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VeriSign Reports Second Quarter Results in Line With Prior Guidance

July 26, 2007

MOUNTAIN VIEW, CA, Jul 26, 2007 (MARKET WIRE via COMTEX News Network) --

VeriSign, Inc. (NASDAQ: VRSN), the leading provider of digital infrastructure for the networked world, today reported financial results for the second quarter ended June 30, 2007.

VeriSign reported total revenue of $368 million for the second quarter of 2007. These results include $4 million of revenue related to the Jamba Services business that is held for sale and which is reported under discontinued operations on the statements of operation. On a GAAP basis, VeriSign reported a net loss of $5 million for the second quarter of 2007 and a net loss per share of $0.02 per fully-diluted share.

On a non-GAAP basis, VeriSign reported net income of $62 million for the second quarter of 2007 and earnings per share of $0.25 per diluted share. A table reconciling the GAAP to non-GAAP net income reported above is appended to this release.

"We are generally pleased with our second quarter performance," said Bill Roper, president and chief executive officer of VeriSign. "These results indicate that the benefits of the company-wide reorganization initiated at the first of the year are beginning to impact our operational and financial performance. We are focusing on more discipline in our business processes and the growth opportunities that we see for the remainder of this year and into the next."

"Our second quarter results demonstrate solid financial execution," said Bert Clement, chief financial officer of VeriSign. "Strong growth in the core registry and SSL businesses continues to strengthen our balance sheet, with Deferred Revenue of $691 million, up 4% from last quarter, and Cash and Investments of $819 million."

Business Highlights

--  In May, VeriSign announced that its Board of Directors had elected
    William A. Roper, Jr. as President and Chief Executive Officer.  The Board
    also elected Edward A. Mueller as Chairman of the Board.
--  Earlier this month, the Company announced that its Board of Directors
    had appointed Albert E. Clement as Chief Financial Officer.
--  VeriSign's Chief Technology Officer, Ari Balogh, was recognized by
    InfoWorld Magazine as a Top 25 CTO for his continued leadership of Project
    Titan, a three-year initiative to fortify and expand the capacity of the
    global Internet infrastructure.
--  On July 16, 2007, VeriSign announced that it had become current in its
    filings with the SEC, including its Annual Report on Form 10-K for the year
    ended December 31, 2006 as well as Quarterly Reports for the second and
    third quarters of 2006 and the first quarter of 2007.
--  Subsequent to completing its filings, the Company received
    notification from Nasdaq that the Company had demonstrated compliance with
    Nasdaq's filing requirements under the Marketplace Rules, that the matter
    relating to the company's listing status had been closed, and that
    VeriSign's securities will continue to be listed on the Nasdaq Global
    Select Market.
--  John D. Roach has been appointed to the Company's Board of Directors,
    effective July 19, 2007.  Mr. Roach will serve on the Audit Committee of
    the Board of Directors.
--  At eBay Live! in June, PayPal announced the general availability of
    the PayPal Security Key, a two-factor authentication token that generates a
    unique security code to protect consumers against phishing and online
    fraud, in the United States, Germany and Australia. The PayPal Security Key
    is part of the VeriSign Identity Protection (VIP) Network, helping to
    prevent unauthorized access to consumer accounts on eBay, PayPal and a
    variety of e-commerce websites.
--  VeriSign and Live Earth integrated mobile messaging and online
    interactivity into events around the globe on 7.7.07 to enable millions of
    participants to use their mobile phones to personally participate in the
    broadcasts and live concerts demonstrating their commitment to making a
    change for the environment.
--  VeriSign partnered with AirMagnet in June to launch the VeriSign
    Wireless Intrusion Prevention Service (IPS), the first comprehensive
    service designed to effectively shield rapidly growing corporate wireless
    networks from data theft and other prominent security threats.


Internet Services Group

--  The Internet Services Group (ISG) -- which includes VeriSign Security
    Services (VSS) and VeriSign Information Services (VIS) -- delivered $225
    million of revenue in the second quarter of 2007.
--  The VeriSign Information Services business ended the quarter with
    approximately 73 million active domain names in .com and .net, representing
    a 5% increase over Q1 2007 and 27% increase year over year.
--  The VeriSign website certificate business issued approximately 211,000
    new and renewal certificates in Q2, bringing the total base to 883,000, up
    4% from Q1 2007.  The installed base excluding the GeoTrust certificates
    grew 13% year over year.


