10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________ 

FORM 10-Q

 ____________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission File Number: 000-23593 

VERISIGN, INC.

(Exact name of registrant as specified in its charter)

Delaware		94-3221585
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
12061 Bluemont Way,
Reston,	Virginia	20190
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 948-3200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	VRSN	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒     No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes ☒     No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes ☐     No  ☒ 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Shares Outstanding as of July 19, 2019
Common stock, $0.001 par value per share	118,371,848

TABLE OF CONTENTS

		Page
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018	4
	Condensed Consolidated Statements of Stockholders’ Deficit for the Three and Six Months Ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	34
Signatures		35

2

PART I—FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

VERISIGN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	751,580		$	357,415
Marketable securities	473,362			912,254
Other current assets	70,440			47,365
Total current assets	1,295,382			1,317,034
Property and equipment, net	250,820			253,905
Goodwill	52,527			52,527
Deferred tax assets	109,917			104,992
Deposits to acquire intangible assets	145,000			145,000
Other long-term assets	36,252			41,046
Total long-term assets	594,516			597,470
Total assets	$	1,889,898		$	1,914,504
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	171,215		$	215,208
Deferred revenues	763,466			732,382
Total current liabilities	934,681			947,590
Long-term deferred revenues	286,143			285,720
Senior notes	1,786,306			1,785,047
Long-term tax and other liabilities	307,935			281,621
Total long-term liabilities	2,380,384			2,352,388
Total liabilities	3,315,065			3,299,978
Commitments and contingencies
Stockholders’ deficit:
Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and outstanding shares: none	—			—
Common stock—par value $.001 per share; Authorized shares: 1,000,000; Issued shares: 352,952 at June 30, 2019 and 352,325 at December 31, 2018; Outstanding shares: 118,548 at June 30, 2019 and 120,037 at December 31, 2018	353			352
Additional paid-in capital	15,356,935			15,706,774
Accumulated deficit	(16,779,728		)	(17,089,789		)
Accumulated other comprehensive loss	(2,727		)	(2,811		)
Total stockholders’ deficit	(1,425,167		)	(1,385,474		)
Total liabilities and stockholders’ deficit	$	1,889,898		$	1,914,504

See accompanying Notes to Condensed Consolidated Financial Statements.

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VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues	$	306,289		$	302,452		$	612,697		$	601,740
Costs and expenses:
Cost of revenues	44,066			47,365			89,570			95,517
Sales and marketing	12,399			16,569			22,918			33,844
Research and development	14,953			13,755			31,085			29,130
General and administrative	33,178			31,753			67,179			64,820
Total costs and expenses	104,596			109,442			210,752			223,311
Operating income	201,693			193,010			401,945			378,429
Interest expense	(22,635		)	(28,792		)	(45,266		)	(69,580		)
Non-operating income, net	11,436			660			23,639			8,464
Income before income taxes	190,494			164,878			380,318			317,313
Income tax expense	(42,960		)	(36,527		)	(70,257		)	(54,699		)
Net income	147,534			128,351			310,061			262,614
Other comprehensive income	35			17			84			260
Comprehensive income	$	147,569		$	128,368		$	310,145		$	262,874
Earnings per share:
Basic	$	1.24		$	1.13		$	2.60		$	2.49
Diluted	$	1.24		$	1.04		$	2.59		$	2.13
Shares used to compute earnings per share
Basic	118,965			113,936			119,359			105,639
Diluted	119,361			123,200			119,837			123,399

See accompanying Notes to Condensed Consolidated Financial Statements.

4

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands, except par value)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Total stockholders’ deficit, beginning of period	$	(1,406,129	)	$	(1,234,734	)	$	(1,385,474	)	$	(1,260,271	)
Common stock
Beginning balance	353			326			352			325
Conversion of Subordinated Convertible Debentures	—			26			—			26
Issuance of common stock under stock plans	—			—			1			1
Balance, end of period:	353			352			353			352
Additional paid-in capital
Beginning balance	15,523,542			16,305,653			15,706,774			16,437,135
Conversion of Subordinated Convertible Debentures	—			(159,618		)	—			(159,618		)
Stock-based compensation expense	13,623			13,825			26,441			27,274
Issuance of common stock under stock plans	—			—			8,252			7,810
Repurchase of common stock	(180,230		)	(128,856		)	(384,532		)	(281,597		)
Balance, end of period	15,356,935			16,031,004			15,356,935			16,031,004
Accumulated deficit
Beginning balance	(16,927,262		)	(17,538,015		)	(17,089,789		)	(17,694,790		)
Net income	147,534			128,351			310,061			262,614
Cumulative adjustment upon adoption of ASU 2014-09	—			—			—			22,512
Balance, end of period	(16,779,728		)	(17,409,664		)	(16,779,728		)	(17,409,664		)
Accumulated other comprehensive (loss) income
Beginning balance	(2,762		)	(2,698		)	(2,811		)	(2,941		)
Other comprehensive income	35			17			84			260
Balance, end of period	(2,727		)	(2,681		)	(2,727		)	(2,681		)
Total stockholders’ deficit, end of period	$	(1,425,167	)	$	(1,380,989	)	$	(1,425,167	)	$	(1,380,989	)

See accompanying Notes to Condensed Consolidated Financial Statements.

5

VERISIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	310,061		$	262,614
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	22,884			24,195
Stock-based compensation	25,617			26,276
Amortization of discount on investments in debt securities	(5,679		)	(7,686		)
Other, net	894			13,452
Changes in operating assets and liabilities:
Other assets	(10,254		)	(7,605		)
Accounts payable and accrued liabilities	(39,351		)	(20,892		)
Deferred revenues	31,857			27,296
Net deferred income taxes and other long-term tax liabilities	16,146			(25,844		)
Net cash provided by operating activities	352,175			291,806
Cash flows from investing activities:
Proceeds from maturities and sales of marketable securities	1,466,303			2,634,376
Purchases of marketable securities	(1,021,741		)	(1,592,403		)
Purchases of property and equipment	(20,189		)	(18,669		)
Other investing activities	(6,311		)	(160		)
Net cash provided by investing activities	418,062			1,023,144
Cash flows from financing activities:
Repayment of principal on subordinated convertible debentures	—			(1,250,009		)
Proceeds from employee stock purchase plan	8,253			7,811
Repurchases of common stock	(384,532		)	(281,597		)
Net cash used in financing activities	(376,279		)	(1,523,795		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	243			(590		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	394,201			(209,435		)
Cash, cash equivalents, and restricted cash at beginning of period	366,753			475,139
Cash, cash equivalents, and restricted cash at end of period	$	760,954		$	265,704
Supplemental cash flow disclosures:
Cash paid for interest	$	43,708		$	73,971
Cash paid for income taxes, net of refunds received	$	62,214		$	85,597

See accompanying Notes to Condensed Consolidated Financial Statements.

6

VERISIGN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

Interim Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by VeriSign, Inc. (“Verisign” or the “Company”) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and notes normally provided in audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for any other interim period or for a full fiscal year. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes contained in Verisign’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”) filed with the SEC on February 15, 2019.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such reclassifications have no effect on net income as previously reported.

Adoption of New Accounting Standards

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases, and several related amendments, issued by the Financial Accounting Standards Board, collectively codified under Accounting Standards Codification (“ASC”) 842, Leases. ASC 842 requires most operating leases to be reported on the balance sheet as a lease liability and a right-of-use asset. This standard was applied as of the effective date of January 1, 2019, and therefore prior period amounts were not adjusted. The adoption of ASC 842 did not have a material impact on the Company’s consolidated financial statements.

Note 2.  Financial Instruments

Cash, Cash Equivalents, and Marketable Securities

The following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value categorization of the financial instruments measured at fair value on a recurring basis:

	June 30,		December 31,
	2019		2018
	(In thousands)
Cash	$	26,451	$	37,190
Time deposits	4,134		3,810
Money market funds (Level 1)	104,275		120,832
Debt securities issued by the U.S. Treasury (Level 1)	1,099,456		1,117,175
Total	$	1,234,316	$	1,279,007
Cash and cash equivalents	$	751,580	$	357,415
Restricted cash (included in Other long-term assets)	9,374		9,338
Total Cash, cash equivalents, and restricted cash	760,954		366,753
Marketable securities	473,362		912,254
Total	$	1,234,316	$	1,279,007

The fair value of the debt securities held as of June 30, 2019 was $1.10 billion, including less than $0.1 million of gross and net unrealized gains. All of the debt securities held as of June 30, 2019 are scheduled to mature in less than one year.

Fair Value Measurements

The fair value of the Company’s investments in money market funds approximates their face value. Such instruments are included in Cash and cash equivalents. The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. Debt securities purchased with original maturities in excess of three months are included in Marketable securities. The fair value of all of these financial instruments are classified as Level 1 in the fair value hierarchy.

7

The Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable. As of June 30, 2019, the carrying value of these financial instruments approximated their fair value. The fair values of the senior notes due 2023, 2025, and 2027 were $763.2 million, $537.2 million, and $576.6 million, respectively, as of June 30, 2019. The fair values of these debt instruments are based on available market information from public data sources and are classified as Level 2.

Note 3. Other Balance Sheet Items

Other Current Assets

Other current assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Prepaid registry fees	$	21,739	$	20,696
Prepaid expenses	22,367		14,109
Contingent consideration receivable	14,721		—
Accounts receivable, net	5,257		6,029
Income taxes receivable	4,656		4,451
Other	1,700		2,080
Total other current assets	$	70,440	$	47,365

Other Long-Term Assets

Other long-term assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Restricted cash	$	9,374	$	9,338
Operating lease right-of-use asset	9,139		—
Long-term prepaid registry fees	7,884		7,779
Other tax receivable	5,673		5,673
Contingent consideration receivable	—		14,721
Other	4,182		3,535
Total other long-term assets	$	36,252	$	41,046

As a result of the adoption of ASC 842, Leases, in 2019, the Company recorded right-of-use assets for operating leases of $9.1 million as of June 30, 2019. The current and long-term prepaid registry fees in the tables above relate to the fees the Company pays to ICANN for each annual increment of .com domain name registrations and renewals which are deferred and amortized over the domain name registration term. The amount of prepaid registry fees as of June 30, 2019 reflects amortization of $8.6 million and $17.1 million during the three and six months ended June 30, 2019 which was recorded in Cost of Revenues.

The contingent consideration receivable in the tables above related to the estimated amount due from Neustar, Inc. (“Neustar”) in the first quarter of 2020, was reclassified from Other long-term assets as of December 31, 2018 to Other current assets as of June 30, 2019.

8

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Accounts payable	$	8,018	$	10,445
Customer deposits, net	51,343		57,025
Accrued employee compensation	34,578		54,746
Interest payable	24,469		24,318
Accrued registry fees	12,834		11,029
Taxes payable and other tax liabilities	12,073		18,961
Payables to buyer	3,623		9,875
Current operating lease liability	3,880		—
Other accrued liabilities	20,397		28,809
Total accounts payable and accrued liabilities	$	171,215	$	215,208

Customer deposits primarily relate to advance payments to cover domain name registration activity by registrars. The balance of customer deposits can fluctuate significantly due to the timing of payments from large customers. Accrued employee compensation primarily consists of liabilities for employee leave, salaries, payroll taxes, employee contributions to the employee stock purchase plan, and incentive compensation. Accrued employee incentive compensation as of December 31, 2018, was paid during the six months ended June 30, 2019. Interest payable varies at each period-end based on the payment due dates for each Senior Note issuance. Payables to buyer relate to amounts due to Neustar for estimated collections from Security Services customers of any billings after the closing date and until the customer contracts are assigned to Neustar. Other liabilities include amounts payable to registrars related to rebates and marketing programs as well as other miscellaneous liabilities. These amounts may vary from period to period due to the timing of payments.

Long-term tax and other liabilities

	June 30,		December 31,
	2019		2018
	(In thousands)
Long-term tax liabilities	$	302,692	$	281,621
Long-term operating lease liability	5,243		—
Long-term tax and other liabilities	$	307,935	$	281,621

Long-term tax liabilities as of June 30, 2019 reflects the reclassification of unrecognized tax benefits during the six months ended June 30, 2019, as deferred tax assets related to tax credits and loss carryforwards are no longer available to offset the liabilities. This was partially offset by a $7.9 million reclassification of a portion of the transition tax liability on accumulated foreign earnings from non-current to current as of June 30, 2019. The current and long-term lease liabilities as of June 30, 2019 in the tables above relate to the lease obligations recorded as a result of the adoption of ASC 842, Leases, during 2019.

Note 4. Stockholders’ Deficit

Effective February 7, 2019, the Company’s Board of Directors authorized the repurchase of the Company’s common stock in the amount of approximately $602.9 million, in addition to the $397.1 million remaining available for repurchase under the Company’s share repurchase program, for a total repurchase authorization of up to $1.0 billion under the share repurchase program. The share repurchase program has no expiration date. Purchases made under the program can be made through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions. During the three and six months ended June 30, 2019, the Company repurchased 0.9 million and 1.9 million shares of its common stock, respectively, at an average stock price of $195.27 and $182.10, respectively. The aggregate cost of the repurchases in the three and six months ended June 30, 2019 was $175.0 million and $349.9 million, respectively. As of June 30, 2019, there was approximately $716.1 million remaining available for future share repurchases under the share repurchase program.

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During the six months ended June 30, 2019, the Company placed 0.2 million shares, at an average stock price of $177.41, and for an aggregate cost of $34.6 million, into treasury stock for purposes related to tax withholding upon vesting of Restricted Stock Units (“RSUs”).

Since inception, the Company has repurchased 234.4 million shares of its common stock for an aggregate cost of $9.80 billion, which is presented as a reduction of Additional paid-in capital.

Note 5. Calculation of Earnings per Share

The following table presents the computation of weighted-average shares used in the calculation of basic and diluted earnings per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
	(In thousands)
Weighted-average shares of common stock outstanding	118,965	113,936	119,359	105,639
Weighted-average potential shares of common stock outstanding:
Conversion spread related to Subordinated Convertible Debentures	—	8,776	—	17,178
Unvested RSUs and ESPP	396	488	478	582
Shares used to compute diluted earnings per share	119,361	123,200	119,837	123,399

The Company settled the Subordinated Convertible Debentures in May 2018. The calculation of diluted weighted average shares outstanding, excludes potentially dilutive securities, the effect of which would have been anti-dilutive, as well as performance-based RSUs granted by the Company for which the relevant performance criteria have not been achieved. The number of potential shares excluded from the calculation was not significant in any period presented.

Note 6. Revenues

The Company generates revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries, including, but not limited to Canada, Australia, and Japan.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
U.S.	$	191,848	$	187,818	$	384,003	$	373,001
EMEA	51,595		53,367		103,741		106,784
China	29,448		26,550		57,690		52,408
Other	33,398		34,717		67,263		69,547
Total revenues	$	306,289	$	302,452	$	612,697	$	601,740

Revenues for the Company’s Registry Services business are attributed to the country of domicile and the respective regions in which registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenues for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenues for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.

