{"url_path":"/sec/vrsn/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-05","source_url":"https://www.sec.gov/Archives/edgar/data/1014473/0001014473-26-000006-index.html","accession_number":"0001014473-26-000006","cik":"0001014473","ticker":"VRSN","issuer_name":"VERISIGN INC/CA","edgar_url":"https://www.sec.gov/Archives/edgar/data/1014473/0001014473-26-000006-index.html","primary_entity_key":"0001014473","primary_entity_name":"VERISIGN INC/CA"},"word_count":9846,"has_tables":true,"body_markdown":"ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\n\n \n\nFinancial Statement DescriptionPage\n\n[Reports of Independent Registered Public Accounting Firm](#i65f0824a78cd40128656bda5d24bc479_64)\n\n[34](#i65f0824a78cd40128656bda5d24bc479_64)\n\n[Consolidated Balance Sheets](#i65f0824a78cd40128656bda5d24bc479_67)\n\n[37](#i65f0824a78cd40128656bda5d24bc479_67)\n\n[Consolidated Statements of Comprehensive Income](#i65f0824a78cd40128656bda5d24bc479_73)\n\n[38](#i65f0824a78cd40128656bda5d24bc479_73)\n\n[Consolidated Statements of Stockholders’ Deficit](#i65f0824a78cd40128656bda5d24bc479_76)\n\n[39](#i65f0824a78cd40128656bda5d24bc479_76)\n\n[Consolidated Statements of Cash Flows](#i65f0824a78cd40128656bda5d24bc479_79)\n\n[40](#i65f0824a78cd40128656bda5d24bc479_79)\n\n[Notes to Consolidated Financial Statements](#i65f0824a78cd40128656bda5d24bc479_82)\n\n[41](#i65f0824a78cd40128656bda5d24bc479_82)\n\n33\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and Board of Directors\n\nVeriSign, Inc.:\n\nOpinion on the Consolidated Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of VeriSign, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe 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, 2025, 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 5, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese 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.\n\nWe 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.\n\nCritical Audit Matter\n\nThe 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 judgments. 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.\n\nEvaluation of accounting for income taxes\n\nAs discussed in Notes 1 and 11 to the consolidated financial statements, the Company recognized $233.2 million of deferred tax assets, net as of December 31, 2025. The Company’s income tax expense was $242.8 million for the year ended December 31, 2025. The Company conducts business globally and consequently is subject to U.S. federal, state, as well as foreign income taxes in the jurisdictions it operates. The Company exercises judgment in the application of complex tax regulations in multiple jurisdictions.\n\nWe identified the evaluation of the accounting for income taxes as a critical audit matter. Evaluating the Company’s application of complex tax regulations in the domestic and foreign jurisdictions it operates and the impact of those regulations on U.S. federal, state, and foreign income tax provisions required complex auditor judgment, and the use of tax professionals with specialized skills and knowledge.\n\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s income tax process, including controls related to the application of complex tax regulations in the Company’s various tax jurisdictions and the impact on the Company’s U.S. federal, state, and foreign income tax provision. We involved domestic and international tax\n\n34\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nprofessionals with specialized skills and knowledge in various tax jurisdictions who assisted in evaluating the Company’s analyses over the application of complex tax regulations in those jurisdictions.\n\n/s/ KPMG LLP\n\nWe have served as the Company’s auditor since 1995.\n\nMcLean, Virginia\n\nFebruary 5, 2026\n\n35\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and Board of Directors\n\nVeriSign, Inc.:\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited VeriSign, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, 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, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 5, 2026 expressed an unqualified opinion on those consolidated financial statements.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ KPMG LLP\n\nMcLean, Virginia\n\nFebruary 5, 2026\n\n36\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(In millions, except par value)\n\nDecember 31,\n2025December 31,\n2024\n\nASSETS\n\nCurrent assets:\n\nCash and cash equivalents$307.9 $206.7 \n\nMarketable securities272.6 393.2 \n\nOther current assets72.0 63.9 \n\nTotal current assets652.5 663.8 \n\nProperty and equipment, net213.7 224.5 \n\nGoodwill52.5 52.5 \n\nDeferred tax assets233.2 281.3 \n\nDeposits to acquire intangible assets145.2 145.0 \n\nOther long-term assets28.8 39.4 \n\nTotal long-term assets673.4 742.7 \n\nTotal assets$1,325.9 $1,406.5 \n\nLIABILITIES AND STOCKHOLDERS’ DEFICIT\n\nCurrent liabilities:\n\nAccounts payable and accrued liabilities$298.0 $257.8 \n\nDeferred revenues1,035.1 973.5 \n\nCurrent senior notes— 299.8 \n\nTotal current liabilities1,333.1 1,531.1 \n\nLong-term deferred revenues349.4 330.7 \n\nLong-term senior notes1,788.2 1,492.5 \n\nLong-term tax and other liabilities9.4 10.1 \n\nTotal long-term liabilities2,147.0 1,833.3 \n\nTotal liabilities3,480.1 3,364.4 \n\nCommitments and contingencies\n\nStockholders’ deficit:\n\nPreferred stock—par value $.001 per share; Authorized shares: 5.0; Issued and outstanding shares: none\n— — \n\nCommon stock and additional paid-in capital—par value $.001 per share; Authorized shares: 1,000; Issued shares: 355.6 at December 31, 2025 and 355.2 at December 31, 2024; Outstanding shares: 91.9 at December 31, 2025 and 95.0 at December 31, 2024\n9,623.5 10,645.3 \n\nAccumulated deficit(11,775.0)(12,600.7)\n\nAccumulated other comprehensive loss(2.7)(2.5)\n\nTotal stockholders’ deficit(2,154.2)(1,957.9)\n\nTotal liabilities and stockholders’ deficit$1,325.9 $1,406.5 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n37\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(In millions, except per share data)\n\n  \nYear Ended December 31,\n\n 202520242023\n\nRevenues$1,656.6 $1,557.4 $1,493.1 \n\nCosts and expenses:\n\nCost of revenues196.3 191.4 197.3 \n\nResearch and development103.6 96.7 91.0 \n\nSelling, general and administrative235.7 211.1 204.2 \n\nTotal costs and expenses535.6 499.2 492.5 \n\nOperating income1,121.0 1,058.2 1,000.6 \n\nInterest expense(77.0)(75.3)(75.3)\n\nNon-operating income, net24.5 39.0 51.2 \n\nIncome before income taxes1,068.5 1,021.9 976.5 \n\nIncome tax expense(242.8)(236.2)(158.9)\n\nNet income825.7 785.7 817.6 \n\nOther comprehensive (loss) income(0.2)0.1 0.1 \n\nComprehensive income$825.5 $785.8 $817.7 \n\nEarnings per share:\n\nBasic$8.83 $8.01 $7.91 \n\nDiluted$8.81 $8.00 $7.90 \n\nShares used to compute earnings per share\n\nBasic93.5 98.1 103.4 \n\nDiluted93.8 98.2 103.5 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n38\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT\n\n(In millions, except per share data)\n\nYear Ended December 31,\n\n202520242023\n\nTotal