Communications Services Group

--  VeriSign Communications Services (VCS) Group -- which provides
    intelligent communications, commerce and content services to
    telecommunications carriers and next generation service providers --
    delivered revenues of $143 million in the second quarter of 2007.
--  The Communications and Commerce group generated revenues of $90
    million.
--  The Content group, which includes Messaging Services, generated
    revenues of $39 million during the quarter.


Additional Financial Information

--  Year-to-date capital expenditures were approximately $48 million.
--  VeriSign ended the second quarter with Cash, Cash Equivalents,
    Restricted Cash and Short-term Investments of $819 million, an increase of
    $80 million from the prior quarter.
--  Deferred revenue on the balance sheet was $691 million as of June 30,
    2007, an increase of $29 million from the prior quarter.
--  Net days sales outstanding (Net DSO), which takes into account the
    change in deferred revenue balances, was 44 days at the end of Q2, an
    improvement of one day from Q1.


Non-GAAP results exclude the following items which are included under GAAP: amortization of intangible assets, stock-based compensation, former CEO severance, non-recurring legal costs and settlements, restructuring and other charges, net loss on sale of investments, unrealized gain on Jamba JV call option, and stock option investigation costs. A table reconciling the GAAP to non-GAAP net income is appended to this release.

Today's Conference Call

VeriSign will host a live teleconference call today at 2:00 pm (PDT) to review the quarter's results. The call will be accessible by direct dial at (888) 676-VRSN (US) or (913) 981-4903 (international). A listen-only live web cast and accompanying slide presentation of the earnings conference call will also be available at http://investor.verisign.com. A replay of this call will be available at (888) 203-1112 or (719) 457-0820 (passcode: 7180604) beginning at 5:00 pm (PDT) on July 26 and will run through August 1. This press release and the financial information discussed on today's conference call are available on the Investor Relations section of the VeriSign website at http://investor.verisign.com.

About VeriSign

VeriSign, Inc. (NASDAQ: VRSN) operates intelligent infrastructure services that enable and protect billions of interactions every day across the world's voice, video and data networks. Additional news and information about the company is available at www.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 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause VeriSign's actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, the uncertainty of future revenue and profitability and potential fluctuations in quarterly operating results due to such factors as increasing competition and pricing pressure from competing services offered at prices below our prices and market acceptance of our existing services, the inability of VeriSign to successfully develop and market new services and the uncertainty of whether new services as provided by VeriSign will achieve market acceptance or result in any revenues and the risk acquired businesses will not be integrated successfully and unanticipated costs of such integration. More information about potential factors that could affect the company's business and financial results is included in VeriSign's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended December 31, 2006 and 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 press release.

