basis $0.2575 for each annual domain name registration and a fixed fee of $6,250. For .name domain name registrations, we pay ICANN on a quarterly basis $0.25 for each annual domain name registration.
From December 2003 to December 2007, he served as the Chief Financial Officer of Towerstream Corporation, a company that delivers high speed wireless internet access to businesses. From 1997 to 2000, he served as the Chief Financial Officer of Stratos Global Corporation, a mobile satellite services company. Mr.
Kilguss, III has served as Chief Financial Officer since May 2012. From April 2008 to May 2012, he was the Chief Financial Officer of Internap Network Services Corporation, an IT infrastructure solutions company. From December 2003 to December 2007, he served as the Chief Financial Officer of Towerstream Corporation, a company that delivers high speed wireless internet access to businesses.
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.
James Bidzos has served as Executive Chairman since August 2009 and Chief Executive Officer since August 2011 and President since April 2024. He also served as President from August 2011 to February 2020.
Kilguss holds an M.B.A. degree from the University of Chicago’s Graduate School of Business and a B.S. degree in Economics and Finance from the University of Hartford. Danny R. McPherson has served as Executive Vice President, Engineering, Operations, and Chief Security Officer since April 2022.
From 1997 to 2000, he served as the Chief Financial Officer of Stratos Global Corporation, a mobile satellite services company. Mr. Kilguss holds an M.B.A. degree from the University of Chicago’s Graduate School of Business and a B.S. degree in Economics and Finance from the University of Hartford. Danny R.
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).
Demand for domain names could be negatively impacted to the extent end-users establish their online identities using social media (such as Facebook, Instagram or Tiktok) or transact business on e-commerce platforms (such as Amazon, Etsy and Taobao) instead of registering domain names.
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.
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. 6 Table of Contents .net Generic Top-Level Domain Our operation of the . net g TLD is subject to the terms of a registry agreement with ICANN (as amended, the “ .net Registry Agreement”).
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.
In our most recent survey conducted in October 2024, approximately 96% of our employee population participated. The survey results indicated that our employees remain highly engaged, have a strong commitment to our mission and values, and are proud to work at Verisign. These sentiments are reflected in our workforce statistics, including our average employee tenure of approximately 10 years.
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.
We also offer a holistic wellness experience for our employees through our Mindful Connections program that supports employees across three pillars: physical, emotional, and financial. We support a hybrid work posture where our employees operate under team agreements that set the foundation for operating norms and allow employees to create work schedules that align with corporate and individual needs.
We take steps to enforce and monitor potential infringement of Verisign’s trademarks.
We take steps to enforce and monitor potential infringement of Verisign’s trademarks. We rely on the strength of our Verisign brand to help differentiate ourselves in the marketing of our products and services.
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.
Our learning opportunities are a blend of on-the-job experiences and instructor-led and on-demand learning sessions that meet the unique 7 Table of Contents development needs of our workforce. Additionally, all employees are required to complete annual ethics and compliance and monthly data security trainings.
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.
This provides employees more flexibility to manage a healthy work-life balance. Our offices remain key to enabling collaboration, networking, and strategic discussion.
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Because we do not possess extensive personal registrant information, we have not yet experienced significant impacts from these regulations.
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In the past, certain of our competitors have consolidated or vertically integrated.
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Amendment 3 also clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .com gTLD and also clarified that our ability to increase prices by 7% over the previous year due to new ICANN Consensus Policies or documented extraordinary expense may occur only in years where we do not otherwise take the price increases described above.
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In 2024, we reinforced the importance of creating a respectful and inclusive workplace through training sessions. Additionally, our five employee resource groups serve to educate and further drive connection and a sense of belonging across the workplace. To monitor engagement levels and well-being we routinely conduct employee surveys and review key workforce statistics.
Removed
Amendment 35 includes the DOC’s consent to the modification of the pricing terms in the . com Registry Agreement (as described above).
Added
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. We are focused on the competitive labor market, and we work diligently to ensure comprehensive sourcing strategies are in place which enable the attraction of the best talent.
Removed
As to the . com gTLD, we are not permitted to acquire, directly or indirectly, control of, or a greater than 15% ownership interest in, any ICANN-accredited registrar that sells . com domain names.
Added
James Bidzos 69 Executive Chairman, President, and Chief Executive Officer George E. Kilguss, III 64 Executive Vice President, Chief Financial Officer Danny R. McPherson 50 Executive Vice President, Technology and Chief Security Officer Thomas C. Indelicarto 61 Executive Vice President, General Counsel and Secretary D.
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These principles are integrated into our operating model and are foundational to our ability to attract, retain, and develop top talent. This commitment serves to create engagement and drives a collaborative and inclusive environment where our employees can thrive. To monitor engagement levels and well-being we routinely conduct employee surveys.
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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.
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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.
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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.
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We are focused on the competitive labor market, and we are working diligently to attract the best talent from a diverse range of sources. We continue to broaden our sourcing strategies, refresh our employment branding, and develop targeted recruitment strategies for specialized skill sets and underrepresented populations.
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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.
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Mr. Bidzos served as a director of VeriSign Japan from March 2008 to August 2010 and served as Representative Director of VeriSign Japan from March 2008 to September 2008. Mr.
Removed
Strubbe has served as Chief Operating Officer since April 2015 and President since February 2020. From September 2009 to April 2015, he served as the President of the Unified Communications Business Segment for West Corporation, a provider of technology-driven communications services. Prior to this, he was a co-founder and Managing Partner of Arbor Capital, LLC.
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He has also served in executive leadership positions at First Data Corporation and CompuBank, N.A. and as an associate and then as an engagement manager with McKinsey & Company, Inc. He also served for five years as an infantry officer with the United States Army. Mr.
