Verisign (VRSN) 10-K risk factor changes: FY2019 vs FY2018

In addition to other information in this Form 10-K, the following risk factors should be carefully considered in evaluating us and our [removed: business because these factors currently have a significant impact or may have a significant impact on our business, operating results or financial condition.][added: business.]

Actual results could differ materially from those projected in the forward-looking statements contained in this Form 10-K as a result of the risk factors discussed below and elsewhere in this Form 10-K and in other filings we make with the [removed: SEC.][added: SEC.*]

[removed: Risks] [added: Risks] arising from our agreements governing our [removed: Registry Services] business could limit our ability to maintain or grow our [removed: business.][added: business.]

We are parties to (i) a Cooperative [removed: Agreement (as amended)] [added: Agreement, as amended,] with the DOC with respect to the [removed: .com] [added: .*com*] gTLD and (ii) Registry Agreements with ICANN [removed: for .com, .net, .name,] [added: with respect to the *.com*, *.net, .name,*] and other gTLDs including our IDN gTLDs.

As substantially all of our revenues are derived from [removed: our Registry Services business,] [added: operation of these gTLDs,] limitations and obligations in, or changes or challenges to, these agreements, particularly the agreements that involve [removed: .com] [added: .*com*] and [removed: .net,] [added: .*net*,] could have a material adverse impact on our business.

Certain competing registries, such as the ccTLDs, [removed: do] [added: are] not [removed: face] [added: subject to] the same limitations or obligations that we [removed: face] [added: are subject to] in our agreements.

Verisign and the DOC entered into Amendment 35 [removed: of] [added: to] the Cooperative Agreement on October 26, 2018, which, among other [removed: items,] [added: things,] extends the term of the Cooperative Agreement [removed: until] [added: through] November 30, 2024.

[removed: The] [added: 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 [added: within] 120 days prior to the end of the then-current term.

[added: *Modifications or Amendments.*] In October 2016, the Company and ICANN entered into an amendment to extend the term of the [removed: .com] [added: *.com*] Registry Agreement to November 30, 2024 [removed: (the “.com] [added: (“First *.com*] Amendment”).

As part of the [removed: .com] [added: First *.com*] Amendment, the Company and ICANN agreed to negotiate in good faith to amend the terms of the [removed: .com] [added: *.com*] Registry Agreement: (i) by October 20, 2018, to preserve and enhance the security and stability of the internet or the [removed: .com] [added: *.com*] TLD, and (ii) as may be necessary for consistency with changes to, or the termination or expiration of, the Cooperative Agreement.

[removed: If, in connection with a renewal] [added: Under the Cooperative Agreement, as amended by Amendment 35, standard renewals] of the [removed: .com] [added: .*com*] Registry Agreement [removed: the Company seeks] [added: will not require further DOC approval, although removal of, or] any [removed: additional] changes to the pricing section [removed: other] [added: (other] than as approved in Amendment [removed: 35,] [added: 35),] changes to the vertical integration [removed: provisions,] [added: provisions (other than] the [added: clarification approved in Amendment 35), changes to the security, stability and resiliency posture as reflected in the] functional or performance specifications (including the SLAs), [added: changes to] the conditions for renewal or termination, or [added: changes] to the Whois [removed: service,] [added: service (other than such changes mandated by ICANN through temporary specifications or policies (“Temporary Policies”) and specifications or polices adopted by ICANN pursuant to the procedures set forth in its bylaws and due process (“Consensus Policies”)),] as set forth in [removed: the] Amendment 35, [removed: DOC] [added: the prior written] approval [added: of the DOC] is required.

We can provide no assurances that such approval would be [removed: obtained.][added: provided.]

At the time of renewal of our [removed: .com] [added: *.com*] or [removed: .net] [added: *.net*] Registry Agreements, ICANN might also attempt to impose this same unilateral right to amend these [removed: registry agreements] [added: Registry Agreements] under certain conditions.

Under the terms of [removed: Amendment 35 to] the Cooperative Agreement, [added: as amended by Amendment 35,] the Company and ICANN may agree to amend the terms of the [removed: .com] [added: .*com*] Registry Agreement to permit the price of registrations or renewals of [removed: .com] [added: .*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 [removed: 7%, with the prior approval of the DOC,] [added: 7%] due to the imposition of any new [removed: ICANN] Consensus [removed: Policies, as established and defined under ICANN’s bylaws and due process, and covering certain items listed in the .com Registry Agreement,] [added: Policies] or documented extraordinary expense resulting from an attack or threat of attack on the security and stability of the [removed: DNS.][added: DNS (“Extraordinary Expense”).]

[removed: However, it] [added: It] is uncertain [removed: that these additional] [added: whether] circumstances [removed: will arise,] [added: would arise that would permit a price increase due to a Consensus Policy] or [added: Extraordinary Expense, or] if they do, whether we would [removed: seek, or the DOC would approve, any request] [added: seek] to increase the price for [removed: .com] [added: *.com*] domain name [removed: registrations.][added: registrations for this reason.]

In comparison, under the terms of the [removed: .net] [added: *.net*] and [removed: .name] [added: *.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.

Under Amendment 35, the parties clarified that the restrictions in the [removed: .com] [added: *.com*] Registry Agreement relating to vertical integration apply solely to the [removed: .com] [added: .*com*] TLD.

As to the [removed: .com] [added: .*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 [removed: .com] [added: .*com*] domain name registrations.

[removed: Renewal] [added: *Renewal] and [removed: Termination.][added: Termination*.]

Our [removed: .com, .net,] [added: .*com*, .*net,*] and [removed: .name] [added: .*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.

If certain terms in our [removed: .com] [added: *.com*] and [removed: .net] [added: *.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.

A failure by ICANN to approve the renewal of the [removed: .com] [added: *.com*] Registry Agreement prior to the expiration of its current term on November 30, 2024 or to approve the renewal of the [removed: .net] [added: .*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 [removed: .com] [added: .*com*] or [removed: .net] [added: .*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 [removed: .com] [added: .*com*] or [removed: .net] [added: .*net*] Registry Agreement would have a material adverse effect on our business.

Our Registry Agreements with ICANN require us to implement Consensus Policies and [removed: specifications or policies established on a temporary basis (“Temporary Policies”).][added: Temporary Policies.]

ICANN could adopt Consensus Policies or Temporary Policies that are unfavorable to us as the registry operator of [removed: .com, .net] [added: *.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.

As an example, ICANN has adopted a Consensus Policy that requires Verisign to receive and display Thick Whois data for [removed: .com] [added: *.com*] and [removed: .net.][added: .*net*, although that Policy is scheduled to be reviewed by ICANN.]

In addition, ICANN has adopted [removed: a Temporary Specification] [added: an interim Consensus Policy] that establishes temporary requirements for registry operators and registrars regarding the collection, display and disclosure of Thick [removed: WHOIS] [added: 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 [removed: personally identifiable] [added: personal] 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.

[added: *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”).

[removed: In addition, under] Amendment 35, we have agreed to continue to operate the [removed: .com] [added: .*com*] TLD in a content-neutral manner and to work within ICANN processes to promote the development of [removed: content neutral] [added: content-neutral] policies for the operation of the [removed: DNS.][added: DNS and under the Proposed LOI, we have agreed to work with the ICANN community to develop certain best practices and other commitments for the security, stability and resiliency of the DNS and the internet.]

Such policies [added: and processes] could expose us to compliance costs and substantial liability and result in costly and time-consuming investigations or litigation.

[removed: Governmental] [added: 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 [removed: business.][added: business.]

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 [added: registry services in China and could impact the growth or renewal rates of domain name registrations in China.]

In addition to registry operators, [removed: certain] [added: some] of [removed: such] [added: 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 [removed: the growth of] our [added: current and future] business in China.

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 [removed: cyber security] [added: cybersecurity] may impose significant additional costs on our business or subject us to additional liabilities.

Other countries and other states have enacted or are enacting data localization laws regulating or limiting data collection, storage and [removed: transfer.][added: transfer as well as granting new rights to data subjects.]

In addition, as we continue to launch [added: 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.

*Please carefully consider the following discussion of significant factors, events and uncertainties that make an investment in our securities risky.

When the factors, events and contingencies described below or elsewhere in this Form 10-K materialize, our business, operating results, financial condition, reputation, cash flows or prospects can be materially adversely affected.

In such case, the trading price of our common stock could decline and you could lose part or all of your investment.

Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also materially adversely affect our business, operating results, financial condition, reputation, cash flows and prospects.

On January 3, 2020, the Company and ICANN announced that they reached a proposed agreement to amend the *.com* Registry Agreement (“Proposed *.com* Amendment”) and to enter into a new proposed framework for working together on initiatives related to the security, stability and resiliency of the DNS in the form of a binding Letter of Intent (“Proposed LOI”).

Together these agreements satisfy the requirements described as part of the First *.com* Amendment.

In conjunction with the public announcement, ICANN published the Proposed *.com* Amendment and the Proposed LOI for public comment until February 14, 2020.

Although we do not anticipate changes to these documents, we can provide no assurance that modifications will not be made in connection with the public comment process or otherwise.

See the “Industry Regulation” section in Part I, Item 1 for further information.

*Pricing*.

The Proposed *.com* Amendment would allow such price increases.

The Proposed *.com* Amendment would clarify that Verisign’s ability to increase prices due to a Consensus Policy or Extraordinary Expense may occur only in years where Verisign does not take a price increase as described in the above paragraph.

*Vertical integration*.

This clarification is now set forth in the Proposed *.com* Amendment.

If we seek to become vertically integrated, except with respect to .*com*, it is uncertain whether approval to do so would be obtained under ICANN’s processes.

*Consensus Policies*.

In addition, under

*Legal Challenges*.

contracted service level obligations, loss of market share, failure to achieve market acceptance, injury to our reputation and increased costs.

While we strive to remediate known vulnerabilities on a timely basis, such vulnerabilities could be exploited before our remediation is effective and if so, could cause systems and service interruptions, data loss and other damages any of which could be materially harmful to our business.

We will operate our DDoS protection services during this transition period.

Any new technologies or services used to replace or enhance existing or future DDoS and other attack mitigation capabilities may introduce risk that may not exist today in those environments and, if security incidents occur associated with those new technologies or services, could disrupt our networks, increase response time, negatively impact our ability to meet our

contracted service level obligations, and generally impede our ability to provide reliable service to our customers and the broader internet community.

