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 Verisign Reports Third Quarter 2017 Results
   Thursday, October 26, 2017 4:05:01 PM ET

VeriSign, Inc. (VRSN ), a global leader in domain names and internet security, today reported financial results for the third quarter of 2017.

Third Quarter GAAP Financial Results

VeriSign, Inc. and subsidiaries ("Verisign") reported revenue of $292 million for the third quarter of 2017, up 1.7 percent from the same quarter in 2016. Verisign reported net income of $115 million and diluted earnings per share (diluted "EPS") of $0.93 for the third quarter of 2017, compared to net income of $114 million and diluted EPS of $0.90 for the same quarter in 2016. The operating margin was 61.9 percent for the third quarter of 2017 compared to 60.8 percent for the same quarter in 2016.

Third Quarter Non-GAAP Financial Results

Verisign reported, on a non-GAAP basis, net income of $124 million and diluted EPS of $1.00 for the third quarter of 2017, compared to net income of $119 million and diluted EPS of $0.93 for the same quarter in 2016. The non-GAAP operating margin was 66.7 percent for the third quarter of 2017 compared to 65.3 percent for the same quarter in 2016. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

"Our team has delivered another quarter of solid results," said Jim Bidzos, Executive Chairman, President and Chief Executive Officer.

Financial Highlights

-- Verisign ended the third quarter with cash, cash equivalents and marketable securities of $2.4 billion, an increase of $568 million from year-end 2016.

-- Cash flow from operations was $175 million for the third quarter of 2017, compared with $171 million for the same quarter in 2016.

-- Deferred revenues on Sept. 30, 2017, totaled $1.01 billion, an increase of $31 million from year-end 2016.

-- During the third quarter, Verisign repurchased 1.5 million shares of its common stock for $147 million. At Sept. 30, 2017, $622 million remained available and authorized under the current share repurchase program which has no expiration.

-- For purposes of calculating diluted EPS, the third quarter diluted share count included 24.0 million shares related to subordinated convertible debentures, compared with 20.8 million shares for the same quarter in 2016. These represent dilutive shares and not shares that have been issued.

Business Highlights

-- Verisign ended the third quarter with 145.8 million .com and .net domain name registrations in the domain name base, a 1.2 percent increase from the end of the third quarter of 2016, and a net increase of 1.47 million during the third quarter of 2017.

-- In the third quarter, Verisign processed 8.9 million new domain name registrations for .com and .net, compared to 8.3 million for the same quarter in 2016.

-- The final .com and .net renewal rate for the second quarter of 2017 was 74.0 percent compared with 73.8 percent for the same quarter in 2016. 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 through August 15, 2017, resulting from upside or downside triggers related to the subordinated convertible debentures, and is adjusted for an income tax rate of 25 percent starting from the second quarter of 2017, and 26 percent for the other periods presented herein, 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 senior notes. Adjusted EBITDA refers to net income before interest, taxes, depreciation and amortization, stock-based compensation, unrealized gain / loss on the contingent interest derivative on the subordinated convertible debentures, unrealized gain / loss on hedging agreements and gain on the sale of a business.

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 and financial performance and the comparability of Verisign’s operating results from period to period. 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.

The tables appended to this 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. (EDT) to review the third quarter 2017 results. The call will be accessible by direct dial at (888) 676-VRSN (U.S.) or (323) 701-0225 (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 function for the core of the internet’s Domain Name System (DNS). Verisign’s Security Services include Distributed Denial of Service Protection 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 changes to the multi-stakeholder model of internet governance; changes in internet practices and behavior and the adoption of substitute technologies; the success or failure of the evolution of our 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, legal 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, 2016, 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)2017 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.
                                                                                                CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                                  (In thousands, except par value)
                                                                                                             (Unaudited)
                                                                                                                                                                                              