stockholders’ deficit, beginning of period$(1,957.9)$(1,581.0)$(1,562.2)\n\nCommon stock and additional paid-in capital\n\nBeginning balance10,645.3 11,808.0 12,644.5 \n\nRepurchase of common stock(881.6)(1,225.6)(901.4)\n\nCommon stock cash dividends(215.2)— — \n\nStock-based compensation70.6 62.1 60.8 \n\nIssuance of common stock under stock plans12.3 12.3 12.3 \n\nExcise tax on repurchase of common stock(7.9)(11.5)(8.2)\n\nBalance, end of period9,623.5 10,645.3 11,808.0 \n\nAccumulated deficit\n\nBeginning balance(12,600.7)(13,386.4)(14,204.0)\n\nNet income825.7 785.7 817.6 \n\nBalance, end of period(11,775.0)(12,600.7)(13,386.4)\n\nAccumulated other comprehensive loss\n\nBeginning balance(2.5)(2.6)(2.7)\n\nOther comprehensive (loss) income(0.2)0.1 0.1 \n\nBalance, end of period(2.7)(2.5)(2.6)\n\nTotal stockholders’ deficit, end of period$(2,154.2)$(1,957.9)$(1,581.0)\n\nCash dividends declared per common share$2.31 $— $— \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n39\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In millions)\n\nYear Ended December 31,\n\n 202520242023\n\nCash flows from operating activities:\n\nNet income$825.7 $785.7 $817.6 \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nDepreciation of property and equipment31.2 36.9 44.1 \n\nStock-based compensation expense69.7 61.1 59.7 \n\nAmortization of discount on investments in debt securities(11.6)(21.1)(27.8)\n\nOther, net6.5 3.6 3.3 \n\nChanges in operating assets and liabilities:\n\nOther assets(1.4)(12.4)(1.5)\n\nOther liabilities42.7 (28.9)(2.2)\n\nDeferred revenues80.2 58.1 27.0 \n\nNet deferred income taxes48.1 19.6 (66.4)\n\nNet cash provided by operating activities1,091.1 902.6 853.8 \n\nCash flows from investing activities:\n\nProceeds from maturities and sales of marketable securities704.3 1,195.1 1,278.9 \n\nPurchases of marketable securities(572.2)(880.7)(1,330.5)\n\nPurchases of property and equipment(22.8)(28.1)(45.8)\n\nOther investing activities(0.2)— — \n\nNet cash provided by (used in) investing activities109.1 286.3 (97.4)\n\nCash flows from financing activities:\n\nRepurchases of common stock(881.6)(1,225.6)(901.4)\n\nRepayment of borrowings(500.0)— — \n\nProceeds from senior note issuance, net of issuance costs493.3 — — \n\nPayment of dividends(215.2)— — \n\nProceeds from employee stock purchase plan12.3 12.3 12.3 \n\nPayment of excise tax on repurchases of common stock(11.6)(8.2)— \n\nOther financing activities— — (0.7)\n\nNet cash used in financing activities(1,102.8)(1,221.5)(889.8)\n\nEffect of exchange rate changes on cash, cash equivalents and restricted cash— (0.8)(0.1)\n\nNet increase (decrease) in cash, cash equivalents and restricted cash97.4 (33.4)(133.5)\n\nCash, cash equivalents, and restricted cash at beginning of period212.1 245.5 379.0 \n\nCash, cash equivalents, and restricted cash at end of period$309.5 $212.1 $245.5 \n\nSee accompanying Notes to Consolidated Financial Statements.\n\n40\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nNote 1. Description of Business and Summary of Significant Accounting Policies\n\nDescription of Business\n\nVeriSign, Inc. (“Verisign” or “the Company”) was incorporated in Delaware on April 12, 1995. The Company has one reportable segment. The Company helps enable the security, stability, and resiliency of the Domain Name System (“DNS”) and the internet by providing Root Zone Maintainer services, operating two of the thirteen global internet root servers, and providing registration services and authoritative resolution for the .com and .net top-level domains, which support the majority of global e-commerce.\n\nBasis of Presentation\n\nThe accompanying consolidated financial statements of Verisign and its subsidiaries have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). All significant intercompany accounts and transactions have been eliminated.\n\nThe preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.\n\nSignificant Accounting Policies\n\nCash and Cash Equivalents\n\nVerisign considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents include certain money market funds, debt securities and various deposit accounts. Verisign maintains its cash and cash equivalents with financial institutions that have investment grade ratings and, as part of its cash management process, performs periodic evaluations of the relative credit standing of these financial institutions.\n\nMarketable Securities\n\nMarketable securities primarily consist of debt securities issued by the U.S. Treasury. All marketable securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses, net of taxes, are reported as a component of Accumulated other comprehensive loss. The specific identification method is used to determine the cost basis of the marketable securities sold. The Company classifies its marketable securities as current based on their nature and availability for use in current operations. The Company amortizes the discount on debt securities purchased below par value over the term of the instrument, and recognizes the amounts as interest income included in Non-operating income, net.\n\nProperty and Equipment\n\nProperty and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of 35 to 47 years for buildings, 10 years for building improvements and three years to six years for computer equipment, software, office equipment, and furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or associated lease terms. Certain assets included in Property and equipment, net on the Consolidated Balance Sheets were classified as held for sale. These assets were not material.\n\nCapitalized Software\n\nSoftware included in property and equipment includes amounts paid for purchased software and development costs for internally developed software. The Company capitalized $6.0 million and $6.7 million of costs related to internally developed software during 2025 and 2024, respectively.\n\nGoodwill and Other Long-lived Assets\n\nGoodwill represents the excess of purchase consideration over fair value of net assets of businesses acquired. The Company has only one reporting unit, which has a negative carrying value. Therefore, the goodwill is not subject to impairment.\n\nLong-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business. Recoverability\n\n41\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nof assets to be held and used is measured by a comparison of the carrying amount of an asset, or asset group, to estimated undiscounted future cash flows expected to be generated by the asset, or asset group. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value.\n\nAs of December 31, 2025, the Company’s assets include a deposit related to the purchase of the contractual rights to the .web gTLD. The amount paid to date has been recorded as a deposit until such time that the contractual rights are transferred to the Company. This asset would be tested for recoverability if the Company were to determine that it is no longer probable that the rights will be transferred. At the time of the transfer of the contractual rights, the Company will record the amount as an indefinite-lived intangible asset subject to review for impairment on an annual basis or more frequently if events or changes in circumstances indicate that an impairment is more likely than not.