*Role of ICANN*.

We are also updating our network architecture in several of our new and existing data centers.

To the extent our data center facilities or the updated network architecture do not operate as expected, we could experience service interruptions or outages which could harm our business.

Such providers have had periodic operational problems or experienced outages in the past beyond our scope of control and may continue to encounter problems and outages.

Furthermore, the laws of foreign countries may not protect our proprietary rights in those countries to the same

to operate the .*web* gTLD, and may have a material adverse effect on our financial condition, results of operations and cash flows.

The Organization for Economic Cooperation and Development (“OECD”) has released plans to issue a final report by the end of 2020 that will provide a long-term, multilateral proposal on the taxation of the digital economy.

If this proposal is ultimately agreed to and implemented by the member states, there could be significant modifications in the way multinational corporations are taxed.

In addition, some international tax jurisdictions have, or may, independently of the OECD, enact new tax regimes aimed at income resulting from digital services.

Although we cannot predict the nature or outcome of such changes or the likelihood of such proposals being adopted legislatively throughout the world and tax treaties being modified

accordingly, any or all of these changes in tax policy for the digital economy could increase our taxes and adversely impact our financial condition, results of operations and cash flow.

The cash equivalents and marketable securities consist primarily of debt securities issued by the U.S. Treasury.

Modifications or Amendments.

ICANN and Verisign are engaged in discussions to satisfy this obligation including modifying the .com Registry Agreement based on 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 the operation of the .com TLD.

Under Amendment 35, standard renewals of the .com Registry Agreement will not require further DOC approval.

Pricing.

Vertical integration.

If we seek to remove the vertical integration restrictions contained in our agreements, it is uncertain whether ICANN approval would be obtained.

Consensus Policies.

Technical Standards and ICANN processes.

Legal Challenges.

Registry Services in China and could impact the growth or renewal rates of domain name registrations in China.

Despite the significant time and money expended on our security measures, we have been subject to a security breach, as disclosed in our Quarterly Report on Form

During this migration period, we will continue to operate DDoS protection services for customers that have yet to transition.

Role of ICANN.

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.

Currently, internet users often navigate to a website either by directly typing its domain name into a

gTLDs in anticipation of, or in response to, market trends.

enforce the Verisign logo in all markets where Verisign products and services are sold.

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.

The Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017.

The Tax Act significantly revamped U.S. taxation of corporations, including a reduction of the federal income tax rate from 35% to 21%, a limitation on interest deductibility, and a new tax regime for foreign earnings.

Our decision to redeem the convertible debentures, the new U.S. taxes on accumulated and future foreign earnings, other adverse changes 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 effective tax rates and/or cash taxes may increase, even significantly, or not decrease much, compared to recent or historical trends.

Many of the provisions of the Tax Act are highly complex and may be subject to further interpretive guidance from the IRS 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.

The marketable securities consist primarily 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 the investment in investment grade securities.

We currently do not use derivative financial instruments to adjust our investment portfolio risk or income profile.

[removed: FORWARD-LOOKING STATEMENTS][added: FORWARD-LOOKING STATEMENTS]

[removed: This] [added: *This] Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.

We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this [removed: document.][added: document.*]

[removed: Overview][added: Overview]

[removed: Verisign enables] [added: 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 [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] top-level domains, which support the majority of global e-commerce.

As of December 31, [removed: 2018,] [added: 2019,] we had approximately [removed: 153.0] [added: 158.8] million [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] registrations in the domain name base.

[removed: 2018 Business] [added: 2019 Business] Highlights and [removed: Trends][added: Trends]

| • | We recorded revenues of [removed: $1,215.0] [added: $1,231.7] million in [removed: 2018,] [added: 2019,] which represents an increase of [removed: 4%] [added: 1%] compared to [removed: 2017.] [added: 2018.] |

| • | We recorded operating income of [removed: $767.4] [added: $806.1] million during [removed: 2018,] [added: 2019,] which represents an increase of [removed: 8%] [added: 5%] as compared to [removed: 2017.] [added: 2018.] |

| • | We finished [removed: 2018] [added: 2019] with [removed: 153.0] [added: 158.8] million [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] registrations in the domain name base, which represents a 4% increase from December 31, [removed: 2017.] [added: 2018.] |

| • | During [removed: 2018,] [added: 2019,] we processed [removed: 38.2] [added: 40.3] million new domain name registrations for [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] compared to [removed: 36.7] [added: 38.2] million in [removed: 2017.] [added: 2018.] |

| • | The final [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] renewal rate for the third quarter of [removed: 2018] [added: 2019] was [removed: 74.8%] [added: 73.7%] compared with [removed: 74.4%] [added: 74.8%] for the same quarter in [removed: 2017.] [added: 2018.] Renewal rates are not fully measurable until 45 days after the end of the quarter. |

| • | We repurchased [removed: 4.4] [added: 3.9] million shares of our common stock for an aggregate cost of [removed: $600.0] [added: $738.5] million in [removed: 2018.] [added: 2019.] As of December 31, [removed: 2018,] [added: 2019,] there was [removed: $463.2] [added: $327.5] million remaining for future share repurchases under the share repurchase program. |

| • | [removed: Through February 7, 2019, we repurchased an additional 0.4 million shares for $66.0 million under our share repurchase program.] Effective February [removed: 7, 2019,] [added: 6, 2020,] our Board authorized the repurchase of our common stock in the amount of [removed: approximately $602.9] [added: $743.0] million, in addition to the [removed: $397.1] [added: $257.0] million [removed: remaining] [added: that remained] available for [removed: repurchase] [added: repurchases] under the [removed: previous] share repurchase program, for a total repurchase authorization of up to $1.0 billion under the [removed: share repurchase] program. |

| • | We generated cash flows from operating activities of [removed: $697.8] [added: $753.9] million in [removed: 2018,] [added: 2019,] which represents [removed: a decrease] [added: an increase] of [removed: 1%] [added: 8%] as compared to [removed: 2017.] [added: 2018.] |

[removed: Critical] [added: Critical] Accounting Policies and Significant Management [removed: Estimates][added: Estimates]

[removed: Income taxes][added: *Income taxes*]

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

| | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | |

| | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | |

| Cost of revenues | [removed: 15.8] [added: 14.6] | | | [removed: 16.6] [added: 15.8] | | | [removed: 17.4] [added: 16.6] | |

| Sales and marketing | [removed: 5.3] [added: 3.8] | | | [removed: 7.0] [added: 5.3] | | | 7.0 | |

| Research and development | [removed: 4.8] [added: 4.9] | | | [removed: 4.5] [added: 4.8] | | | [removed: 5.2] [added: 4.5] | |

| General and administrative | [removed: 10.9] [added: 11.2] | | | [removed: 11.2] [added: 10.9] | | | [removed: 10.3] [added: 11.2] | |

| Total costs and expenses | [removed: 36.8] [added: 34.5] | | | [removed: 39.3] [added: 36.8] | | | [removed: 39.9] [added: 39.3] | |

| Operating income | [removed: 63.2] [added: 65.5] | | | [removed: 60.7] [added: 63.2] | | | [removed: 60.1] [added: 60.7] | |

| Interest expense | [removed: (9.5] [added: (7.4] | ) | | [removed: (11.7] [added: (9.5] | ) | | [removed: (10.1] [added: (11.7] | ) |

| Non-operating income, net | [removed: 6.3] [added: 3.5] | | | [removed: 2.4] [added: 6.3] | | | [removed: 0.9] [added: 2.4] | |

| Income before income taxes | [removed: 60.0] [added: 61.6] | | | [removed: 51.4] [added: 60.0] | | | [removed: 50.9] [added: 51.4] | |

| Income tax expense | [removed: (12.1] [added: (11.9] | ) | | [removed: (12.2] [added: (12.1] | ) | | [removed: (12.3] [added: (12.2] | ) |

| Net income | [removed: 47.9] [added: 49.7] | % | | [removed: 39.2] [added: 47.9] | % | | [removed: 38.6] [added: 39.2] | % |

[removed: Revenues][added: Revenues]

[removed: Revenues related to our Registry Services] [added: Our revenues] are primarily derived from registrations for domain names in the [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] domain name registries.

For domain names registered with the [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] registries we receive a fee from registrars per annual registration that is fixed pursuant to our agreements with ICANN.

We increased the annual fee for a [removed: .net] [added: *.net*] domain name registration from [removed: $7.46 to] $8.20 [removed: on February 1, 2017, and from $8.20] to $9.02 on February 1, 2018.

We have the contractual right to increase the fees for [removed: .net] [added: *.net*] domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30, 2023.

The annual fee for a [removed: .com] [added: *.com*] domain name registration has been fixed at [removed: $7.85 since 2012.]

The amendment extends the term of the Cooperative Agreement until November 30, 2024 and permits the price of a [removed: .com] [added: *.com*] domain name to be increased without further DOC approval by up to 7% in each of the final four years of each [removed: 6-year] [added: six-year] period beginning on October 26, 2018.

All fees paid to us for [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] registrations are in U.S. dollars.

| | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | |

*This section of this Form 10-K generally discusses 2019 and 2018 items and year-to-year comparisons between 2019 and 2018.

Discussions of 2017 items and year-to-year comparisons between 2018 and 2017 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.*

$7.85 since 2012.

Revenues increased by $16.7 million in 2019 compared to 2018, 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.

Revenues in the U.S. and EMEA regions in particular, were impacted by the decrease in revenues from our security services business as customers terminated or consented to the assignment of their contracts to Neustar.

Salary and benefits expenses decreased by $5.5 million due to a reduction in average headcount primarily related to employees supporting the divested security services business.

Advertising and marketing expenses decreased by $4.4 million as we executed fewer marketing activities and campaigns.

We expect sales and marketing expenses as a percentage of revenues to remain consistent in 2020 as compared to 2019.

Software license expenses increased by $2.4 million resulting from costs related to certain security initiatives.

We expect interest expense to remain consistent in 2020 as compared to 2019.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | |

The benefit from the tax holiday is calculated before consideration of any offsetting tax impact in the United States.

Effective January 1, 2020, due to Swiss tax law changes, the tax holiday was eliminated, which was partially offset by a lowered statutory tax rate.

We expect the effective tax rate for 2020 to be between 18% and 21%.

| | 2019 | | | | 2018 | | |

Following the Tax Cuts and Jobs Act, we have greater flexibility in accessing the cash, cash equivalents and marketable securities balances held by our foreign subsidiaries.