                                                                                                                         September 30,                                                                    December 31,
                                                                                                                             2017                                                                             2016
                                                                                                            ------------------------------------                                             ------------------------------------
                                        ASSETS
--------------------------------------------------------------------------------------
Current assets:
     Cash and cash equivalents                                                                                    $   286,822                                                                      $   231,945
     Marketable securities                                                                                          2,078,905                                                                        1,565,962
     Other current assets                                                                                              40,293                                                        44,435  
                                                                                                            --------------------------------------                                           --------------------------------------
          Total current assets                                                                                      2,406,020                                                     1,842,342  
                                                                                                            --------------------------------------                                           --------------------------------------
Property and equipment, net                                                                                           265,306                                                                          266,125
Goodwill                                                                                                               52,527                                                                           52,527
Deferred tax assets                                                                                                    20,458                                                                            9,385
Deposits to acquire intangible assets                                                                                 145,000                                                                          145,000
Other long-term assets                                                                                                 19,052                                                        19,193  
                                                                                                            --------------------------------------                                           --------------------------------------
          Total long-term assets                                                                                      502,343                                                       492,230  
                                                                                                            --------------------------------------                                           --------------------------------------
          Total assets                                                                                            $ 2,908,363                                                   $ 2,334,572  
                                                                                                            ======= ========= ====================                                           ======= ========= ====================
           LIABILITIES AND STOCKHOLDERS’ DEFICIT
--------------------------------------------------------------------------------------
Current liabilities:
     Accounts payable and accrued liabilities                                                                     $   193,462                                                                      $   203,920
     Deferred revenues                                                                                                717,586                                                                          688,265
     Subordinated convertible debentures, including contingent interest                                               624,474                                                       629,764  
     derivative
                                                                                                            ----------------  --------------------                                           ----------------  --------------------
          Total current liabilities                                                                                 1,535,522                                                     1,521,949  
                                                                                                            --------------------------------------                                           --------------------------------------
Long-term deferred revenues                                                                                           289,262                                                                          287,424
Senior notes                                                                                                        1,781,912                                                                        1,237,189
Deferred tax liabilities                                                                                              401,359                                                                          371,433
Other long-term tax liabilities                                                                                       130,246                                                       117,172  
                                                                                                            --------------------------------------                                           --------------------------------------
          Total long-term liabilities                                                                               2,602,779                                                     2,013,218  
                                                                                                            --------------------------------------                                           --------------------------------------
          Total liabilities                                                                                         4,138,301                                                     3,535,167  
                                                                                                            --------------------------------------                                           --------------------------------------
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:                                              325                                                                              324
     1,000,000; Issued shares:325,172 at September 30, 2017 and 324,118
     at December 31, 2016; Outstanding shares:98,865 at September 30,
     2017 and 103,091 at December 31, 2016
     Additional paid-in capital                                                                                    16,570,518                                                                       16,987,488
     Accumulated deficit                                                                                          (17,797,627 )                                                                    (18,184,954 )
     Accumulated other comprehensive loss                                                                              (3,154 )                                                                         (3,453 )
                                                                                                            --------------------------------------                                           --------------------------------------
          Total stockholders’ deficit                                                   (1,229,938 )                                                                     (1,200,595 )
                                                                                                            --------------------------------------                                           --------------------------------------
          Total liabilities and stockholders’ deficit                                  $ 2,908,363                                                   $ 2,334,572  
                                                                                                            ======= ========= ====================                                           ======= ========= ====================
                                                                                                                                                                                                                
                                                                                                                                                                             
                                                                                                                                                                     VERISIGN, INC.
                                                                                                                                                CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                                                                          (In thousands, except per share data)
                                                                                                                                                                       (Unaudited)
                                                                                                                                                                                                                                                           