Deferred Revenues

As payment for domain name registrations and renewals are due in advance of our performance, we record these amounts as deferred revenues. The increase in the deferred revenues balance for the six months ended June 30, 2019 was primarily driven by amounts billed in the first half of 2019 for domain name registrations and renewals to be recognized as revenues in future periods, offset by refunds for domain name renewals deleted during the 45-day grace period, and $488.8 million of revenues recognized that were included in the deferred revenues balance at the beginning of the period. The balance of deferred revenues as of June 30, 2019 represents our aggregate remaining performance obligations. Amounts included in current deferred revenues are all expected to be recognized in revenues within 12 months, except for a portion of deferred

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revenues that relates to domain name renewals that are deleted in the 45-day grace period following the transaction. The long-term deferred revenues amounts will be recognized in revenues over several years and in some cases up to 10 years.

Historically, we have experienced a higher volume of domain name transactions, particularly renewals, in the first quarter of the year compared to other quarters. Our quarterly revenues do not reflect these seasonal patterns because the preponderance of our revenues for each quarterly period is provided by the ratable recognition of our deferred revenues balance. The effect of this seasonality has historically resulted in the largest amount of growth in our deferred revenues balance occurring during the first quarter of the year compared to the other quarters.

Note 7. Stock-based Compensation

Stock-based compensation is classified in the Condensed Consolidated Statements of Comprehensive Income in the same expense line items as cash compensation. The following table presents the classification of stock-based compensation:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Cost of revenues	$	1,741	$	1,818	$	3,339	$	3,428
Sales and marketing	1,019		1,494		2,002		2,942
Research and development	1,642		1,688		3,231		3,409
General and administrative	8,753		8,298		17,045		16,497
Total stock-based compensation expense	$	13,155	$	13,298	$	25,617	$	26,276

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
RSUs	$	9,059		$	9,406		$	17,668		$	18,693
Performance-based RSUs	3,294			3,360			6,332			6,473
ESPP	1,270			1,059			2,441			2,109
Capitalization (included in Property and equipment, net)	(468		)	(527		)	(824		)	(999		)
Total stock-based compensation expense	$	13,155		$	13,298		$	25,617		$	26,276

Note 8. Debt and Interest Expense

The following table presents the components of the Company’s Interest expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest on Senior Notes	$	21,766	$	21,766	$	43,532	$	43,531
Contractual interest on Subordinated Convertible Debentures	—		5,067		—		20,015
Amortization of debt discount on Subordinated Convertible Debentures	—		1,075		—		4,236
Amortization of debt issuance costs and other interest expense	869		884		1,734		1,798
Total interest expense	$	22,635	$	28,792	$	45,266	$	69,580

The Company settled its Subordinated Convertible Debentures in May 2018.

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Note 9. Non-operating Income, Net

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(In thousands)
Interest income	$	7,228	$	6,583		$	14,588	$	14,071
Transition services income	4,050		—			8,100		—
Loss on extinguishment of Subordinated Convertible Debentures	—		(6,554		)	—		(6,554		)
Other, net	158		631			951		947
Total non-operating income, net	$	11,436	$	660		$	23,639	$	8,464

During the three and six months ended June 30, 2019, the Company recognized $4.1 million and $8.1 million, respectively, of income from the transition services provided to Neustar in connection with the sale of customer contracts of the Security Services business. In the second quarter of 2018, the Company recognized a $6.6 million loss on the extinguishment of the Subordinated Convertible Debentures.

Note 10. Income Taxes

The following table presents Income tax expense and the effective tax rate:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Income tax expense	$	42,960		$	36,527		$	70,257		$	54,699
Effective tax rate	23		%	22		%	18		%	17		%

The effective tax rate for each of the periods in the table above differed from the statutory federal rate of 21% due to a lower foreign effective tax rate, offset by state income taxes and U.S. taxes on foreign earnings, net of foreign tax credits. Additionally, income tax expense for the six months ended June 30, 2019 was reduced by $12.7 million of excess tax benefits related to stock-based compensation. Income tax expense for the six months ended June 30, 2018 was reduced by $12.1 million of tax benefits recognized related to changes to provisional amounts previously recognized for the impact of the 2017 Tax Cuts and Jobs Act (“Tax Act”), and $6.0 million of excess tax benefits related to stock-based compensation.

During the six months ended June 30, 2019, the Company completed the repatriation of $249.0 million of cash held by foreign subsidiaries, net of $13.1 million of foreign withholding taxes which were previously accrued in 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the 2018 Form 10-K and the interim unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item I of this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties, including, among other things, statements regarding our expectations about quarterly revenues for the remainder of 2019 and our expectations about costs and expenses as a percentage of revenues for the remainder of 2019. Forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. You should also carefully review the risks described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q or Current Reports on Form 8-K that we file in 2019 and the 2018 Form 10-K, which discuss our business in greater detail. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.

For purposes of this Quarterly Report on Form 10-Q, the terms “Verisign,” “the Company,” “we,” “us,” and “our” refer to VeriSign, Inc. and its consolidated subsidiaries.

Overview

We are a global provider of domain name registry services and internet infrastructure, enabling internet navigation for many of the world’s most recognized domain names. We enable the security, stability, and resiliency of key internet infrastructure and services, including providing root zone maintainer services, operating two of the 13 global internet root servers, and providing registration services and authoritative resolution for the .com and .net top-level domains (“TLDs”), which support the majority of global e-commerce.

As of June 30, 2019, we had 156.1 million .com and .net registrations in the domain name base. The number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by us and our registrars. Growth in the number of domain name registrations under our management may be hindered by certain factors, including overall economic conditions, competition from country code top-level domains (“ccTLDs”), competition from, and the continued introduction of, new generic top-level domains (“gTLDs”), and ongoing changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how they will manage their investment in domain names, can negatively impact our business and the demand for new domain name registrations and renewals.

Business Highlights and Trends

• We recorded revenues of $306.3 million and $612.7 million during the three and six months ended June 30, 2019, an increase of 1% and 2%, respectively, compared to the same periods in 2018.

• We recorded operating income of $201.7 million and $401.9 million during the three and six months ended June 30, 2019, an increase of 4% and 6%, respectively, compared to the same periods in 2018.

• As of June 30, 2019, we had 156.1 million .com and .net registrations in the domain name base, which represents a 4% increase from June 30, 2018, and a net increase of 1.3 million domain name registrations from March 31, 2019.

• During the three months ended June 30, 2019, we processed 10.3 million new domain name registrations for .com and .net compared to 9.6 million for the same period in 2018.

• The final .com and .net renewal rate for the first quarter of 2019 was 75.0% compared to 75.3% for the first quarter of 2018. Renewal rates are not fully measurable until 45 days after the end of the quarter.

• During the three months ended June 30, 2019, we repurchased 0.9 million shares of our common stock for an aggregate cost of $175.0 million. As of June 30, 2019, there was approximately $716.1 million remaining available for future share repurchases under our share repurchase program.

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• We generated cash flows from operating activities of $352.2 million during the six months ended June 30, 2019, compared to $291.8 million for the same period in 2018.

Pursuant to our agreements with ICANN, we make available on our website (at https://www.Verisign.com/zone) files containing all active domain names registered in the .com and .net registries. At the same website address, we make available a summary of the active zone count registered in the .com and .net registries and the number of .com and .net domain name registrations in the domain name base. The domain name base is the active zone plus the number of domain name registrations that are registered but not configured for use in the respective top level domain zone file plus the number of domain name registrations that are in a client or server hold status. These files and the related summary data are updated at least once per day. The update times may vary each day. The number of domain name registrations provided in this Quarterly Report on Form 10-Q are as of midnight of the date reported. Information available on, or accessible through, our website is not incorporated herein by reference.

Results of Operations

The following table presents information regarding our results of operations as a percentage of revenues:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Cost of revenues	14.4		15.7		14.6		15.9
Sales and marketing	4.0		5.5		3.7		5.6
Research and development	4.9		4.5		5.1		4.8
General and administrative	10.8		10.5		11.0		10.8
Total costs and expenses	34.1		36.2		34.4		37.1
Operating income	65.9		63.8		65.6		62.9
Interest expense	(7.4	)	(9.5	)	(7.4	)	(11.6	)
Non-operating income, net	3.7		0.2		3.9		1.4
Income before income taxes	62.2		54.5		62.1		52.7
Income tax expense	(14.0	)	(12.1	)	(11.5	)	(9.1	)
Net income	48.2	%	42.4	%	50.6	%	43.6	%

Revenues

Our revenues are primarily derived from registrations for domain names in the .com and .net domain name registries. We also derive revenues from operating domain name registries for several other TLDs and from providing back-end registry services to a number of TLD registry operators, all of which are not significant in relation to our consolidated revenues. For domain names registered with the .com and .net registries we receive a fee from registrars per annual registration that is fixed pursuant to our agreements with ICANN. Individual customers, called registrants, contract directly with registrars or their resellers, and the registrars in turn register the domain names with Verisign. Changes in revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the Department of Commerce (“DOC”). New registrations and the renewal rate for existing registrations are impacted by continued growth in online advertising, e-commerce, and the number of internet users, as well as marketing activities carried out by us and our registrars. The annual fee for a .com domain name registration has been fixed at $7.85 since 2012. On October 26, 2018, we entered into an agreement with the DOC to amend the Cooperative Agreement. The amendment extends the term of the Cooperative Agreement until November 30, 2024 and permits the price of a .com domain name to be increased without further DOC approval by up to 7% in each of the final four years of each 6-year period beginning on October 26, 2018. We increased the annual fee for a .net domain name registration from $8.20 to $9.02 on February 1, 2018. We have the contractual right to increase the fees for .net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2023. We offer promotional marketing programs for our registrars based upon market conditions and the business environment in which the registrars operate. All fees paid to us for .com and .net registrations are in U.S. dollars.

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A comparison of revenues is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
Revenues	$	306,289	1	%	$	302,452	$	612,697	2	%	$	601,740

The following table compares the .com and .net domain name registrations in the domain name base:

	June 30, 2019	% Change		June 30, 2018
.com and .net domain name registrations in the domain name base	156.1 million	4	%	149.7 million

Revenues increased by $3.8 million and $11.0 million during the three and six months ended June 30, 2019, respectively, as compared to the same period last year, primarily due to an increase in revenues from the operation of the registries for the .com and .net TLDs, partially offset by the decrease in revenues from the Security Services business as customers terminated or consented to the assignment of their contracts to Neustar. The increase in revenues from the .com and .net TLDs was driven by a 5% increase in the domain name base for .com and the increase in the .net domain name registration fees in February 2018, partially offset by a 4% decline in the domain name base for .net.

Growth in the domain name base has been primarily driven by continued internet growth and marketing activities carried out by us and our registrars. However, competitive pressure from ccTLDs, the continued introduction of new gTLDs, 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, and historical global economic uncertainty, has limited the rate of growth of the domain name base in recent years and may continue to do so in the remainder of 2019 and beyond.

We expect revenues will remain consistent in the remainder of 2019 compared to the six months ended June 30, 2019, as a result of continued growth in the aggregate number of .com domain names, offset by a decline in revenues from the Security Services business as the remaining customers terminate or consent to the assignment of their contracts to Neustar.

Geographic revenues

We generate revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries, including Canada, Australia, and Japan.

The following table presents a comparison of our geographic revenues:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
U.S.	$	191,848	2	%	$	187,818	$	384,003	3	%	$	373,001
EMEA	51,595		(3	)%	53,367		103,741		(3	)%	106,784
China	29,448		11	%	26,550		57,690		10	%	52,408
Other	33,398		(4	)%	34,717		67,263		(3	)%	69,547
Total revenues	$	306,289			$	302,452	612,697				601,740

Revenues for our Registry Services business 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. 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. During the three and six months ended June 30, 2019, the majority of our revenue growth has come from increased sales to registrars based in the U.S. and China.

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, consulting and development services, costs of facilities and computer equipment used in these activities, telecommunications expense and allocations of indirect costs such as corporate overhead.

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A comparison of Cost of revenues is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
Cost of revenues	$	44,066	(7	)%	$	47,365	$	89,570	(6	)%	$	95,517

Cost of revenues decreased by $3.3 million during the three months ended June 30, 2019, compared to the same period last year, primarily due to a $1.8 million decrease in telecommunications expenses as a result of lower costs to support our operations.

Cost of revenues decreased by $5.9 million during the six months ended June 30, 2019, compared to the same period last year, primarily due to decreases in telecommunications expenses and salary and employee benefits expenses. Telecommunications expenses decreased by $3.1 million as a result of lower costs to support our operations. Salary and benefits expenses decreased by $2.2 million due to a reduction in average headcount.

We expect Cost of revenues as a percentage of revenues to increase slightly during the remainder of 2019 compared to the six months ended June 30, 2019 primarily due to costs related to infrastructure projects.

Sales and marketing

Sales and marketing expenses consist primarily of salaries, sales commissions, sales operations and other personnel-related expenses, travel and related expenses, trade shows, costs of lead generation, costs of computer and communications equipment and support services, facilities costs, consulting fees, costs of marketing programs, such as online, television, radio, print and direct mail advertising costs, and allocations of indirect costs such as corporate overhead.

A comparison of Sales and marketing expenses is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
Sales and marketing	$	12,399	(25	)%	$	16,569	$	22,918	(32	)%	$	33,844

Sales and marketing expenses decreased by $4.2 million during the three months ended June 30, 2019, compared to the same period last year, primarily due to a $2.1 million decrease in salary and employee benefits expenses as a result of a reduction in average headcount primarily affecting employees supporting the Security Services business.

Sales and marketing expenses decreased by $10.9 million during the six months ended June 30, 2019, compared to the same period last year, primarily due to decreases in salary and employee benefits expenses, advertising and marketing expenses and allocated overhead expenses. Salary and employee benefits expenses decreased by $4.6 million due to a reduction in average headcount primarily affecting employees supporting the Security Services business. Advertising and marketing expenses decreased by $3.1 million as we executed fewer marketing activities and campaigns. Allocated overhead expenses decreased by $1.6 million primarily due to a decrease in average headcount relative to other cost types.

We expect Sales and marketing expenses as a percentage of revenues to increase slightly during the remainder of 2019, compared to the six months ended June 30, 2019, as we execute more advertising and marketing campaigns.

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.

A comparison of Research and development expenses is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
Research and development	$	14,953	9	%	$	13,755	$	31,085	7	%	$	29,130

Research and development expenses increased by $1.2 million during the three months ended June 30, 2019, compared to the same period last year, due to a combination of individually insignificant factors.

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Research and development expenses increased by $2.0 million during the six months ended June 30, 2019, compared to the same period last year, due to a combination of individually insignificant factors.

We expect Research and development expenses as a percentage of revenues to remain consistent during the remainder of 2019 compared to the six months ended June 30, 2019.

General and administrative

General and administrative expenses consist primarily of salaries and other personnel-related expenses for our executive, administrative, legal, finance, information technology and human resources personnel, costs of facilities, computer and communications equipment, management information systems, support services, professional services fees, certain tax and license fees, and bad debt expense, offset by allocations of indirect costs such as facilities and shared services expenses to other cost types.