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Strubbe holds an M.B.A. degree from Harvard Business School and a B.S. degree from the United States Military Academy at West Point. George E. Kilguss, III has served as Chief Financial Officer since May 2012. From April 2008 to May 2012, he was the Chief Financial Officer of Internap Network Services Corporation, an IT infrastructure solutions company.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+6 added−3 removed135 unchanged
Biggest changeIn addition, it is possible that others may independently develop substantially equivalent intellectual property. If we do not effectively protect our intellectual property, our business could suffer. Additionally, we have filed patent applications with respect to some of our technology in the U.S. Patent and Trademark Office and patent offices outside the U.S.
Biggest changeFurthermore, 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. In addition, it is possible that others may independently develop substantially equivalent intellectual property. If we do not effectively protect our intellectual property, our business could suffer.
If these new technologies, services and capabilities are not effective, our infrastructure could be 10 Table of Contents disrupted, our response times could increase, our ability to meet our service level agreements could be negatively impacted, and our ability to provide reliable service to our customers and the broader internet community could be impeded.
If these new technologies, services and capabilities are not effective, our infrastructure could be disrupted, our response times could increase, our ability to meet our service level 10 Table of Contents agreements could be negatively impacted, and our ability to provide reliable service to our customers and the broader internet community could be impeded.
A failure in the operation or update of the root zone servers, the root zone file, the Root Zone Management System, the TLD name servers, the TLD zone files that we operate, or other network functions, could result in, among other problems, (1) a DNS resolution or other service outage or degradation, (2) the deletion of one or more gTLDs or ccTLDs from the internet, (3) the deletion of one or more second-level domain names from the internet, or (4) a misdirection of one or more domain names to different servers.
A failure in the operation or update of the root zone servers that we operate, the root zone file, the Root Zone Management System, the TLD name servers, the TLD zone files that we operate, or other network functions, could result in, among other problems, (1) a DNS resolution or other service outage or degradation, (2) the deletion of one or more gTLDs or ccTLDs from the internet, (3) the deletion of one or more second-level domain names from the internet, or (4) a misdirection of one or more domain names to different servers.
Contracting with RIRs for the provision of and access to RPKI services carries material operational risks, as described above, as well as material contractual risks, which may expose us to service disruptions and material liability. 11 Table of Contents We could encounter system interruptions or systems failures resulting from activities beyond our direct control that could materially harm our business.
Contracting with RIRs for the provision of and access to RPKI services carries material operational risks, as described above, as well as material contractual risks, which may expose us to service disruptions and material liability. 11 Table of Contents We could encounter system interruptions or system failures resulting from activities beyond our direct control that could materially harm our business.
Laws and regulations, including those designed to restrict who can register and who can distribute domain names or to require registrants to provide additional documentation to register domain names, have, and may in the future, impose significant additional costs on our business and subject us to additional liabilities or could prevent us from operating in certain jurisdictions.
In addition, laws and regulations, including those designed to restrict who can register and who can distribute domain names or to require registrants to provide additional documentation to register domain names, have, and may in the future, impose significant additional costs on our business and subject us to additional liabilities or could prevent us from operating in certain jurisdictions.
Our failure to prevent such attacks, including any successful social engineering attack, could result in our inability to meet our service legal agreements and could otherwise materially harm our business, including from legal claims, governmental investigations and scrutiny, injury to our reputation, and increased costs.
Our failure to prevent such attacks, including any successful social engineering attack, could result in our inability to meet our service level agreements and could otherwise materially harm our business, including from legal claims, governmental investigations and scrutiny, injury to our reputation, and increased costs.
When the factors, events and contingencies described below or elsewhere in this Form 10-K materialize, our business, operating results, financial condition, reputation, cash flows or prospects can be materially adversely affected. In such case, the trading price of our common stock could decline and you could lose part or all of your investment.
When the factors, events and contingencies described below or elsewhere in this Form 10-K materialize, our business, operating results, financial condition, reputation, cash flows or prospects can be materially adversely affected. In such cases, the trading price of our common stock could decline and you could lose part or all of your investment.
ICANN could adopt Consensus Policies or Temporary Policies that (1) are unfavorable to us as the registry operator of .com , .net and other gTLDs we operate, (2) are inconsistent with our current or future plans, (3) impose substantial costs on our business, (4) subject the Company to additional legal risks, or (5) affect our competitive position.
ICANN could adopt Consensus Policies or Temporary 15 Table of Contents Policies that (1) are unfavorable to us as the registry operator of .com , .net and other gTLDs we operate, (2) are inconsistent with our current or future plans, (3) impose substantial costs on our business, (4) subject the Company to additional legal risks, or (5) affect our competitive position.
The business environment is highly competitive and, if we do not compete effectively, we may suffer material adverse impact to our business, including lower demand for our products, reduced gross margins, and loss of market share. We face competition from services that provide an online identity or presence, including other gTLDs and ccTLDs.
The business environment is highly competitive and, if we do not compete effectively, we may suffer material adverse impact to our business, including lower demand for our products, reduced gross margins, and loss of market share. 16 Table of Contents We face competition from services that provide an online identity or presence, including other gTLDs and ccTLDs.
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.
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.
Changes in the way these registrars and registrants are compensated (including changes in methodologies and metrics) by advertisers and advertisement placement networks, such as Google, Baidu and Bing, have adversely affected, and may continue to adversely affect the market for domain names used for this purpose, which has resulted in, and may continue to result in, a decrease in demand and/or the renewal rate for such domain names.
Changes in the way these registrars and registrants are compensated (including changes in methodologies and metrics) by advertisers and advertisement placement networks, such as Google, Baidu and Bing, have adversely affected, and may continue to adversely affect the market for domain names used for this purpose, which has resulted in, and may continue to 17 Table of Contents result in, a decrease in demand and/or the renewal rate for such domain names.