                                                                                                                                                       Three Months Ended                                                                                                                        Nine Months Ended
                                                                                                                                                          September 30,                                                                                                                            September 30,
                                                                                                                 ----------------------------------------------------------------------------------------                                                 ---------------------------------------------------------------------------------------
                                                                                                                                 2017                                   2016                                                                           2017                                   2016
                                                                                                                 -------------------------------------                     -------------------------------------                                          -------------------------------------                     ------------------------------------
Revenues                                                                                                               $ 292,428                              $ 287,554                                                   $ 869,594                             $ 855,896  
                                                                                                                 ------- ------- --------------------                      ------- ------- --------------------                                           ------- ------- --------------------                      ------ ------- --------------------
Costs and expenses:
    Cost of revenues                                                                                                      47,333                                                    49,807                                                                        145,646                                                  149,142
    Sales and marketing                                                                                                   18,667                                                    18,647                                                                         56,463                                                   58,431
    Research and development                                                                                              12,715                                                    14,324                                                                         39,569                                                   45,355
    General and administrative                                                                                            32,654                                 30,000                                                      96,626                                85,158  
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
        Total costs and expenses                                                                                         111,369                                112,778                                                     338,304                               338,086  
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
Operating income                                                                                                         181,059                                                   174,776                                                                        531,290                                                  517,810
Interest expense                                                                                                         (37,756 )                                                 (28,919 )                                                                      (95,869 )                                                (86,582 )
Non-operating income, net                                                                                                  6,241                                  3,262                                                      21,544                                 8,092  
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
Income before income taxes                                                                                               149,544                                                   149,119                                                                        456,965                                                  439,320
Income tax expense                                                                                                       (34,645 )                                                 (34,692 )                                                                     (102,554 )                                               (104,227 )
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
Net income                                                                                                               114,899                                114,427                                                     354,411                               335,093  
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
    Realized foreign currency translation adjustments, included in net                                            --                                            --                                                                 --                                                       85
    income
    Unrealized gain (loss) on investments                                                                                     61                                                      (485 )                                                                          739                                                    1,301
    Realized gain on investments, included in net income                                                                    (325 )                                                     (11 )                                                                         (440 )                                                    (78 )
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
Other comprehensive (loss) income                                                                                           (264 )                                                    (496 )                                                                          299                                 1,308  
                                                                                                                 ------------------------------------                      ------------------------------------                                           ------------------------------------                      -----------------------------------
Comprehensive income                                                                                                   $ 114,635                              $ 113,931                                                   $ 354,710                             $ 336,401  
                                                                                                                 ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                     
Earnings per share:
    Basic                                                                                                              $    1.15                              $    1.08                                                   $    3.51                             $    3.10  
                                                                                                                 ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ====== ======= ====================
    Diluted                                                                                                            $    0.93                              $    0.90                                                   $    2.85                             $    2.58  
                                                                                                                 ======= ======= ====================                      ======= ======= ====================                                           ======= ======= ====================                      ====== ======= ====================
Shares used to compute earnings per share
    Basic                                                                                                                 99,614                                106,307                                                     101,036                               107,982  
                                                                                                                 ====================================                      ====================================                                           ====================================                      ===================================
    Diluted                                                                                                              124,074                                127,750                                                     124,162                               129,967  
                                                                                                                 ====================================                      ====================================                                           ====================================                      ===================================
                                                                                                                                                                                                                                                                                                                                    
                                                                            
                                                                                        VERISIGN, INC.
                                                                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                        (In thousands)
                                                                                          (Unaudited)
                                                                                                 
                                                                                                                                       Nine Months Ended
                                                                                                                                         September 30,
                                                                                                ----------------------------------------------------------------------------------------
                                                                                                                2017                                   2016
                                                                                                -------------------------------------                     -------------------------------------
Cash flows from operating activities:
    Net income                                                                                        $ 354,411                                                 $ 335,093
    Adjustments to reconcile net income to net cash provided by
    operating activities:
        Depreciation of property and equipment                                                           37,665                                                    44,114
        Gain on sale of business                                                                        (10,421 )                                          --
        Stock-based compensation                                                                         40,043                                                    35,745
        Payment of contingent interest                                                                  (15,232 )                                                 (13,385 )
        Amortization of debt discount and issuance costs                                                 10,827                                                     9,971
        Other, net                                                                                       (8,942 )                                                  (5,355 )
        Changes in operating assets and liabilities:
             Other assets                                                                                 4,566                                                    14,278
             Accounts payable and accrued liabilities                                                    (9,524 )                                                  (8,285 )
             Deferred revenues                                                                           32,790                                                    19,470
             Net deferred income taxes and other long-term tax liabilities                               67,385                                 56,397  
                                                                                                ------------------------------------                      ------------------------------------
                  Net cash provided by operating activities                                             503,568                                488,043  
                                                                                                ------------------------------------                      ------------------------------------
Cash flows from investing activities:
    Proceeds from maturities and sales of marketable securities                                       3,895,675                                                 3,029,699
    Purchases of marketable securities                                                               (4,398,787 )                                              (2,917,743 )
    Purchases of property and equipment                                                                 (40,609 )                                                 (19,889 )
    Deposits to acquire intangible assets                                                        --                                                  (143,000 )
    Other investing activities                                                                           12,102                                    171  
                                                                                                ------------------------------------                      ------------------------------------
                  Net cash used in investing activities                                                (531,619 )                                                 (50,762 )
                                                                                                ------------------------------------                      ------------------------------------
Cash flows from financing activities:
    Proceeds from employee stock purchase plan                                                           12,915                                                    13,670
    Repurchases of common stock                                                                        (474,290 )                                                (501,934 )
    Proceeds from borrowings, net of issuance costs                                                     543,185                         --  
                                                                                                ------------------------------------                      ------------------------------------
                  Net cash provided by (used in) financing activities                                    81,810                               (488,264 )
                                                                                                ------------------------------------                      ------------------------------------
Effect of exchange rate changes on cash and cash equivalents                                              1,118                                    109  
                                                                                                ------------------------------------                      ------------------------------------
Net increase (decrease) in cash and cash equivalents                                                     54,877                                                   (50,874 )
Cash and cash equivalents at beginning of period                                                        231,945                                228,659  
                                                                                                ------------------------------------                      ------------------------------------
Cash and cash equivalents at end of period                                                            $ 286,822                              $ 177,785  
                                                                                                ======= ======= ====================                      ======= ======= ====================
Supplemental cash flow disclosures:
    Cash paid for interest                                                                            $  86,622                              $  84,930  
                                                                                                ======= ======= ====================                      ======= ======= ====================
    Cash paid for income taxes, net of refunds received                                               $  22,717                              $  14,474  
                                                                                                ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                           
                                                                             