                      VERISIGN, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
              (In thousands, except share and per share data)
                                (Unaudited)
                                                June 30,     December 31,
                                                  2007           2006
                                              -------------  -------------
                         Assets
Current assets:
    Cash and cash equivalents                 $     656,517  $     478,749
    Short-term investments                           94,308        198,656
    Accounts receivable, net                        225,296        319,305
    Prepaid expenses and other current assets       100,178        217,196
    Deferred tax assets                              80,063         84,318
    Current assets of discontinued operations        34,909         34,356
                                              -------------  -------------
            Total current assets                  1,191,271      1,332,580
                                              -------------  -------------
    Property and equipment, net                     581,140        605,292
    Goodwill                                      1,261,944      1,449,493
    Other intangible assets, net                    242,003        333,430
    Restricted cash                                  48,361         49,437
    Long-term deferred tax assets                   218,050        177,805
    Other assets, net                                34,545         25,214
    Investment in unconsolidated entities           105,500              -
    Long-term assets of discontinued
     operations                                       7,055          1,217
                                              -------------  -------------
            Total long-term assets                2,498,598      2,641,888
                                              -------------  -------------
            Total assets                      $   3,689,869  $   3,974,468
                                              =============  =============
          Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable and accrued liabilities  $     319,985  $     675,105
    Accrued restructuring costs                      12,666          3,818
    Deferred revenue                                505,119        448,413
    Short-term debt                                       -        199,000
    Deferred tax liabilities                          1,025          1,414
    Current liabilities of discontinued
     operations                                      33,798         31,743
                                              -------------  -------------
            Total current liabilities               872,593      1,359,493
                                              -------------  -------------
    Long-term deferred revenue                      179,666        159,439
    Long-term accrued restructuring costs               624            937
    Long-term tax liability                          44,705              -
    Other long-term liabilities                      10,497          5,175
    Long-term deferred tax liabilities               12,953         24,815
    Long-term liabilities of discontinued
     operations                                           -             34
                                              -------------  -------------
            Total long-term liabilities             248,445        190,400
                                              -------------  -------------
            Total liabilities                     1,121,038      1,549,893
Commitments and contingencies
Minority interest in subsidiaries                    47,684         47,716
Stockholders' equity:
  Preferred stock - par value $ 001 per share
     Authorized shares:  5,000,000
     Issued and outstanding shares: none                  -              -
  Common stock - par value $ 001 per share
     Authorized shares:  1,000,000,000
     Issued and outstanding shares:
      243,838,287 and  243,844,122
      (excluding 35,493,973 and 35,471,662
      shares held in treasury at June 30, 2007
      and December 31, 2006, respectively )             244            244
    Additional paid-in capital                   23,362,353     23,314,511
    Accumulated deficit                         (20,834,462)   (20,929,498)
    Accumulated other comprehensive loss             (6,988)        (8,398)
                                              -------------  -------------
            Total stockholders' equity            2,521,147      2,376,859
                                              -------------  -------------
            Total liabilities and
             stockholders' equity             $   3,689,869  $   3,974,468
                                              =============  =============
                      VERISIGN, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                (Unaudited)
                                 Three Months Ended     Six Months Ended
                                      June 30,              June 30,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Revenues                        $ 363,217  $ 387,832  $ 736,266  $ 757,941
Cost and expenses
   Cost of revenues               147,836    145,715    298,476    282,682
   Sales & marketing               63,890     92,808    142,840    183,358
   Research & development          36,254     31,021     81,416     59,280
   General & administrative        77,142     59,297    128,731    119,812
   Restructuring, impairments &
    other charges                  15,179     (7,604)    42,191     (4,195)
   Amortization of intangible
    assets                         29,669     31,833     61,456     59,833
   Acquired in-process R&D              -      4,600          -     15,500
                                ---------  ---------  ---------  ---------
    Total costs & expenses        369,970    357,670    755,110    716,270
                                ---------  ---------  ---------  ---------
Operating (loss) income            (6,753)    30,162    (18,844)    41,671
Other income, net                  10,849      4,946     92,236     33,667
                                ---------  ---------  ---------  ---------
Income from continuing
 operations before income
 taxes, earnings from
 unconsolidated entities and
 minority interest                  4,096     35,108     73,392     75,338
Income tax expense (benefit)       11,609   (341,532)    20,371   (317,317)
Earnings from unconsolidated
 entities, net of tax               1,748          -      2,196          -
Minority interest, net of tax          82       (758)      (487)    (1,405)
                                ---------  ---------  ---------  ---------
Net (loss) income from
 continuing operations             (5,683)   375,882     54,730    391,250