In December 2019, we entered into a new $200.0 million unsecured revolving credit facility.

This facility will expire in 2024 and takes the place of our prior unsecured revolving credit facility.

As of December 31, 2019, there were no borrowings outstanding under this credit facility.

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.

We expect cash paid for income taxes in 2020 to approximate our Income tax expenses for the year.

On December 5, 2018, we completed the sale of our rights, economic benefits, and obligations, in all customer contracts related to our Security Services business, which primarily consisted of DDoS Protection Services, and Managed DNS Services, to Neustar.

As part of the transaction, we will continue to support the Security Services customers during the transition to Neustar over the course of 2019.

Revenues from Security Services are not significant in relation to our consolidated revenues.

| | |

| --- | --- |

| | |

| --- | --- |

| • | On October 26, 2018, Verisign and the DOC entered into Amendment 35 to the Cooperative Agreement, which, among other items, permits Verisign, without further approval of the DOC, to agree with ICANN to change the .com Registry Agreement to increase wholesale prices for .com domain names up to 7 percent in each of the last four years of each six-year period of the .com Registry Agreement. |

| • | On December 5, 2018, we completed the sale of the rights, economic benefits, and obligations, in all customer contracts related to our Security Services business. We recognized a gain of $54.8 million in 2018, based on the estimated amount of total net consideration we expect to receive from the sale. To the extent that the actual results differ from our estimates, the gain on the sale may be adjusted in 2019. For further information refer to Note 8 “Sale of Security Services Business”of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K. |

Accounting for income taxes requires significant judgments in the development of estimates used in income tax calculations.

Such judgments include, but are not limited to, interpretation and application of the 2017 Tax Act, and related IRS guidance changes, especially related to accumulated and ongoing foreign earnings, the likelihood we would realize the benefits of carryforwards from net operating losses (“NOLs”), capital losses, domestic and/or foreign tax credits, the adequacy of valuation allowances, and the rates used to measure transactions with foreign subsidiaries.

To the extent recovery of deferred tax assets is not likely, we record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

Revenues from Security Services were not significant in relation to our total consolidated revenues.

2017 compared to 2016: Revenues increased by $22.9 million, primarily due to a 4% increase in the domain name base for .com and increases in the .net domain name registration fees in February 2016 and 2017, partially offset by a 5% decline in the domain name base for .net.

Additionally, 2016 revenue was elevated due to an increased volume of new domain name registrations primarily from our registrars in China during the second half of 2015 and the first quarter of 2016.

The volume of these new registrations was inconsistent and episodic compared to prior periods, and by the end of the first quarter of 2016, reverted back to a more normalized registration pace.

A significant portion of these registrations did not renew upon expiration.

Revenues from China in 2016 benefited from the increased volume of registrations in the second half of 2015 and the first quarter of 2016, as discussed earlier.

However, a significant portion of those registrations did not renew, resulting in the decline in revenues from China in 2017.

Depreciation expenses decreased by $2.5 million as a result of lower average hardware purchases over the last several years.

Depreciation expenses decreased by $5.3 million as a result of lower average hardware purchases over the last several years.

Salary and employee benefits expenses decreased by $3.1 million, primarily due to a reduction in average headcount related to the sale of the iDefense business in April 2017, partially offset by increases in salary and employee benefits expenses for the remaining employee base.

Telecommunications expenses increased by $3.2 million as a result of an increase in network costs supporting our operations.

Advertising and marketing expenses decreased by $12.6 million, primarily due to a decrease in marketing activities and campaigns supporting our Registry Services business.

2017 compared to 2016: Sales and marketing expenses increased by $1.7 million, primarily due to an increase in advertising and marketing expenses, partially offset by a decrease in salary and employee benefits expenses.

Advertising and marketing expenses increased by $7.0 million, primarily due to increases in costs related to certain marketing campaigns supporting our Registry Services business.

We expect sales and marketing expenses as a percentage of revenues to decrease in 2019 as compared to 2018, primarily due to the sale of the customer contracts of our Security Services business and the reduction in headcount from employees supporting the Security Services business.

Salary and employee benefits expenses, including stock-based compensation expenses increased due to annual salary increases and an increase in allocated benefit expenses.

2017 compared to 2016: Research and development expenses decreased by $6.8 million, primarily due to a decrease in salary and employee benefits expenses as a result of a reduction in average headcount.

2018 compared to 2017: General and administrative expenses increased by $2.9 million, primarily due to an increase in salary and employee benefits expenses, partially offset by a decrease in professional services expenses and an increase in overhead expenses allocated to other cost types.

Salary and employee benefits expenses increased by $6.8 million due to an increase in average headcount and bonus expenses.

Professional services expenses decreased by $2.4 million primarily due to decreased external consulting costs related to various projects.

2017 compared to 2016: General and administrative expenses increased by $11.8 million, primarily due to increases in salary and employee benefits expenses, including stock-based compensation expenses, professional services expenses, and a decrease in overhead expenses allocated to other cost types, partially offset by a decrease in depreciation expenses.

Salary and employee benefits expenses, including stock-based compensation expenses, increased by $4.9 million due to an increase in average headcount and higher projected achievement levels on certain performance-based restricted stock units (“RSU”) grants.

Professional services expenses increased by $4.1 million primarily due to higher external fees on various projects.

We expect interest expense to decrease in 2019 as compared to 2018 due to the redemption of the Subordinated Convertible Debentures in the second quarter of 2018.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

Our effective tax rate was lower than the statutory rate of 35% in 2017 and 2016, primarily due to benefits from foreign income taxed at lower rates and excess tax benefits related to stock-based compensation in 2017, partially offset by state income taxes.

[removed: Interest] [added: Interest] rate [removed: sensitivity][added: sensitivity]

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: $1.12] [added: $1.04] billion of fixed income securities, which consisted of U.S. Treasury bills with maturities of less than one year.

[removed: Foreign] [added: Foreign] exchange risk [removed: management][added: management]

As of December 31, [removed: 2018,] [added: 2019,] we held foreign currency forward contracts in notional amounts totaling [removed: $28.5] [added: $26.3] million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies.

[removed: Market] [added: Market] risk [removed: management][added: management]

As of December 31, [removed: 2018,] [added: 2019,] the fair values of the senior notes issued in 2013, [removed: the senior notes issued in 2015,] [added: 2015] and [removed: the senior notes issued in] 2017 were [removed: $741.3] [added: $762.8] million, [removed: $502.2] [added: $552.3] million, and [removed: $524.2] [added: $581.9] million, respectively, based on available market information from public data sources.

[removed: Overview][added: 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 [removed: names (“Registry Services”).][added: names.]

[removed: Our Registry Services] [added: 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 [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] top-level domains (“TLDs”), which support the majority of global e-commerce.

Pursuant to our agreements with the Internet Corporation for Assigned Names and Numbers (“ICANN”), we make available on our website (at https://www.Verisign.com/zone) files containing all active domain names registered in the [removed: .com] [added: .*com*] and [removed: .net] [added: .*net*] registries.

At the same website address, we make available a summary of the active zone count registered in the [removed: .com] [added: .*com*] and [removed: .net] [added: *.net*] registries and the number of [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] domain [removed: names] [added: name registrations] in the domain name base.

[removed: Registry Services][added: Services]

[removed: Registry Services operates] [added: We operate] the authoritative directory of and/or the back-end systems for all [removed: .com,] [added: *.com,] .net, .cc, .tv, .gov, .jobs, [added: .edu* and *.name* domain names, among others.]

[removed: Registry Services allows] [added: Our services allow] individuals and organizations to establish their online identities, while providing the secure, always-on access they need to communicate and transact reliably with large-scale online audiences.

We are the exclusive registry of domain names within the [removed: .com, .net,] [added: *.com, .net,*] and [removed: .name] [added: *.name*] generic top-level domains (“gTLDs”), among others, under agreements with ICANN and also, with respect to the [removed: .com] [added: *.com*] agreement, the U.S. Department of Commerce (“DOC”).

We are also the exclusive registry of domain names within certain transliterations of [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] in a number of different native languages and scripts (“IDN gTLDs”).

In addition to our registry agreements with ICANN, we have agreements to operate the registry for the [removed: .tv] [added: *.tv*] and [removed: .cc] [added: *.cc*] country code top-level domains (“ccTLDs”) for Tuvalu and Cocos (Keeling) Islands, respectively, and to operate the back-end registry systems for the [removed: .gov, .jobs,] [added: *.gov*, *.jobs,*] and [removed: .edu] [added: *.edu*] sponsored TLDs, among others.

The fees charged for [removed: .com, .net] [added: *.com*, *.net*] and [removed: .name] [added: *.name*] may only be increased according to adjustments prescribed in our agreements with ICANN over the applicable term.

Revenues for [removed: .cc] [added: *.cc*] and [removed: .tv] [added: *.tv*] domain names and our IDN gTLDs are based on a similar fee system and registration system, although the fees charged are not subject to the same pricing restrictions as those imposed by the DOC on [removed: .com,] [added: *.com*,] or ICANN with respect to [removed: .net] [added: *.net*] and [removed: .name.][added: *.name*.]

The fees received from operating the [removed: .gov] [added: .*gov*] registry are based on the terms of Verisign’s agreement with the U.S. General Services Administration.

The fees received from operating the [removed: .jobs] [added: *.jobs*] registry infrastructure, and that of others for which Verisign provides such services, are based on the terms of Verisign’s agreements with those respective registry [removed: operators.][added: operators*.*]

[removed: Operations Infrastructure][added: Operations Infrastructure]

Our operations infrastructure consists of three secure data centers in Dulles, Virginia; New Castle, Delaware; and Fribourg, Switzerland as well as more than [removed: 160] [added: 100] resolution sites around the world.