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.
Our . com and . net Registry Agreements contain “presumptive” rights of renewal upon the expiration of their current terms on November 30, 2030 and June 30, 2029, respectively.
Moreover, local laws and customs in many countries differ significantly from those in the U.S. In many foreign countries, particularly in those with developing economies, it is common for others to engage in business practices that are prohibited by our internal policies and procedures or U.S. law or regulations applicable to us.
Moreover, local laws and customs in many countries differ 14 Table of Contents significantly from those in the U.S. In many foreign countries, particularly in those with developing economies, it is common for others to engage in business practices that are prohibited by our internal policies and procedures or U.S. law or regulations applicable to us.
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.
The overall economic impact, severity and duration of these conditions, as well as the timing, strength, and sustainability of any future economic growth or recovery, are not known at this time, and are not within the Company’s control.
New laws, regulations, directives or ICANN polices that require us to obtain and maintain personal information of registrants of domain names in the . com and . net gTLDs could impose material compliance costs and could create new, material legal and others risks to our business.
New laws, regulations, directives or ICANN policies that require us to obtain and maintain personal information of registrants of domain names in the . com and . net gTLDs could impose material compliance costs and could create new, material legal and other risks to our business.
In order to remain competitive, we must continually demonstrate the security, stability, and resiliency of our services and must adopt and support new technologies to adapt our services to changing technologies, market conditions, and our customers’ and internet users’ preferences and practices.
In order to remain competitive, we must continually demonstrate the security, stability, and resiliency of our services and must adopt and support new technologies to adapt our services to changing cybersecurity threats, regulations, application environments, market conditions, and our customers’ and internet users’ preferences and practices.
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.
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.
While we have adopted mitigation techniques, procedures, and strategies to defend against DDoS attacks, and have successfully mitigated DDoS attacks to date, there can be no assurance that we will be able to defend against every attack, especially as the attacks increase in size and sophistication.
We have successfully mitigated DDoS attacks to date; however, there can be no assurance that we will be able to defend against every attack, especially as the attacks increase in size and sophistication.
Our activities may also include disabling one or more domain names in the gTLDs or ccTLDs we operate including in response to governmental directives and orders in those jurisdictions in which we operate. Activities such as these have resulted in, and could in the future result in, significant litigation and could harm our reputation.
We may also disable one or more domain names in the gTLDs or ccTLD we operate including in response to reports of suspected threats and abuse, governmental directives and court orders in those jurisdictions in which we operate. Activities such as these have resulted in, and could in the future result in, significant litigation and could harm our reputation.
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.
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.
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.
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.
Although the overall root server system is redundant and dispersed, a failure or interruption in the operation of the root server system could impact the effectiveness of our . com and . net authoritative servers and therefore negatively impact directory services necessary for the operation of the internet.
Although the overall root server system is redundant and dispersed, an infrastructure or services failure or other disruption of one or more organizations involved in the operation of the root server system could impact the effectiveness of our . com and . net authoritative servers and therefore negatively impact directory services necessary for the operation of the internet.
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.
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, including our major international tax jurisdictions, have enacted legislation based on the OECD’s guidance.
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.
We are also regularly updating and enhancing our network architecture in our data centers and globally distributed resolution systems. 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.
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.
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.
Because such employees are in high demand by our competitors and other companies, we must be able to attract, integrate, retain and motivate such highly skilled employees and leaders. Failure to attract and retain such employees and to effectively implement succession plans for these employees could harm our business.
Because such employees are in high demand by our competitors and other companies, we must be able to attract, integrate, retain and motivate such highly skilled employees and leaders.
Most of the computing infrastructure for our Shared Registration System is located at, and most of our customer information is stored in, data centers we own or lease and operate. In 2019, we expanded some of our data center services to a leased data center facility.
Most of the computing infrastructure for our Shared Registration System is located at, and most of our customer information is stored in, data centers we own or lease.
For example, we are engaged in activities to help mitigate security threats and other forms of DNS abuse in the gTLDs and ccTLDs we operate and we are involved in community efforts that could increase and expand such activities including potential new contractual obligations.
For example, we are engaged in activities to help mitigate security threats and other forms of DNS abuse in the gTLDs and ccTLD we operate and we are involved in community efforts that have increased and expanded such activities to include contractual obligations.
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.
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.
Although we cannot predict the nature or outcome of such changes or the likelihood of such legislative proposals being adopted in the U.S. or throughout the world, any or all of these changes in tax laws could increase our taxes and adversely impact our financial condition and cash flow.
Although we cannot predict the nature or outcome of such changes or the likelihood of such legislative proposals being adopted in the U.S. or throughout the world, any or all of these changes in tax laws, including but not limited to changes in scope of OECD’s Pillar One, as well as new guidance issued and enacted pertaining to OECD’s Pillar Two, could increase our taxes and adversely impact our financial condition and cash flow.
While we deploy advanced tools and conduct continuous security awareness training to address social engineering attacks, such measures cannot provide absolute security. Similarly, although we implement redundant architecture and multiple recovery solutions, and conduct periodic exercises to mitigate the threat of ransomware, we still may be subject to successful ransomware attacks.
The various measures we take to mitigate cyber-attacks, including our deployment of advanced tools and implementation of redundant architecture and multiple recovery solutions, as well as conducting continuous security awareness training to address social engineering attacks and periodic exercises to mitigate the threat of ransomware cannot provide absolute security. We still may be subject to successful cyber attacks.
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.
Political tensions between the United States and China, including tensions resulting from tariffs or proposed tariffs, 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.
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.