\n\nForeign Currency Remeasurement\n\n \n\nVerisign conducts business in several different countries and transacts in multiple currencies. The functional currency for all of Verisign’s international subsidiaries is the U.S. dollar. The Company’s subsidiaries’ financial statements are remeasured into U.S. dollars using a combination of current and historical exchange rates and any remeasurement gains and losses are included in Non-operating income, net. The Company recognized net remeasurement gains of $14.7 million in 2023. Net remeasurement gains and losses were not significant in 2025 and 2024.\n\nVerisign maintains a foreign currency risk management program designed to mitigate foreign exchange risks associated with the monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. The primary objective of this program is to minimize the gains and losses resulting from fluctuations in exchange rates. The Company does not enter into foreign currency transactions for trading or speculative purposes, nor does it hedge foreign currency exposures in a manner that entirely offsets the effects of changes in exchange rates. The program may entail the use of forward or option contracts, which are derivatives and are recorded at fair market value. The Company records gains and losses on foreign currency forward contracts in Non-operating income, net. The Company recognized a $9.8 million loss related to foreign currency forward contracts in 2023. Gains and losses related to foreign currency forward contracts were not significant in 2025 and 2024.\n\nAs of December 31, 2025, Verisign held foreign currency forward contracts in notional amounts totaling $67.7 million to mitigate the impact of exchange rate fluctuations associated with certain assets and liabilities held in foreign currencies.\n\nRevenue Recognition\n\nRevenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues primarily arise from fixed fees charged to registrars for the initial registration or renewal of .com, .net, and other domain names. Individual customers, called registrants, contract directly with registrars or their resellers, and the registrars, who are our direct customers, in turn register the domain names with Verisign. Fees for domain name registrations and renewals are generally due at the time of registration or renewal. Domain name registration terms range from one year up to ten years.\n\nMost customers either maintain a deposit with Verisign or provide an irrevocable letter of credit in excess of the amounts owed. Verisign also offers promotional incentive-based discount programs to its registrars based upon market conditions and the business environment in which the registrars operate. Amounts payable for these programs are recorded as a reduction of revenue.\n\nPerformance Obligations\n\nA performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Each domain name registration or renewal is considered a separate optional purchase and represents a single performance obligation, which is to allow its registration and maintain that registration (by allowing updates, DNS resolution and Whois and Registration Data Access Protocol services, which allow users to find information about registered domain names) through the registration term. These services are provided continuously throughout each registration term, and as such, revenues from the initial registration or renewal of domain names are deferred and recognized ratably over the registration term. Fees for renewals and advance extensions to the existing term are deferred until the new incremental period commences. These fees are then recognized ratably over the renewal or extension term.\n\n42\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nCosts Incurred to Obtain a Contract\n\nThe Company recognizes the fees payable to ICANN for each annual term of domain name registrations and renewals as an asset, which is amortized on a straight-line basis over the related registration term. These assets are included in Other current assets and Other long-term assets.\n\nIncome Taxes\n\nVerisign uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance to reduce deferred tax assets to an amount whose realization is more likely than not. The Company does not consider various minimum taxes imposed in certain jurisdictions for purposes of evaluating whether a deferred tax asset will be realized. For every tax-paying component and within each tax jurisdiction, all deferred tax liabilities and assets are offset and presented as a single net noncurrent asset or liability.\n\nThe Company recognizes the U.S. income tax effect of future global intangible low-taxed income inclusions in the period in which they arise.\n\nThe Company’s income taxes payable are reduced by the tax benefits from restricted stock unit (“RSU”) vestings equal to the fair market value of the stock at the vesting date. If the income tax benefit at the vesting date differs from the income tax benefit recorded based on the grant date fair value of the RSUs, the excess or shortfall of the tax benefit is recognized within income tax expense.\n\nVerisign operates in multiple tax jurisdictions in the United States and internationally. Tax laws and regulations in these jurisdictions are complex, interrelated, and periodically changing. Significant judgment or interpretation of these laws and regulations is often required in determining the Company’s worldwide provision for income taxes, including, for example, the calculations of taxable income in each jurisdiction, deferred taxes, and the availability and amount of deductions and tax credits. The final taxes payable are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from various tax examinations. The Company only recognizes tax positions taken or expected to be taken on its tax returns that are more likely than not to be sustained upon examination, and records a tax benefit amount that is more likely than not to be realized upon ultimate settlement with the taxing authority. The Company adjusts its estimate of unrecognized tax benefits in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in an outcome that is materially different from the estimate. See Note 11, “Income Taxes,” for details of the changes to the Company’s unrecognized tax benefits for the periods presented.