A comparison of General and administrative expenses is presented below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019		% Change		2018		2019		% Change		2018
	(Dollars in thousands)
General and administrative	$	33,178	4	%	$	31,753	$	67,179	4	%	$	64,820

General and administrative expenses increased by $1.4 million during the three months ended June 30, 2019, compared to the same period last year, due to a combination of individually insignificant factors.

General and administrative expenses increased by $2.4 million during the six months ended June 30, 2019, compared to the same period last year, due to a combination of individually insignificant factors.

We expect General and administrative expenses as a percentage of revenues to increase slightly during the remainder of 2019 compared to the six months ended June 30, 2019 due to the timing of certain projects and an increase in infrastructure and security related expenses.

Interest expense

The following table presents the components of Interest expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest on Senior Notes	$	21,766	$	21,766	$	43,532	$	43,531
Contractual interest on Subordinated Convertible Debentures	—		5,067		—		20,015
Amortization of debt discount on Subordinated Convertible Debentures	—		1,075		—		4,236
Amortization of debt issuance costs and other interest expense	869		884		1,734		1,798
Total interest expense	$	22,635	$	28,792	$	45,266	$	69,580

There was no contractual interest or amortization of debt discount on the Subordinated Convertible Debentures in the three and six months ended June 30, 2019 due to the settlement of the outstanding convertible debentures in May 2018.

We expect Interest expense to remain consistent during the remainder of 2019 compared to the six months ended June 30, 2019.

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Non-operating income, net

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(In thousands)
Interest income	$	7,228	$	6,583		$	14,588	$	14,071
Transition services income	4,050		—			8,100		—
Loss on extinguishment of Subordinated Convertible Debentures	—		(6,554		)	—		(6,554		)
Other, net	158		631			951		947
Total non-operating income, net	$	11,436	$	660		$	23,639	$	8,464

Non-operating income, net, increased in the three and six months ended June 30, 2019 due to income from the transition services provided to Neustar in 2019 in connection with the sale of customer contracts of our Security Services business in 2018 and the loss on extinguishment of the Subordinated Convertible Debentures which was recognized in the second quarter of 2018.

Income tax expense

The following table presents Income tax expense and the effective tax rate:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Income tax expense	$	42,960		$	36,527		$	70,257		$	54,699
Effective tax rate	23		%	22		%	18		%	17		%

The effective tax rate for each of the periods in the table above differed from the statutory federal rate of 21% due to a lower foreign effective tax rate, offset by state income taxes and U.S. taxes on foreign earnings, net of foreign tax credits. Additionally, income tax expense for the six months ended June 30, 2019 was reduced by $12.7 million of excess tax benefits related to stock-based compensation, and income tax expense for the six months ended June 30, 2018 was reduced by $12.1 million of tax benefits recognized related to changes to provisional amounts previously recognized for the impact of the Tax Act, and $6.0 million of excess tax benefits related to stock-based compensation.

Liquidity and Capital Resources

	June 30,		December 31,
	2019		2018
	(In thousands)
Cash and cash equivalents	$	751,580	$	357,415
Marketable securities	473,362		912,254
Total	$	1,224,942	$	1,269,669

As of June 30, 2019, our principal source of liquidity was $751.6 million of cash and cash equivalents and $473.4 million of marketable securities. The marketable securities primarily consist of debt securities issued by the U.S. Treasury meeting the criteria of our investment policy, which is focused on the preservation of our capital through investment in investment grade securities. The cash equivalents consist of amounts invested in money market funds and U.S. Treasury bills purchased with original maturities of less than 90 days. As of June 30, 2019, 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 Condensed Consolidated Financial Statements in Part I, Item I of this Quarterly Report on Form 10-Q.

During the six months ended June 30, 2019, we completed the previously disclosed repatriation of $249.0 million of cash held by foreign subsidiaries, net of $13.1 million of foreign withholding taxes which were accrued during 2018. As of June 30, 2019, the amount of cash and cash equivalents and marketable securities held by foreign subsidiaries was $643.2 million.

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During the three months ended June 30, 2019, we repurchased 0.9 million shares of our common stock for an aggregate cost of $175.0 million. As of June 30, 2019, there was approximately $716.1 million remaining available for future share repurchases under the share repurchase program which has no expiration date.

As of June 30, 2019, we had $550.0 million principal amount outstanding of 4.75% senior unsecured notes due 2027, $500.0 million principal amount outstanding of 5.25% senior unsecured notes due 2025, and $750.0 million principal amount outstanding of 4.625% senior unsecured notes due 2023. As of June 30, 2019, there were no borrowings outstanding under our $200.0 million unsecured revolving credit facility that will expire in 2020.

We believe existing cash, cash equivalents and marketable securities, and funds generated from operations, together with our borrowing capacity under the unsecured revolving credit facility should be sufficient to meet our working capital, capital expenditure requirements, and to service our debt for at least the next 12 months. We regularly assess our cash management approach and activities in view of our current and potential future needs.

In summary, our cash flows for the six months ended June 30, 2019 and 2018 were as follows:

	Six Months Ended June 30,
	2019			2018
	(In thousands)
Net cash provided by operating activities	$	352,175		$	291,806
Net cash provided by investing activities	418,062			1,023,144
Net cash used in financing activities	(376,279		)	(1,523,795		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	243			(590		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	$	394,201		$	(209,435	)

Cash flows from operating activities

Our largest source of operating cash flows is cash collections from our customers. 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.

Net cash provided by operating activities increased during the six months ended June 30, 2019, compared to the same period last year, primarily due to decreases in cash paid for interest on our debt obligations, for income taxes, and to suppliers and employees and an increase in cash collected from customers. The decrease in cash paid for interest on our debt obligations was primarily due to the settlement of our Subordinated Convertible Debentures in May 2018. The decrease in cash paid for income taxes was primarily due to the foreign withholding taxes paid on the repatriation of $1.15 billion cash held by foreign subsidiaries to the U.S. in the first quarter of 2018. Cash paid to suppliers and employees decreased due to lower operating expenses. Cash received from customers increased primarily due to higher domain name registrations and renewals.

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 and proceeds from the sale of businesses.

Cash provided by investing activities decreased in the six months ended June 30, 2019, compared to the same period last year, primarily due to a decrease in proceeds from sales and maturities of marketable securities, net of purchases, and an increase in payments to Neustar related to the sale of the customer contracts of the Security Services business.

Cash flows from financing activities

The changes in cash flows from financing activities primarily relate to share repurchases, debt repayments, proceeds from borrowings, and our employee stock purchase plan.

Net cash used in financing activities decreased during the six months ended June 30, 2019, compared to the same period last year, primarily due to the repayment of the principal amount of the Subordinated Convertible Debentures during the second quarter of 2018, partially offset by an increase in share repurchases.

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our market risk exposures since December 31, 2018.

ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on our management’s evaluation, with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), as of June 30, 2019, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Internal Control over Financial Reporting

Because of their inherent limitations, our disclosure controls and procedures and our internal control over financial reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to risks, including that the control may become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may deteriorate.

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PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

We are 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. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of management attention.

ITEM 1A.    RISK FACTORS

In addition to other information in this Quarterly Report on Form 10-Q, the following risk factors should be carefully considered in evaluating us and our business because these factors currently have a significant impact or may have a significant impact on our business, prospects, operating results or financial condition. Actual results could differ materially from those projected in the forward-looking statements contained in this Quarterly Report on Form 10-Q as a result of the risk factors discussed below and elsewhere in this Quarterly Report on Form 10-Q and in other filings we make with the SEC.

Risks arising from our agreements governing our Registry Services business could limit our ability to maintain or grow our business.

We are parties to (i) a Cooperative Agreement, as amended, with the DOC with respect to the .com gTLD and (ii) Registry Agreements with ICANN with respect to the .com, .net, .name, and other gTLDs including our IDN gTLDs. As substantially all of our revenues are derived from our Registry Services business, limitations and obligations in, or changes or challenges to, these agreements, particularly the agreements that involve .com and .net, could have a material adverse impact on our business. Certain competing registries, such as the ccTLDs, are not subject to the same limitations or obligations that we are subject to in our agreements. Verisign and the DOC entered into Amendment 35 to the Cooperative Agreement on October 26, 2018, which, among other things, extends the term of the Cooperative Agreement through November 30, 2024. As amended by Amendment 35, the Cooperative Agreement will automatically renew on the same terms for successive six-year terms unless the DOC provides written notice of non-renewal within 120 days prior to the end of the then-current term. Further changes to the Cooperative Agreement require the mutual agreement of the DOC and the Company.

Modifications or Amendments. In October 2016, the Company and ICANN entered into an amendment to extend the term of the .com Registry Agreement to November 30, 2024 (the “.com Amendment”). As part of the .com Amendment, the Company and ICANN agreed to negotiate in good faith to amend the terms of the .com Registry Agreement: (i) by October 20, 2018, to preserve and enhance the security and stability of the internet or the .com TLD, and (ii) as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement. ICANN and Verisign are engaged in discussions to satisfy this obligation, including modifying the .com Registry Agreement based on the changes to the Cooperative Agreement arising from Amendment 35. We can provide no assurance that any new terms for the .com Registry Agreement that we agree to as a result of these discussions will match the changes permitted in Amendment 35 nor can we provide assurances that certain terms that we agree to will not increase the costs or risks associated with our operation of the .com TLD. Under the Cooperative Agreement, as amended by Amendment 35, standard renewals of the .com Registry Agreement will not require further DOC approval. If, in connection with a renewal of the .com Registry Agreement, the Company seeks any additional changes to the pricing section other than as approved in Amendment 35, changes to the vertical integration provisions, changes to the functional or performance specifications (including the SLAs), changes to the conditions for renewal or termination, or changes to the Whois service (other than such changes mandated by ICANN through Consensus Policies and specifications or policies established on a temporary basis (“Temporary Policies”)), as set forth in the Amendment 35, the prior written approval of the DOC is required. We can provide no assurances that such approval would be obtained.

In addition, our Registry Agreements for new gTLDs, including the Registry Agreements for our IDN gTLDs, include ICANN’s right to amend the agreements without our consent, which could impose unfavorable contract obligations on us that could impact our plans and competitive positions with respect to new gTLDs. At the time of renewal of our .com or .net Registry Agreements, ICANN might also attempt to impose this same unilateral right to amend these Registry Agreements under certain conditions. ICANN has also included new mandatory obligations on new gTLD registry operators, including us, that may increase the risks and potential liabilities associated with operating new gTLDs. ICANN might seek to impose these new mandatory obligations in our other Registry Agreements under certain conditions. We can provide no assurance that any changes to our Registry Agreements as a result of the above obligations will not have a material adverse impact on our business, operating results, financial condition, and cash flows.

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Pricing. Under the terms of the Cooperative Agreement, as amended by Amendment 35, the Company and ICANN may agree to amend the terms of the .com Registry Agreement to permit the price of registrations or renewals of .com domain names to be increased by up to 7% per year in each of the final four years of each six-year period beginning on October 26, 2018. In addition, we are entitled to increase the price up to 7%, with the prior approval of the DOC, due to the imposition of any new ICANN Consensus Policies, as established and defined under ICANN’s bylaws and due process, and covering certain items listed in the .com Registry Agreement, or documented extraordinary expense resulting from an attack or threat of attack on the security and stability of the DNS. However, it is uncertain whether these additional circumstances would arise, or if they do, whether we would seek, or the DOC would approve, any request to increase the price for .com domain name registrations. We also have the right under the Cooperative Agreement to seek the removal of these pricing restrictions if we demonstrate to the DOC that market conditions no longer warrant such restrictions. However, it is uncertain whether we will seek the removal of such restrictions, or whether the DOC would approve the removal of such restrictions. In comparison, under the terms of the .net and .name Registry Agreements with ICANN, we are permitted to increase the price of domain name registrations and renewals in these TLDs up to 10% per year. Additionally, ICANN’s registry agreements for new gTLDs do not contain such pricing restrictions.

Vertical integration. Under Amendment 35, the parties clarified that the restrictions in the .com Registry Agreement relating to vertical integration apply solely to the .com TLD. As to the .com TLD, 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 name registrations. Historically, all gTLD registry operators were subject to a vertical integration prohibition; however, ICANN has established a process whereby registry operators may seek ICANN’s approval to remove this restriction, and ICANN has approved such removal for certain other registry operators. Additionally, ICANN’s registry agreement for new gTLDs generally permits such vertical integration, with certain limitations including ICANN’s right, but not the obligation, to refer such vertical integration activities to competition authorities. If we seek to remove the vertical integration restrictions contained in our agreements, it is uncertain whether ICANN approval would be obtained. Furthermore, even if we obtain such approval, we can provide no assurances that we will enter the domain name retail market, or that we will be successful if we choose to do so. If registry operators of other TLDs, including ccTLDs, are able to obtain competitive advantages through vertical integration, and we are not, it could materially harm our business.

Renewal and Termination. Our .com, .net, and .name Registry Agreements with ICANN contain “presumptive” rights of renewal upon the expiration of their current terms on November 30, 2024, June 30, 2023 and August 15, 2020, respectively. The Registry Agreements for our new gTLDs including our IDN gTLDs are subject to a 10-year term and contain similar “presumptive” renewal rights. If certain terms in our .com and .net Registry 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 shall be upon terms reasonably necessary to render such terms similar to the registry agreements for those other gTLDs. There can be no assurance that such terms, if they apply, will not have a material adverse impact on our business. A failure by ICANN to approve the renewal of the .com Registry Agreement prior to the expiration of its current term on November 30, 2024 or to approve the renewal of the .net Registry Agreement prior to or upon the expiration of its current term on June 30, 2023, would have, absent an extension, a material adverse effect on our business. ICANN could terminate or refuse to renew our .com or .net Registry Agreements if, upon proper notice, (i) we fail to cure a fundamental and material breach of certain specified obligations, and (ii) we fail to timely comply with a final decision of an arbitrator or court. ICANN’s termination or refusal to renew either the .com or .net Registry Agreement would have a material adverse effect on our business.

Consensus Policies. Our Registry Agreements with ICANN require us to implement Consensus Policies and Temporary Policies. ICANN could adopt Consensus Policies or Temporary Policies that are unfavorable to us as the registry operator of .com, .net and our other gTLDs, that are inconsistent with our current or future plans, that impose substantial costs on our business, that subject the Company to additional legal risks, or that affect our competitive position. Such Consensus Policies or Temporary Policies could have a material adverse effect on our business. As an example, ICANN has adopted a Consensus Policy that requires Verisign to receive and display Thick Whois data for .com and .net. In addition, ICANN has adopted a Temporary Specification that establishes temporary requirements for registry operators and registrars regarding the collection, display and disclosure of Thick Whois data pending ICANN’s establishment of a permanent Consensus Policy. The costs of complying or failing to comply with these policies as well as laws and regulations, such as General Data Protection Regulation (“GDPR”), regarding personally identifiable information and data privacy, such as domestic and various foreign privacy regimes, could expose us to compliance costs and substantial liability, and result in costly and time-consuming investigations or litigation.