In particular, demand for our services has substantially declined in China and may continue to decline further due to lower economic growth and as a result of Chinese regulatory mandates that make it more difficult to register a domain name or establish an online presence using a domain name.
Similarly, some international tax jurisdictions, independent of the OECD, have enacted or may enact new tax regimes aimed at income resulting from digital services.
To date the legislation has had a limited impact on us, but the impact of future legislation is uncertain. Similarly, some international tax jurisdictions, independent of the OECD, have enacted or may enact new tax regimes aimed at income resulting from digital services.
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.
These data centers, which are concentrated in the same geographic region, 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.
In addition, such claims, lawsuits, audits and investigations could involve significant expense and diversion of management’s attention and resources from other matters.
In addition, such claims, lawsuits, audits and investigations could involve significant expense and diversion of management’s attention and resources from other matters. Economic and Competition Risk Factors Challenging global economic conditions have in the past and may in the future negatively impact our business.
We are subject to income taxes in both the U.S. and numerous international jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our income taxes. We are subject to income taxes in both the U.S. and numerous international jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes.
Intellectual Property Risk Factors We rely on our intellectual property rights to protect our proprietary assets, and any failure by us to protect or enforce, or any misappropriation of, our intellectual property could materially harm our business. Our success depends in part on our internally developed technologies and related intellectual property.
Failure to attract and retain such employees and to effectively implement succession plans for these employees could harm our business. 18 Table of Contents Intellectual Property Risk Factors We rely on our intellectual property rights to protect our proprietary assets, and any failure by us to protect or enforce, or any misappropriation of, our intellectual property could materially harm our business.
For example, we could incur material costs to protect such information from unauthorized disclosure and, under GDPR, to ensure authorized disclosures are permitted. Failure to properly protect such information, or failure to comply with GDPR, could expose the Company to material costs and penalties.
Failure to properly protect such information, if obtained, or failure to comply with GDPR or NIS 2, could expose the Company to material costs and penalties.
Such activities include, for example, receiving reports of suspected threats and abuse from appropriate “trusted notifiers” (typically involving national and international law enforcement) and notifying registrars or others of domain names associated with suspected malicious or illegal activity.
For example, we receive reports of suspected threats and abuse and we notify registrars or others of domain names associated with suspected malicious or illegal activity.
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.
The Chinese government has announced actions that, if implemented, could impose additional restrictions on the operations of non-Chinese companies in China. These and possible 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.
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.
Our success depends in part on our internally developed technologies and related intellectual property. Despite our precautions, it may be possible for an external party to copy or otherwise obtain and use our intellectual property without authorization.
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.
Factors such as inflation, interest rates, currency fluctuations, trade barriers, tariffs, war, civil unrest, and other political and economic developments and their impact on global economic conditions have in the past and may in the future negatively impact our business.
Some registrars and registrants purchase and resell domain names at an increased price in a secondary market.
In addition, applications using artificial intelligence could be transformational in ways that cannot be predicted at this time. To the extent such applications impact the demand for domain names, it could have a material impact on our business. Some registrars and registrants purchase and resell domain names at an increased price in a secondary market.
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.
Such challenges have arisen, and could in the future, arise from trade organizations, the media, registrars, registrants, and others, particularly when these agreements are being renewed. These challenges, if successful, and even when unmeritorious and/or unsuccessful, could have a material adverse effect on our business.
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.
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, and the Cooperative Agreement, including their pricing provisions, have been challenged, and could face challenges in the future, through publicity campaigns, governmental scrutiny, media interest, legal challenges, or challenges under ICANN’s accountability mechanisms.
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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.
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In the U.S., new or modified Executive Orders or legislation involving the internet, cybersecurity, or in other areas could result in new obligations that could negatively impact our business.
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In 2022, the United States and European Union announced a new, but undefined data transfer framework, which once finalized, also could be subject to further legal challenges.
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For example, the data transfer frameworks between the U.S. and E.U. have been subject to legal challenges, which has created uncertain legal obligations.
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In addition, proceedings that we initially view as immaterial could prove to be material.
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For example, in 2023, the European Union adopted the Network and Information Security Directive (“NIS 2”) that addresses registrant data. Our current obligations do not require us to obtain and maintain personal information of registrants of domain names. Specific E.U. member state implementations of NIS 2 could create uncertainty about, or change, these obligations.
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In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Added
See the “Competition” section in Part I, Item 1 of this Form 10-K for further information.
Added
Additionally, we have filed patent applications with respect to some of our technology in the U.S. Patent and Trademark Office and patent offices outside the U.S.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHe has served in various capacities on various technology working groups and standards setting organizations including the Internet Architecture Board and the Internet Engineering Task Force. Our CSO manages a converged security, engineering and operations organization that helps to ensure that cyber and other security priorities are appropriately integrated throughout the Company.
Biggest changeOur CSO manages a converged security, engineering and operations organization that helps to ensure that cyber and other security priorities are appropriately integrated throughout technology and operations, as well as more broadly across the Company. Our CISO, Chief Information Officer (“CIO”), Chief Technology Officer (“CTO”) and the head of architecture and engineering report to our CSO.
For more information on the Company’s cybersecurity risks and their possible impact on our business strategy, results of operations, or financial condition see Risk Factors – Cybersecurity and Technology Risk Factors in Part I, Item 1A of this Form 10-K.
For more information on the Company’s cybersecurity risks and their possible impact on our business strategy, results of operations, or financial condition see “Risk Factors – Cybersecurity and Technology Risk Factors” in Part I, Item 1A of this Form 10-K.
Our cybersecurity program incorporates several control and best practice regimes, including for example, the Center for Internet Security (CIS) controls. We conduct regular internal and external assessments, audits, and tabletop exercises to assess security vulnerabilities, control compliance and incident preparedness.