\n\nStock-based Compensation\n\nThe Company’s stock-based compensation consists of RSUs granted to employees and the employee stock purchase plan (“ESPP”). Stock-based compensation expense is typically recognized ratably over the requisite service period. Forfeitures of stock-based awards are recognized as they occur. As substantially all of the RSUs granted by the Company are routine annual grants, none of the awards are designed to be spring-loaded, and as such, the Company does not adjust the market price of its common stock when estimating the grant-date fair value of these awards. The Company also grants RSUs which include performance conditions, and in some cases market conditions, to certain executives. The expense for these performance-based RSUs is recognized based on the probable outcome of the performance conditions. The expense recognized for awards with market conditions is based on the grant date fair value of the awards including the impact of the market conditions, using a Monte Carlo simulation model. The Company uses the Black-Scholes option pricing model to determine the fair value of its ESPP offerings. The determination of the fair value of stock-based payment awards using the Monte Carlo simulation model or the Black-Scholes option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables.\n\nEarnings per Share\n\nThe Company computes basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share gives effect to dilutive potential common shares, including unvested RSUs and ESPP offerings, using the treasury stock method.\n\n \n\n43\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nFair Value of Financial Instruments\n\nThe Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:\n\n \n\n•Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\n•Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.\n\n•Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.\n\nLegal Proceedings\n\nVerisign is involved in various investigations, claims and lawsuits arising in the normal conduct of its business, none of which, in its opinion, will have a material adverse effect on its financial condition, results of operations, or cash flows. The Company can provide no assurance that it will prevail in any litigation. Regardless of the outcome, any litigation may require the Company to incur significant litigation expense and may result in significant diversion of management attention.\n\nWhile certain legal proceedings and related indemnification obligations to which the Company is a party specify the amounts claimed, such claims may not represent reasonably possible losses. Given the inherent uncertainties of the litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has been recorded for probable and reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. The Company does not believe that any such matter currently being reviewed will have a material adverse effect on its financial condition, results of operations, or cash flows.\n\nAdoption of New Accounting Standards\n\nThe Company adopted Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance has been applied prospectively. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements. Refer to Note 11, “Income Taxes,” for income tax disclosures.\n\nRecent Accounting Pronouncements\n\nIn November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of certain costs and expenses within the notes to the financial statements. This guidance will be effective for our 2027 Form 10-K. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.\n\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes certain aspects of the accounting for and disclosure of internal-use software costs. The ASU does not change what types of costs are capitalized or when internal-use software cost capitalization ceases. This guidance will be effective for the Company in 2028. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.\n\n44\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nNote 2. Financial Instruments\n\nCash, Cash Equivalents, and Marketable Securities\n\nThe following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value categorization of the financial instruments measured at fair value on a recurring basis:\n\nAs of December 31,\n\n20252024\n\n (In millions)\n\nCash $18.5 $21.7 \n\nTime deposits1.9 1.8 \n\nMoney market funds (Level 1)243.3 188.6 \n\nDebt securities issued by the U.S. Treasury (Level 1)318.4 393.2 \n\nTotal$582.1 $605.3 \n\nCash and cash equivalents $307.9 $206.7 \n\nRestricted cash (included in Other long-term assets)1.6 5.4 \n\nTotal Cash, cash equivalents, and restricted cash309.5 212.1 \n\nMarketable securities 272.6 393.2 \n\nTotal$582.1 $605.3 \n\nThe gross and net unrealized gains and losses included in the fair value of the debt securities were not significant for the periods presented. All of the debt securities held as of December 31, 2025 are scheduled to mature in less than one year.\n\nFair Value Measurements\n\nThe fair value of the Company’s investments in money market funds approximates their face value. Such instruments are included in Cash and cash equivalents. The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. Debt securities purchased with original maturities in excess of three months are included in Marketable securities. The fair value of the Company’s foreign currency forward contracts is based on foreign currency rates quoted by banks or foreign currency dealers and other public data sources. The fair value of all of these financial instruments are classified as Level 1 in the fair value hierarchy.\n\nAs of December 31, 2025, the Company’s other financial instruments include cash, accounts receivable, restricted cash, and accounts payable whose carrying values approximated their face values. The aggregate fair value of the Company’s senior notes is $1.75 billion and $1.69 billion as of December 31, 2025 and 2024, respectively. The fair values of these debt instruments are based on available market information from public data sources and are classified as Level 2.\n\nNote 3. Selected Balance Sheet Items\n\nOther Current Assets\n\nOther current assets consist of the following: \n\nAs of December 31,\n\n20252024\n\n (In millions)\n\nPrepaid expenses$28.1 $30.8 \n\nPrepaid registry fees26.6 24.3 \n\nAccounts receivable, net7.7 5.6 \n\nTaxes receivable7.2 2.2 \n\nOther2.4 1.0 \n\nTotal other current assets$72.0 $63.9 \n\n45\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nProperty and Equipment, Net\n\nThe following table presents the detail of property and equipment, net:\n\nAs of December 31,\n\n20252024\n\n (In millions)\n\nComputer equipment and software$425.4 $418.7 \n\nBuildings and building improvements266.7 264.8 \n\nLand37.9 37.9 \n\nOffice equipment and furniture11.8 11.1 \n\nCapital work in progress12.4 16.9 \n\nLeasehold improvements1.7 1.6 \n\nTotal cost755.9 751.0 \n\nLess: accumulated depreciation(542.2)(526.5)\n\nTotal property and equipment, net$213.7 $224.5 \n\nSubstantially all of the Company’s property and equipment were held in the U.S. for both periods presented.\n\nGoodwill\n\nThe following table presents the detail of goodwill:\n\nAs of December 31,\n\n20252024\n\n (In millions)\n\nGoodwill, gross$1,537.8 $1,537.8 \n\nAccumulated goodwill impairment(1,485.3)(1,485.3)\n\nTotal goodwill$52.5 $52.5 \n\nThere was no impairment of goodwill or other long-lived assets recognized in any of the periods presented.\n\nDeposits to Acquire Intangible Assets\n\nThe Company’s Deposits to acquire intangible assets represents the $145.2 million paid for the future assignment to the Company of contractual rights to the .web gTLD, pending resolution of objections by other applicants, and approval from ICANN.