Technical Standards and ICANN Processes. Our Registry Agreements with ICANN require Verisign to implement and comply with various technical standards and specifications published by the Internet Engineering Task Force (“IETF”). ICANN could impose requirements on us through changes to these IETF standards that are inconsistent with our current or future plans, that impose substantial costs on our business, that subject the Company to additional legal risks, or that affect our competitive position. Any such changes to the IETF standards could have a material adverse effect on our business. In addition, under Amendment 35, we have agreed to continue to operate the .com TLD in a content neutral manner and to work within ICANN

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processes to promote the development of content neutral policies for the operation of the DNS. Such policies could expose us to compliance costs and substantial liability and result in costly and time-consuming investigations or litigation.

Legal Challenges. Our Registry Agreements have faced, and could face in the future, challenges, including possible legal challenges, resulting from our activities or the activities of ICANN, registrars, registrants, and others, and any adverse outcome from such challenges could have a material adverse effect on our business.

Governmental regulation and the application of new and existing laws in the U.S. and overseas may slow business growth, increase our costs of doing business, create potential liability and have an adverse effect on our business.

Application of new and existing laws and regulations in the U.S. or overseas to the internet and communications industry can be unclear. The costs of complying or failing to comply with these laws and regulations could limit our ability to operate in our current markets, expose us to compliance costs and substantial liability, and result in costly and time-consuming litigation. For example, the government of China has indicated that it will issue, and in some instances has begun to issue, new regulations, and has begun to enforce existing regulations, that impose additional costs on, and risks to, our provision of Registry Services in China and could impact the growth or renewal rates of domain name registrations in China. In addition to registry operators, some of these regulations also require registrars to obtain a government-issued license for each TLD whose domain name registrations they intend to sell directly to registrants. Any failure to obtain the required licenses, or to comply with any license requirements or any updates thereto, by us or our registrars could impact our current and future business in China.

Foreign, federal or state laws could have an adverse impact on our business, financial condition, results of operations and cash flows, and our ability to conduct business in certain foreign countries. For example, laws designed to restrict who can register and who can distribute domain names, online gambling, counterfeit goods, and intellectual property violations such as cybersquatting; laws designed to require registrants to provide additional documentation or information in connection with domain name registrations; and laws designed to promote cybersecurity may impose significant additional costs on our business or subject us to additional liabilities.

To conduct our operations, we regularly move data across national borders and receive data originating from different jurisdictions, and consequently are subject to a variety of continuously evolving and developing laws and regulations in the United States and abroad regarding privacy, data protection and data security. The scope of the laws that may be applicable to us is often uncertain and may be conflicting, particularly with respect to foreign laws. For example, the European Union’s GDPR, which greatly increases the jurisdictional reach of European Union law and adds a broad array of requirements for handling personal data, including the public disclosure of significant data breaches, and significant penalties, became effective in May 2018. Other countries and other states have enacted or are enacting data localization laws regulating or limiting data collection, storage and transfer as well as granting new rights to data subjects. All of these evolving compliance and operational requirements can impose significant costs for us that are likely to increase over time.

Due to the nature of the internet, it is possible that federal, state or foreign governments might attempt to regulate internet transmissions or prosecute us for violations of laws. We might unintentionally violate such laws, such laws may be modified or enforced using new or novel legal theories, and new laws may be enacted in the future. In addition, as we continue to launch and market our IDN gTLDs and increase our marketing efforts of our other TLDs in foreign countries, we may raise our profile in certain foreign countries thereby increasing the regulatory and other scrutiny of our operations. Any such developments could increase the costs of regulatory compliance for us, affect our reputation, expose us to liability, penalties or fines, force us to change our business practices or otherwise materially harm our business. In addition, any such laws could impede growth of, or result in a decline in, domain name registrations.

Undetected or unknown defects in our service, security breaches, defects in the technologies and services in our supply chain, and Distributed Denial of Service (“DDoS”) attacks could expose us to liability and harm our business and reputation.

Services as complex as those we offer or develop could contain undetected defects or errors. Despite testing, defects or errors may occur in our existing or new services, which could result in service outages or disruptions, compromised customer data, including DNS data, diversion of development resources, injury to our reputation, tort or contract claims, increased insurance costs or increased service costs, any of which could harm our business. Performance of our services could have unforeseen or unknown adverse effects on the networks over which they are delivered as well as, more broadly, on internet users and consumers, and on third-party applications and services that utilize our services, which could result in legal claims against us, harming our business. Our failure to identify, remediate and mitigate security vulnerabilities and breaches or our inability to meet customer expectations in a timely manner could also result in loss of or delay in revenues, failure to meet contracted service level obligations, loss of market share, failure to achieve market acceptance, injury to our reputation and increased costs.

In addition to undetected defects or errors, we are also subject to cyber-attacks and attempted security breaches. We retain certain customer and employee information in our data centers and various domain name registration systems. It is critical to our business strategy, as well as fulfilling our obligations as the registry operator for .com and .net, that our facilities and

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infrastructure remain secure, that we continue to meet our service level agreements and that we maintain the public’s trust in the internet services that we provide. The Company, as an operator of critical internet infrastructure, is frequently targeted and experiences a high rate of attacks. These include the most sophisticated forms of attacks, such as advanced persistent threat attacks and zero-hour threats. These forms of attacks involve situations where the threat is not compiled or has been previously unobserved within our observation and threat indicators space until the moment it is launched. In addition, these forms of attacks may target specific unidentified or unresolved vulnerabilities that exist only within the target’s supply chain or operating environment, making these attacks virtually impossible to anticipate and difficult to defend against. In addition to external threats, we may be subject to insider threats, including those from third-party suppliers such as consultants and advisors, SaaS providers, hardware, software, and network systems manufacturers, and other outside vendors, or from current or former contractors or employees; these threats can be realized from intentional or unintentional actions. The Shared Registration System, the root zone servers, the root zone file, the Root Zone Maintainer System, the TLD name servers and the TLD zone files that we operate are critical to our Registry Services operations. Therefore, attacks against third-party suppliers that provide services to our Registry Services operations could also impact our infrastructure. Despite the significant time and money expended on our security measures, we have been subject to a security breach, that was previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, and our infrastructure may in the future be vulnerable to physical break-ins, disruptions resulting from destructive malware, hardware or enabling software defects, computer viruses, attacks by hackers or nefarious actors or similar disruptive problems, including hacktivism. It is possible that we may have to expend additional financial and other resources to address such problems. Any physical or electronic break-in or other security breach or compromise of the information stored at our data centers or domain name registration systems may cause an outage of, or jeopardize the security of, information stored on our premises or in the computer systems and networks of our customers. In such an event, we could face significant liability, fail to meet contracted service level obligations, customers could be reluctant to use our services and we could be at risk for loss of various security and standards-based compliance certifications needed for operation of our businesses, all or any of which could adversely affect our reputation and harm our business or cause financial losses that are either not insured against or not fully covered through any insurance that we maintain. Such an occurrence could also result in adverse publicity and therefore adversely affect the market’s perception of the security of e-commerce and communications over the internet as well as of the security or reliability of our services.

We use externally developed technology, systems and services including both hardware and software, for a variety of purposes, including, without limitation, compute, storage, encryption and authentication, back-office support, and other functions. While we have developed operational policies and procedures to reduce the impact of security vulnerabilities in system components, as well as at any vendors where Company data is stored or processed, such measures cannot provide absolute security. Vulnerabilities in, and exploits leading to, breaches of our vendors’ technology, systems or services could expose us or our customers to a risk of loss or misuse of Company data, including but not limited to sensitive personally identifiable information.

Additionally, our networks have been, and likely will continue to be, subject to DDoS attacks. Recent attacks have demonstrated that DDoS attacks continue to grow in size and sophistication and have an ability to widely disrupt internet services. Particularly since 2016, the size of DDoS attacks has grown rapidly, and we have successfully mitigated DDoS attacks during this time frame that are significantly larger than those we have historically experienced. While we have adopted mitigation techniques, procedures and strategies to defend against such attacks, there can be no assurance that we will be able to defend against every attack, especially as the attacks increase in size and sophistication. Any attack, even if only partially successful, could disrupt our networks, increase response time, negatively impact our ability to meet our contracted service level obligations, and generally hamper our ability to provide reliable service to our Registry Services customers and the broader internet community. We have historically incurred, and will continue to incur, significant costs to enable our infrastructure to process levels of attack traffic that are significant multiples of our normal transaction volume. Further, we are in the process of transitioning our Security Services customer contracts to Neustar. During this migration period, we will continue to operate DDoS protection services for customers that have yet to transition. These DDoS protection services share some of the infrastructure used in our Registry Services business. Therefore the operation of such services might expose our critical Registry Services infrastructure to temporary degradations or outages caused by DDoS attacks against those customers, in addition to any attacks directed specifically against us and our networks.

Changes to the multi-stakeholder model of internet governance could materially and adversely impact our business.

The internet 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.

Role of the U.S. Government. In the fourth quarter of 2016, the U.S. government completed a transition to the multi-stakeholder community of the historical role played by the National Telecommunications and Information Administration (“NTIA”) in the coordination of the DNS. Changes arising from this transition to the multi-stakeholder model of internet governance could materially and adversely impact our business. For example, ICANN has adopted bylaws that are designed, in

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part, to enhance accountability through a new organization called the Empowered Community, which is comprised of a cross section of stakeholders. ICANN or the Empowered Community may assert positions that could negatively impact our strategy or our business.

By completing the transition discussed above, the U.S. government through the NTIA has ended its coordination and management of important aspects of the DNS including the IANA functions and the root zone. There can be no assurance that the removal of the U.S. government oversight of these key functions will not negatively impact our business.

Role of ICANN. ICANN plays a central coordination role in the multi-stakeholder system. ICANN is mandated through its bylaws to uphold a private sector-led multi-stakeholder approach to internet governance for the public benefit. If ICANN or the Empowered Community fails to uphold or significantly redefines the multi-stakeholder model, it could harm our business. Additionally, the Empowered Community could adversely impact ICANN, which could negatively impact its ability to coordinate the multi-stakeholder system of governance, or negatively affect our interests. Also, legal, regulatory or other challenges could be brought challenging the legal authority underlying the roles and actions of ICANN, the Empowered Community or us.

Role of Foreign Governments. Some governments and members of the multi-stakeholder community have questioned ICANN’s role with respect to internet governance and, as a result, could seek a multilateral oversight body as a replacement. Additionally, the role of ICANN’s Governmental Advisory Committee, which is comprised of representatives of national governments, could change, and give governments more control of certain aspects of internet governance. Some governments and governmental authorities outside the U.S. have in the past disagreed, and may in the future disagree, with the actions, policies or programs of ICANN, the U.S. government and us relating to the DNS. Changes to the roles that foreign governments play in internet governance could materially and adversely impact our business.

We face risks from our operation of two root zone servers and performance of the Root Zone Maintainer functions under the RZMA.

We operate two of the 13 root zone servers. Root zone servers are name servers that contain authoritative data for the very top of the DNS hierarchy. These servers have the software and DNS configuration data necessary to locate name servers that contain authoritative data for the TLDs. These root zone servers are critical to the functioning of the internet. We also have an important operational role in support of a key IANA function as the Root Zone Maintainer. In this role, we provision and publish the authoritative root zone data and make it available to all root server operators under an agreement with ICANN, the Root Zone Maintainer Service Agreement (“RZMA”).

As we perform the Root Zone Maintainer Services under the RZMA, we may be subject to significant claims challenging the agreement or our performance under the agreement, and we may not have immunity from, or sufficient indemnification or insurance for, such claims.

For example, DNSSEC enabled in the root zone and at other levels of the DNS requires new preventative maintenance, including root key signing key (“KSK”) rollover, necessitating functions and complex operational practices that did not exist prior to the introduction of DNSSEC. Any failure by us, ICANN, external DNS vendors and service providers, or other relying parties to comply with stated practices, such as those outlined in relevant DNSSEC Practice Statements and internet standards, introduces risk to DNSSEC relying parties and other internet users and consumers of the DNS, which could have a material adverse impact on our business. In particular, because root KSK rollover involves updates to the KSK public key (the “Trust Anchor”) and private key pair managed by ICANN’s Public Technical Identifiers (PTI) operation; to the root zone DNSSEC records published by us in our role as Root Zone Maintainer; and to corresponding Trust Anchor configurations maintained by external DNS vendors and service providers’ DNSSEC-aware implementations, if such external parties are not adequately prepared for and/or do not appropriately effectuate root key updates, any root KSK rollover, including the initial rollover that occurred on October 11, 2018 at ICANN’s direction, may introduce substantial risk to relying parties. Even where we have correctly implemented our key updates, we could face potential legal claims and reputational harm if the failures described occur.

Additionally, over 1,200 new gTLDs have already been delegated into the root zone in the current round of new gTLDs. ICANN plans on offering a subsequent round of new gTLDs, the timing of which remains uncertain. We believe there are potential security and stability issues that could involve the root zone and at other levels of the DNS from the deployment of the new gTLDs that should have been addressed before any new gTLDs were delegated, and despite our and others’ efforts, some of these issues have not been addressed by ICANN sufficiently, if at all. For example, domain name collisions have been reported to ICANN, which have resulted in various network interruptions for enterprises as well as confusion and usability issues that have led to phishing and other cyber-attacks. It is anticipated that as additional new gTLDs are delegated now, or in subsequent rounds, more domain name collisions and associated security issues will occur.

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The evolution of internet practices and behaviors and the adoption of substitute technologies may impact the demand for domain names.

Domain names and the domain name system have been used by consumers and businesses to access or disseminate information, conduct e-commerce, and develop an online identity for many years. The growth of technologies such as social media, mobile devices, apps and the dominance of search engines has evolved and changed the internet practices and behaviors of consumers and businesses alike. These changes can impact the demand for domain names by those who purchase domain names for personal, commercial and investment reasons. 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 monetize their investment in domain names can negatively impact our business. Some domain name registrars and registrants seek to purchase and resell domain names at an increased price. Adverse changes in the resale value of domain names, changes in the business models for such domain name registrars and registrants, or other factors, including regulations limiting the resale of domain names, could result in a decrease in the demand and/or renewal rates for domain names in our TLDs. Such a resulting decrease in demand and/or renewal rates could negatively impact the volume of new domain name registrations, our renewal rates and our associated revenue growth.

Some domain name registrants use a domain name to access or disseminate information, conduct e-commerce, and develop an online identity. Currently, internet users often navigate to a website either by directly typing its domain name into a web browser, the use of an app on their smart phone or mobile device, the use of a voice recognition technology such as Alexa, Cortana, Google Assistant, or Siri, or through the use of a search engine. If (i) web browser or internet search technologies were to change significantly; (ii) internet users’ preferences or practices shift away from recognizing and relying on web addresses for navigation through the use of new and existing technologies; (iii) internet users were to significantly decrease the use of web browsers in favor of applications to locate and access content; (iv) internet users were to significantly decrease the use of domain names to develop and protect their online identity; or (v) internet users were to increasingly use third-level domains or alternate identifiers, such as social networking and microblogging sites, in each case the demand for domain names in our TLDs could decrease. This may trigger current or prospective customers and parties in our target markets to reevaluate their need for registration or renewal of domain names.

