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 Verisign Reports Fourth Quarter and Full Year 2015 Results
   Thursday, February 11, 2016 4:05:02 PM ET

VeriSign, Inc. (VRSN ), a global leader in domain names and Internet security, today reported financial results for the fourth quarter and full year of 2015.

Fourth Quarter GAAP Financial Results

VeriSign, Inc. and subsidiaries ("Verisign") reported revenue of $273 million for the fourth quarter of 2015, up 6.5 percent from the same quarter in 2014. Verisign reported net income of $102 million and diluted earnings per share ("diluted EPS") of $0.76 for the fourth quarter of 2015, compared to net income of $65 million and diluted EPS of $0.48 for the same quarter in 2014. The operating margin was 58.1 percent for the fourth quarter of 2015 compared to 55.6 percent for the same quarter in 2014.

As described in fourth quarter of 2014 earnings news release, net income for the fourth quarter of 2014 was decreased by $26 million and diluted EPS was decreased by $0.19 primarily due to a non-U.S. income tax charge related to a reorganization of certain international operations and a change in estimate for U.S. income tax charges related to the repatriation of offshore assets.

Fourth Quarter Non-GAAP Financial Results

Verisign reported, on a non-GAAP basis, net income of $105 million and diluted EPS of $0.79 for the fourth quarter of 2015, compared to net income of $95 million and diluted EPS of $0.70 for the same quarter in 2014. The non-GAAP operating margin was 62.4 percent for the fourth quarter of 2015 compared to 59.4 percent for the same quarter in 2014. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

"We close 2015 marking more than five years, since completing the divestitures in 2010, of growing revenues, operating income and earnings while providing more than 18 years of uninterrupted availability of the Verisign DNS for .com and .net. During 2015 we repurchased 9.3 million shares returning $622 million to shareholders," commented Jim Bidzos, Executive Chairman, President and Chief Executive Officer.

2015 GAAP Financial Results

For the year ended Dec. 31, 2015, Verisign reported revenue of $1.06 billion, up 4.9 percent from $1.01 billion in 2014. Verisign reported net income of $375 million and diluted EPS of $2.82 in 2015, compared to net income of $355 million and diluted EPS of $2.52 in 2014. The operating margin for 2015 was 57.2 percent compared to 55.9 percent in 2014.

As described in the fourth quarter of 2014 earnings news release, net income for 2014 was decreased by $10 million and diluted EPS was decreased by $0.07 primarily due to the fourth quarter of 2014 non-U.S. income tax charge related to a reorganization of certain international operations and changes in estimates during 2014 for U.S. income taxes related to the 2013 worthless stock deduction and the 2014 repatriation of offshore assets.

2015 Non-GAAP Financial Results

Verisign reported, on a non-GAAP basis, net income of $405 million and diluted EPS of $3.05 for 2015, compared to net income of $383 million and diluted EPS of $2.72 for 2014. The non-GAAP operating margin for 2015 was 61.5 percent compared to 60.2 percent for 2014.

Financial Highlights

-- Verisign ended 2015 with cash, cash equivalents and marketable securities of $1.9 billion, an increase of $491 million as compared with year-end 2014.

-- Cash flow from operations was $189 million for the fourth quarter of 2015 and $651 million for the full year 2015 compared with $170 million for the same quarter in 2014 and $601 million for the full year 2014.

-- Deferred revenues on Dec. 31, 2015, totaled $961 million, an increase of $71 million from year-end 2014.

-- Capital expenditures were $12 million in the fourth quarter and $41 million for the full year 2015.

-- During the fourth quarter, Verisign repurchased 1.8 million shares of its common stock for $150 million. During the full year 2015, Verisign repurchased 9.3 million shares of its common stock for $622 million.

-- Effective Feb. 11, 2016, the Board of Directors approved an additional authorization for share repurchases of approximately $611 million of common stock, which brings the total amount to $1 billion authorized and available under Verisign’s share buyback program, which has no expiration.