\n\nOther Long-Term Assets\n\nOther long-term assets consist of the following: \n\nAs of December 31,\n\n20252024\n\n(In millions)\n\nOperating lease right-of-use asset$9.8 $9.3 \n\nLong-term prepaid registry fees8.4 8.2 \n\nLong-term prepaid expenses6.5 13.5 \n\nRestricted cash1.6 5.4 \n\nOther2.5 3.0 \n\nTotal other long-term assets$28.8 $39.4 \n\nThe prepaid registry fees in the tables above primarily relate to the fees the Company pays to ICANN for each annual term of .com domain name registrations and renewals which are deferred and amortized over the domain name registration term. The amount of prepaid registry fees as of December 31, 2025 reflects amortization of $42.0 million during 2025 which was recorded in Cost of Revenues.\n\n46\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nAccounts Payable and Accrued Liabilities\n\nAccounts payable and accrued liabilities consist of the following: \n\nAs of December 31,\n\n20252024\n\n (In millions)\n\nAccounts payable and accrued expenses$13.8 $10.6 \n\nCustomer deposits92.6 64.6 \n\nAccrued employee compensation77.2 66.9 \n\nTaxes payable64.0 65.8 \n\nInterest payable15.1 19.5 \n\nAccrued registry fees13.4 12.6 \n\nCustomer incentives payable13.2 8.9 \n\nCurrent operating lease liabilities 5.8 5.2 \n\nOther accrued liabilities2.9 3.7 \n\nTotal accounts payable and accrued liabilities$298.0 $257.8 \n\nCustomer deposits varies from period to period due to the timing of payments from certain large customers. Accrued employee compensation primarily consists of liabilities for employee leave, salaries, payroll taxes, employee contributions to the employee stock purchase plan, and incentive compensation.\n\nLong-term Tax and Other Liabilities\n\nLong-term tax and other liabilities consist of the following: \n\nAs of December 31,\n\n20252024\n\n(In millions)\n\nLong-term tax liabilities$5.4 $6.1 \n\nLong-term operating lease liabilities4.0 4.0 \n\nLong-term tax and other liabilities$9.4 $10.1 \n\nNote 4. Debt\n\nSenior Notes\n\nThe following table summarizes information related to our senior notes:\n\nIssuance DateMaturity DateInterest RatePrincipal\n\nAs of December 31,\n\n20252024\n\n(in millions except interest rates)\n\nSenior notes due 2025\nMarch 27, 2015April 1, 20255.25 %$— $500.0 \n\nSenior notes due 2027\nJuly 5, 2017July 15, 20274.75 %550.0 550.0 \n\nSenior notes due 2031\nJune 8, 2021June 15, 20312.70 %750.0 750.0 \n\nSenior notes due 2032March 11, 2025June 1, 20325.25 %500.0 — \n\nLess: unamortized issuance costs(11.8)(7.7)\n\nTotal senior notes\n1,788.2 1,792.3 \n\nLess: current portion of senior notes due 2025\n— (299.8)\n\nTotal long-term senior notes\n$1,788.2 $1,492.5 \n\n47\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nOn March 11, 2025, the Company issued $500.0 million of 5.25% senior unsecured notes due June 1, 2032 (“2032 Notes”). The 2032 Notes were issued at 99.581% of par value. Interest payments on the 2032 Notes commenced June 1, 2025 and are due semi-annually. The total discount and issuance costs of $6.7 million are presented on the balance sheet as a reduction of the debt obligation and are being amortized to Interest expense over the 7-year term of the notes.\n\nOn March 31, 2025, the Company used the net proceeds from the 2032 Notes and cash on hand to fund the repayment of all of its $500.0 million aggregate principal amount of outstanding 5.25% senior unsecured notes (“2025 Notes”), prior to their maturity on April 1, 2025.\n\nThe $750.0 million of 2.70% senior unsecured notes due June 15, 2031 were issued at 99.712% of par value. The $550.0 million of 4.75% senior unsecured notes due July 15, 2027 were issued at par. All outstanding senior notes are senior unsecured obligations of the Company. Each of the senior notes issuances is redeemable, in whole or in part, at the Company’s option at times and redemption prices specified in the indentures. Interest is payable on each of the senior notes semi-annually. Cash paid for interest was $78.7 million in 2025 and $72.8 million each in 2024 and 2023.\n\n2023 Credit Facility\n\nOn December 6, 2023, the Company entered into a credit agreement for a $200.0 million committed unsecured revolving credit facility (the “2023 Credit Facility”) which takes the place of its prior unsecured revolving credit facility. The 2023 Credit Facility includes a financial covenant requiring that the Company’s leverage ratio not exceed 4.0 to 1.0, which may be increased subject to certain conditions defined in the 2023 Credit Facility Agreement. As of December 31, 2025, there were no borrowings outstanding under the 2023 Credit Facility, and the Company was in compliance with the financial covenants. The 2023 Credit Facility expires on December 6, 2028, at which time any outstanding borrowings are due. Verisign may from time to time request lenders to agree on a discretionary basis to increase the commitment amount by up to an aggregate of $150.0 million.\n\nNote 5. Stockholders’ Deficit\n\nTreasury Stock\n\nTreasury stock is accounted for under the cost method. Treasury stock includes shares repurchased under stock repurchase programs and shares withheld in lieu of the tax withholding due upon vesting of RSUs.\n\nEffective July 24, 2025, the Company’s Board of Directors authorized the repurchase of its common stock in the amount of approximately $913.1 million, in addition to the $586.9 million that remained available for repurchases under the share repurchase program, for a total authorization of up to $1.50 billion under the program. The 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. As of December 31, 2025, there was approximately $1.08 billion remaining available for repurchases under the program.\n\nThe summary of the Company’s common stock repurchases are as follows:\n\n 202520242023\n\nSharesAverage PriceSharesAverage PriceSharesAverage Price\n\n (In millions, except average price amounts)\n\nTotal repurchases under the repurchase plans3.4 $252.42 6.6 $183.84 4.2 $210.28 \n\nTotal repurchases for tax withholdings0.1 $247.80 0.1 $188.23 0.1 $211.29 \n\nTotal repurchases3.5 $252.29 6.7 $183.90 4.3 $210.30 \n\nTotal costs$881.6 $1,225.6 $901.4 \n\nSince inception, the Company has repurchased 263.7 million shares of its common stock for an aggregate cost of $15.76 billion, which is recorded as a reduction of Additional paid-in capital. The share repurchase and authorization amounts disclosed within this Form 10-K exclude the excise tax on share repurchases.\n\n48\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nThe Company initiated a quarterly cash dividend in April 2025. A summary of the Company’s dividend activities for the periods presented is as follows:\n\nRecord Date\n\nPayment Date\n\nDividend Per Share\n\nTotal\n\n(In millions, except per share amounts)\n\nMay 19, 2025May 28, 2025$0.77 $72.1 \n\nAugust 19, 2025August 27, 20250.77 72.0 \n\nNovember 18, 2025November 25, 20250.77 71.1 \n\n$2.31 $215.2 \n\nThe dividends were accounted for as a reduction of Additional paid-in capital. On February 3, 2026, our Board of Directors declared a cash dividend of $0.81 per share of the Company’s outstanding common stock to stockholders of record as of the close of business on February 19, 2026, payable on February 27, 2026. The Company intends to continue to pay a cash dividend on a quarterly basis, subject to market conditions and approval by the Company’s Board of Directors.