Some domain name registrars and registrants seek to generate revenues through advertising on their websites; 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, Yahoo!, Baidu and Bing, have adversely affected and may continue to adversely affect the market for those domain names favored by such registrars and registrants which has resulted in, and may continue to result in, a decrease in demand and/or the renewal rate for those domain names. For example, according to published reports, Google has in the past changed (and may change in the future) its search algorithm, which may decrease site traffic to certain websites and provide less pay-per-click compensation for certain types of websites. This has reportedly made such websites less profitable which has resulted in, and may continue to result in, fewer domain registrations and renewals. In addition, as a result of the general economic environment, spending on online advertising and marketing may not increase or may be reduced, which in turn, may result in a further decline in the demand for those domain names.

If any of the above factors negatively impact the renewal of domain names or the demand for new domain names, we may experience material adverse impacts on our business, operating results, financial condition and cash flows.

Many of our markets are evolving, and if these markets fail to develop or if our products and services are not widely accepted in these markets, our business or our prospects could be harmed.

We seek to serve many new, developing and emerging markets in foreign countries to grow our business. These markets are rapidly evolving, and may not grow. Even if these markets grow, our services may not be widely used or accepted. Accordingly, the demand for our services in these markets is very uncertain. The factors that may affect market acceptance or adoption of our services in these markets include the following:

• regional internet infrastructure development, expansion, penetration and adoption;

• market acceptance and adoption of substitute products and services that enable online presence without a domain, including social media, e-commerce platforms, website builders and mobile applications;

• public perception of the security of our technologies and of IP and other networks;

• the introduction and consumer acceptance of new generations of mobile devices, and in particular, the use of mobile applications as the primary engagement mechanism for navigating the internet;

• increasing cyber threats;

• government regulations affecting internet access and availability, domain name registrations or the provision of registry services, data security or data localization, or e-commerce and telecommunications over the internet;

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• the maturity and depth of the sales channels within developing and emerging markets and their ability and motivation to establish and support sales for domain names;

• preference by markets for the use of their own country’s ccTLDs as a substitute or alternative to our TLDs; and

• increased acceptance and use of new gTLDs as substitutes for established gTLDs.

If the market for e-commerce and communications over IP and other networks does not grow or these services are not widely accepted in the market, our business could be materially harmed.

The business environment is highly competitive and, if we do not compete effectively, we may suffer lower demand for our products, reduced gross margins and loss of market share.

The internet and communications network services industries are characterized by rapid technological change and frequent new product and service announcements which require us to continually improve the performance, features and reliability of our services, particularly in response to competitive offerings or alternatives to our products and services. In order to remain competitive and retain our market position, we must continually improve our access to technology and software, support the latest transmission technologies, and adapt our products and services to changing market conditions and our customers’ and internet users’ preferences and practices, or potentially launch entirely new products and services such as new gTLDs in anticipation of, or in response to, market trends. We cannot assure that competing technologies developed by others or the emergence of new industry standards will not adversely affect our competitive position or render our services or technologies noncompetitive or obsolete. In addition, our markets are characterized by announcements of collaborative relationships involving our competitors. The existence or announcement of any such relationships could adversely affect our ability to attract and retain customers. As a result of the foregoing and other factors, we may not be able to compete effectively with current or future competitors, and competitive pressures that we face could materially harm our business.

We face competition in the domain name registry space from other gTLD and ccTLD registries that are competing for the business of entities and individuals that are seeking to obtain a domain name registration and/or establish a web presence. We have been designated as the registry operator for certain new gTLDs including certain IDN gTLDs; however, there is no guarantee that such new gTLDs will be as or more successful than the new gTLDs obtained by our competitors. For example, some of the new gTLDs, including our new gTLDs, may face additional universal acceptance and usability challenges in that current desktop and mobile device software does not ubiquitously recognize these new gTLDs and developers of desktop and mobile device software may be slow to adopt standards or support these gTLDs, even if demand for such products is strong. This is particularly true for IDN gTLDs, but applies to conventional gTLDs as well. As a result of these challenges, it is possible that resolution of domain names within some of these new gTLDs may be blocked within certain state or organizational environments, challenging universal resolvability of these strings and their general acceptance and usability on the internet.

See the “Competition” section in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2018 for further information.

We must establish and maintain strong relationships with registrars and their resellers to maintain their focus on marketing our products and services otherwise our Registry Services business could be harmed.

All of our domain name registrations occur through registrars. Registrars and their resellers utilize substantial marketing efforts to increase the demand and/or renewal rates for domain names as well as their own associated offerings. Consolidation in the registrar or reseller industry or changes in ownership, management, or strategy among individual registrars or resellers could result in significant changes to their business, operating model and cost structure. Such changes could include reduced marketing efforts or other operational changes that could adversely impact the demand and/or the renewal rates for domain names.

With the introduction of new gTLDs, many of our registrars have chosen to, and may continue to choose to, focus their short or long-term marketing efforts on these new offerings and/or reduce the prominence or visibility of our products and services on their e-commerce platforms. Our registrars and resellers sell domain name registrations of other competing registries, including other new gTLDs, and some also sell and support their own services for websites such as email, website hosting, as well as other services. Therefore, our registrars and resellers may be more motivated to sell to registrants to whom they can also market their own services. To the extent that registrars and their resellers focus more on selling and supporting their services and less on the registration and renewal of domain names in our TLDs, our revenues could be adversely impacted. Our ability to successfully market our services to, and build and maintain strong relationships with, new and existing registrars or resellers is a factor upon which successful operation of our business is dependent. If we are unable to keep a significant portion of their marketing efforts focused on selling registrations of domain names in our TLDs as opposed to other competing TLDs, including the new gTLDs, or their own services, our business could be harmed.

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If we encounter system interruptions or failures, we could be exposed to liability and our reputation and business could suffer.

We depend on the uninterrupted operation of our various systems, secure data centers and other computer and communication networks. Our systems and operations are vulnerable to damage or interruption from:

• power loss, transmission cable cuts and other telecommunications failures;

• damage or interruption caused by fire, earthquake, and other natural disasters;

• attacks, including hacktivism, by miscreants or other nefarious actors;

• computer viruses, software defects, or hardware defects, both in our systems and those of our service providers and suppliers;

• physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks, unintentional mistakes or errors, and other events beyond our control;

• risks inherent in or arising from the terms and conditions of our agreements with service providers to operate our networks and data centers;

• interconnection and internet routing system vulnerabilities;

• state suppression of internet operations; and

• any failure to implement effective and timely remedial actions in response to any damage or interruption.

Most of the computing infrastructure for our Shared Registration System is located at, and most of our customer information is stored in, our facilities in New Castle, Delaware; Dulles, Virginia; and Fribourg, Switzerland. In 2019, we began transitioning some of our data center operations to a leased data center facility in Ashburn, Virginia. To the extent we are unable to partially or completely switch over to our primary alternate or tertiary sites, any damage or failure that causes interruptions in any of these facilities or our other computer and communications systems could materially harm our business. Although we carry insurance for property damage, we do not carry insurance or financial reserves for such interruptions.

In addition, our Registry Services business and certain of our other services depend on the secure and efficient operation of the internet connections to and from customers to our Shared Registration System residing in our secure data centers. These connections depend upon the secure and efficient operation of internet service providers, internet exchange point operators, and internet backbone service providers, some or all of which have had periodic operational problems or experienced outages in the past beyond our scope of control. In addition, if these service providers do not protect, maintain, improve, and reinvest in their networks or present inconsistent data regarding the DNS through their networks, our business could be harmed.

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, or the TLD zone files that we operate, including, for example, our operation of the .gov registry, or other network functions, could result in a DNS resolution or other service outage or degradation; the deletion of one or more TLDs from the internet; the deletion of one or more second-level domain names from the internet for a period of time; or a misdirection of a domain name to a different server. A failure in the operation or update of the supporting cryptographic and other operational infrastructure that we maintain could result in similar consequences. A failure in the operation of our Shared Registration System could result in the inability of one or more registrars to register or maintain domain names for a period of time. In the event that a registrar has not implemented back-up services in conformance with industry best practices, the failure could result in permanent loss of transactions at the registrar during that period. Any of these problems or outages could create potential liability and exposure, including from a failure to meet our service level agreements in our Registry Agreements, and could decrease customer satisfaction, harming our business or resulting in adverse publicity and damage to our reputation that could adversely affect the market’s perception of the security of e-commerce and communications over the internet as well as of the reliability of our services or call into question our ability to preserve the security and stability of the internet.

Our operating results may be adversely affected as a result of unfavorable market, economic, social and political conditions.

An unfavorable global market, economic, social and political environment has impacted or may negatively impact, among other things:

• our customers’ or end-users’ continued growth and development of their businesses, or their ability to maintain their businesses and continue as going concerns, which could affect demand for our products and services;

• current and future demand for our services, including as a result of reduced spending on information technology and communications by our customers;

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• price competition for our products and services;

• the price of our common stock;

• our liquidity and our associated ability to execute on any share repurchase plans; and

• our ability to service our debt, to obtain financing or assume new debt obligations.

In addition, to the extent that the market, economic, social and political environment impacts specific industry and geographic sectors in which many end-users of our products and services are concentrated, that may have a disproportionate negative impact on our business.

Our international operations subject our business to additional economic, legal and political risks that could have an adverse impact on our revenues and business.

A significant portion of our revenues is derived from customers outside the U.S. Our business operations in international markets has required, and will continue to require, significant management attention and resources. We may also need to tailor some of our services for a particular market and to enter into international distribution and operating relationships. We may fail to maintain our ability to conduct business, including potentially material business operations in some international locations, or we may not succeed in expanding our services into new international markets or expand our presence in existing markets. Failure to do so could materially harm our business. 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. There can be no assurance that our employees, contractors and agents will not take actions in violation of such policies, procedures, laws and/or regulations. Violations of laws, regulations or internal policies and procedures by our employees, contractors or agents could result in financial reporting problems, investigations, fines, penalties, or prohibition on the importation or exportation of our products and services and could have a material adverse effect on our business. In addition, we face risks inherent in doing business internationally, including, among others:

• competition with foreign companies or other domestic companies entering the foreign markets in which we operate, as well as foreign governments actively promoting their ccTLDs, which we do not operate;

• legal uncertainty regarding liability, enforcing our contracts, and compliance with foreign laws;

• economic tensions between governments and changes in international trade policies;

• tariffs and other trade barriers and restrictions;

• difficulties in staffing and managing foreign operations;

• currency exchange rate fluctuations;

• potential problems associated with adapting our services to technical conditions existing in different countries;

• difficulty of verifying customer information, including complying with the customer verification requirements of certain countries;

• more stringent privacy and data localization policies in some foreign countries;

• additional vulnerability from terrorist groups targeting U.S. interests abroad;

• potentially conflicting or adverse tax consequences;

• reliance on third parties in foreign markets in which we only recently started doing business; and

• potential concerns of international customers and prospects regarding doing business with U.S. technology companies due to alleged U.S. government data collection policies.

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 harm our business.

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. Furthermore, the laws of foreign 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. 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. Patents may not be awarded with respect to these applications and even if such patents are awarded, third parties may seek to oppose or otherwise challenge our patents, and such patents’ scope may differ significantly from what

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was requested in the patent applications and may not provide us with sufficient protection of our intellectual property. In the future, we may have to resort to litigation to enforce and protect our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This type of litigation is inherently unpredictable and, regardless of its outcome, could result in substantial costs and diversion of management attention and technical resources. Some of the software and protocols used in our business are based on standards set by standards setting organizations such as the IETF. To the extent any of our patents are considered “standards essential patents,” in some cases we may be required to license such patents to our competitors on reasonable and non-discriminatory terms or otherwise be limited in our ability to assert such patents.

We also license externally-developed technology that is used in some of our products and services to perform key functions. These externally-developed technology licenses may not continue to be available to us on commercially reasonable terms or at all. The loss of, or our inability to obtain or maintain, any of these technology licenses could hinder or increase the cost of our launching new products and services, entering into new markets and/or otherwise harm our business. Some of the software and protocols used in our Registry Services business are in the public domain or may otherwise become publicly available, which means that such software and protocols are equally available to our competitors.

We rely on the strength of our Verisign brand to help differentiate Verisign in the marketing of our products. Dilution of the strength of our brand could harm our business. We are at risk that we will be unable to fully register, build equity in, or enforce the Verisign logo in all markets where Verisign products and services are sold. In addition, in the U.S. and most other countries, word marks solely for TLDs have currently not been successfully registered as trademarks. Accordingly, we may not be able to fully realize or maintain the value of these intellectual property assets.

We could become subject to claims of infringement of intellectual property of others, which could be costly to defend and could harm our business.

We cannot be certain that we do not and will not infringe the intellectual property rights of others. Claims relating to infringement of intellectual property of others or other similar claims have been made against us in the past and could be made against us in the future. It is possible that we could become subject to additional claims for infringement of the intellectual property of other parties. The international use of our logo could present additional potential risks for external party claims of infringement. Any claims, with or without merit, could be time-consuming, result in costly litigation and diversion of technical and management personnel attention, cause delays in our business activities generally, or require us to develop a non-infringing logo or technology or enter into royalty or licensing agreements. Royalty or licensing agreements, if required, may not be available on acceptable terms or at all. If a successful claim of infringement were made against us, we could be required to pay damages or have portions of our business enjoined. If we could not identify and adopt an alternative non-infringing logo, develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis, our business could be harmed.

An external party could claim that the technology we license from other parties infringes a patent or other proprietary right. Litigation between the licensor and a third party or between us and a third party could lead to royalty obligations for which we are not indemnified or for which indemnification is insufficient, or we may not be able to obtain any additional license on commercially reasonable terms or at all.

In addition, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights in internet-related businesses, including patents related to software and business methods, are uncertain and evolving. Because of the growth of the internet and internet-related businesses, patent applications are continuously being filed in connection with internet-related technology. There are a significant number of U.S. and foreign patents and patent applications in our areas of interest, and we believe that there has been, and is likely to continue to be, significant litigation in the industry regarding patent and other intellectual property rights.

We could become involved in claims, lawsuits, audits or investigations that may result in adverse outcomes.

In addition to possible intellectual property litigation and infringement claims, we are, and may in the future, become involved in other claims, lawsuits, audits and investigations. For example, Afilias, a competitor and a losing bidder in the .web auction, filed an arbitration proceeding against ICANN on November 14, 2018, alleging that ICANN’s failure to disqualify Nu Dotco, LLC (“NDC”) from participating in the .web auction violated ICANN’s rules.  The arbitration, which was filed more than two years after the .web auction took place, seeks to compel ICANN to award the .web TLD to Afilias.  Neither Verisign nor NDC currently are parties in the Afilias arbitration, but both have filed requests to participate in the arbitration as interested parties as allowed by ICANN’s rules.  We believe Afilias’ claims against ICANN are without merit.  If Afilias were successful in the arbitration on its claims that ICANN violated its own rules, we believe that ICANN would still need to make a further determination to remedy such a violation. Nevertheless, it is possible that Afilias or another party could potentially become the operator of the .web TLD.