Our cybersecurity program incorporates several control and best practice regimes, including for example, the Center for Internet Security (“CIS”) controls. We conduct regular internal and external assessments, audits, and tabletop exercises to assess security vulnerabilities, control compliance and incident preparedness.
The cybersecurity program includes, among other items, vulnerability and patch management, network and data segmentation, application of zero-trust principles, automated ingestion of multi-source threat intelligence, end point and network detection/response, application security, secure configurations for operating systems and databases, continuous security monitoring and 24/7 security operations.
The cybersecurity program includes, among other items, vulnerability and patch management, segmentation, identity and access management, application of zero-trust principles, automated ingestion of multi-source threat intelligence, end point and network detection/response, application security, secure configurations for operating systems and databases, continuous security monitoring and 24/7 security operations.
The Cybersecurity Committee and the full Board receive quarterly status reports on the cybersecurity program from the CSO, addressing progress and updates on various cybersecurity functions and initiatives including, for example, compliance, assessments, security operations and incident response, business resilience, distributed denial of service attacks, data privacy, technology and asset management, controls, and vulnerability management.
The Cybersecurity Committee and the full Board receive quarterly status reports on the cybersecurity program from the CSO, addressing progress and updates on various cybersecurity functions and initiatives including, for example, compliance, assessments, security operations and incident response, business resilience, DDoS attacks, data privacy, technology and asset management, controls, and vulnerability management.
Our GRC team assesses the cybersecurity practices of current and prospective service providers for compliance with our requirements, and our procurement functions seek terms and conditions, including by example, audit rights and vulnerability or breach disclosure obligations, to enhance our defenses against supply chain risks.
Our cybersecurity program also focuses on risks from the use of third-party services. Our GRC team assesses the cybersecurity practices of current and prospective service providers for compliance 19 with our requirements, and our procurement functions seek terms and conditions, including by example, audit rights and vulnerability or breach disclosure obligations, to enhance our defenses against supply chain risks.
The program has dedicated business resilience, insider threat and governance, risk and compliance (GRC) functions. Incident management is governed by our Incident Response Plan that assigns incident command and control parameters and escalation protocols to management and the Board of Directors. Our cybersecurity program also focuses on risks from the use of third-party services.
The program has dedicated business resilience, insider threat and governance, risk and compliance (“GRC”) functions that report to our Chief Information Security Officer (“CISO”). Incident management is governed by our Incident Response Plan that assigns incident command and control parameters and escalation protocols to management and the Board of Directors.
The Committee reviews our incident response plan, including escalation protocols, business continuity program plans, program budgets and resources, and our cybersecurity insurance program. The Committee also reviews and discusses the activities of the Council at each of its regularly scheduled meetings. The Committee operates pursuant to a written charter and calendar, each of which are reviewed on an annual basis.
The Cybersecurity Committee assists the Board with its oversight of the Company’s cybersecurity risks and our cybersecurity program. The Committee reviews our incident response plan, including escalation protocols, business continuity program plans, program budgets and resources, and our cybersecurity insurance program. The Committee also reviews and discusses the activities of the Council at each of its regularly scheduled meetings.
Management and the Board’s Cybersecurity Committee reviews the results of these exercises, audits and assessments. 19 We also actively engage with third parties, such as key vendors, auditors, consultants, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our cybersecurity program.
We also actively engage with third parties, such as key vendors, auditors, consultants, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our cybersecurity program. We monitor emerging data protection laws and cybersecurity and privacy regulatory requirements and implement changes to our standards and processes for continued compliance.
In addition, a management-level Safety and Security Council (“Council”) chaired by our CEO and comprised of our CSO and other senior officers, provides cross-functional coordination for the management of the Company’s security functions. The Council receives information, typically monthly, on the status of the cybersecurity program, initiatives, incidents, cybersecurity risks, assessments, and threats, among other items.
These and other experienced employees lead the teams responsible for implementing various parts of our cybersecurity program. In addition, a management-level Safety and Security Council (“Council”) chaired by our CEO and comprised of our CSO, General Counsel, and other senior officers, provides cross-functional coordination for the management of the Company’s security functions.
These assessments and exercises include, for example, red team exercises simulating external attacks, crisis management exercises, including incident response, and internal audit reviews.
These assessments and exercises include red team exercises simulating external attacks, threat and vulnerability assessments, ransomware, application, and secure image testing, crisis management exercises, including incident response, and internal audit reviews. Management and the Board’s Cybersecurity Committee reviews the results of these exercises, audits and assessments.
The Chair of the Board’s Cybersecurity Committee is the Board’s liaison to the Council and attends the regular meetings of the Council. The Cybersecurity Committee assists the Board with its oversight of the Company’s cybersecurity risks and our cybersecurity program.
The Council receives information, typically monthly, on the status of the cybersecurity program, initiatives, incidents, cybersecurity risks, assessments, and threats, among other items. The Chair of the Board’s Cybersecurity Committee is the Board’s liaison to the Council and attends the regular meetings of the Council.
Our cybersecurity strategy and program are led by our Executive Vice President and Chief Security Officer (CSO), who reports to the CEO. Our CSO is Danny McPherson, who has over 25 years of experience in technology and cybersecurity leadership positions and has authored several security-related books and numerous patents, IP standards, and security research publications.
Our CSO has over 25 years of experience in technology and cybersecurity leadership positions and has authored several security-related books and numerous patents, IP standards, and security research publications. He has served in various capacities on various technology working groups and standards setting organizations including the Internet Architecture Board and the Internet Engineering Task Force.
We monitor emerging data protection laws and cybersecurity and privacy regulatory requirements and implement changes to our standards and processes for continued compliance. Our cybersecurity program also includes employee and contractor training, which primarily consists of monthly educational videos, annual trainings and certifications, and phishing exercises.