\n\nAccumulated Other Comprehensive Loss\n\nThe Accumulated other comprehensive loss balances as of December 31, 2025 and 2024 primarily consists of foreign currency translation adjustment losses. There were no significant changes to accumulated other comprehensive loss balances for the periods presented.\n\nNote 6. Calculation of Earnings per Share\n\nThe following table presents the computation of weighted-average shares used in the calculation of basic and diluted earnings per share:\n\n Year Ended December 31,\n\n 202520242023\n\n (In millions)\n\nWeighted-average shares of common stock outstanding93.598.1103.4\n\nWeighted-average potential shares of common stock outstanding:\n\nUnvested RSUs and ESPP0.3 0.1 0.1 \n\nShares used to compute diluted earnings per share93.898.2103.5\n\nThe calculation of diluted weighted average shares outstanding excludes performance-based RSUs granted by the Company for which the relevant performance criteria have not been achieved and any awards that are antidilutive. The number of potential shares excluded from the calculation was not significant in any period presented.\n\nNote 7. Segment Information\n\nThe Company has one reportable segment that includes all the operations of the business. The segment’s chief operating decision maker is the Executive Chairman, President, and Chief Executive Officer. The chief operating decision maker assesses performance and decides how to allocate resources based on revenues, operating income and net income as reported on the Consolidated Statement of Comprehensive Income.\n\nRevenues, operating income and net income are used to evaluate budget versus actual results and the overall return generated by the segment assets. The analysis of these financial results, among other metrics, is used to assess performance and drives employee incentive compensation, as well as executive compensation.\n\n49\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nThe following table presents information about segment revenues, significant expenses and profits:\n\nYear Ended December 31,\n\n202520242023\n\n(In millions)\n\nRevenues$1,656.6 $1,557.4 $1,493.1 \n\nCosts and expenses:\n\nCompensation and benefits expenses244.6 224.7 214.5 \n\nStock-based compensation expenses69.7 61.1 59.7 \n\nEquipment and software expenses50.2 45.6 42.1 \n\nRegistry fee expenses47.8 45.3 44.1 \n\nDepreciation expenses31.2 36.9 44.1 \n\nOther segment items92.1 85.6 88.0 \n\nTotal costs and expenses535.6 499.2 492.5 \n\nOperating income1,121.0 1,058.2 1,000.6 \n\nInterest expense(77.0)(75.3)(75.3)\n\nNon-operating income, net24.5 39.0 51.2 \n\nIncome tax expense(242.8)(236.2)(158.9)\n\nNet income$825.7 $785.7 $817.6 \n\nOther segment items that are a part of the Company’s segment net income include professional services expenses, legal expenses, telecommunication expenses, marketing expenses, occupancy expenses, and travel expenses.\n\nNote 8. Revenues\n\nThe Company generates revenues in the U.S.; Europe, the Middle East and Africa (“EMEA”); Australia, China, Japan, Singapore, and other Asia Pacific countries (“APAC”); and certain other countries, including Canada and Latin American countries.\n\nThe following table presents the Company’s revenues disaggregated by geography, based on the billing addresses of our customers:\n\nYear Ended December 31,\n\n202520242023\n\n(In millions)\n\nU.S$1,093.1 $1,035.5 $994.7 \n\nEMEA279.4 249.6 228.2 \n\nAPAC\n184.6 175.7 174.8 \n\nOther99.5 96.6 95.4 \n\nTotal revenues$1,656.6 $1,557.4 $1,493.1 \n\nRevenues in the table above are attributed to the country of domicile and the respective regions in which registrars are located; however, this may differ from the regions where the registrars operate or where registrants are located. Revenues for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or changes in affiliations of resellers. Revenues for each region may also be impacted by registrars domiciled in one region, registering domain names in another region.\n\nMajor Customers\n\nThe Company’s largest customer accounted for approximately 31% of revenues in 2025, and approximately 32% of revenues in 2024 and 2023. The Company does not believe that the loss of this customer would have a material adverse effect on the Company’s business because, in that event, end-users of this customer would transfer to the Company’s other existing customers.\n\n50\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nDeferred Revenues\n\nAs payment for domain name registrations and renewals are due in advance of the Company’s performance, the Company records these amounts as deferred revenues. The increase in the deferred revenues balance in 2025 was primarily driven by amounts billed in 2025 for domain name registrations and renewals to be recognized as revenues in future periods, offset by refunds for domain name renewals deleted during the 45-day grace period, and $934.7 million of revenues recognized that were included in the deferred revenues balance at December 31, 2024. The balance of deferred revenues as of December 31, 2025 represents the Company’s aggregate remaining performance obligations. Amounts included in current deferred revenues are all expected to be recognized in revenues within 12 months, except for a portion of deferred revenues that relates to domain name renewals that are deleted in the 45-day grace period following the transaction. The long-term deferred revenues amounts will be recognized in revenues over several years, and in some cases, up to ten years.\n\nNote 9. Employee Benefits and Stock-based Compensation\n\n401(k) Plan\n\nThe Company maintains a defined contribution 401(k) plan (the “401(k) Plan”) for substantially all of its U.S. employees. Under the 401(k) Plan, eligible employees may contribute up to 50% of their pre-tax salary, subject to the Internal Revenue Service (“IRS”) annual contribution limits. The Company matches 50% of up to the first 8% of the employee’s annual salary contributed to the plan. The Company contributed $6.4 million in 2025, $6.0 million in 2024, and $5.8 million in 2023 under the 401(k) Plan. The Company can terminate matching contributions at its discretion at any time.