-- For purposes of calculating diluted EPS, the fourth quarter diluted share count included 21.4 million shares related to subordinated convertible debentures, compared with 14.7 million shares for the same quarter in 2014. These represent diluted shares and not shares that have been issued.

Business Highlights

-- Verisign Registry Services added 4.6 million net new names during the fourth quarter, ending with 139.8 million .com and .net domain names in the domain name base, which represents a 6.3 percent increase over the base at the end of the fourth quarter in 2014, as calculated including domain names on hold for both periods.

-- In the fourth quarter, Verisign processed 12.2 million new domain name registrations for .com and .net, as compared to 8.2 million for the same quarter in 2014.

-- The final .com and .net renewal rate for the third quarter of 2015 was 71.9 percent compared with 72.0 percent for the same quarter in 2014. Renewal rates are not fully measurable until 45 days after the end of the quarter.

Non-GAAP Financial Measures and Adjusted EBITDA

Verisign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, management typically discloses and discusses certain non-GAAP financial information in quarterly earnings releases, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: stock-based compensation, unrealized gain/loss on the contingent interest derivative on the subordinated convertible debentures, and non-cash interest expense. Non-GAAP net income is decreased by amounts accrued, if any, during the period for contingent interest payable resulting from upside or downside triggers related to the subordinated convertible debentures and is adjusted for an income tax rate of 26 percent for 2015 and 28 percent for 2014, both of which differ from the GAAP income tax rate.

On a quarterly basis, Verisign also provides Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure and is calculated in accordance with the terms of the indentures governing Verisign’s 4.625% senior notes due 2023 and 5.25% senior notes due 2025. Adjusted EBITDA refers to net income before interest, taxes, depreciation and amortization, stock-based compensation, unrealized loss (gain) on the contingent interest derivative on the subordinated convertible debentures and unrealized loss (gain) on hedging agreements.

Management believes that this non-GAAP financial data supplements the GAAP financial data by providing investors with additional information that allows them to have a clearer picture of Verisign’s operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. Management believes that the non-GAAP information enhances investors’ overall understanding of Verisign’s financial performance and the comparability of Verisign’s operating results from period to period.

The tables appended to this news release include a reconciliation of the non-GAAP financial information to the comparable financial information reported in accordance with GAAP for the given periods.

Today’s Conference Call

Verisign will host a live conference call today at 4:30 p.m. (EST) to review the fourth quarter and full year 2015 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (913) 312-1460 (international), conference ID: Verisign. A listen-only live web cast of the conference call and accompanying slide presentation will also be available at https://investor.verisign.com. An audio archive of the call will be available at https://investor.verisign.com/events.cfm. This news release and the financial information discussed on today’s conference call are available at https://investor.verisign.com.

About Verisign

Verisign, a global leader in domain names and Internet security, enables Internet navigation for many of the world’s most recognized domain names and provides protection for websites and enterprises around the world. Verisign ensures the security, stability and resiliency of key Internet infrastructure and services, including the .com and .net domains and two of the Internet’s root servers, as well as performs the root-zone maintainer functions for the core of the Internet’s Domain Name System (DNS). Verisign’s Security Services include intelligence-driven Distributed Denial of Service Protection, iDefense Security Intelligence and Managed DNS. To learn more about what it means to be Powered by Verisign, please visit Verisign.com.