Our cybersecurity program also includes employee and contractor training, which primarily consists of monthly educational videos, annual trainings and certifications, and phishing exercises. Our cybersecurity strategy and program are led by our Executive Vice President of Technology and Chief Security Officer (“CSO”), who reports to the CEO.
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Our Chief Information Security Officer, Chief Information Officer and the head of architecture and engineering report to our CSO. These and other experienced employees lead the teams responsible for implementing various parts of our cybersecurity program.
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The Committee operates pursuant to a written charter and calendar, each of which are reviewed on an annual basis.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we owned each of our significant properties, which include our 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 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.
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.
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
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
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.
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. 20 Table of Contents 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.
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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.
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Similar to the first IRP, Afilias again seeks to invalidate the . web auction and have . web awarded to Afilias. On April 11, 2024, Verisign and NDC submitted a written request to participate in the IRP. Additional IRP hearings and briefings are scheduled during 2025.
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Verisign and NDC intend to seek to participate in this new IRP at the appropriate time.
Added
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. We cannot assure you that we will prevail in any litigation.

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, 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.
Biggest changeShare Repurchases The following table presents the share repurchase activity during the three months ended December 31, 2024: 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, 2024 548 $185.21 548 $ 1,181.2 million November 1 – 30, 2024 575 $181.46 575 $ 1,076.9 million December 1 – 31, 2024 277 $195.90 277 $ 1,022.7 million 1,399 1,399 (1) Effective July 25, 2024, our Board of Directors authorized the repurchase of our common stock in the amount of $1.11 billion, in addition to the $388.0 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, 2018, and calculates the return annually through December 31, 2023.
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, 2019, and calculates the return annually through December 31, 2024.
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.
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 7, 2025, there were 289 holders of record of our common stock.
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
The stock price performance on the following graph is not necessarily indicative of future stock price performance. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 VeriSign, Inc. $ 100 $ 112 $ 132 $ 107 $ 107 $ 107 S&P 500 Index $ 100 $ 118 $ 152 $ 125 $ 157 $ 197 S&P 500 Information Technology Index $ 100 $ 144 $ 194 $ 139 $ 219 $ 300 ITEM 6. [Reserved] 23 Table of Contents

Item 7. Management's Discussion & Analysis

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

51 edited+8 added−6 removed22 unchanged
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.
Biggest changeAs of December 31, 2024, there was $1.02 billion remaining for future share repurchases under the share repurchase program. • We generated cash flows from operating activities of $902.6 million in 2024, which represents an increase of 6% as compared to 2023. • Effective September 1, 2024, we increased the annual registry-level wholesale fee for each new and renewal . com domain name registration from $9.59 to $10.26. 24 Table of Contents • On November 25, 2024, we renewed the . com Registry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the . com registry through November 30, 2030.
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.
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 .com and .net domain names and may continue to do so in the future.
Cost of revenues Cost of revenues consist primarily of salaries and employee benefits expenses for our personnel who manage the operational systems, depreciation expenses, operational costs associated with the delivery of our services, fees paid to ICANN, customer support and training, costs of facilities and computer equipment used in these activities, telecommunications expense and allocations of indirect costs such as corporate overhead.
Cost of revenues Cost of revenues consists primarily of salaries and employee benefits expenses for our personnel who manage the operational systems, depreciation expenses, operational costs associated with the delivery of our services, fees paid to ICANN, customer support and training, costs of facilities and computer equipment used in these activities, telecommunications expense and allocations of indirect costs such as corporate overhead.
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.
As of December 31, 2024, 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 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.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 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, 2023.
See Note 10, “Income Taxes” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.
See Note 11, “Income Taxes” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.
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.
As of December 31, 2024, 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.
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.
We also derive revenues from operating domain name registries and technical systems for several other gTLDs and one ccTLD, all of which are not significant in relation to our consolidated revenues. For domain names registered in the .com and .net registries, we receive a fee from registrars per annual registration that is determined pursuant to our agreements with ICANN.
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.
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 2025.
Growth in the number of domain name registrations under our management may be hindered by certain factors, including overall economic conditions, competition from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, and ongoing changes in the internet practices and behaviors of consumers and businesses.
The number of domain name registrations under our management may be negatively impacted by certain factors, including overall economic conditions, competition from ccTLDs, other gTLDs, services that offer alternatives for an online presence, such as social media, and ongoing changes in the internet practices and behaviors of consumers and businesses.
Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the DOC.
Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the 25 Table of Contents extent permitted by ICANN and the DOC.
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.
Income tax expense Year Ended December 31, 2024 2023 2022 (Dollars in millions) Income tax expense $ 236.2 $ 158.9 $ 206.4 Effective tax rate 23 % 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.
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.
With the exception of a portion of 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.
Under the . com Registry Agreement, we are permitted to increase the price of a .com domain name registration by up to 7% in each of the final four years of each six-year period beginning on October 26, 2018.
Under the . com Registry Agreement, we are permitted to increase the price of a .com domain name registration by up to 7% in each of the final four years of each six-year period. The first such six-year period began on October 26, 2018.
This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
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.
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 $281.3 million of deferred tax assets, net as of December 31, 2024.
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.
Our income tax expense was $236.2 million for the year ended December 31, 2024. 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.
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.
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. 2024 Business Highlights and Trends • We recorded revenues of $1,557.4 million in 2024, which represents an increase of 4% as compared to 2023. • We recorded operating income of $1,058.2 million during 2024, which represents an increase of 6% as compared to 2023. • We finished 2024 with 169.0 million .com and .net registrations in the domain name base, which represents a 2.1% decrease from December 31, 2023. • During 2024, we processed 37.4 million new domain name registrations for . com and . net compared to 39.4 million in 2023. • The final .com and .net renewal rate for the third quarter of 2024 was 72.2% compared to 73.5% for the same quarter of 2023.