                                                                                                                                                                     VERISIGN, INC.
                                                                                                                                                      RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                                                                                                                                                          (In thousands, except per share data)
                                                                                                                                                                       (Unaudited)
                                                                                                                     
                                                                                                                                                                                                                      Three Months Ended September 30,
                                                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                 2017                                                                                             2016
                                                                                                                    ----------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------
                                                                                                                                  Operating                            Net Income                                                                      Operating                            Net Income
                                                                                                                                   Income                                                                                                                                  Income
                                                                                                                    ---------------------------------                        ----------------------------------                                             ---------------------------------                        ---------------------------------
GAAP as reported                                                                                                         $ 181,059                                                 $ 114,899                                                                     $ 174,776                                                $ 114,427
     Adjustments:
       Stock-based compensation                                                                                             14,105                                                    14,105                                                                        12,854                                                   12,854
       Unrealized gain on contingent interest derivative on the                                                                                                               --                                                                                                                                 (1,440 )
       subordinated convertible debentures
       Non-cash interest expense                                                                                                                                                       3,779                                                                                                                                  3,381
       Contingent interest payable on subordinated convertible debentures                                                                                                             (1,879 )                                                                                                                               (3,639 )
     Tax adjustment                                                                                                                                                (6,741 )                                                                                                            (6,979 )
                                                                                                                    ------------------------------------                     ------------------------------------                                           ------------------------------------                     -----------------------------------
Non-GAAP                                                                                                                 $ 195,164                              $ 124,163                                                  $ 187,630                             $ 118,604  
                                                                                                                    ====== ======= ====================                      ======= ======= ====================                                           ====== ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                      
Revenues                                                                                                                 $ 292,428                                                                                                                               $ 287,554
Non-GAAP operating margin                                                                                                     66.7                    %                                                                                                               65.3                    %
                                                                                                                    ===================================                                                                                                     ===================================
Diluted shares                                                                                                                                                                       124,074                                                                                                                                127,750
Diluted EPS, non-GAAP                                                                                                                                                              $    1.00                                                                                                           $    0.93  
                                                                                                                                                                             ======= ======= ====================                                                                                                    ====== ======= ====================
                                                                                                                     