VRSNF

Statements in this announcement other than historical data and information constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These statements involve risks and uncertainties that could cause our actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, whether the U.S. Department of Commerce will approve any exercise by us of our right to increase the price per .com domain name, under certain circumstances, the uncertainty of whether we will be able to demonstrate to the U.S. Department of Commerce that market conditions warrant removal of the pricing restrictions on .com domain names and the uncertainty of whether we will experience other negative changes to our pricing terms; the failure to renew key agreements on similar terms, or at all; new or existing governmental laws and regulations in the U.S. or other applicable foreign jurisdictions; system interruptions; security breaches; attacks on the Internet by hackers, viruses, or intentional acts of vandalism; the uncertainty of the impact of the U.S. government’s transition of key Internet domain name functions (the Internet Assigned Numbers Authority ("IANA") function) and related root zone management functions, changes in Internet practices and behavior and the adoption of substitute technologies; the success or failure of the evolution of our target markets; the operational and other risks from the introduction of new gTLDs by ICANN and our provision of back-end registry services; the highly competitive business environment in which we operate; whether we can maintain strong relationships with registrars and their resellers to maintain their marketing focus on our products and services; challenging global economic conditions; economic and political risk associated with our international operations; our ability to protect and enforce our rights to our intellectual property and ensure that we do not infringe on others’ intellectual property; the outcome of legal or other challenges resulting from our activities or the activities of registrars or registrants, or litigation generally; the impact of our new strategic initiatives, including our IDN gTLDs; whether we can retain and motivate our senior management and key employees; the impact of unfavorable tax rules and regulations; and our ability to continue to reinvest offshore our foreign earnings. More information about potential factors that could affect our business and financial results is included in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended Dec. 31, 2014, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Verisign undertakes no obligation to update any of the forward-looking statements after the date of this announcement.

(C)2016 VeriSign, Inc. All rights reserved. VERISIGN, the VERISIGN logo, and other trademarks, service marks, and designs are registered or unregistered trademarks of VeriSign, Inc. and its subsidiaries in the United States and in foreign countries. All other trademarks are property of their respective owners.

 
                                                                                                VERISIGN, INC.
                                                                                          CONSOLIDATED BALANCE SHEETS
                                                                                       (In thousands, except par value)
                                                                                                  (Unaudited)
                                                                                                                                
                                                                                                                        December 31,                                                December 31,
                                                                                                                            2015                                                        2014
                                                                                                           ---------------------------------------                     ---------------------------------------
                                        ASSETS
-------------------------------------------------------------------------------------
Current assets:
    Cash and cash equivalents                                                                                    $   228,659                                                 $   191,608
    Marketable securities                                                                                          1,686,771                                                   1,233,076
    Accounts receivable, net                                                                                          12,638                                                      13,448
    Other current assets                                                                                              39,856                                   41,658  
                                                                                                           --------------------------------------                      --------------------------------------
        Total current assets                                                                                       1,967,924                                1,479,790  
                                                                                                           --------------------------------------                      --------------------------------------
Property and equipment, net                                                                                          295,570                                                     319,028
Goodwill                                                                                                              52,527                                                      52,527
Deferred tax assets                                                                                                   17,361                                                      33,887
Other long-term assets                                                                                                24,355                                   15,918  
                                                                                                           --------------------------------------                      --------------------------------------
        Total long-term assets                                                                                       389,813                                  421,360  
                                                                                                           --------------------------------------                      --------------------------------------
        Total assets                                                                                             $ 2,357,737                              $ 1,901,150  
                                                                                                           ======= ========= ====================                      ======= ========= ====================
           LIABILITIES AND STOCKHOLDERS’ DEFICIT
-------------------------------------------------------------------------------------
Current liabilities:
    Accounts payable and accrued liabilities                                                                     $   188,171                                                 $   190,278
    Deferred revenues                                                                                                680,483                                                     621,307
    Subordinated convertible debentures, including contingent interest                                               634,326                                  620,620  
    derivative
                                                                                                           ----------------  --------------------                      ----------------  --------------------
        Total current liabilities                                                                                  1,502,980                                1,432,205  
                                                                                                           --------------------------------------                      --------------------------------------
Long-term deferred revenues                                                                                          280,859                                                     269,047
Senior notes                                                                                                       1,235,354                                                     740,175
Deferred tax liabilities                                                                                             294,194                                                     244,467
Other long-term tax liabilities                                                                                      114,797                                   98,722  
                                                                                                           --------------------------------------                      --------------------------------------
        Total long-term liabilities                                                                                1,925,204                                1,352,411  
                                                                                                           --------------------------------------                      --------------------------------------
        Total liabilities                                                                                          3,428,184                                2,784,616  
                                                                                                           --------------------------------------                      --------------------------------------
Commitments and contingencies
Stockholders’ deficit:
    Preferred stock--par value $.001 per share; Authorized shares: 5,000;                         --                                              --
    Issued and outstanding shares: none
    Common stock--par value $.001 per share; Authorized shares:                                              323                                                         322
    1,000,000; Issued shares: 322,990 at December 31, 2015 and 321,699
    at December 31, 2014; Outstanding shares: 110,072 at December 31,
    2015 and 118,452 at December 31, 2014
    Additional paid-in capital                                                                                    17,558,822                                                  18,120,045
    Accumulated deficit                                                                                          (18,625,599 )                                               (19,000,835 )
    Accumulated other comprehensive loss                                                                              (3,993 )                                                    (2,998 )
                                                                                                           --------------------------------------                      --------------------------------------
        Total stockholders’ deficit                                                    (1,070,447 )                                                  (883,466 )
                                                                                                           --------------------------------------                      --------------------------------------
        Total liabilities and stockholders’ deficit                                   $ 2,357,737                              $ 1,901,150  
                                                                                                           ======= ========= ====================                      ======= ========= ====================
                                                                                                                                                                                          