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.
As of December 31, 2024, we had $750.0 million principal amount outstanding of 2.70% senior unsecured notes due 2031, $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027, and $500.0 million principal amount outstanding of 5.25% senior unsecured notes due April 2025 (“2025 Senior Notes”).
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.
Results of Operations The following table presents information regarding our results of operations as a percentage of revenues: Year Ended December 31, 2024 2023 2022 Revenues 100.0 % 100.0 % 100.0 % Costs and expenses: Cost of revenues 12.3 13.2 14.1 Research and development 6.2 6.1 6.0 Selling, general and administrative 13.6 13.7 13.7 Total costs and expenses 32.1 33.0 33.8 Operating income 67.9 67.0 66.2 Interest expense (4.8) (5.0) (5.3) Non-operating income, net 2.5 3.4 0.9 Income before income taxes 65.6 65.4 61.8 Income tax expense (15.2) (10.6) (14.5) Net income 50.4 % 54.8 % 47.3 % Revenues Our revenues are primarily derived from registrations for domain names in the .com and .net domain name registries.
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.
We increased 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, and from $9.59 to $10.26 effective September 1, 2024.
As of December 31, 2023, there was approximately $1.12 billion remaining available for future share repurchases under the share repurchase program.
As of December 31, 2024, there was approximately $1.02 billion remaining available for future share repurchases under the share repurchase program.
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.
As of December 31, 2024, we had deferred tax assets arising from deductible temporary differences, tax losses, and tax credits of $282.2 million, net of valuation allowances, but before the offset of certain deferred tax liabilities.
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.
We had net cash inflows from investing activities in 2024, compared to net cash outflows from investing activities in 2023, 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, primarily related to the purchase of a building in 2023.
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.
Effective July 25, 2024, our Board of Directors authorized the repurchase of our common stock in the amount of $1.11 billion, in addition to the $388.0 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.
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.
A comparison of selling, general and administrative expenses is presented below: Year Ended December 31, 2024 % Change 2023 % Change 2022 (Dollars in millions) Selling, general and administrative $ 211.1 3 % $ 204.2 4 % $ 195.4 Selling, general and administrative expenses increased in 2024 compared to 2023 primarily due to increases in compensation and benefits expenses, equipment and software expenses and professional services expenses, partially offset by an increase in overhead expenses allocated to other cost types.
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.
In 2024, we repurchased 6.6 million shares of our common stock at an average stock price of $183.84 for an aggregate cost of $1.21 billion under our share repurchase program. 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.
As of December 31, 2023, we had 172.7 million . com and . net registrations in the domain name base.
As of December 31, 2024, we had 169.0 million . com and . net registrations in the domain name base.
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.
Renewal rates are not fully measurable until 45 days after the end of the quarter. • We repurchased 6.6 million shares of our common stock for an aggregate cost of $1.21 billion in 2024.
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.
A comparison of cost of revenues is presented below: Year Ended December 31, 2024 % Change 2023 % Change 2022 (Dollars in millions) Cost of revenues $ 191.4 (3) % $ 197.3 (2) % $ 200.7 Cost of revenues decreased in 2024 compared to 2023 primarily due to decreases in depreciation expenses and telecommunication expenses, partially offset by an increase in compensation and benefits expenses and a combination of other individually insignificant factors.
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.
The following table presents a comparison of the Company’s geographic revenues: Year Ended December 31, 2024 % Change 2023 % Change 2022 (Dollars in millions) U.S $ 1,035.5 4 % $ 994.7 6 % $ 937.6 EMEA 249.6 9 % 228.2 1 % 226.0 APAC 175.7 1 % 174.8 4 % 167.7 Other 96.6 1 % 95.4 2 % 93.6 Total revenues $ 1,557.4 4 % $ 1,493.1 5 % $ 1,424.9 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.
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.
In summary, our cash flows were as follows: Year Ended December 31, 2024 2023 2022 (In millions) Net cash provided by operating activities $ 902.6 $ 853.8 $ 831.1 Net cash provided by (used in) investing activities 286.3 (97.4) 355.7 Net cash used in financing activities (1,221.5) (889.8) (1,035.8) Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.8) (0.1) (0.8) Net (decrease) increase in cash, cash equivalents and restricted cash $ (33.4) $ (133.5) $ 150.2 Cash flows from operating activities Our largest source of operating cash flows is cash collections from our customers.
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.
Cash paid to employees and vendors increased primarily due to increases in operating expenses and the timing of payments. 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.
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 revenues is presented below: Year Ended December 31, 2024 % Change 2023 % Change 2022 (Dollars in millions) Revenues $ 1,557.4 4 % $ 1,493.1 5 % $ 1,424.9 The following table compares the . com and .net domain name registrations in the domain name base: As of December 31, 2024 % Change 2023 % Change 2022 .com and .net domain name registrations in the domain name base 169.0 million (2) % 172.7 million (1) % 173.8 million Revenues increased in 2024 compared to 2023, primarily due to the . com and . net price increases, partially offset by a decline in the . com and . net domain name base, and the elimination of revenue from the operation of the . gov gTLD, which was transitioned to another service provider in the fourth quarter of 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.
We increased the annual registry-level wholesale fee for each new and renewal .net domain name registration from $9.02 to $9.92 effective February 1, 2023, and from $9.92 to $10.91 effective February 1, 2024. All fees paid to us for .com and .net registrations are in U.S. dollars.
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.
Overhead expenses allocated to other cost types increased by $3.1 million due to an increase in total allocable expenses. Interest expense Interest expense remained consistent during 2024 compared to 2023. Non-operating income, net See Note 10, “Non-operating Income, Net” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
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.