                                                                                                                     
                                                                                                                                                                                                                       Nine Months Ended September 30,
                                                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                 2017                                                                                                                                   2016
                                                                                                                    ----------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------
                                                                                                                                  Operating                                               Net Income                                                                      Operating                                               Net Income
                                                                                                                                   Income                                                                                                                                  Income
                                                                                                                    ---------------------------------                        ----------------------------------                                             ---------------------------------                        ---------------------------------
GAAP as reported                                                                                                         $ 531,290                                                 $ 354,411                                                                     $ 517,810                                                $ 335,093
     Adjustments:
       Stock-based compensation                                                                                             40,043                                                    40,043                                                                        35,745                                                   35,745
       Unrealized loss (gain) on contingent interest derivative on the                                                                                                                   893                                                                                                                                 (2,411 )
       subordinated convertible debentures
       Non-cash interest expense                                                                                                                                                      10,827                                                                                                                                  9,971
       Contingent interest payable on subordinated convertible debentures                                                                                                             (9,445 )                                                                                                                              (10,406 )
     Tax adjustment                                                                                                                                               (23,872 )                                                                                                           (18,550 )
                                                                                                                    ------------------------------------                     ------------------------------------                                           ------------------------------------                     -----------------------------------
Non-GAAP                                                                                                                 $ 571,333                              $ 372,857                                                  $ 553,555                             $ 349,442  
                                                                                                                    ====== ======= ====================                      ======= ======= ====================                                           ====== ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                      
Revenues                                                                                                                 $ 869,594                                                                                                                               $ 855,896
Non-GAAP operating margin                                                                                                     65.7                    %                                                                                                               64.7                    %
                                                                                                                    ===================================                                                                                                     ===================================
Diluted shares                                                                                                                                                                       124,162                                                                                                                                129,967
Diluted EPS, non-GAAP                                                                                                                                                              $    3.00                                                                                                           $    2.69  
                                                                                                                                                                             ======= ======= ====================                                                                                                    ====== ======= ====================
                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                           
                                                                                                                                       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                                                                                             Four Quarters
                                                                                                                                                        September 30,                                                                                                   Ended
                                                                                                                                                                                                                                                                    September 30,
                                                                                                               ----------------------------------------------------------------------------------------                                                 ---------------------------------
                                                                                                                               2017                                   2016                                                                           2017
                                                                                                               -------------------------------------                     -------------------------------------                                          ------------------------------------
Net Income                                                                                                           $ 114,899                                                 $ 114,427                                                                     $ 459,963
     Interest expense                                                                                                   37,756                                                    28,919                                                                       124,851
     Income tax expense                                                                                                 34,645                                                    34,692                                                                       138,855
     Depreciation and amortization                                                                                      12,493                                                    14,697                                                                        51,718
     Stock-based compensation                                                                                           14,105                                                    12,854                                                                        54,342
     Unrealized (gain) loss on contingent interest derivative on the                                            --                                                    (1,440 )                                                                         902
     subordinated convertible debentures
     Unrealized loss on hedging agreements                                                                                  10                                                       460                                                                            99
     Loss (gain) on sale of business                                                                                       186                         --                                                    (10,421 )
                                                                                                               ------------------------------------                      ------------------------------------                                           -----------------------------------
Non-GAAP Adjusted EBITDA                                                                                             $ 214,094                              $ 204,609                                                  $ 820,309  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                                           ====== ======= ====================
                                                                                                                                                                                                                                                                        
                                                                                                                                   
                                                                                                                                        VERISIGN, INC.
                                                                                                                            STOCK-BASED COMPENSATION CLASSIFICATION
                                                                                                                                        (In thousands)
                                                                                                                                          (Unaudited)
 
The following table presents the classification of stock-based
compensation:
                                                                                                                                                                                                                 
                                                                                                                  Three Months Ended                                                                                                           Nine Months Ended
                                                                                                                     September 30,                                                                                                               September 30,
                                                                                 ------------------------------------------------------------------------------                                                 ------------------------------------------------------------------------
                                                                                               2017                              2016                                                                      2017                          2016
                                                                                 --------------------------------                     --------------------------------                                          --------------------------------                     -------------------------
     Cost of revenues                                                              $  1,774                                             $  1,779                                                                  $  5,311                                             $                5,367
     Sales and marketing                                                              1,369                                                1,129                                                                     4,255                                                              4,219
     Research and development                                                         1,575                                                1,676                                                                     4,553                                                              4,966
     General and administrative                                                       9,387                             8,270                                                 25,924                                          21,193
                                                                                 -------------------------------                      -------------------------------                                           -------------------------------                      -------------------------
Total stock-based compensation expense                                             $ 14,105                          $ 12,854                                               $ 40,043                          $               35,745
                                                                                 === ====== ====================                      === ====== ====================                                           === ====== ====================                      === ====================
                                                                                                                                                                                                                                                                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20171026006236r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006236/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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