 
                                                                                                                                                 VERISIGN, INC.
                                                                                                                                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                                                      (In thousands, except per share data)
                                                                                                                                                   (Unaudited)
                                                                                                                                                                         
                                                                                                                            Three Months Ended December 31,                                                                                          Year Ended December 31,
                                                                                            -----------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------
                                                                                                            2015                                   2014                                                      2015                                   2014
                                                                                            -------------------------------------                     -------------------------------------                     ------------------------------------                     ---------------------------------------
Revenues                                                                                          $ 272,625                              $ 255,917                           $ 1,059,366                              $ 1,010,117  
                                                                                            ------- ------- --------------------                      ------- ------- --------------------                      ---- --------- --------------------                      ------- --------- --------------------
Costs and expenses:
    Cost of revenues                                                                                 48,996                                                    47,477                                                  192,788                                                     188,425
    Sales and marketing                                                                              22,507                                                    23,757                                                   90,184                                                      92,001
    Research and development                                                                         15,200                                                    17,324                                                   63,718                                                      67,777
    General and administrative                                                                       27,640                                 25,138                               106,730                                   97,487  
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
                                                                                                    114,343                                113,696                               453,420                                  445,690  
        Total costs and expenses
                                                                                            --------------  --------------------                      --------------  --------------------                      -------------  --------------------                      ----------------  --------------------
Operating income                                                                                    158,282                                                   142,221                                                  605,946                                                     564,427
Interest expense                                                                                    (28,567 )                                                 (21,586 )                                               (107,631 )                                                   (85,994 )
Non-operating (loss) income, net                                                                     (4,336 )                                                    (159 )                                                (10,665 )                                                     4,878  
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
Income before income taxes                                                                          125,379                                                   120,476                                                  487,650                                                     483,311
Income tax expense                                                                                  (23,849 )                                                 (55,004 )                                               (112,414 )                                                  (128,051 )
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
Net income                                                                                          101,530                                 65,472                               375,236                                  355,260  
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
    Realized foreign currency translation adjustments, included in net                       --                                            --                                                     (291 )                                            --
    income
    Unrealized (loss) gain on investments                                                            (1,318 )                                                      50                                                     (519 )                                                        84
    Realized (gain) loss on investments, included in net income                                         (86 )                                                       1                                  (185 )                                                         3  
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
Other comprehensive (loss) income                                                                    (1,404 )                                                      51                                  (995 )                                                        87  
                                                                                            ------------------------------------                      ------------------------------------                      -----------------------------------                      --------------------------------------
Comprehensive income                                                                              $ 100,126                              $  65,523                           $   374,241                              $   355,347  
                                                                                            ======= ======= ====================                      ======= ======= ====================                      ==== ========= ====================                      ======= ========= ====================
                                                                                                                                                                                                                                                                          