Our domain name servers provide the associated authoritative name servers and IP addresses for every [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] domain name on the internet and a large number of other TLD queries, processing more than [removed: 152] [added: 192] billion queries daily.

| • | [removed: Distributed Servers:] [added: *Distributed Servers:*] We operate a large number of high-speed servers globally to support localized capacity and availability demands. In conjunction with our proprietary software, processes and procedures, this platform offers rapid failover, global and local load balancing, and threshold monitoring on critical servers. |

| • | [removed: Networking:] [added: *Networking:*] We deploy and maintain a redundant and diverse global network, maintain high-speed, redundant connections to numerous internet service providers, and maintain peering relationships globally to ensure that our critical services are readily accessible to customers at all times. |

| • | [removed: Security:] [added: *Security:*] We incorporate architectural concepts such as protected domains, restricted nodes and distributed access control in our system architecture. In addition, we employ firewalls and intrusion detection software, as well as proprietary security mechanisms at many points across our infrastructure. We perform recurring internal vulnerability testing and controls audits, and also contract with third-party security consultants who perform periodic penetration tests and security risk assessments on our systems. [removed: Verisign has] [added: We have] engineered resiliency and diversity into how [removed: it hosts] [added: we host] classes of products throughout [removed: its] [added: our] set of interconnected sites to mitigate unknown vendor defects and zero-hour security vulnerabilities. This includes different physical security silos, which themselves are separated into bulkheads, and in which servers are located. Corporate networks are in their own physical silo. Thus, the corporate networks to which [removed: personnel directly connect are separated from the silos that house production services; administration of production gear from corporate systems must go through an internal, fortified intermediary; and account credentials used within the corporate networks are not used within the production silos, nor on the fortified systems.] |

| • | [removed: Data Integrity: Verisign employs] [added: *Data Integrity:* We employ] both phased and systemic integrity validation operations via a number of proprietary mechanisms on all internal DNS publication operations. |

[removed: Call] [added: *Call] Centers and Help [removed: Desk:] [added: Desk:*] We provide customer support services through phone-based call centers, email help desks and web-based self-help systems.

[removed: Operations] [added: *Operations] Support and [removed: Monitoring:] [added: Monitoring:*] Through our network operations center, we have an extensive monitoring capability that enables us to track the status and performance of our critical database systems and our global resolution systems.

[removed: Disaster] [added: *Disaster] Recovery [removed: Plans:] [added: Plans:*] We have disaster recovery and business continuity capabilities that are designed to deal with the loss of entire data centers and other facilities.

[removed: Marketing,] [added: Marketing,] Sales and [removed: Distribution][added: Distribution]

We seek to expand our business through focused marketing campaigns and programs that target growth in the [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] domain name base, both domestically and in foreign markets.

We provide tools to be used by both registrars and end users to [removed: allow] [added: enable] them to find relevant domain names.

[removed: Research] [added: Research] and [removed: Development][added: Development]

[removed: Competition][added: Competition]

In addition to the gTLDs and ccTLDs we operate or for which we provide back-end registry services, there are over 1,200 other operational gTLD registries, over 250 Latin script ccTLD registries, more than 50 IDN ccTLD registries, and over [removed: 150] [added: 90] IDN gTLD registries.

Under our agreements with ICANN, we are subject to certain restrictions in the operation of [removed: .com, .net] [added: *.com*, *.net*] and [removed: .name] [added: *.name*] on pricing, bundling, marketing, methods of distribution, the introduction of new registry services, and use of registrars, that do not apply to ccTLDs and other gTLDs and therefore may create a competitive disadvantage.

To the extent end-users navigate using search engines or social media, or transact on e-commerce platforms, as opposed to direct navigation, we face competition from search engines such as Google, Bing, Yahoo!, and Baidu, social media networks such [removed: as Facebook and WeChat, e-commerce platforms such as Amazon, eBay and Taobao, and microblogging tools such as Twitter.]

In addition, we face competition from these social media businesses and e-commerce platforms if they are used [added: by businesses and individuals] to establish an online presence [removed: by end-users] rather than through the use of a domain name.

We [removed: also face competition from service providers] [added: compete with numerous companies] that offer outsourced domain name registration, resolution and other DNS services to registries that require a reliable and scalable infrastructure.

[removed: Industry Regulation][added: Industry Regulation]

In addition, country-level regulations, such as those implemented by China, impose additional costs on our [removed: Registry Services,] [added: business,] can affect the growth or renewal rates of domain name registrations, and may also affect our ability to do business.

[removed: Similarly, in the European Union,] [added: Domestically and abroad,] legislative and regulatory bodies [removed: responsible for data privacy] continue to enhance and modify data privacy protections, which [removed: impacts] [added: impact] our collection and delivery of personal data as we provide our domain name registry [removed: services,] [added: services] and could affect [added: our] costs of operation.

As the exclusive registry of domain names within the [removed: .com] [added: *.com*] and [removed: .net] [added: *.net*] gTLDs, we have entered into certain agreements with ICANN and, in the case of [removed: .com,] [added: .*com*,] the DOC under a Cooperative Agreement.

[removed: .com] [added: *.com] Registry [removed: Agreement][added: Agreement*]

personnel directly connect are separated from the silos that house production services; administration of production gear from corporate systems must go through an internal, fortified intermediary; and account credentials used within the corporate networks are not used within the production silos, nor on the fortified systems.

as Facebook and WeChat, e-commerce platforms such as Amazon, eBay and Taobao, and microblogging tools such as Twitter.

For example, under its internet domain name regulations, China’s Ministry of Industry and Information Technology awarded licenses for the continued operation of the .*com* and .*net* TLDs in China.

These licenses must be renewed in 2022.

On January 3, 2020, the Company and ICANN announced that they reached a proposed agreement to amend the *.com* Registry Agreement (“Proposed *.com* Amendment”) and to enter into a new proposed framework for working together on initiatives related to the security, stability and resiliency of the DNS in the form of a binding Letter of Intent (“Proposed LOI”).

Together, these agreements satisfy the requirements described above as part of the *.com* Registry Agreement extension.

In conjunction with the public announcement, ICANN published the Proposed *.com* Amendment and Proposed LOI for public comment until February 14, 2020.

Following the close of the comment period and review of the public comments, ICANN will prepare and publish a summary and analysis report.

Thereafter, ICANN and Verisign will determine whether to enter into the Proposed *.com* Amendment and Proposed LOI.

The Proposed *.com* Amendment, among other items, incorporates the applicable terms of Amendment 35 to the Cooperative Agreement.

Specifically, the Proposed .*com* Amendment would allow Verisign to increase the Maximum Price (as defined in the *.com* Registry Agreement) of a *.com* domain name registration by up to 7% in each of the final four years of each six-year period.

The Proposed .*com* Amendment also clarifies that the restrictions on the.

*com* Registry Agreement relating to vertical integration apply solely to the .*com* TLD.

The Proposed *.com* Amendment also clarifies that Verisign’s ability to increase prices by 7% over the previous year due to new ICANN specifications or polices adopted by ICANN pursuant to the procedures set forth in its bylaws and due process (“Consensus Policies”) or documented extraordinary expense may occur only in years where Verisign does not otherwise take the price increases described above.

In addition, it sets forth additional obligations, including updated technical and reporting requirements that are similar to requirements in ICANN’s new gTLD base agreement.

The Proposed LOI formalizes a framework by which ICANN and the Company will work together to support additional enhancements to the security and stability of the DNS.

The Proposed LOI provides that the Company will, make payments annually to ICANN totaling $20 million over five years, beginning on January 1, 2021, to support ICANN’s initiatives to preserve and enhance the security, stability and resiliency of the DNS, including root server system governance, mitigation of DNS security threats, promotion and/or facilitation of DNSSEC deployment, the mitigation of name collisions and research into the operation of the DNS.

A material term of the Proposed LOI is a signed confirmation by an ICANN offer confirming that ICANN incurred costs in the amount of Verisign’s support payment during each period.

The .*com* and .*net* Registry Agreements contain service level agreements for the availability of our DNS resolution services, our shared registration system, and our Whois services.

The first such six-year period began on October 26, 2018.

Information About Our Executive Officers

The following table sets forth information regarding our executive officers as of February 14, 2020:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| Name | | Age | | | Position |

| D. James Bidzos | | 64 | | | Executive Chairman and Chief Executive Officer |

| Todd B. Strubbe | | 56 | | | President and Chief Operating Officer |

| George E. Kilguss, III | | 59 | | | Executive Vice President, Chief Financial Officer |

| Thomas C. Indelicarto | | 56 | | | Executive Vice President, General Counsel and Secretary |

D.

James Bidzos has served as Executive Chairman since August 2009 and Chief Executive Officer since August 2011.

He served as President from August 2011 to February 2020.

He served as Executive Chairman and Chief Executive Officer on an interim basis from June 2008 to August 2009 and served as President from June 2008 to January 2009.

He served as Chairman of the Board since August 2007 and from April 1995 to December 2001.

He served as Vice Chairman of the Board from December 2001 to August 2007.

Mr. Bidzos served as a director of VeriSign Japan from March 2008 to August 2010 and served as Representative Director of VeriSign Japan from March 2008 to September 2008.

Mr. Bidzos served as Vice Chairman of RSA Security Inc., an internet identity and access management solution provider, from March 1999 to May 2002, and Executive Vice President from July 1996 to February 1999.

Prior thereto, he served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986 to February 1999.

Todd B.

On December 5, 2018, we completed the sale of our rights, economic benefits, and obligations, in all customer contracts related to our Security Services business, which primarily consisted of Distributed Denial of Service (“DDoS”) Protection Services and Managed Domain Name System (“DNS”) Services, to NeuStar, Inc. (“Neustar”).

As part of the transaction, we will continue to support the Security Services customers during the transition to Neustar over the course of 2019.

We have operations inside as well as outside the United States (“U.S.”).

For certain additional information about our business, including a geographic breakdown of revenues and changes in revenues, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and Note 7, “Revenue Recognition” of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K.

.edu and .name domain names, among others.

Historically, we have experienced a higher volume of domain name transactions in the first quarter of the year compared to other quarters.

Our quarterly revenue does not reflect these seasonal patterns because the preponderance of our revenue for each quarterly period is provided by the ratable recognition of our deferred revenue balance.

The effect of this seasonality has historically resulted in the largest amount of growth in our deferred revenue balance occurring during the first quarter of the year compared to the other quarters.

Security Services

As described above, the Company sold its Security Services customer contracts to Neustar on December 5, 2018.

Security Services was primarily comprised of DDoS Protection Services and Managed DNS Services.

DDoS Protection Services supports online business continuity by providing monitoring and mitigation services against DDoS attacks.

Customers include financial institutions, software-as-a-service providers, e-commerce providers, and media companies.

Customers pay a subscription fee that varies depending on the customer’s network requirements.

Managed DNS Services is a hosting service that delivers DNS resolution, improving the availability of web-based systems.