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Litigation is inherently unpredictable, and unexpected judgments or excessive verdicts do occur. In addition, such proceedings may initially be viewed as immaterial but 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, such as our ability to operate the .web gTLD, and may have a material adverse effect on our financial condition, results of operations and cash flows. Given the inherent uncertainties in litigation, even when we are able to reasonably estimate the amount of possible loss or range of loss and therefore record an aggregate litigation accrual for probable and reasonably estimable loss contingencies, the accrual may change in the future due to new developments or changes in approach.  In addition, such claims, lawsuits, audits and investigations could involve significant expense and diversion of management’s attention and resources from other matters.

We continue to explore new strategic initiatives, the pursuit of any of which may pose significant risks and could have a material adverse effect on our business, financial condition and results of operations.

We explore possible strategic initiatives which may include, among other things, the investment in, and the pursuit of, new revenue streams, services or products, changes to our offerings, initiatives to leverage our patent portfolio, back-end registry services and IDN gTLDs. In addition, we have evaluated and are pursuing and will continue to evaluate and pursue acquisitions of TLDs that are currently in operation and those that have not yet been awarded or delegated as long as they support our growth strategy.

Any such strategic initiative may involve a number of risks, including: the diversion of our management’s attention from our existing business to develop the initiative, related operations and any requisite personnel, including, for example, our management’s involvement in the transition of Security Services customers to Neustar; possible regulatory scrutiny or third-party claims; possible material adverse effects on our results of operations during and after the development process; our possible inability to achieve the intended objectives of the initiative; as well as damage to our reputation if we are unsuccessful in pursuing a strategic initiative. Such initiatives may result in a reduction of cash or increased costs. We may not be able to successfully or profitably develop, integrate, operate, maintain and manage any such initiative and the related operations or employees in a timely manner or at all. Furthermore, under our agreements with ICANN, we are subject to certain restrictions in the operation of .com, .net, .name and other TLDs, including required ICANN approval of new registry services for such TLDs. If any new initiative requires ICANN review or ICANN determines that such a review is required, we cannot predict whether this process will prevent us from implementing the initiative in a timely manner or at all. Any strategic initiative to leverage our patent portfolio will likely increase litigation risks from potential licensees and we may have to resort to litigation to enforce our intellectual property rights.

We depend on key employees to manage our business effectively, and we may face difficulty attracting and retaining qualified leaders.

We operate in a unique, competitive and highly regulated environment, and we depend on the knowledge, experience, and performance of our senior management team and other key employees in this regard and otherwise. We periodically experience changes in our management team. If we are unable to attract, integrate, retain and motivate these key individuals as well as other highly skilled employees, and implement succession plans for these personnel, our business may suffer. For example, our service products are highly technical and require individuals skilled and knowledgeable in unique platforms, operating systems and software development tools.

Changes in, or interpretations of, tax rules and regulations or our tax positions may adversely affect our income taxes.

We are subject to income taxes in both the U.S. and numerous foreign 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. Our effective tax rates may fluctuate significantly on a quarterly basis because of a variety of factors, including changes in the mix of earnings and losses in countries with differing statutory tax rates, changes in our business or structure, changes in tax laws that could adversely impact our income or non-income taxes or the expiration of or disputes about certain tax agreements in a particular country. We are subject to audit by various tax authorities. In accordance with U.S. GAAP, we recognize income tax benefits, net of required valuation allowances and accrual for uncertain tax positions. For example, we claimed a worthless stock deduction on our 2013 federal income tax return and recorded a net income tax benefit of $380.1 million. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and accruals. Should additional taxes be assessed as a result of an audit or litigation, an adverse effect on our results of operations, financial condition and cash flows in the period or periods for which that determination is made could result.

The Tax Act significantly revamped U.S. taxation of corporations, including a reduction of the federal income tax rate from 35% to 21%, and a new tax regime for foreign earnings. However, the new U.S. taxes on accumulated and future foreign earnings, limited remaining carried forward net operating losses and tax credits to reduce taxable income, other adverse changes

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resulting from the Tax Act, or a change in the mix of domestic and foreign earnings, might offset the benefit from the reduced tax rate, and our future cash taxes may increase, even significantly, compared to recent or historical trends, which could adversely impact our financial condition and cash flows. Many of the provisions of the Tax Act are highly complex and may be subject to further interpretive guidance from the Internal Revenue Service or others. Some of the provisions of the Tax Act may be changed by a future Congress or challenged by the World Trade Organization (“WTO”) or be subject to trade or tax retaliation by other countries. Although we cannot predict the nature or outcome of such future interpretive guidance, or actions by a future Congress, WTO or other countries, they could adversely impact our financial condition, results of operations and cash flows.

Our marketable securities portfolio could experience a decline in market value, which could materially and adversely affect our financial results.

As of June 30, 2019, we had $1.23 billion in cash, cash equivalents, marketable securities and restricted cash, of which $473.4 million was invested in marketable securities. The cash equivalents and marketable securities consist primarily of debt securities issued by the U.S. Treasury. These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and interest rate risks, which may be exacerbated by financial market credit and liquidity events. If the global credit or liquidity market deteriorates or other events negatively impact the market for U.S. Treasury securities, our investment portfolio may be impacted and we could determine that some of our investments have experienced an other-than-temporary decline in fair value, requiring an impairment charge which could adversely impact our results of operations and cash flows.

We are subject to the risks of owning real property.

We own the land and building in Reston, Virginia, which constitutes our headquarters facility. Ownership of this property, as well as our data centers in Dulles, Virginia and New Castle, Delaware, may subject us to risks, including:

• adverse changes in the value of the properties, due to interest rate changes, changes in the commercial property markets, easements or other encumbrances, a government exercising its right of eminent domain, or other factors;

• ongoing maintenance expenses and costs of improvements or repairs;

• the possible need for structural improvements in order to comply with environmental, health and safety, zoning, seismic, disability law, or other requirements;

• the possibility of environmental contamination or notices of violation from federal or state environmental agencies; and

• possible disputes with neighboring owners, tenants, service providers or others.

We have anti-takeover protections that may discourage, delay or prevent a change in control that could benefit our stockholders.

Our amended and restated Certificate of Incorporation and Bylaws contain provisions that could make it more difficult for an outside party to acquire us without the consent of our Board of Directors (“Board”). These provisions include:

• our stockholders may take action only at a duly called meeting and not by written consent;

• special meetings of our stockholders may be called only by the chairman of the board of directors, the president, our Board, or the secretary (acting as a representative of the stockholders) whenever a stockholder or group of stockholders owning at least 25% in the aggregate of the capital stock issued, outstanding and entitled to vote, and who held that amount in a net long position continuously for at least one year, so request in writing;

• vacancies and newly created directorships on our Board can be filled until the next annual meeting of stockholders by a majority of directors then in office; and

• our Board has the ability to designate the terms of and issue new series of preferred stock without stockholder approval.

In addition, Section 203 of the General Corporation Law of Delaware prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, which generally means a person who, together with its affiliates owns, or within the last three years has owned, 15% or more of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless in the same transaction the interested stockholder acquired 85% ownership of our voting stock (excluding certain shares) or the business combination is approved in a prescribed manner. Section 203 therefore may impact the ability of an acquirer to complete an acquisition of us after a successful tender offer and accordingly could discourage, delay or prevent an acquirer from making an unsolicited offer without the approval of our Board.

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Our financial condition and results of operations could be adversely affected if we do not effectively manage our indebtedness.

We have a significant amount of outstanding debt, and we periodically reassess our capital structure and may incur additional indebtedness in the future. Our substantial indebtedness, including any future indebtedness, requires us to dedicate a significant portion of our cash flow from operations or to arrange alternative liquidity sources to make principal and interest payments, when due, or to repurchase or settle our debt, if triggered, by certain corporate events, or certain events of default. It could also limit our flexibility in planning for or reacting to changes in our business and our industry, or make required capital expenditures and investments in our business; make it difficult or more expensive to refinance our debt or obtain new debt; trigger an event of default; and increase our vulnerability to adverse changes in general economic and industry conditions. Some of our debt contains covenants which may limit our operating flexibility, including restrictions on share repurchases, dividends, prepayment or repurchase of debt, acquisitions, disposing of assets, if we do not continue to meet certain financial ratios. Any rating assigned to our debt securities could be lowered or withdrawn by a rating agency, which could make it more difficult or more expensive for us to obtain additional debt financing in the future. The occurrence of any of the foregoing factors could have a material adverse effect on our business, cash flows, results of operations and financial condition.

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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the share repurchase activity during the three months ended June 30, 2019:

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
	(Shares in thousands)
April 1 - 30, 2019	310	$	188.08	310	$	832.8	million
May 1 - 31, 2019	313	$	194.95	313	$	771.6	million
June 1 - 30, 2019	273	$	203.83	273	$	716.1	million
	896			896

(1) Effective February 7, 2019, our Board authorized the repurchase of our common stock in the amount of approximately $602.9 million, in addition to the $397.1 million remaining available for repurchase under our share repurchase program, for a total repurchase authorization of up to $1.0 billion under the share repurchase program. The share repurchase program has no expiration date. Purchases made under the program could be effected through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions.

ITEM 6.    EXHIBITS

As required under Item 6—Exhibits, the exhibits filed as part of this report are provided in this separate section. The exhibits included in this section are as follows:

Exhibit Number	Exhibit Description	Incorporated by Reference
		Form	Date	Number	Filed Herewith
31.01	Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a).				X
31.02	Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a).				X
32.01	Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code (18 U.S.C. 1350). *				X
32.02	Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code (18 U.S.C. 1350). *				X
101	Interactive Data File. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL (“iXBRL”) document.				X

* As contemplated by SEC Release No. 33-8212, these exhibits are furnished with this Quarterly Report on Form 10-Q and are not deemed filed with the SEC and are not incorporated by reference in any filing of VeriSign, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in such filings.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		VERISIGN, INC.
Date: July 25, 2019	By:	/S/    D. JAMES BIDZOS
		D. James Bidzos
		Chief Executive Officer

Date: July 25, 2019	By:	/S/   GEORGE E. KILGUSS, III
		George E. Kilguss, III
		Chief Financial Officer

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EX-31.01

EXHIBIT 31.01

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, D. James Bidzos, certify that:

1. I have reviewed this quarterly report on Form 10-Q of VeriSign, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019	By:	/S/ D. JAMES BIDZOS
		D. James Bidzos
		Chief Executive Officer

EX-31.02

EXHIBIT 31.02

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

EXCHANGE ACT RULE 13a-14(a)/15d-14(a)

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, George E. Kilguss, III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of VeriSign, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019	By:	/S/ GEORGE E. KILGUSS, III
		George E. Kilguss, III
		Chief Financial Officer

EX-32.01

EXHIBIT 32.01

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, D. James Bidzos, Chief Executive Officer of VeriSign, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 25, 2019	/S/ D. JAMES BIDZOS
	D. James Bidzos
	Chief Executive Officer

EX-32.02

EXHIBIT 32.02

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, George E. Kilguss, III, Chief Financial Officer of VeriSign, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2019, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 25, 2019	/S/ GEORGE E. KILGUSS, III
	George E. Kilguss, III
	Chief Financial Officer

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Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2019	Jul. 19, 2019
Document And Entity Information [Abstract]
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	VRSN
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3221585
Entity Address, Postal Zip Code	20190
Document Transition Report	false
Document Quarterly Report	true
Entity Registrant Name	VERISIGN INC/CA
Entity Central Index Key	0001014473
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Entity File Number	000-23593
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		118,371,848
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Address, Address Line One	12061 Bluemont Way,
Entity Address, City or Town	Reston,
Entity Address, State or Province	VA
City Area Code	703
Local Phone Number	948-3200
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 751,580	$ 357,415
Marketable securities	473,362	912,254
Other Assets, Current	70,440	47,365
Total current assets	1,295,382	1,317,034
Property and equipment, net	250,820	253,905
Goodwill	52,527	52,527
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent	109,917	104,992
Deposits to acquire Intangible Assets	145,000	145,000
Other long-term assets	36,252	41,046
Total long-term assets	594,516	597,470
Total assets	1,889,898	1,914,504
Current liabilities:
Accounts payable and accrued liabilities	171,215	215,208
Deferred revenues	763,466	732,382
Total current liabilities	934,681	947,590
Long-term deferred revenues	286,143	285,720
Senior Notes	1,786,306	1,785,047
Other long-term liabilities	307,935	281,621
Total long-term liabilities	2,380,384	2,352,388
Total liabilities	3,315,065	3,299,978
Commitments and contingencies
Stockholders' deficit:
Preferred stock-par value $.001 per share	0	0
Common stock-par value $.001 per share	353	352
Additional paid-in capital	15,356,935	15,706,774
Accumulated deficit	(16,779,728)	(17,089,789)
Accumulated other comprehensive loss	(2,727)	(2,811)
Total stockholders' deficit	(1,425,167)	(1,385,474)
Total liabilities and stockholders' deficit	$ 1,889,898	$ 1,914,504

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized shares	5,000	5,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	1,000,000	1,000,000
Common Stock, Shares, Issued	352,952	352,325
Common stock, outstanding shares	118,548	120,037

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Condensed Consolidated Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues	$ 306,289	$ 302,452	$ 612,697	$ 601,740
Costs and expenses:
Cost of revenues	44,066	47,365	89,570	95,517
Sales and marketing	12,399	16,569	22,918	33,844
Research and development	14,953	13,755	31,085	29,130
General and administrative	33,178	31,753	67,179	64,820
Total costs and expenses	104,596	109,442	210,752	223,311
Operating income	201,693	193,010	401,945	378,429
Interest expense	(22,635)	(28,792)	(45,266)	(69,580)
Non-operating income (loss), net	11,436	660	23,639	8,464
Income before income taxes	190,494	164,878	380,318	317,313
Income tax expense	(42,960)	(36,527)	(70,257)	(54,699)
Net Income	147,534	128,351	310,061	262,614
Other comprehensive income (loss)	35	17	84	260
Comprehensive Income	$ 147,569	$ 128,368	$ 310,145	$ 262,874
Basic income (loss) per share
Net Income	$ 1.24	$ 1.13	$ 2.60	$ 2.49
Diluted income (loss) per share
Net Income	$ 1.24	$ 1.04	$ 2.59	$ 2.13
Shares used to compute net income per share
Basic	118,965	113,936	119,359	105,639
Diluted	119,361	123,200	119,837	123,399