Depreciation expenses decreased by $7.4 million due to a decrease in capital expenditures in recent periods. Telecommunication expenses decreased by $3.9 million primarily due to savings on renewals of colocation agreements. Compensation and benefits expenses increased by $2.6 million primarily due to annual salary increases.
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.
Cash flows from financing activities The changes in cash flows from financing activities primarily relate to share repurchases, proceeds from our employee stock purchase plan and payment of excise tax on share repurchases.
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.
In November 2024, we renewed the . com Registry Agreement with ICANN, pursuant to which we will remain the sole registry operator for the . com registry through November 30, 2030.
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.
Cash paid for income taxes decreased primarily due to comparatively lower federal and foreign income tax payments, partially offset by higher state income tax payments and a higher installment payment for the transition tax on accumulated foreign earnings resulting from the 2017 Tax Cuts and Jobs Act.
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.
A comparison of research and development expenses is presented below: Year Ended December 31, 2024 % Change 2023 % Change 2022 (Dollars in millions) Research and development $ 96.7 6 % $ 91.0 6 % $ 85.7 27 Table of Contents Research and development expenses increased in 2024 compared to 2023 primarily due to an increase in compensation and benefit expenses and a combination of several other individually insignificant factors.
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.
Our primary uses of cash from operating activities are for personnel-related expenditures and other general operating expenses, as well as payments related to taxes, interest and facilities. 29 Table of Contents Net cash provided by operating activities increased in 2024 compared to 2023 primarily due to an increase in cash received from customers and a decrease in cash paid for income taxes, partially offset by an increase in cash paid to employees and vendors.
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.
The combination of these factors has negatively impacted our renewal rates and the volume of new .com and .net domain name registrations, resulting in 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”); Australia, China, Japan, Singapore, and other Asia Pacific countries (“APAC”); and certain other countries, including Canada and Latin American countries.
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.
Cash received from customers increased primarily due to the impact of the . com and the .net price increases.
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.
While our foreign income taxes increased as a result of the Pillar 2 minimum tax, the overall impact was not material as the additional taxes in these jurisdictions were partly offset by related foreign tax credits in the U.S. 28 Table of Contents Liquidity and Capital Resources The following table presents our principal sources of liquidity: As of December 31, 2024 2023 (In millions) Cash and cash equivalents $ 206.7 $ 240.1 Marketable securities 393.2 686.3 Total $ 599.9 $ 926.4 The marketable securities primarily consist of debt securities issued by the U.S.
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.
The majority of our revenue growth was generated from registrars based in the U.S. and EMEA, while revenue growth in APAC was limited during 2024 compared to 2023 primarily as a result of a 13% decline in revenues from China due to the lower demand noted above.
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.
Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.
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.
Under the .net Registry Agreement, which renewed in June 2023, we are permitted to increase the price of .net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2029.
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.
Demand for .com and .net 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 $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.
Compensation and benefits expenses increased by $4.4 million primarily due to annual salary increases. Equipment and software expenses increased by $3.6 million primarily due to increases in expenses related to network security and other software services. Professional services expenses increased by $2.9 million primarily due to an increase in external consulting costs related to various projects.
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.
Under existing market conditions, we intend to refinance all of our 2025 Senior Notes through the issuance of new long-term debt. As of December 31, 2024, we had no outstanding borrowings and $200.0 million in borrowing capacity under our credit facility which matures in 2028.
Removed
We only recognize or continue to recognize tax positions and tax benefit amounts that are more likely than not to be sustained upon examination.
Added
Pursuant to the renewed . com Registry Agreement, we cannot increase the price of a . com domain name registration during the first two years of the six year contract term.
Removed
We adjust these amounts in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in an outcome that is materially different from our current estimate of unrecognized tax benefits.
Added
While the core value proposition of a domain name remains strong, challenging economic and regulatory conditions have continued to weaken demand for .com and .net domain name registrations in China, and some registrars, particularly in the U.S., have shifted their focus to increasing profitability through higher retail pricing and a decrease in marketing activities targeting new customer acquisition.
Removed
All fees paid to us for .com and .net registrations are in U.S. dollars.
Added
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.
Removed
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.
Added
Compensation and benefits expenses increased by $3.0 million primarily due to annual salary increases.
Removed
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.
Added
The income tax expense for 2024 includes the impact of the OECD Pillar 2 minimum tax adopted by applicable tax jurisdictions.
Removed
Our primary uses of cash from operating activities are for personnel-related expenditures, and other general operating expenses, as well as payments related to taxes, interest and facilities.
Added
If a suitable refinancing arrangement is not available due to a change in market conditions, we intend to utilize the credit facility to repay $200.0 million of the 2025 Senior Notes.
Added
These items are detailed in Note 12, “Commitments and Contingencies” of our Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
Added
Net cash used in financing activities increased in 2024 compared to 2023 primarily due to an increase in share repurchases and payment of excise tax on share repurchases in 2024.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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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.
Biggest changeGains or losses on the foreign currency forward contracts would be largely offset by the remeasurement of our foreign currency denominated assets and 30 Table of Contents liabilities, resulting in an insignificant net impact to income.
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
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, 2024, 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, 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.
As of December 31, 2024, we held foreign currency forward contracts in notional amounts totaling $44.8 million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies.
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.
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, 2023, we had $744.9 million of fixed income securities, which consisted of U.S. Treasury bills with maturities of less than one year.
As of December 31, 2024, we had $393.2 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.
Added
Net gains and losses from the Company’s foreign currency exposure and related hedges are included in Non-operating income, net on the Consolidated Statements of Comprehensive Income.

Other VRSN 10-K year-over-year comparisons