Customers include financial institutions, e-commerce, and software-as-a-service providers.

Customers pay a subscription fee that varies based on the amount of DNS traffic they receive.

We compete with numerous companies in the Registry Services business.

The overall number of our competitors may increase and the identity and composition of competitors may change over time.

ICANN and Verisign are engaged in discussions related to these obligations, including modifying the .com Registry Agreement based on changes to the Cooperative Agreement arising from Amendment 35.

As we previously disclosed, Afilias, a competitor and losing bidder in the .web auction, filed a form of arbitration proceeding against ICANN, an Independent Review Process (IRP) under ICANN’s bylaws, on November 14, 2018.

Afilias alleges that the agreement between Verisign and Nu Dotco, LLC (NDC) pertaining to .web violated ICANN’s new gTLD Applicant Guidebook.

As a result, Afilias claims that ICANN had a duty to disqualify NDC’s bid and award .web to Afilias.

Afilias also claims that ICANN would violate its bylaws pertaining to competition by awarding .web to Verisign.

Afilias amended its IRP on March 21, 2019 in part to oppose Verisign’s and NDC’s participation in the IRP.

A hearing was held on Verisign’s and NDC’s applications for participation and, on February 12, 2020, the IRP Panel permitted Verisign and NDC to participate in aspects of the IRP.

We believe that Afilias’ claims regarding Verisign’s and NDC’s conduct are without merit and we intend to vigorously oppose Afilias in this matter.

We are also involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, in our opinion, will have a material adverse effect on our financial condition, results of operations, or cash flows.

We cannot assure you that we will prevail in any litigation.

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

None.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

| [removed: þ] [added: ☒] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018][added: 2019]

| [removed: o] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period [removed: from to][added: from to]

[removed: Commission] [added: Commission] File [removed: Number: 000-23593][added: Number: 000-23593]

[removed: VERISIGN, INC.][added: VERISIGN, INC.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: Delaware] [added: Delaware] | | [removed: 94-3221585] | [added: 94-3221585 |]

| [removed: (State] [added: (State] or other jurisdiction [removed: of incorporation] [added: of incorporation] or [removed: organization)] [added: organization)] | | [removed: (I.R.S. Employer Identification No.)] | [added: (I.R.S. Employer Identification No.) |]

| [removed: 12061] [added: 12061] Bluemont [removed: Way, Reston, Virginia] [added: Way,] | | [removed: 20190] | [added: |]

| [removed: (Address] [added: (Address] of principal executive [removed: offices)] [added: offices)] | | [removed: (Zip Code)] | [added: (Zip Code) |]

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

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Name] [added: Trading Symbol(s) | Name] of each exchange on which [removed: registered] [added: registered] |

| Common [removed: Stock] [added: Stock,] $0.001 [removed: Par Value Per Share] [added: par value per share] | [added: VRSN |] Nasdaq Global Select Market |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [removed: None][added: None]

[removed: YES þ NO o][added: Yes ☒ No ☒]

[removed: YES o NO þ][added: Yes ☒ No ☒]

[removed: YES þ NO o][added: Yes ☒ No ☒]

[removed: YES þ NO o][added: Yes ☒ No ☒]

| Large accelerated filer | [removed: þ | | |] [added: ☒] | | Accelerated filer | [removed: o] [added: ☐] |

| Non-accelerated filer | [removed: o | | |] [added: ☐] | | Smaller reporting company | [removed: o] [added: ☐] |

| | | | [removed: | | |] Emerging growth company | [removed: o] [added: ☐] |

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): [removed: YES o NO þ][added: Yes ☐ No ☒]

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the Registrant as of June 30, [removed: 2018,] [added: 2019,] was [removed: $10.0] [added: $16.1] billion based upon the last sale price reported for such date on the Nasdaq Global Select Market.

Number of shares of Common Stock, $0.001 par value, outstanding as of the close of business on February [removed: 8, 2019: 119,714,949] [added: 7, 2020: 116,417,738] shares.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the definitive Proxy Statement to be delivered to stockholders in connection with the [removed: 2019] [added: 2020] Annual Meeting of Stockholders are incorporated by reference into Part III

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: Page] [added: Page] |

[removed: | | [PART I](#s3D575680A1ECBF34EA09CAA817FCFB4C) | |][added: PART I]

| [Item [removed: 1.](#s2D01E9ED3BDD22A69514CAA7EC65CAFE)] [added: 1.](#sE8E54B6D6DCD5F3F8A4227F54FD5C13A)] | [removed: [Business](#s2D01E9ED3BDD22A69514CAA7EC65CAFE)] [added: [Business](#sE8E54B6D6DCD5F3F8A4227F54FD5C13A)] | [removed: [3](#s2D01E9ED3BDD22A69514CAA7EC65CAFE)] [added: [3](#sE8E54B6D6DCD5F3F8A4227F54FD5C13A)] |

| [Item [removed: 1A.](#sE1A95219BFEA57C69C9DCAA8184DAC07)] [added: 1A.](#sDE247978EEF95E71865B28CEE894CC81)] | [Risk [removed: Factors](#sE1A95219BFEA57C69C9DCAA8184DAC07)] [added: Factors](#sDE247978EEF95E71865B28CEE894CC81)] | [removed: [9](#sE1A95219BFEA57C69C9DCAA8184DAC07)] [added: [10](#sDE247978EEF95E71865B28CEE894CC81)] |

| [Item [removed: 1B.](#sDFD38A29E0C63D20E39CCAA818710F9C)] [added: 1B.](#s5AC8DD24A5BA54A89EF8615AFD6D5936)] | [Unresolved Staff [removed: Comments](#sDFD38A29E0C63D20E39CCAA818710F9C)] [added: Comments](#s5AC8DD24A5BA54A89EF8615AFD6D5936)] | [removed: [21](#sDFD38A29E0C63D20E39CCAA818710F9C)] [added: [22](#s5AC8DD24A5BA54A89EF8615AFD6D5936)] |

| [Item [removed: 2.](#s047323D8C18EC2527DF2CAA818A2AB1E)] [added: 2.](#s410D73C2BE045337BAD3BDFA3C1EEF12)] | [removed: [Properties](#s047323D8C18EC2527DF2CAA818A2AB1E)] [added: [Properties](#s410D73C2BE045337BAD3BDFA3C1EEF12)] | [removed: [21](#s047323D8C18EC2527DF2CAA818A2AB1E)] [added: [22](#s410D73C2BE045337BAD3BDFA3C1EEF12)] |

| [Item [removed: 3.](#sC0869F786800F61DE8DFCAA818C24BC3)] [added: 3.](#s3A80303C328C5C1A824D1E6BD13249E3)] | [Legal [removed: Proceedings](#sC0869F786800F61DE8DFCAA818C24BC3)] [added: Proceedings](#s3A80303C328C5C1A824D1E6BD13249E3)] | [removed: [21](#sC0869F786800F61DE8DFCAA818C24BC3)] [added: [22](#s3A80303C328C5C1A824D1E6BD13249E3)] |

————————

OR

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| --- | --- | --- | --- |

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| Reston, | Virginia | | 20190 |

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| --- | --- | --- | --- | --- |

| | | | | |

| | [PART II](#sEBDBAC07ED0657C798C61A82E3993FED) | |

| | [PART IV](#s0FA42D95724651ACBC753A4ECE3B9FC8) | |

| [Signatures](#s3B6F6F60DF5F5971B6FBD1F9B401064D) | | [65](#s3B6F6F60DF5F5971B6FBD1F9B401064D) |

10-K 1 vrsn-20181231x10k.htm 10-K

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| --- | --- |

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OR

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———————

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| | [Executive Officers of the Registrant](#sF7EA378DF26DA5B0E538CAA819157682) | [22](#sF7EA378DF26DA5B0E538CAA819157682) |

| | [PART II](#s77E2F73ADD6C4853F742CAA81947585E) | |

| | [PART IV](#s40714A5AD4722A664AE3CAA81C35951C) | |

| [Financial Statements and Notes to Consolidated Financial Statements](#s27269F7726D2AF5AF0C7CAA81CAA1F80) | | [43](#s27269F7726D2AF5AF0C7CAA81CAA1F80) |

| [Signatures](#sE3A0A0764A983B193819CAA8218E833C) | | [69](#sE3A0A0764A983B193819CAA8218E833C) |

We believe that our existing [removed: facilities are well maintained] [added: facilities, both owned] and [added: leased, are] in good [removed: operating condition,] [added: condition] and [removed: are sufficient for our needs] [added: suitable] for the [removed: foreseeable future.][added: conduct of our business.]

As of December 31, 2019, we owned each of our significant properties, which include our corporate headquarters facility in Reston, Virginia, and data center facilities in New Castle, Delaware and Dulles, Virginia.

We also lease a number of smaller office and data center locations around the world.

Our corporate headquarters are located in Reston, Virginia.

We have administrative, sales, marketing, research and development and operations facilities located in the U.S., Europe, Asia, and Australia.

As of December 31, 2018, we owned approximately 454,000 square feet of space, which includes facilities in Reston and Dulles, Virginia and New Castle, Delaware.

As of December 31, 2018, we leased approximately 17,000 square feet of space in Europe, Australia and Asia.

These facilities are under lease agreements that expire at various dates through 2022.

The following table lists our major locations and primary use as of December 31, 2018:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| | | Approximate | | | |

| Major Locations | | Square Footage | | | Use |

| United States: | | | | | |

| Reston, Virginia | | 221,000 | | | Corporate Headquarters |

| New Castle, Delaware | | 105,000 | | | Data Center |

| Dulles, Virginia | | 70,000 | | | Data Center |

| Europe: | | | | | |

| Fribourg, Switzerland | | 10,000 | | | Data Center and Corporate Services |

The table above does not include approximately 58,000 square feet of space owned by us and leased to third parties.

[removed: PART II][added: PART II]

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information regarding our executive officers as of February 15, 2019:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| Name | | Age | | | Position |

| D. James Bidzos | | 63 | | | Executive Chairman, President and Chief Executive Officer |

| Todd B. Strubbe | | 55 | | | Executive Vice President, Chief Operating Officer |

| George E. Kilguss, III | | 58 | | | Executive Vice President, Chief Financial Officer |

| Thomas C. Indelicarto | | 55 | | | Executive Vice President, General Counsel and Secretary |

D.