Earnings per share:
    Basic                                                                                         $    0.92                              $    0.54                           $      3.29                              $      2.80  
                                                                                            ======= ======= ====================                      ======= ======= ====================                      ==== ========= ====================                      ======= ========= ====================
    Diluted                                                                                       $    0.76                              $    0.48                           $      2.82                              $      2.52  
                                                                                            ======= ======= ====================                      ======= ======= ====================                      ==== ========= ====================                      ======= ========= ====================
Shares used to compute earnings per share:
    Basic                                                                                           110,952                                120,140                               114,155                                  126,710  
                                                                                            ====================================                      ====================================                      ===================================                      ======================================
    Diluted                                                                                         133,385                                135,899                               133,031                                  140,895  
                                                                                            ====================================                      ====================================                      ===================================                      ======================================
                                                                                                                                                                                                                                                                                            
 
                                                                                       VERISIGN, INC.
                                                                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                       (In thousands)
                                                                                         (Unaudited)
                                                                           
                                                                                                                                  Year Ended December 31,
                                                                                               ---------------------------------------------------------------------------------------------
                                                                                                              2015                                  2014
                                                                                               -----------------------------------                     -------------------------------------
Cash flows from operating activities:
    Net income                                                                                     $ 375,236                                                 $ 355,260
    Adjustments to reconcile net income to net cash provided by
    operating activities:
        Depreciation of property and equipment                                                        61,491                                                    63,690
        Stock-based compensation                                                                      46,075                                                    43,977
        Excess tax benefit associated with stock-based compensation                                  (18,464 )                                                  (6,054 )
        Unrealized loss (gain) on contingent interest derivative on                                   14,130                                                    (2,249 )
        Subordinated Convertible Debentures
        Payment of contingent interest                                                               (10,759 )                                          --
        Amortization of debt discount and issuance costs                                              12,292                                                    10,878
        Other, net                                                                                    (1,781 )                                                     480
        Changes in operating assets and liabilities
            Accounts receivable                                                                          661                                                       (73 )
            Prepaid expenses and other assets                                                         (1,728 )                                                  11,571
            Accounts payable and accrued liabilities                                                  21,013                                                    45,419
            Deferred revenues                                                                         70,988                                                    34,518
            Net deferred income taxes and other long-term tax liabilities                             82,328                                 43,532  
                                                                                               ----------------------------------                      ------------------------------------
                Net cash provided by operating activities                                            651,482                                600,949  
                                                                                               ----------------------------------                      ------------------------------------
Cash flows from investing activities:
    Proceeds from maturities and sales of marketable securities and                                2,767,027                                                 3,428,659
    investments
    Purchases of marketable securities                                                            (3,219,329 )                                              (3,277,096 )
    Purchases of property and equipment                                                              (40,656 )                                                 (39,327 )
    Other investing activities                                                                        (3,941 )                                                     452  
                                                                                               ----------------------------------                      ------------------------------------
                Net cash (used in) provided by investing activities                                 (496,899 )                                                 112,688  
                                                                                               ----------------------------------                      ------------------------------------
Cash flows from financing activities:
    Proceeds from issuance of common stock from option exercises and                                  14,690                                                    17,597
    employee stock purchase plans
    Repurchases of common stock                                                                     (643,169 )                                                (883,403 )
    Proceeds from borrowings, net of issuance costs                                                  492,237                                            --
    Excess tax benefit associated with stock-based compensation                                       18,464                                  6,054  
                                                                                               ----------------------------------                      ------------------------------------
                Net cash used in financing activities                                               (117,778 )                                                (859,752 )
                                                                                               ----------------------------------                      ------------------------------------
Effect of exchange rate changes on cash and cash equivalents                                             246                                 (1,500 )
                                                                                               ----------------------------------                      ------------------------------------
Net increase (decrease) in cash and cash equivalents                                                  37,051                                                  (147,615 )
Cash and cash equivalents at beginning of period                                                     191,608                                339,223  
                                                                                               ----------------------------------                      ------------------------------------
Cash and cash equivalents at end of period                                                         $ 228,659                              $ 191,608  
                                                                                               ===== ======= ====================                      ======= ======= ====================
Supplemental cash flow disclosures:
    Cash paid for interest, net of capitalized interest                                            $  99,473                              $  75,088  
                                                                                               ===== ======= ====================                      ======= ======= ====================
    Cash paid for income taxes, net of refunds received                                            $  39,723                              $  35,201  
                                                                                               ===== ======= ====================                      ======= ======= ====================
                                                                                                                                                                        