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Condensed Consolidated Statements of Stockholders' Deficit Statement - USD ($) $ in Thousands	Total	Accumulated Deficit [Member]	AOCI Attributable to Parent [Member]	Additional Paid-in Capital [Member]	Common Stock [Member]
Stockholders' Deficit	$ (1,260,271)	$ (17,694,790)	$ (2,941)	$ 16,437,135	$ 325
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt				(159,618)
Stock Issued During Period, Value, Conversion of Convertible Securities					26
Stock-based compensation expense				27,274
Stock Issued During Period, Value, Employee Stock Purchase Plan				7,810	1
Stock Repurchased During Period, Value				(281,597)
Net Income	262,614	262,614
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification		22,512
Other Comprehensive Income (Loss), Net of Tax	260		260
Stockholders' Deficit	(1,234,734)	(17,538,015)	(2,698)	16,305,653	326
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt				(159,618)
Stock Issued During Period, Value, Conversion of Convertible Securities					26
Stock-based compensation expense				13,825
Stock Issued During Period, Value, Employee Stock Purchase Plan				0	0
Stock Repurchased During Period, Value				(128,856)
Net Income		128,351
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification		0
Other Comprehensive Income (Loss), Net of Tax	17		17
Stockholders' Deficit	(1,380,989)	(17,409,664)	(2,681)	16,031,004	352
Stockholders' Deficit	(1,385,474)	(17,089,789)	(2,811)	15,706,774	352
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt				0
Stock Issued During Period, Value, Conversion of Convertible Securities					0
Stock-based compensation expense				26,441
Stock Issued During Period, Value, Employee Stock Purchase Plan				8,252	1
Stock Repurchased During Period, Value				(384,532)
Net Income	310,061	310,061
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification		0
Other Comprehensive Income (Loss), Net of Tax	84		84
Stockholders' Deficit	(1,406,129)	(16,927,262)	(2,762)	15,523,542	353
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt				0
Stock Issued During Period, Value, Conversion of Convertible Securities					0
Stock-based compensation expense				13,623
Stock Issued During Period, Value, Employee Stock Purchase Plan				0	0
Stock Repurchased During Period, Value				(180,230)
Net Income		147,534
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification		0
Other Comprehensive Income (Loss), Net of Tax	35		35
Stockholders' Deficit	$ (1,425,167)	$ (16,779,728)	$ (2,727)	$ 15,356,935	$ 353

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Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 310,061	$ 262,614
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	22,884	24,195
Stock-based compensation	25,617	26,276
Accretion (Amortization) of Discounts and Premiums, Investments	(5,679)	(7,686)
Other Noncash Income (Expense)	(894)	(13,452)
Changes in operating assets and liabilities
Other assets	(10,254)	(7,605)
Accounts payable and accrued liabilities	(39,351)	(20,892)
Deferred revenues	31,857	27,296
Deferred Income Taxes	16,146	(25,844)
Net cash provided by operating activities	352,175	291,806
Net Cash Provided by (Used in) Investing Activities [Abstract]
Proceeds from maturities and sales of marketable securities	1,466,303	2,634,376
Purchases of marketable securities	(1,021,741)	(1,592,403)
Purchases of property and equipment	(20,189)	(18,669)
Other investing activities	(6,311)	(160)
Net cash used in investing activities	418,062	1,023,144
Cash flows from financing activities:
Repayments of Subordinated Debt	0	(1,250,009)
Proceeds from employee stock purchase plans	8,253	7,811
Repurchases of common stock	(384,532)	(281,597)
Net cash used in financing activities	(376,279)	(1,523,795)
Effect of exchange rate changes on cash and cash equivalents	243	(590)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect	394,201	(209,435)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, beginning of period	366,753	475,139
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, end of period	760,954	265,704
Supplemental cash flow disclosures:
Cash paid for interest	43,708	73,971
Cash paid for income taxes, net of refunds received	$ 62,214	$ 85,597

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Basis Of Presentation

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis Of Presentation

Basis of Presentation

Interim Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by VeriSign, Inc. (“Verisign” or the “Company”) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and notes normally provided in audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and other adjustments) considered necessary for a fair presentation have been included. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for any other interim period or for a full fiscal year. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes contained in Verisign’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”) filed with the SEC on February 15, 2019.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such reclassifications have no effect on net income as previously reported.

Adoption of New Accounting Standards

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases, and several related amendments, issued by the Financial Accounting Standards Board, collectively codified under Accounting Standards Codification (“ASC”) 842, Leases. ASC 842 requires most operating leases to be reported on the balance sheet as a lease liability and a right-of-use asset. This standard was applied as of the effective date of January 1, 2019, and therefore prior period amounts were not adjusted. The adoption of ASC 842 did not have a material impact on the Company’s consolidated financial statements.

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Financial Instruments

6 Months Ended

Jun. 30, 2019

Financial Instruments, Owned, at Fair Value [Abstract]

Financial Instruments

Cash, Cash Equivalents, and Marketable Securities

The following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value categorization of the financial instruments measured at fair value on a recurring basis:

	June 30,		December 31,
	2019		2018
	(In thousands)
Cash	$	26,451	$	37,190
Time deposits	4,134		3,810
Money market funds (Level 1)	104,275		120,832
Debt securities issued by the U.S. Treasury (Level 1)	1,099,456		1,117,175
Total	$	1,234,316	$	1,279,007
Cash and cash equivalents	$	751,580	$	357,415
Restricted cash (included in Other long-term assets)	9,374		9,338
Total Cash, cash equivalents, and restricted cash	760,954		366,753
Marketable securities	473,362		912,254
Total	$	1,234,316	$	1,279,007

The fair value of the debt securities held as of June 30, 2019 was $1.10 billion, including less than $0.1 million of gross and net unrealized gains. All of the debt securities held as of June 30, 2019 are scheduled to mature in less than one year.

Fair Value Measurements

The fair value of the Company’s investments in money market funds approximates their face value. Such instruments are included in Cash and cash equivalents. The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. Debt securities purchased with original maturities in excess of three months are included in Marketable securities. The fair value of all of these financial instruments are classified as Level 1 in the fair value hierarchy.

The Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable. As of June 30, 2019, the carrying value of these financial instruments approximated their fair value. The fair values of the senior notes due 2023, 2025, and 2027 were $763.2 million, $537.2 million, and $576.6 million, respectively, as of June 30, 2019. The fair values of these debt instruments are based on available market information from public data sources and are classified as Level 2.

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Other Balance Sheet Items

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

Other Balance Sheet Items

Other Balance Sheet Items

Other Current Assets

Other current assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Prepaid registry fees	$	21,739	$	20,696
Prepaid expenses	22,367		14,109
Contingent consideration receivable	14,721		—
Accounts receivable, net	5,257		6,029
Income taxes receivable	4,656		4,451
Other	1,700		2,080
Total other current assets	$	70,440	$	47,365

Other Long-Term Assets

Other long-term assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Restricted cash	$	9,374	$	9,338
Operating lease right-of-use asset	9,139		—
Long-term prepaid registry fees	7,884		7,779
Other tax receivable	5,673		5,673
Contingent consideration receivable	—		14,721
Other	4,182		3,535
Total other long-term assets	$	36,252	$	41,046

As a result of the adoption of ASC 842, Leases, in 2019, the Company recorded right-of-use assets for operating leases of $9.1 million as of June 30, 2019. The current and long-term prepaid registry fees in the tables above relate to the fees the Company pays to ICANN for each annual increment of .com domain name registrations and renewals which are deferred and amortized over the domain name registration term. The amount of prepaid registry fees as of June 30, 2019 reflects amortization of $8.6 million and $17.1 million during the three and six months ended June 30, 2019 which was recorded in Cost of Revenues.

The contingent consideration receivable in the tables above related to the estimated amount due from Neustar, Inc. (“Neustar”) in the first quarter of 2020, was reclassified from Other long-term assets as of December 31, 2018 to Other current assets as of June 30, 2019.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Accounts payable	$	8,018	$	10,445
Customer deposits, net	51,343		57,025
Accrued employee compensation	34,578		54,746
Interest payable	24,469		24,318
Accrued registry fees	12,834		11,029
Taxes payable and other tax liabilities	12,073		18,961
Payables to buyer	3,623		9,875
Current operating lease liability	3,880		—
Other accrued liabilities	20,397		28,809
Total accounts payable and accrued liabilities	$	171,215	$	215,208

Customer deposits primarily relate to advance payments to cover domain name registration activity by registrars. The balance of customer deposits can fluctuate significantly due to the timing of payments from large customers. Accrued employee compensation primarily consists of liabilities for employee leave, salaries, payroll taxes, employee contributions to the employee stock purchase plan, and incentive compensation. Accrued employee incentive compensation as of December 31, 2018, was paid during the six months ended June 30, 2019. Interest payable varies at each period-end based on the payment due dates for each Senior Note issuance. Payables to buyer relate to amounts due to Neustar for estimated collections from Security Services customers of any billings after the closing date and until the customer contracts are assigned to Neustar. Other liabilities include amounts payable to registrars related to rebates and marketing programs as well as other miscellaneous liabilities. These amounts may vary from period to period due to the timing of payments.

Long-term tax and other liabilities

	June 30,		December 31,
	2019		2018
	(In thousands)
Long-term tax liabilities	$	302,692	$	281,621
Long-term operating lease liability	5,243		—
Long-term tax and other liabilities	$	307,935	$	281,621

Long-term tax liabilities as of June 30, 2019 reflects the reclassification of unrecognized tax benefits during the six months ended June 30, 2019, as deferred tax assets related to tax credits and loss carryforwards are no longer available to offset the liabilities. This was partially offset by a $7.9 million reclassification of a portion of the transition tax liability on accumulated foreign earnings from non-current to current as of June 30, 2019. The current and long-term lease liabilities as of June 30, 2019 in the tables above relate to the lease obligations recorded as a result of the adoption of ASC 842, Leases, during 2019.

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Stockholders' Deficit

6 Months Ended

Jun. 30, 2019

Stockholders' Equity Note [Abstract]

Stockholders' (Deficit) Equity

Stockholders’ Deficit

Effective February 7, 2019, the Company’s Board of Directors authorized the repurchase of the Company’s common stock in the amount of approximately $602.9 million, in addition to the $397.1 million remaining available for repurchase under the Company’s share repurchase program, for a total repurchase authorization of up to $1.0 billion under the share repurchase program. The share repurchase program has no expiration date. Purchases made under the program can be made through open market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions. During the three and six months ended June 30, 2019, the Company repurchased 0.9 million and 1.9 million shares of its common stock, respectively, at an average stock price of $195.27 and $182.10, respectively. The aggregate cost of the repurchases in the three and six months ended June 30, 2019 was $175.0 million and $349.9 million, respectively. As of June 30, 2019, there was approximately $716.1 million remaining available for future share repurchases under the share repurchase program.

During the six months ended June 30, 2019, the Company placed 0.2 million shares, at an average stock price of $177.41, and for an aggregate cost of $34.6 million, into treasury stock for purposes related to tax withholding upon vesting of Restricted Stock Units (“RSUs”).

Since inception, the Company has repurchased 234.4 million shares of its common stock for an aggregate cost of $9.80 billion, which is presented as a reduction of Additional paid-in capital.

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Calculation Of Net Income Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Calculation Of Net Income Per Share Attributable To Verisign Stockholders

Calculation of Earnings per Share

The following table presents the computation of weighted-average shares used in the calculation of basic and diluted earnings per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
	(In thousands)
Weighted-average shares of common stock outstanding	118,965	113,936	119,359	105,639
Weighted-average potential shares of common stock outstanding:
Conversion spread related to Subordinated Convertible Debentures	—	8,776	—	17,178
Unvested RSUs and ESPP	396	488	478	582
Shares used to compute diluted earnings per share	119,361	123,200	119,837	123,399

The Company settled the Subordinated Convertible Debentures in May 2018. The calculation of diluted weighted average shares outstanding, excludes potentially dilutive securities, the effect of which would have been anti-dilutive, as well as performance-based RSUs granted by the Company for which the relevant performance criteria have not been achieved. The number of potential shares excluded from the calculation was not significant in any period presented.

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Revenue (Notes)

6 Months Ended

Jun. 30, 2019

Revenue Recognition [Abstract]

Revenue from Contract with Customer [Table Text Block]

Revenues

The Company generates revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries, including, but not limited to Canada, Australia, and Japan.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
U.S.	$	191,848	$	187,818	$	384,003	$	373,001
EMEA	51,595		53,367		103,741		106,784
China	29,448		26,550		57,690		52,408
Other	33,398		34,717		67,263		69,547
Total revenues	$	306,289	$	302,452	$	612,697	$	601,740

Revenues for the Company’s Registry Services business are attributed to the country of domicile and the respective regions in which registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenues for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenues for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.

Deferred Revenues

As payment for domain name registrations and renewals are due in advance of our performance, we record these amounts as deferred revenues. The increase in the deferred revenues balance for the six months ended June 30, 2019 was primarily driven by amounts billed in the first half of 2019 for domain name registrations and renewals to be recognized as revenues in future periods, offset by refunds for domain name renewals deleted during the 45-day grace period, and $488.8 million of revenues recognized that were included in the deferred revenues balance at the beginning of the period. The balance of deferred revenues as of June 30, 2019 represents our aggregate remaining performance obligations. Amounts included in current deferred revenues are all expected to be recognized in revenues within 12 months, except for a portion of deferred

revenues that relates to domain name renewals that are deleted in the 45-day grace period following the transaction. The long-term deferred revenues amounts will be recognized in revenues over several years and in some cases up to 10 years.

Historically, we have experienced a higher volume of domain name transactions, particularly renewals, in the first quarter of the year compared to other quarters. Our quarterly revenues do not reflect these seasonal patterns because the preponderance of our revenues for each quarterly period is provided by the ratable recognition of our deferred revenues balance. The effect of this seasonality has historically resulted in the largest amount of growth in our deferred revenues balance occurring during the first quarter of the year compared to the other quarters.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-based Compensation

Stock-based compensation is classified in the Condensed Consolidated Statements of Comprehensive Income in the same expense line items as cash compensation. The following table presents the classification of stock-based compensation:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Cost of revenues	$	1,741	$	1,818	$	3,339	$	3,428
Sales and marketing	1,019		1,494		2,002		2,942
Research and development	1,642		1,688		3,231		3,409
General and administrative	8,753		8,298		17,045		16,497
Total stock-based compensation expense	$	13,155	$	13,298	$	25,617	$	26,276

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
RSUs	$	9,059		$	9,406		$	17,668		$	18,693
Performance-based RSUs	3,294			3,360			6,332			6,473
ESPP	1,270			1,059			2,441			2,109
Capitalization (included in Property and equipment, net)	(468		)	(527		)	(824		)	(999		)
Total stock-based compensation expense	$	13,155		$	13,298		$	25,617		$	26,276

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Interest Expense

6 Months Ended

Jun. 30, 2019

Interest Expense [Abstract]

Interest Expense

Interest Expense

The following table presents the components of the Company’s Interest expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest on Senior Notes	$	21,766	$	21,766	$	43,532	$	43,531
Contractual interest on Subordinated Convertible Debentures	—		5,067		—		20,015
Amortization of debt discount on Subordinated Convertible Debentures	—		1,075		—		4,236
Amortization of debt issuance costs and other interest expense	869		884		1,734		1,798
Total interest expense	$	22,635	$	28,792	$	45,266	$	69,580

The Company settled its Subordinated Convertible Debentures in May 2018.