James Bidzos has served as Executive Chairman since August 2009 and President and Chief Executive Officer since August 2011.

He served as Executive Chairman and Chief Executive Officer on an interim basis from June 2008 to August 2009 and served as President from June 2008 to January 2009.

He served as Chairman of the Board since August 2007 and from April 1995 to December 2001.

He served as Vice Chairman of the Board from December 2001 to August 2007.

Mr. Bidzos served as a director of VeriSign Japan from March 2008 to August 2010 and served as Representative Director of VeriSign Japan from March 2008 to September 2008.

Mr. Bidzos served as Vice Chairman of RSA Security Inc., an internet identity and access management solution provider, from March 1999 to May 2002, and Executive Vice President from July 1996 to February 1999.

Prior thereto, he served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986 to February 1999.

Todd B.

Strubbe has served as Chief Operating Officer since April 2015.

From September 2009 to April 2015, he served as the President of the Unified Communications Business Segment for West Corporation, a provider of technology-driven communications services.

Prior to this, he was a co-founder and Managing Partner of Arbor Capital, LLC.

He has also served in executive leadership positions at First Data Corporation and CompuBank, N.A. and as an associate and then as an engagement manager with McKinsey & Company, Inc. He also served for five years as an infantry officer with the United States Army.

Mr. Strubbe holds an M.B.A. degree from Harvard Business School and a B.S. degree from the United States Military Academy at West Point.

George E.

Kilguss, III has served as Chief Financial Officer since May 2012.

From April 2008 to May 2012, he was the Chief Financial Officer of Internap Network Services Corporation, an IT infrastructure solutions company.

From December 2003 to December 2007, he served as the Chief Financial Officer of Towerstream Corporation, a company that delivers high speed wireless internet access to businesses.

Mr. Kilguss holds an M.B.A. degree from the University of Chicago’s Graduate School of Business and a B.S. degree in Economics and Finance from the University of Hartford.

Thomas C.

Indelicarto has served as General Counsel and Secretary since November 2014.

From September 2008 to November 2014, he served as Vice President and Associate General Counsel.

From January 2006 to September 2008, he served as Litigation Counsel.

Prior to joining the Company, Mr. Indelicarto was in private practice as an associate at Arnold & Porter LLP and Buchanan Ingersoll (now, Buchanan Ingersoll & Rooney, PC).

Mr. Indelicarto also served as a U.S. Army officer for nine years.

Mr. Indelicarto holds a J.D. degree from the University of Pittsburgh School of Law and a B.S. degree from Indiana University of Pennsylvania.

[removed: Market Information][added: Market Information]

On February [removed: 8, 2019,] [added: 7, 2020,] there were [removed: 394] [added: 367] holders of record of our common stock.

[removed: Share Repurchases][added: Share Repurchases]

The following table presents the share repurchase activity during the three months ended December 31, [removed: 2018:][added: 2019:]

| | [removed: Total Number of Shares Purchased] [added: Total Number of Shares Purchased] | | | [removed: Average Price Paid per Share] [added: Average Price Paid per Share] | | | | [removed: Total Number of Shares Purchased as Part] [added: Total Number of Shares Purchased as Part] of [removed: Publicly Announced Plans or Programs (1)] [added: Publicly Announced Plans or Programs (1)] | | | [removed: Approximate Dollar] [added: Approximate Dollar] Value [removed: of Shares] [added: of Shares] That [removed: May Yet] [added: May Yet] Be [removed: Purchased Under] [added: Purchased Under] the Plans [removed: or Programs (1)(2)] [added: or Programs (1)(2)] | | |

| | [removed: (Shares] [added: (Shares] in [removed: thousands)] [added: thousands)] | | | | | | | | | | | | |

| (1) | Effective February [removed: 8, 2018,] [added: 7, 2019,] our Board authorized the repurchase of our common stock in the amount of approximately [removed: $585.8] [added: $602.9] million, in addition to the [removed: $414.2] [added: $397.1] million remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0 billion under the share repurchase program. |

| (2) | Effective February [removed: 7, 2019,] [added: 6, 2020,] our Board authorized the repurchase of our common stock in the amount of [removed: approximately $602.9] [added: $743.0] million, in addition to the [removed: $397.1] [added: $257.0] million [removed: remaining] [added: that remained] available for [removed: repurchase] [added: repurchases] under the [removed: previous] share repurchase program, for a total repurchase authorization of up to $1.0 billion under the [removed: 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. |

[removed: Performance Graph][added: Performance Graph]

[removed: The] [added: *The] information contained in the Performance Graph shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange [removed: Act.][added: Act.*]

The graph assumes that $100 (and the reinvestment of any dividends thereafter) was invested in our common stock, the S&P 500 Index and the S&P 500 Information Technology Index on December 31, [removed: 2013,] [added: 2014,] and calculates the return annually through December 31, [removed: 2018.][added: 2019.]

[removed: ][added: ]

| October 1 – 31, 2019 | 429 | | | | $184.83 | | | 429 | | | $ | 442.8 | million |

| November 1 – 30, 2019 | 302 | | | | $188.04 | | | 302 | | | $ | 386.1 | million |

| December 1 – 31, 2019 | 308 | | | | $190.04 | | | 308 | | | $ | 327.5 | million |

| | 1,039 | | | | | | | 1,039 | | | | | |

| | 12/31/14 | | | 12/31/15 | | | 12/31/16 | | | 12/31/17 | | | 12/31/18 | | | 12/31/19 | | |

| VeriSign, Inc. | $ | 100 | | $ | 153 | | $ | 133 | | $ | 201 | | $ | 260 | | $ | 338 | |

| S&P 500 Index | $ | 100 | | $ | 101 | | $ | 113 | | $ | 138 | | $ | 132 | | $ | 174 | |

| S&P 500 Information Technology Index | $ | 100 | | $ | 106 | | $ | 121 | | $ | 167 | | $ | 167 | | $ | 251 | |

| October 1 – 31, 2018 | 428 | | | | $146.85 | | | 428 | | | $ | 575.4 | million |

| November 1 – 30, 2018 | 376 | | | | $152.63 | | | 376 | | | $ | 518.0 | million |

| December 1 – 31, 2018 | 360 | | | | $152.18 | | | 360 | | | $ | 463.2 | million |

| | 1,164 | | | | | | | 1,164 | | | | | |

| | 12/31/13 | | | 12/31/14 | | | 12/31/15 | | | 12/31/16 | | | 12/31/17 | | | 12/31/18 | | |

| VeriSign, Inc | $ | 100 | | $ | 95 | | $ | 146 | | $ | 127 | | $ | 191 | | $ | 248 | |

| S&P 500 Index | $ | 100 | | $ | 114 | | $ | 115 | | $ | 129 | | $ | 157 | | $ | 150 | |

| S&P 500 Information Technology Index | $ | 100 | | $ | 120 | | $ | 127 | | $ | 145 | | $ | 201 | | $ | 201 | |

The information set forth below is not necessarily indicative of results of future operations, and should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our Notes to Consolidated Financial Statements in Item [removed: 15] [added: 8] of this Form 10-K, to fully understand factors that may affect the comparability of the information presented below.

[removed: Selected] [added: Selected] Consolidated Statements of Comprehensive Income [removed: Data:] [added: Data:] (in millions, except per share data)

| | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Revenues | $ | [removed: 1,215] [added: 1,232] | | | $ | [removed: 1,165] [added: 1,215] | | | $ | [removed: 1,142] [added: 1,165] | | | $ | [removed: 1,059] [added: 1,142] | | | $ | [removed: 1,010] [added: 1,059] | |

| Operating income | $ | [removed: 767] [added: 806] | | | $ | [removed: 708] [added: 767] | | | $ | [removed: 687] [added: 708] | | | $ | [removed: 606] [added: 687] | | | $ | [removed: 564] [added: 606] | |

| Net income (1) | $ | [removed: 582] [added: 612] | | | $ | [removed: 457] [added: 582] | | | $ | [removed: 441] [added: 457] | | | $ | [removed: 375] [added: 441] | | | $ | [removed: 355] [added: 375] | |

| Basic | $ | [removed: 5.13] [added: 5.17] | | | $ | [removed: 4.56] [added: 5.13] | | | $ | [removed: 4.12] [added: 4.56] | | | $ | [removed: 3.29] [added: 4.12] | | | $ | [removed: 2.80] [added: 3.29] | |

| Diluted | $ | [removed: 4.75] [added: 5.15] | | | $ | [removed: 3.68] [added: 4.75] | | | $ | [removed: 3.42] [added: 3.68] | | | $ | [removed: 2.82] [added: 3.42] | | | $ | [removed: 2.52] [added: 2.82] | |

[removed: Consolidated] [added: Consolidated] Balance Sheet [removed: Data:] [added: Data:] (in millions)

| | [removed: As] [added: As] of December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Cash, cash equivalents and marketable securities (1) (2) | $ | [removed: 1,270] [added: 1,218] | | | $ | [removed: 2,415] [added: 1,270] | | | $ | [removed: 1,798] [added: 2,415] | | | $ | [removed: 1,915] [added: 1,798] | | | $ | [removed: 1,425] [added: 1,915] | |

| Total assets (1) (2) | $ | [removed: 1,915] [added: 1,854] | | | $ | [removed: 2,941] [added: 1,915] | | | $ | [removed: 2,335] [added: 2,941] | | | $ | [removed: 2,358] [added: 2,335] | | | $ | [removed: 1,901] [added: 2,358] | |

| Deferred revenues | $ | [removed: 1,018] [added: 1,034] | | | $ | [removed: 999] [added: 1,018] | | | $ | [removed: 976] [added: 999] | | | $ | [removed: 961] [added: 976] | | | $ | [removed: 890] [added: 961] | |

| Subordinated convertible debentures, including contingent interest derivative (2) | $ | — | | | $ | [removed: 628] [added: —] | | | $ | [removed: 630] [added: 628] | | | $ | [removed: 634] [added: 630] | | | $ | [removed: 621] [added: 634] | |

| Long-term debt (1) | $ | [removed: 1,785] [added: 1,788] | | | $ | [removed: 1,783] [added: 1,785] | | | $ | [removed: 1,237] [added: 1,783] | | | $ | [removed: 1,235] [added: 1,237] | | | $ | [removed: 740] [added: 1,235] | |

| (1) | The [removed: increase] [added: increases] in [added: Cash, cash equivalents and marketable securities, Total assets and] Long-term debt from 2016 to 2017 was due to the issuance of $550.0 million aggregate principal amount of 4.75% senior unsecured notes due 2027. [removed: The increase in Long-term debt from 2014 to 2015 was due to the issuance of $500.0 million aggregate principal amount of 5.25% senior unsecured notes due 2025. The proceeds from these senior notes issuances resulted in the increase in cash, cash equivalents and marketable securities as well as total assets in the same periods.] |

| (2) | The decreases in Cash, cash equivalents and marketable securities, Total assets and Subordinated convertible debentures, including contingent interest derivative from 2017 to 2018 was due to the settlement of our subordinated convertible debentures in 2018. |

| (2) | All of the outstanding subordinated convertible debentures were called for redemption in 2018. Substantially all of the holders elected to convert their debentures and upon conversion we settled the $1.25 billion principal value in cash, and issued 26.1 million shares of common stock for the excess of the conversion value over the principal amount. The repayment of the principal amount of the subordinated convertible debentures resulted in a decrease in cash, cash equivalents and marketable securities as well as total assets during the same period. |