                                                                       
                                                                                                                                              VERISIGN, INC.
                                                                                                                               RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                                                                                                                   (In thousands, except per share data)
                                                                                                                                                (Unaudited)
                                                                                            
                                                                                                                                                                                    Three Months Ended December 31,
                                                                                           ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       2015                                                                                           2014
                                                                                           --------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                                          Operating                                                                                     Operating               
                                                                                                           Income                                                Net Income                                                 Income                                                  Net Income
                                                                                           --------------------------------------                     ---------------------------------                     --------------------------------------                     ------------------------------------
GAAP as reported                                                                                $   158,282                                             $ 101,530                                                $   142,221                                                $  65,472
   Adjustments:
   Stock-based compensation                                                                          11,724                                                11,724                                                      9,696                                                    9,696
   Unrealized loss on contingent interest derivative on the                                                                                                 5,072                                                                                                               1,704
   subordinated convertible debentures
   Non-cash interest expense                                                                                                                                3,091                                                                                                               2,641
   Contingent interest payable on subordinated convertible debentures                                                                                      (3,272 )                                                                                                            (2,613 )
   Tax adjustment                                                                                                                      (13,070 )                                                                                         18,071  
                                                                                           --------------------------------------                     --------------------------------                      --------------------------------------                     -----------------------------------
Non-GAAP                                                                                        $   170,006                          $ 105,075                             $   151,917                             $  94,971  
                                                                                           ====== ========= ====================                      === ======= ====================                      ====== ========= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                        
Revenues                                                                                        $   272,625                                                                                                      $   255,917
Non-GAAP operating margin                                                                              62.4                    %                                                                                        59.4                    %
                                                                                           =====================================                                                                            =====================================
Diluted shares                                                                                                                                            133,385                                                                                                             135,899
Diluted EPS, non-GAAP                                                                                                                                   $    0.79                                                                                        $    0.70  
                                                                                                                                                      === ======= ====================                                                                                 ====== ======= ====================
                                                                                            
                                                                                            
                                                                                                                                                                                        Year Ended December 31,
                                                                                           ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       2015                                                                                                              2014
                                                                                           --------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
                                                                                                          Operating                                                                                                        Operating
                                                                                                           Income                                                Net Income                                                 Income                                                  Net Income
                                                                                           --------------------------------------                     ---------------------------------                     --------------------------------------                     ------------------------------------
GAAP as reported                                                                                $   605,946                                             $ 375,236                                                $   564,427                                                $ 355,260
   Adjustments:
   Stock-based compensation                                                                          46,075                                                46,075                                                     43,977                                                   43,977
   Unrealized (gain) loss on contingent interest derivative on the                                                                                         14,130                                                                                                              (2,249 )
   subordinated convertible debentures
   Non-cash interest expense                                                                                                                               11,746                                                                                                              10,223
   Contingent interest payable on subordinated convertible debentures                                                                                     (11,749 )                                                                                                            (3,919 )
   Tax adjustment                                                                                                                      (30,028 )                                                                                        (20,725 )
                                                                                           --------------------------------------                     --------------------------------                      --------------------------------------                     -----------------------------------
Non-GAAP                                                                                        $   652,021                          $ 405,410                             $   608,404                             $ 382,567  
                                                                                           ====== ========= ====================                      === ======= ====================                      ====== ========= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                        
Revenues                                                                                        $ 1,059,366                                                                                                      $ 1,010,117
Non-GAAP operating margin                                                                              61.5                    %                                                                                        60.2                    %
                                                                                           =====================================                                                                            =====================================
Diluted shares                                                                                                                                            133,031                                                                                                             140,895
Diluted EPS, non-GAAP                                                                                                                                   $    3.05                                                                                        $    2.72  
                                                                                                                                                      === ======= ====================                                                                                 ====== ======= ====================
                                                                                                                                                                                                                                                                                       