\n\nEquity Incentive Plan\n\nThe majority of Verisign’s stock-based compensation relates to RSUs granted under the 2006 Equity Incentive Plan (the “2006 Plan”). As of December 31, 2025, a total of 7.0 million shares of common stock remain reserved for issuance upon the vesting of RSUs and for the future grant of equity awards. The 2006 Plan authorizes the award of incentive stock options to employees and non-qualified stock options, restricted stock awards, RSUs, stock bonus awards, stock appreciation rights and performance shares to eligible employees, officers, directors, consultants, independent contractors and advisers. The 2006 Plan is administered by the Compensation Committee which may delegate to a committee of one or more members of the Board or Verisign’s officers the ability to grant certain awards and take certain other actions with respect to participants who are not executive officers or non-employee directors. RSUs are awards covering a specified number of shares of Verisign common stock that may be settled by issuance of those shares (which may be restricted shares). RSUs generally vest over four years. Certain RSUs with performance and market conditions (“PSUs”), granted to the Company’s executives, generally vest over a three-year term. Additionally, the Company has granted fully vested RSUs to members of its Board in each of the last three years. The Compensation Committee may authorize grants with a different vesting schedule in the future.\n\n2007 Employee Stock Purchase Plan\n\nEligible employees of the Company may purchase common stock under the 2007 Employee Stock Purchase Plan through payroll deductions by electing to have between 2% and 25% of their compensation withheld to cover the purchase price. Each participant is granted an option to purchase common stock. This option is automatically exercised on the last day of each six-month purchase period during the offering period. The purchase price for the common stock under the ESPP is 85% of the lesser of the fair market value of the common stock on the first day of the applicable offering period or the last day of the applicable purchase period. Offering periods begin on the first business day of February and August of each year. As of December 31, 2025, 2.7 million shares of the Company’s common stock remain reserved for future issuance under this plan.\n\n51\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nStock-based Compensation\n\nStock-based compensation is classified in the Consolidated Statements of Comprehensive Income in the same expense line items as cash compensation. The following table presents the classification of stock-based compensation:\n\n Year Ended December 31,\n\n202520242023\n\n (In millions)\n\nCost of revenues$8.7 $8.0 $7.1 \n\nResearch and development11.3 10.6 10.0 \n\nSelling, general and administrative49.7 42.5 42.6 \n\nStock-based compensation expense69.7 61.1 59.7 \n\nCapitalization (included in Property and equipment, net)0.9 1.0 1.1 \n\nTotal stock-based compensation$70.6 $62.1 $60.8 \n\nThe following table presents the nature of the Company’s total stock-based compensation:\n\n Year Ended December 31,\n\n202520242023\n\n (In millions)\n\nRSUs$53.1 $49.9 $47.1 \n\nPSUs13.7 8.2 9.3 \n\nESPP3.8 4.0 4.4 \n\nTotal stock-based compensation$70.6 $62.1 $60.8 \n\nThe income tax benefit that was included within Income tax expense related to these stock-based compensation expenses for 2025, 2024, and 2023 was $14.6 million, $12.4 million, and $11.7 million, respectively.\n\nRSUs Information\n\nThe following table summarizes unvested RSUs activity for the year ended December 31, 2025:\n\nSharesWeighted-Average Grant-Date Fair Value\n\n(Shares in millions)\n\nUnvested at beginning of period 0.7 $203.36 \n\nGranted 0.4 $226.12 \n\nVested and settled(0.3)$206.43 \n\nForfeited\n(0.1)$210.48 \n\nUnvested at end of period\n0.7 $213.00 \n\nThe RSUs in the table above include PSUs. The unvested RSUs as of December 31, 2025 include 0.2 million PSUs. The number of shares received upon vesting of these PSUs may range from 0.1 million to 0.4 million depending on the level of performance achieved and whether any market conditions are satisfied.\n\nThe closing price of Verisign’s stock was $242.95 on December 31, 2025. As of December 31, 2025, the aggregate market value of unvested RSUs was $174.1 million. The fair values of RSUs that vested during 2025, 2024, and 2023 were $73.9 million, $52.6 million, and $58.8 million, respectively. The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2024 and 2023, was $194.76 and $212.80, respectively. As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $109.7 million which is expected to be recognized over a weighted-average period of 2.4 years.\n\n52\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nNote 10. Non-operating Income, Net\n\nThe following table presents the components of non-operating income, net:\n\nYear Ended December 31,\n\n202520242023\n\n(In millions)\n\nInterest income$26.5 $37.4 $46.1 \n\nOther, net(2.0)1.6 5.1 \n\nTotal non-operating income, net$24.5 $39.0 $51.2 \n\nInterest income is earned primarily from the Company’s surplus cash balances and marketable securities. The decrease in interest income in 2025 primarily reflects the lower amounts invested in debt securities in 2025 and slightly lower interest rates on the Company’s investments in debt securities compared to 2024. Other, net, reflects net gains and losses from the Company’s foreign currency exposure and related hedges.\n\nNote 11. Income Taxes\n\nIncome before income taxes is categorized geographically as follows:\n\nYear Ended December 31,\n\n202520242023\n\n(In millions)\n\nUnited States$674.2 $655.4 $607.1 \n\nForeign394.3 366.5 369.4 \n\nTotal income before income taxes$1,068.5 $1,021.9 $976.5 \n\nThe provision for income taxes consisted of the following:\n\nYear Ended December 31,\n\n202520242023\n\n(In millions)\n\nCurrent expense:\n\nFederal$118.5 $147.9 $159.1 \n\nState 29.2 31.3 28.0 \n\nForeign, including withholding tax47.8 43.3 24.4 \n\n195.5 222.5 211.5 \n\nDeferred expense (benefit):\n\nFederal 24.0 (3.3)(25.6)\n\nState3.3 (3.3)11.2 \n\nForeign20.0 20.3 (38.2)\n\n47.3 13.7 (52.6)\n\nTotal income tax expense\n$242.8 $236.2 $158.9 \n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nThe One Big Beautiful Bill Act (“the Act”), signed into law on July 4, 2025, restored the immediate deduction of research and development expenditures for U.S. federal income tax purposes. This change resulted in a decrease to the Company’s current federal expense, and an increase to deferred federal expense in 2025. The increased foreign current expense in 2024 was primarily driven by the Organization for Economic Cooperation and Development (“OECD”) Pillar 2 minimum tax adopted by Switzerland, partially offset by related foreign tax credits in the U.S.\n\nThe difference between income tax expense and effective tax rate and the amounts resulting from applying the federal statutory rate of 21% to Income before income taxes in 2025 is attributable to the following:\n\nYear Ended December 31, 2025\n\nBalancePercent\n\n(Balance in millions)\n\nU.S. federal statutory tax rate$224.4 21.0 %\n\nDomestic federal:\n\nEffect of cross-border tax laws\n\nGlobal intangible low-taxed income5.8 0.5 %\n\nOther0.1 — %\n\nOther adjustments1.7 0.2 %\n\nDomestic state and local income taxes, net of federal income tax effect25.7 2.4 %\n\nForeign tax effects:\n\nSwitzerland\n\nEffect of rates different than statutory(49.0)(4.6)%\n\nCanton of Fribourg, Switzerland15.9 1.5 %\n\nMinimum taxes13.5 1.3 %\n\nOther4.8 0.4 %\n\nOther foreign jurisdictions(0.1)— %\n\nTotal$242.8 22.7 %\n\nThe majority of domestic state and local income taxes, net of federal income tax effect, in the table above relates to state taxes in Virginia and New York.