[removed: Financial Statements][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

[removed: Supplementary] [added: Supplementary] Data [removed: (Unaudited)][added: (Unaudited)]

The following tables set forth unaudited supplementary quarterly financial data for the [removed: two year] [added: two-year] period ended December 31, [removed: 2018.][added: 2019.]

| | [removed: 2018 | | | | | | | | | | | |] [added: 2019] | | | | [added: 2018] | | |

| | [removed: Quarter Ended] [added: Quarter Ended] | | | | | | | | | | | | | | | | [removed: Year Ended] [added: Year Ended] | | |

| | [removed: March 31] [added: March 31] | | | | [removed: June 30] [added: June 30] | | | | [removed: September 30] [added: September 30] | | | | [removed: December 31 (2)] [added: December 31] | | | | [removed: December 31,] [added: December 31,] | | |

[removed: | | (In] [added: (In] thousands, except per share [removed: data) | | | | | | | | | | | | | | | | | | |][added: data)]

| | [removed: Quarter Ended] [added: Quarter Ended] | | | | | | | | | | | | | | | | [removed: Year Ended] [added: Year Ended] | | |

| | [removed: March 31] [added: March 31] | | | | [removed: June 30 (2)] [added: June 30] | | | | [removed: September 30] [added: September 30] | | | | [removed: December] [added: December] 31 [added: (2)] | | | | [removed: December 31,] [added: December 31,] | | |

| | [removed: (In] [added: (In] thousands, except per share [removed: data)] [added: data)] | | | | | | | | | | | | | | | | | | |

| Financial Statement Description | Page |

| [Reports of Independent Registered Public Accounting Firm](#s0D2CE1401DF55B93B56298C86A5EEBED) | [35](#s0D2CE1401DF55B93B56298C86A5EEBED) |

| [Consolidated Balance Sheets](#s88D12C1C2E4F5E999553884B688D57EF) | [38](#s88D12C1C2E4F5E999553884B688D57EF) |

| [Consolidated Statements of Comprehensive Income](#s5F601192E687596FA74CE15916C8E66D) | [39](#s5F601192E687596FA74CE15916C8E66D) |

| [Consolidated Statements of Stockholders’ Deficit](#sA774377C62C05FE890CB2CEAD76ACAE5) | [40](#sA774377C62C05FE890CB2CEAD76ACAE5) |

| [Consolidated Statements of Cash Flows](#s69DD8753E902546D9F7CAD9024041973) | [41](#s69DD8753E902546D9F7CAD9024041973) |

| [Notes to Consolidated Financial Statements](#s1B461C3011D8548BB2A9CF29BCF3E22B) | [42](#s1B461C3011D8548BB2A9CF29BCF3E22B) |

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

VeriSign, Inc.:

*Opinion on the Consolidated* *Financial Statements*

We have audited the accompanying consolidated balance sheets of Verisign, Inc. and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income, stockholders’ deficit, and cash flows for each of the years in the three‑year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 14, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

*Change in Accounting Principle*

Effective January 1, 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, and several related amendments, issued by the Financial Accounting Standards Board (FASB).

This change was adopted using the modified retrospective method.

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

*Critical Audit Matter*

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Evaluation of the Company’s uncertain tax positions.*

As discussed in Notes 1 and 10 of the consolidated financial statements, as of December 31, 2019, the Company had $231.3 million of gross unrecognized tax benefits.

We identified the evaluation of the Company’s uncertain tax positions as a critical audit matter because complex auditor judgment was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of the tax positions.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s uncertain tax positions process to assess that new and existing tax positions and

adjustments giving rise to additional uncertain tax positions were considered in accordance with applicable guidance over accounting for uncertain tax positions.

Since tax law is complex and often subject to interpretations, we involved tax professionals with specialized skills and knowledge, who assisted in:

| • | Evaluating the Company’s tax positions and its interpretation of tax laws, |

| • | Identifying any changes or developments in tax law, court cases, tax regulations or any pertinent tax rulings that would impact the positions taken by the Company, |

| • | Performing a web based search of key terms relating to the Company’s uncertain tax positions to identify public company filings that disclose similar positions with alternative treatments, |

Verisign’s financial statements required by this Item are set forth as a separate section of this Form 10-K.

See Item 15 for a listing of financial statements provided in the section titled “Financial Statements.”

——————

| (1) | Earnings per share for the year is computed independently and may not equal the sum of the quarterly earnings per share. |

| | 2017 | | | | | | | | | | | | | | | | | | |

| Revenues | $ | 288,614 | | | $ | 288,552 | | | $ | 292,428 | | | $ | 295,501 | | | $ | 1,165,095 | |

| Gross Profit | $ | 237,945 | | | $ | 240,908 | | | $ | 245,095 | | | $ | 247,821 | | | $ | 971,769 | |

| Operating Income | $ | 175,271 | | | $ | 174,960 | | | $ | 181,059 | | | $ | 176,432 | | | $ | 707,722 | |

| Net income | $ | 116,412 | | | $ | 123,100 | | | $ | 114,899 | | | $ | 102,837 | | | $ | 457,248 | |

| Basic | $ | 1.14 | | | $ | 1.22 | | | $ | 1.15 | | | $ | 1.05 | | | $ | 4.56 | |

| Diluted (1) | $ | 0.94 | | | $ | 0.99 | | | $ | 0.93 | | | $ | 0.83 | | | $ | 3.68 | |

| (2) | Results for the quarter ended June 30, 2017 include a $10.6 million pre-tax gain recognized on the sale of the iDefense business. |

Evaluation of Disclosure Controls and [removed: Procedures][added: 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 December 31, [removed: 2018,] [added: 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 Securities Exchange Act of 1934, as amended, (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.

Management’s Report on Internal Control over Financial [removed: Reporting][added: Reporting]

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2018] [added: 2019] using the criteria established in [removed: Internal] [added: *Internal] Control-Integrated [removed: Framework] [added: Framework*] (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

KPMG LLP, an independent registered public accounting firm, has issued a report concerning the effectiveness of our internal control over financial reporting as of December 31, [removed: 2018.][added: 2019.]

See “Report of Independent Registered Public Accounting Firm” in Item [removed: 15] [added: 8] of this Form 10-K.

Changes in Internal Control over Financial [removed: Reporting][added: 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 December 31, [removed: 2018] [added: 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 [removed: Reporting][added: Reporting]

a.

b.

c.

d.

a.

b.

c.

d.

[removed: PART III][added: PART III]

On February 11, 2020, the Board appointed Todd B.

Strubbe, 56, as President and Chief Operating Officer of the Company, effective as of that date.

Mr. Strubbe previously served as Executive Vice President and Chief Operating Officer since April 2015.

See “Information About Our Executive Officers” in Part I, Item 1 for further information.

Mr. Strubbe will continue to earn a base salary at the annual rate of $565,000, payable in accordance with the Company’s standard payroll practices.

Mr. Strubbe’s annual incentive bonus target as a percentage of his Base Salary will be increased from 90% to 95% (the “Annual Incentive Bonus”).

The Annual Incentive Bonus is not guaranteed; the Annual Incentive Bonus is based upon the Company’s achievement of pre-established financial goals, as well as individual performance.

The

compensation package also includes a $240,000 promotional equity grant, which is in addition to a $2,760,000 annual long-term incentive equity grant, both consisting of 50% performance-based RSUs and 50% time-vesting RSUs.

The metrics associated with the performance-based RSUs consist of two financial measures - compound annual growth rate of operating income per share and the total shareholder return (“TSR”) of Verisign stock compared to the TSR of the S&P 500 Index, each measured over a three-year performance period from January 1, 2020 through December 31, 2022.

Mr. Strubbe has no family relationships with any of the Company’s directors or executive officers, and there have been no related party transactions between the Company and Mr. Strubbe reportable under Item 404(a) of Regulation S-K.

None.

The information required by this item relating to our directors and nominees, regarding compliance with Section 16(a) of the Exchange Act, and regarding our Audit Committee, Corporate Governance and Nominating Committee and Compensation Committee will be included under the captions “Proposal No. 1: Election of Directors,” “Security Ownership of Certain Beneficial [removed: Owners and Management-Section 16(a) Beneficial Ownership Reporting Compliance,”] [added: Owners”] and “Corporate Governance” in our Proxy Statement related to the [removed: 2019] [added: 2020] Annual Meeting of Stockholders and is incorporated herein by reference [removed: (“2019] [added: (“2020] Proxy Statement”).

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating to our executive officers is included under the caption [removed: “Executive Officers of the Registrant”] [added: “Information about our Executive Officers”] in Part I of this Annual Report on Form 10-K.

Information required by this item is incorporated herein by reference to our [removed: 2019] [added: 2020] Proxy Statement from the discussions under the captions “Compensation of Directors,” “Non-Employee Director Retainer Fees and Equity Compensation Information” and “Non-Employee Director Compensation Table for Fiscal [removed: 2018,”] [added: 2019,”] and “Executive Compensation.”

Information required by this item is incorporated herein by reference from the discussions under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our [removed: 2019] [added: 2020] Proxy Statement.

Information required by this item is incorporated herein by reference to our [removed: 2019] [added: 2020] Proxy Statement from the discussions under the captions “Policies and Procedures with Respect to Transactions with Related Persons,” “Certain Relationships and Related Transactions” and “Independence of Directors.”