 
                                                                                VERISIGN, INC.
                                                                  RECONCILIATION OF NON-GAAP ADJUSTED EBITDA
                                                                                      (In
                                                                                  thousands)
                                                                                  (Unaudited)
 
The following table reconciles GAAP net income to non-GAAP
Adjusted EBITDA for the periods shown below (in thousands):
                                                              
                                                                                                                       Three Months Ended
                                                                                                                          December 31,
                                                                                  --------------------------------------------------------------------------------------
                                                                                                  2015                                  2014
                                                                                  ------------------------------------                     ------------------------------------
Net Income                                                                             $ 101,530                                                $  65,472
    Interest expense                                                                      28,567                                                   21,586
    Income tax expense                                                                    23,849                                                   55,004
    Depreciation and amortization                                                         14,937                                                   15,767
    Stock-based compensation                                                              11,724                                                    9,696
    Unrealized loss on contingent interest derivative on the                               5,072                                                    1,704
    subordinated convertible debentures
    Unrealized loss (gain) on hedging agreements                                              84                                  (267 )
                                                                                  -----------------------------------                      -----------------------------------
Non-GAAP Adjusted EBITDA                                                               $ 185,763                             $ 168,962  
                                                                                  ====== ======= ====================                      ====== ======= ====================
                                                                                   
                                                                                                                           Year Ended
                                                                                                                        December 31, 2015
                                                                                  --------------------------------------------------------------------------------------
Net Income                                                                             $                                                          375,236
    Interest expense                                                                                                                              107,631
    Income tax expense                                                                                                                            112,414
    Depreciation and amortization                                                                                                                  61,491
    Stock-based compensation                                                                                                                       46,075
    Unrealized loss on contingent interest derivative on the                                                                                       14,130
    subordinated convertible debentures
    Unrealized loss on hedging agreements                                                                                                              95  
                                                                                  --------------------------------------------------------------------------------------------
Non-GAAP Adjusted EBITDA                                                               $                                                          717,072  
                                                                                  ====== =====================================================================================
                                                                                                                                                           
 
                                                                                                           VERISIGN, INC.
                                                                                               STOCK-BASED COMPENSATION CLASSIFICATION
                                                                                                           (In thousands)
                                                                                                             (Unaudited)
 
The following table presents the classification of stock-based
compensation:
                                                                                                                              
                                                                                             Three Months Ended                                                                                 Year Ended
                                                                                                December 31,                                                                                   December 31,
                                                            ------------------------------------------------------------------------------------                     ----------------------------------------------------------------
                                                                          2015                             2014                                                 2015                   2014
                                                            ---------------------------------------------------- -------------------------------                     ---------------------------------------------------- -----------
    Cost of revenues                                          $  1,807                          $ 1,652                                             $  7,009                          $  6,400
    Sales and marketing                                          1,963                                               2,121                                                6,763                                                8,023
    Research and development                                     1,598                                               1,829                                                6,488                                                7,018
    General and administrative                                   6,356                            4,094                            25,815                            22,536
                                                            -------------------------------                      ------------------------------                      -------------------------------                      -----------
Total stock-based compensation expense                        $ 11,724                          $ 9,696                          $ 46,075                          $ 43,977
                                                            === ====== ====================                      === ===== ====================                      === ====== ====================                      === ======

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160211006258r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160211006258/en/

SOURCE: VeriSign, Inc.

VeriSign, Inc. 
Investor Relations: 
David Atchley, 703-948-4643 
datchley@verisign.com 
or 
Media Relations: 
Deana Alvy, 703-948-4179 
dalvy@verisign.com


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