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Non-operating (loss) income

6 Months Ended

Jun. 30, 2019

Non-operating (loss) income, net [Abstract]

Other Income and Other Expense Disclosure [Text Block]

Non-operating Income, Net

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(In thousands)
Interest income	$	7,228	$	6,583		$	14,588	$	14,071
Transition services income	4,050		—			8,100		—
Loss on extinguishment of Subordinated Convertible Debentures	—		(6,554		)	—		(6,554		)
Other, net	158		631			951		947
Total non-operating income, net	$	11,436	$	660		$	23,639	$	8,464

During the three and six months ended June 30, 2019, the Company recognized $4.1 million and $8.1 million, respectively, of income from the transition services provided to Neustar in connection with the sale of customer contracts of the Security Services business. In the second quarter of 2018, the Company recognized a $6.6 million loss on the extinguishment of the Subordinated Convertible Debentures.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents Income tax expense and the effective tax rate:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Income tax expense	$	42,960		$	36,527		$	70,257		$	54,699
Effective tax rate	23		%	22		%	18		%	17		%

The effective tax rate for each of the periods in the table above differed from the statutory federal rate of 21% due to a lower foreign effective tax rate, offset by state income taxes and U.S. taxes on foreign earnings, net of foreign tax credits. Additionally, income tax expense for the six months ended June 30, 2019 was reduced by $12.7 million of excess tax benefits related to stock-based compensation. Income tax expense for the six months ended June 30, 2018 was reduced by $12.1 million of tax benefits recognized related to changes to provisional amounts previously recognized for the impact of the 2017 Tax Cuts and Jobs Act (“Tax Act”), and $6.0 million of excess tax benefits related to stock-based compensation.

During the six months ended June 30, 2019, the Company completed the repatriation of $249.0 million of cash held by foreign subsidiaries, net of $13.1 million of foreign withholding taxes which were previously accrued in 2018.

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Financial Instruments, Owned, at Fair Value [Abstract]

Cash, Cash Equivalents, And Marketable Securities

The following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value categorization of the financial instruments measured at fair value on a recurring basis:

	June 30,		December 31,
	2019		2018
	(In thousands)
Cash	$	26,451	$	37,190
Time deposits	4,134		3,810
Money market funds (Level 1)	104,275		120,832
Debt securities issued by the U.S. Treasury (Level 1)	1,099,456		1,117,175
Total	$	1,234,316	$	1,279,007
Cash and cash equivalents	$	751,580	$	357,415
Restricted cash (included in Other long-term assets)	9,374		9,338
Total Cash, cash equivalents, and restricted cash	760,954		366,753
Marketable securities	473,362		912,254
Total	$	1,234,316	$	1,279,007

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Other Balance Sheet Items (Tables)

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

Other Current Assets

Other current assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Prepaid registry fees	$	21,739	$	20,696
Prepaid expenses	22,367		14,109
Contingent consideration receivable	14,721		—
Accounts receivable, net	5,257		6,029
Income taxes receivable	4,656		4,451
Other	1,700		2,080
Total other current assets	$	70,440	$	47,365

Schedule of Other Assets, Noncurrent [Table Text Block]

Other long-term assets consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Restricted cash	$	9,374	$	9,338
Operating lease right-of-use asset	9,139		—
Long-term prepaid registry fees	7,884		7,779
Other tax receivable	5,673		5,673
Contingent consideration receivable	—		14,721
Other	4,182		3,535
Total other long-term assets	$	36,252	$	41,046

Components Of Accounts Payable And Accrued Liabilities

Accounts payable and accrued liabilities consist of the following: 

	June 30,		December 31,
	2019		2018
	(In thousands)
Accounts payable	$	8,018	$	10,445
Customer deposits, net	51,343		57,025
Accrued employee compensation	34,578		54,746
Interest payable	24,469		24,318
Accrued registry fees	12,834		11,029
Taxes payable and other tax liabilities	12,073		18,961
Payables to buyer	3,623		9,875
Current operating lease liability	3,880		—
Other accrued liabilities	20,397		28,809
Total accounts payable and accrued liabilities	$	171,215	$	215,208

Other Noncurrent Liabilities [Table Text Block]

Long-term tax and other liabilities

	June 30,		December 31,
	2019		2018
	(In thousands)
Long-term tax liabilities	$	302,692	$	281,621
Long-term operating lease liability	5,243		—
Long-term tax and other liabilities	$	307,935	$	281,621

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Calculation Of Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

The following table presents the computation of weighted-average shares used in the calculation of basic and diluted earnings per share:

	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
	(In thousands)
Weighted-average shares of common stock outstanding	118,965	113,936	119,359	105,639
Weighted-average potential shares of common stock outstanding:
Conversion spread related to Subordinated Convertible Debentures	—	8,776	—	17,178
Unvested RSUs and ESPP	396	488	478	582
Shares used to compute diluted earnings per share	119,361	123,200	119,837	123,399

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Revenue (Tables)

6 Months Ended

Jun. 30, 2019

Revenue Recognition [Abstract]

Disaggregation of Revenue [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
U.S.	$	191,848	$	187,818	$	384,003	$	373,001
EMEA	51,595		53,367		103,741		106,784
China	29,448		26,550		57,690		52,408
Other	33,398		34,717		67,263		69,547
Total revenues	$	306,289	$	302,452	$	612,697	$	601,740

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

Classification Of Stock-Based Compensation

The following table presents the classification of stock-based compensation:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Cost of revenues	$	1,741	$	1,818	$	3,339	$	3,428
Sales and marketing	1,019		1,494		2,002		2,942
Research and development	1,642		1,688		3,231		3,409
General and administrative	8,753		8,298		17,045		16,497
Total stock-based compensation expense	$	13,155	$	13,298	$	25,617	$	26,276

Nature Of Total Stock-Based Compensation

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
RSUs	$	9,059		$	9,406		$	17,668		$	18,693
Performance-based RSUs	3,294			3,360			6,332			6,473
ESPP	1,270			1,059			2,441			2,109
Capitalization (included in Property and equipment, net)	(468		)	(527		)	(824		)	(999		)
Total stock-based compensation expense	$	13,155		$	13,298		$	25,617		$	26,276

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Interest Expense (Tables)

6 Months Ended

Jun. 30, 2019

Interest Expense [Abstract]

Interest Expense Schedule

The following table presents the components of the Company’s Interest expense:

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In thousands)
Contractual interest on Senior Notes	$	21,766	$	21,766	$	43,532	$	43,531
Contractual interest on Subordinated Convertible Debentures	—		5,067		—		20,015
Amortization of debt discount on Subordinated Convertible Debentures	—		1,075		—		4,236
Amortization of debt issuance costs and other interest expense	869		884		1,734		1,798
Total interest expense	$	22,635	$	28,792	$	45,266	$	69,580

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Non-operating (loss) income (Tables)

6 Months Ended

Jun. 30, 2019

Non-operating (loss) income, net [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

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

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(In thousands)
Interest income	$	7,228	$	6,583		$	14,588	$	14,071
Transition services income	4,050		—			8,100		—
Loss on extinguishment of Subordinated Convertible Debentures	—		(6,554		)	—		(6,554		)
Other, net	158		631			951		947
Total non-operating income, net	$	11,436	$	660		$	23,639	$	8,464

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Tax Expense From Continuing Operations And The Effective Tax Rate

The following table presents Income tax expense and the effective tax rate:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(Dollars in thousands)
Income tax expense	$	42,960		$	36,527		$	70,257		$	54,699
Effective tax rate	23		%	22		%	18		%	17		%

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Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Cash	$ 26,451	$ 37,190
Time deposits	4,134	3,810
Money Market Funds (level 1)	104,275	120,832
Financial Instruments, Owned, US Government and Agency Obligations, at Fair Value	1,099,456	1,117,175
Total	1,234,316	1,279,007
Included in Cash and cash equivalents	751,580	357,415
Restricted Cash Equivalents, Noncurrent	9,374	9,338
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	760,954	366,753	$ 265,704	$ 475,139
Included in Marketable securities	$ 473,362	$ 912,254

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Financial Instruments Financial Instruments narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Financial Instruments, Owned, US Government and Agency Obligations, at Fair Value	$ 1,099,456	$ 1,117,175
Debt securities gross unrealized gains	100
Debt instrument fair value senior notes 2023	763,200
Debt instrument fair value senior notes 2025	537,200
Debt instrument fair value senior notes 2027	$ 576,600

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Other Balance Sheet Items (Other Current Assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Prepaid registry fees, current	$ 21,739	$ 20,696
Estimated contingent consideration receivable	14,721	0
Prepaid expenses	22,367	14,109
Accounts Receivable, Net	5,257	6,029
Income Taxes Receivable, Current	4,656	4,451
Other Assets, Miscellaneous, Current	1,700	2,080
Other Assets, Current	$ 70,440	$ 47,365

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Other Balance Sheet Items Other Balance Sheet Items (Other long-term assets) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Restricted Cash	$ 9,374	$ 9,338
Operating Lease, Right-of-Use Asset	9,139	0
Prepaid registry fees, noncurent	7,884	7,779
Restricted Cash and Investments, Noncurrent	5,673	5,673
Nontrade Receivables, Noncurrent	0	14,721
Other Assets, Miscellaneous, Noncurrent	4,182	3,535
Other Assets, Noncurrent	$ 36,252	$ 41,046

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Other Balance Sheet Items (Components Of Accounts Payable And Accrued Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Accounts payable	$ 8,018	$ 10,445
Accrued employee compensation	34,578	54,746
Taxes Payable	12,073	18,961
Interest Payable	24,469	24,318
Deposits, net	51,343	57,025
accrued fees	12,834	11,029
Due to buyer	3,623	9,875
Operating Lease, Liability, Current	3,880	0
Other accrued liabilities	20,397	28,809
Total accounts payable and accrued liabilities	$ 171,215	$ 215,208

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Other Balance Sheet Items Other Balance Sheet Items (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability, Current	$ 7,900	$ 7,900
Operating Lease, Right-of-Use Asset	9,139	9,139	$ 0
Amortization of Other Deferred Charges	$ 8,600	$ 17,100

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Other Balance Sheet Items Other Balance Sheet Items (Long-term tax and other liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Long-term tax and other liabilities Disclosure [Abstract]
Deferred Tax and Other Liabilities, Noncurrent	$ 302,692	$ 281,621
Operating Lease, Liability, Noncurrent	5,243	0
Other long-term liabilities	$ 307,935	$ 281,621

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Stockholders' Deficit (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Feb. 07, 2019
Treasury Stock Repurchase Programs [Line Items]
Additional share repurchase amount authorized		$ 602.9
Remaining common stock available for repurchase	$ 716.1	$ 716.1	$ 397.1
Common stock, held in treasury	234.4	234.4
Common stock repurchased	$ 9,800.0	$ 9,800.0
Share Buyback Program [Member]
Treasury Stock Repurchase Programs [Line Items]
Common stock authorized to repurchase			$ 1,000.0
Common stock repurchase, share	0.9	1.9
Average stock price	$ 195.27	$ 182.10
Aggregate cost of share	$ 175.0	$ 349.9
Restricted Stock Units [Member]
Treasury Stock Repurchase Programs [Line Items]
Common stock repurchase, share		0.2
Average stock price		$ 177.41
Aggregate cost of share		$ 34.6

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Calculation Of Net Income Per Share (Weighted-Average Shares Used In Calculation Of Basic And Diluted EPS) (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Weighted-average number of common shares outstanding	118,965	113,936	119,359	105,639
Conversion spread related to Convertible Debentures	0	8,776	0	17,178
Unvested RSUs and ESPP	396	488	478	582
Shares used to compute diluted net income per share	119,361	123,200	119,837	123,399

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenues	$ 306,289	$ 302,452	$ 612,697	$ 601,740
US [Member]
Disaggregation of Revenue [Line Items]
Revenues	191,848	187,818	384,003	373,001
EMEA [Member]
Disaggregation of Revenue [Line Items]
Revenues	51,595	53,367	103,741	106,784
China [Member]
Disaggregation of Revenue [Line Items]
Revenues	29,448	26,550	57,690	52,408
Other [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 33,398	$ 34,717	$ 67,263	$ 69,547

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Revenue Revenue (Narrative detail) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Revenue Recognition and Deferred Revenue [Abstract]
Deferred Revenue, Revenue Recognized	$ 488.8

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Stock-Based Compensation (Classification Of Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 13,155	$ 13,298	$ 25,617	$ 26,276
Cost Of Revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,741	1,818	3,339	3,428
Sales And Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,019	1,494	2,002	2,942
Research And Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,642	1,688	3,231	3,409
General And Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 8,753	$ 8,298	$ 17,045	$ 16,497

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Stock-Based Compensation (Nature Of Total Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Amount Capitalized	$ (468)	$ (527)	$ (824)	$ (999)
Stock-based compensation	13,155	13,298	25,617	26,276
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	9,059	9,406	17,668	18,693
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	3,294	3,360	6,332	6,473
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 1,270	$ 1,059	$ 2,441	$ 2,109

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Interest Expense (Interest Expense Schedule) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest Expense [Abstract]
Contractual interest on Convertible Debentures	$ 21,766	$ 21,766	$ 43,532	$ 43,531
Contractual interest on Notes	0	5,067	0	20,015
Amortization of debt discount on the Convertible Debentures	0	1,075	0	4,236
Credit facility and other interest expense	869	884	1,734	1,798
Total interest expense	$ 22,635	$ 28,792	$ 45,266	$ 69,580

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Non-operating (loss) income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Non-operating (loss) income, net [Abstract]
Interest Income	$ 7,228	$ 6,583	$ 14,588	$ 14,071
income from transition services	4,050	0	8,100	0
Gain (Loss) on Extinguishment of Debt	0	(6,554)	0	(6,554)
Other Nonoperating Income (Expense)	158	631	951	947
Nonoperating (loss) Income	$ 11,436	$ 660	$ 23,639	$ 8,464

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Non-operating (loss) income Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Non-Operating (loss) income, net narrative [Abstract]
income from transition services	$ 4,050	$ 0	$ 8,100	$ 0
Gain (Loss) on Extinguishment of Debt	$ 0	$ 6,554	$ 0	$ 6,554

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Income Taxes (Income Tax Expense From Continuing Operations And Effective Tax Rate) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense from continuing operations	$ 42,960	$ 36,527	$ 70,257	$ 54,699
Effective tax rate	23.00%	22.00%	18.00%	17.00%

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	23.00%	22.00%	18.00%	17.00%
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount	$ 12.7	$ 6.0
Tax Cuts and Jobs Act, Income Tax Expense (Benefit)				$ 12.1
Statutory federal rate			21.00%
Foreign Earnings Repatriated			$ 249.0
foreign withholding tax			$ 13.1