Information required by this item is incorporated herein by reference to our [removed: 2019] [added: 2020] Proxy Statement from the discussions under the captions “Principal Accountant Fees and Services” and “Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors.”

[removed: PART IV][added: PART IV]

| [removed: • | Reports] [added: [Reports] of Independent Registered Public Accounting [removed: Firm] [added: Firm](#s0D2CE1401DF55B93B56298C86A5EEBED)] | [added: [35](#s0D2CE1401DF55B93B56298C86A5EEBED) |]

| [removed: • | Notes] [added: [Notes] to Consolidated Financial [removed: Statements] [added: Statements](#s1B461C3011D8548BB2A9CF29BCF3E22B)] | [added: [42](#s1B461C3011D8548BB2A9CF29BCF3E22B) |]

[removed: (a)] [added: *(a)] Index to [removed: Exhibits][added: Exhibits*]

| | | | | [removed: Incorporated] [added: Incorporated] by [removed: Reference] [added: Reference] | | | | | | | |

| [removed: Exhibit Number] [added: Exhibit Number] | | [removed: Exhibit Description] [added: Exhibit Description] | | [removed: Form] [added: Form] | | [removed: Date] [added: Date] | | [removed: Number] [added: Number] | | | [removed: Filed Herewith] [added: Filed Herewith] |

| | | | | [removed: Incorporated] [added: Incorporated] by [removed: Reference] [added: Reference] | | | | | | | |

| [removed: Exhibit Number] [added: Exhibit Number] | | [removed: Exhibit Description] [added: Exhibit Description] | | [removed: Form] [added: Form] | | [removed: Date] [added: Date] | | [removed: Number] [added: Number] | | | [removed: Filed Herewith] [added: Filed Herewith] |

| [removed: [10.12](http://www.sec.gov/Archives/edgar/data/1014473/000101447315000037/form8-k4115xex991.htm)] [added: [10.12](http://www.sec.gov/Archives/edgar/data/1014473/000101447319000041/vrsnform8-k121319xex101.htm)] | | [Credit Agreement dated as of [removed: March 31, 2015] [added: December 12, 2019] among VeriSign, Inc., the Lenders as defined therein, JPMorgan Chase Bank, N.A., as Administrative Agent, and J.P. Morgan Europe Limited, as London [removed: Agent.](http://www.sec.gov/Archives/edgar/data/1014473/000101447315000037/form8-k4115xex991.htm)] [added: Agent.](http://www.sec.gov/Archives/edgar/data/1014473/000101447319000041/vrsnform8-k121319xex101.htm)] | | 8-K | | [removed: 4/1/15] [added: 12/13/19] | | [removed: 99.1] [added: 10.1] | | | |

| | | | | [removed: Incorporated] [added: Incorporated] by [removed: Reference] [added: Reference] | | | | | | | |

| [removed: Exhibit Number] [added: Exhibit Number] | | [removed: Exhibit Description] [added: Exhibit Description] | | [removed: Form] [added: Form] | | [removed: Date] [added: Date] | | [removed: Number] [added: Number] | | | [removed: Filed Herewith] [added: Filed Herewith] |

| [removed: [10.20](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex1020.htm)] [added: [10.20](http://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex1020.htm)] | | [Asset Purchase Agreement between Verisign, Inc., as the seller and Neustar, Inc., as the buyer, dated as of October 24, [removed: 2018](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex1020.htm)] [added: 2018](http://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex1020.htm)] | | [added: 10-K] | | [added: 2/15/19] | | [added: 10.20] | | | [removed: X] |

| [removed: [21.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex2101.htm)] [added: [21.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex21.htm)] | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex2101.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex21.htm)] | | | | | | | | | X |

| [removed: [23.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex2301.htm)] [added: [23.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex23.htm)] | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex2301.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex23.htm)] | | | | | | | | | X |

| [removed: [24.01](#sE3A0A0764A983B193819CAA8218E833C)] [added: [24.01](#s3B6F6F60DF5F5971B6FBD1F9B401064D)] | | [Powers of Attorney (Included as part of the signature pages [removed: hereto).](#sE3A0A0764A983B193819CAA8218E833C)] [added: hereto).](#s3B6F6F60DF5F5971B6FBD1F9B401064D)] | | | | | | | | | X |

| [removed: [31.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3101.htm)] [added: [31.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3101.htm)] | | [Certification of Principal Executive Officer pursuant to Exchange Act Rule [removed: 13a-14(a).](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3101.htm)] [added: 13a-14(a).](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3101.htm)] | | | | | | | | | X |

| [removed: [31.02](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3102.htm)] [added: [31.02](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3102.htm)] | | [Certification of Principal Financial Officer pursuant to Exchange Act Rule [removed: 13a-14(a).](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3102.htm)] [added: 13a-14(a).](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3102.htm)] | | | | | | | | | X |

| [removed: [32.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3201.htm)] [added: [32.01](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3201.htm)] | | [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. [removed: 1350).](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3201.htm)] [added: 1350).](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3201.htm)] * | | | | | | | | | X |

| [removed: [32.02](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3202.htm)] [added: [32.02](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3202.htm)] | | [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. [removed: 1350).](https://www.sec.gov/Archives/edgar/data/1014473/000101447319000005/vrsn-20181231x10kxex3202.htm)] [added: 1350).](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex3202.htm)] * | | | | | | | | | X |

The financial statements are set forth under Item 8 of this Form 10-K, as indexed below.

| | Page |

| [Consolidated Balance Sheets](#s88D12C1C2E4F5E999553884B688D57EF) | [38](#s88D12C1C2E4F5E999553884B688D57EF) |

| [Consolidated Statements of Comprehensive Income](#s5F601192E687596FA74CE15916C8E66D) | [39](#s5F601192E687596FA74CE15916C8E66D) |

| [Consolidated Statements of Stockholders’ Deficit](#sA774377C62C05FE890CB2CEAD76ACAE5) | [40](#sA774377C62C05FE890CB2CEAD76ACAE5) |

| [Consolidated Statements of Cash Flows](#s69DD8753E902546D9F7CAD9024041973) | [41](#s69DD8753E902546D9F7CAD9024041973) |

| [4.04](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex404.htm) | | [Description of Securities of the Registrant](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex404.htm) | | | | | | | | | X |

| [10.21](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex1021.htm) | | [Second Amendment to the .com Registry Agreement between VeriSign, Inc. and the Internet Corporation for Assigned Names and Numbers, entered into on March 27, 2019](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex1021.htm) | | | | | | | | | X |

| [10.22](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex1022.htm) | | [Amendment to Asset Purchase Agreement and Transition Services Agreement between Neustar, Inc. and VeriSign, Inc., dated as of December 10, 2019](https://www.sec.gov/Archives/edgar/data/1014473/000101447320000006/vrsn-20191231x10kxex1022.htm)† | | | | | | | | | 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 document. | | | | | | | | | X |

| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | | | | | | | | | X |

| † | Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. |

| | |

| --- | --- |

| | |

| --- | --- |

| • | Consolidated Balance Sheets as of December 31, 2018 and 2017 |

| --- | --- |

| • | Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017, and 2016 |

| --- | --- |

| • | Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2018, 2017, and 2016 |

| • | Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017, and 2016 |

| 101 | | Interactive Data File | | | | | | | | | X |

[removed: SIGNATURES][added: SIGNATURES]

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Reston, Commonwealth of Virginia, on the [removed: 15th] [added: 14th] day of February [removed: 2019.][added: 2020.]

| | | [removed: President and Chief] [added: *Chief] Executive [removed: Officer] [added: Officer*] |

| | | [removed: (Principal] [added: *(Principal] Executive [removed: Officer)] [added: Officer)*] |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on the [removed: 15th] [added: 14th] day of February [removed: 2019.][added: 2020.]

| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] |

| /S/ D. JAMES BIDZOS | | [removed: President,] Chief Executive Officer, Executive Chairman and Director (Principal Executive Officer) |

| /S/ YEHUDA ARI BUCHALTER | | Director |

| YEHUDA ARI BUCHALTER | | |

| | | |

FINANCIAL STATEMENTS

As required under Item 8—Financial Statements and Supplementary Data, the consolidated financial statements of Verisign, Inc. are provided in this separate section.

The consolidated financial statements included in this section are as follows:

| | |

| --- | --- |

| | |

| Financial Statement Description | Page |

| [Reports of Independent Registered Public Accounting Firm](#s58E2CE4B7624460BE2F2CAA81CDC2A64) | [44](#s58E2CE4B7624460BE2F2CAA81CDC2A64) |

| [Consolidated Balance Sheets](#s1890056BE3C5A4BAD4EACAA7EA406D08) [As of December 31, 2018 and December 31, 2017](#s1890056BE3C5A4BAD4EACAA7EA406D08) | [46](#s1890056BE3C5A4BAD4EACAA7EA406D08) |

| [Consolidated Statements of Comprehensive Income](#sCE864C549E4606D12752CAA7EB38B3D7) [For the Years Ended December 31, 2018, 2017, and 2016](#sCE864C549E4606D12752CAA7EB38B3D7) | [47](#sCE864C549E4606D12752CAA7EB38B3D7) |

| [Consolidated Statements of Stockholders’ Deficit](#sD815F1F2F51C648B57E1CAA7EC248869) [For the Years Ended December 31, 2018, 2017, and 2016](#sD815F1F2F51C648B57E1CAA7EC248869) | [48](#sD815F1F2F51C648B57E1CAA7EC248869) |

| [Consolidated Statements of Cash Flows](#s957EA707C4AEDC04BD80CAA7EAAD1C2D) [For the Years Ended December 31, 2018, 2017, and 2016](#s957EA707C4AEDC04BD80CAA7EAAD1C2D) | [49](#s957EA707C4AEDC04BD80CAA7EAAD1C2D) |

| [Notes to Consolidated Financial Statements](#sAA11E4BFC7BF158FA709CAA81E3038BD) | [50](#sAA11E4BFC7BF158FA709CAA81E3038BD) |

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

VeriSign, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of VeriSign, Inc. and subsidiaries (the Company) as of December 31, 2018 and 2017, the related consolidated statements of comprehensive income, stockholders’ deficit, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 15, 2019 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2018, the Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, and several related amendments, issued by the Financial Accounting Standards Board (FASB).

This change was adopted using the modified retrospective method.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.