\n\nThe difference between income tax expense and the amount resulting from applying the federal statutory rate of 21% to Income before income taxes in 2024 and 2023 is attributable to the following:\n\nYear Ended December 31,\n\n20242023\n\nIncome tax expense at federal statutory rate$214.6 $205.1 \n\nState taxes, net of federal benefit20.4 28.5 \n\nChange in valuation allowance(6.5)66.1 \n\nRemeasurement of unrecognized tax benefits2.4 (8.3)\n\nEffect of non-U.S. operations2.3 (15.5)\n\nNon-U.S. intellectual property— (118.0)\n\nOther3.0 1.0 \n\nTotal income tax expense\n$236.2 $158.9 \n\nDuring the fourth quarter of 2023, due to a change in local tax systems, the Company recognized amortizable tax basis related to a portion of its non-U.S. intellectual property based on a fair value of approximately $1.80 billion. This intellectual property had no book value, resulting in the recognition of a $118.0 million deferred tax asset and a corresponding income tax benefit in 2023.\n\n54\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nDue to the change in the tax systems mentioned above, the Company determined that it is more likely than not that a portion of the deferred tax asset related to certain non-U.S. intellectual property previously transferred as part of a legal entity reorganization, will not be realized, and as a result, recognized a valuation allowance of $64.7 million in 2023.\n\nThe tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and liabilities are as follows:\n\nAs of December 31,\n\n20252024\n\n(In millions)\n\nDeferred tax assets:\n\nIntellectual property$199.7 $227.4 \n\nDeferred revenue, accruals and reserves78.5 72.4 \n\nResearch and development costs— 32.5 \n\nOther11.2 11.7 \n\nTotal deferred tax assets289.4 344.0 \n\nValuation allowance(55.2)(61.8)\n\nNet deferred tax assets234.2 282.2 \n\nDeferred tax liabilities\n(1.0)(0.9)\n\nTotal net deferred tax assets$233.2 $281.3 \n\nThe decrease in the deferred tax assets related to research and development costs in 2025 was due to the passage of the Act which changed the timing of deductibility of these expenses as discussed above.\n\nWith the exception of a portion of deferred tax assets related to intellectual property and certain state and foreign net operating loss and foreign tax credit carryforwards, management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable income, will be sufficient to fully recover the remaining deferred tax assets.\n\nAs of December 31, 2025, the Company’s deferred tax assets included $23.1 million of state net operating loss carryforwards, before applying tax rates for the respective jurisdictions. The tax credit carryforwards as of December 31, 2025 consisted primarily of foreign tax credit carryforwards. The state net operating loss carryforwards expire in various years from 2026 through 2034. The foreign tax credits will expire between 2028 and 2035.\n\nThe following table presents income taxes paid to United States, state, and foreign jurisdictions, net of refunds received in 2025:\n\nYear Ended December 31,\n\n2025\n\n(in millions)\n\nUnited States\n\nFederal$140.8 \n\nState\n\nVirginia12.5\n\nOther20.3\n\nForeign\n\nSwitzerland - federal17.9\n\nOther10.9\n\nTotal $202.4 \n\nThe Company paid $230.5 million and $239.7 million for income taxes, net of refunds received, in 2024 and 2023, respectively.\n\n55\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nA reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:\n\nAs of December 31,\n\n20252024\n\n(In millions)\n\nBeginning balance$6.5 $9.6 \n\nIncreases in tax positions for prior years0.1 0.3 \n\nDecreases in tax positions for prior years— (2.8)\n\nIncreases in tax positions for current year0.4 0.4 \n\nLapse in statute of limitations(1.2)(1.0)\n\nEnding balance$5.8 $6.5 \n\nAs of December 31, 2025, approximately $3.9 million of unrecognized tax benefits, including penalties and interest, could affect the Company’s tax provision and effective tax rate.\n\nIn accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. These accruals were not material in any period presented.\n\nThe Company’s major taxing jurisdictions are the U.S., the Commonwealth of Virginia, and Switzerland. The Company’s U.S. federal income tax returns are not currently under examination by the IRS and only the Company’s tax returns for 2021 and years thereafter are subject to examination. The Company’s other material tax returns are not currently under examination by their respective taxing jurisdictions. Because the Company has previously used net operating loss carryforwards and other tax attributes to offset its taxable income in income tax returns for the U.S. and Virginia, such attributes can be adjusted by these taxing authorities until the statute of limitations closes on the year in which such attributes were utilized. The open years for examination in Switzerland are the 2021 tax year and forward.\n\nNote 12. Commitments and Contingencies\n\nThe following table represents the minimum payments required by Verisign under certain purchase obligations, leases, and the interest payments and principal on the Senior Notes:\n\nPurchase ObligationsSenior NotesTotal\n\n(In millions)\n\n2026$42.2 $72.6 $114.8 \n\n202725.0 622.6 647.6 \n\n202814.0 46.5 60.5 \n\n20297.0 46.5 53.5 \n\n20305.4 46.5 51.9 \n\nThereafter0.3 1,299.6 1,299.9 \n\nTotal$93.9 $2,134.3 $2,228.2 \n\nVerisign enters into certain purchase obligations with various vendors. The Company’s significant purchase obligations include firm commitments with telecommunication carriers, other service providers and the fixed portion of registry fees related to the operation of certain top-level domains. Registry fees for top-level domains that we operate where the amounts are variable or passed-through to registrars have been excluded from the table above.\n\nThe Company has an agreement with Internet Corporation for Assigned Names and Numbers (“ICANN”) to be the sole registry operator for domain names in the .com registry through November 30, 2030. For 2023 and 2024, the Company paid ICANN a fee of $0.25 for each annual term of a domain name registered or renewed. For 2025, these fees increased to $0.2575 for each annual term of a domain name registered or renewed. We also incur registry fees for certain other registries. The Company incurred total registry fees for .com and other registries of $47.8 million in 2025, $45.3 million in 2024, and $44.1 million in 2023.\n\n56\n\n[Table of Contents](#i65f0824a78cd40128656bda5d24bc479_7)\n\nVERISIGN, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)\n\nDECEMBER 31, 2025, 2024 AND 2023\n\nVerisign leases a small portion of its office space and a portion of its data center facilities under operating leases, the longest of which extends into 2029. Rental expenses under operating leases were not material in any period presented. Operating lease obligations for 2026 through 2029 are included in Purchase obligations in the table above."}