Net income from from
 discontinued operations, net
 of tax                               965        905      2,305      2,023
                                ---------  ---------  ---------  ---------
Net (loss) income               $  (4,718) $ 376,787  $  57,035  $ 393,273
                                =========  =========  =========  =========
Basic net income (loss) per
 share from:
   Continuing operations        $   (0.02) $    1.54  $    0.22  $    1.59
   Discontinued operations           0.00       0.00       0.01       0.01
                                ---------  ---------  ---------  ---------
   Net (loss) income            $   (0.02) $    1.54  $    0.23  $    1.60
                                =========  =========  =========  =========
Diluted net (loss) income per
 share from:
   Continuing operations        $   (0.02) $    1.52  $    0.22  $    1.58
   Discontinued operations           0.00       0.00       0.01       0.01
                                ---------  ---------  ---------  ---------
   Net (loss) income            $   (0.02) $    1.52  $    0.23  $    1.59
                                =========  =========  =========  =========
    Shares used in per share
     computation:
       Basic                      243,846    244,744    243,849    245,171
                                =========  =========  =========  =========
       Diluted                    243,846    247,252    246,102    247,745
                                =========  =========  =========  =========
Stock-based compensation
    Cost of revenue             $   3,659  $   3,381  $   7,339  $   7,286
    Sales & marketing               4,198      3,709      9,913      7,252
    Research & development          2,298      2,596      5,322      4,873
    General & administrative       15,118      5,647     21,071     12,588
                                ---------  ---------  ---------  ---------
      Total stock-based
       compensation             $  25,273  $  15,333  $  43,645  $  31,999
                                =========  =========  =========  =========
                      VERISIGN, INC. AND SUBSIDIARIES
                  STATEMENTS OF OPERATIONS RECONCILIATION
                  (In thousands, except per share data)
                                 Three Months Ended     Six Months Ended
                                      June 30,              June 30,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Revenue reconciliation
Revenue from continuing
 operations                     $ 363,217  $ 387,832  $ 736,266  $ 757,941
     Revenue from discontinued
      operations (1)                4,407      2,938      8,804      5,598
                                ---------  ---------  ---------  ---------
Revenue including discontinued
 operations                     $ 367,624  $ 390,770  $ 745,070  $ 763,539
                                =========  =========  =========  =========
(1) For the three and six months ended June 30, 2007, revenue from
discontinued operations represents activity related primarily to the Jamba
Services business. VeriSign previously provided investors and analysts
forecasts for the period that included revenue up until an estimated
disposition date of the business. For the three and six months ended
June 30, 2006, revenue from discontinued operations represents activity
related to the Payments Gateway business.  For GAAP purposes, revenue from
these and all periods are reclassified to net income from discontinued
operations.
Statements of operations reconciliation
Net (loss) income on a GAAP
 basis                          $  (4,718) $ 376,787  $  57,035  $ 393,273
     Amortization of intangible
      assets                       29,669     31,833     61,456     59,833
     Acquired in-process
      research and development          -      4,600          -     15,500
     Stock-based compensation      25,273     15,333     43,645     31,999
     Former CEO severance          10,430          -     10,430          -
     Non-recurring legal costs
      and settlements                 487      1,300        762      3,300
     Restructuring, impairments
      and other charges
      (reversals)                  15,179     (7,604)    42,191     (4,195)
     Net (gain) loss on sale of
      investments                     (55)        28       (885)   (20,220)
     Net gain on sale of
      subsidiary                        -          -    (74,999)         -
     Unrealized gain on Jamba
      JV call option               (3,755)         -     (3,755)         -
     Stock option investigation
      costs                         3,787          -      6,719          -
     Income tax expense
      (benefit) (2)                12,307   (340,972)    21,839   (316,550)
                                ---------  ---------  ---------  ---------
   Non-GAAP income before
    income taxes                   88,604     81,305    164,438    162,940
   Non-GAAP tax rate in lieu of
    the GAAP rate                 (26,581)   (24,392)   (49,331)   (48,882)
                                ---------  ---------  ---------  ---------
Net income on a non-GAAP basis  $  62,023  $  56,913  $ 115,107  $ 114,058
                                =========  =========  =========  =========
Statements of operations  reconciliation per share
Diluted net (loss) income per
 share on a GAAP basis          $   (0.02) $    1.52  $    0.23  $    1.59
     Amortization of intangible
      assets                         0.12       0.13       0.25       0.24
     Acquired in-process
      research and development          -       0.02          -       0.06
     Stock-based compensation        0.10       0.06       0.17       0.13
     Former CEO severance            0.04          -       0.04          -
     Non-recurring legal costs
      and settlements                   -       0.01          -       0.01
     Restructuring, impairments
      and other charges
      (reversals)                    0.06      (0.03)      0.17      (0.02)
     Net (gain) loss on sale of
      investments                       -          -          -      (0.08)
     Net gain on sale of
      subsidiary                        -          -      (0.30)         -
     Unrealized gain on Jamba
      JV call option                (0.02)         -      (0.02)         -
     Stock option investigation
      costs                          0.02          -       0.03          -
     Non-GAAP tax rate of 30%
      in lieu of the GAAP rate      (0.05)     (1.48)     (0.11)     (1.47)
                                ---------  ---------  ---------  ---------
Diluted net income per share on
 a non-GAAP basis               $    0.25  $    0.23  $    0.46  $    0.46
                                =========  =========  =========  =========
Shares used in calculation of
 net (loss) income per share      249,404    247,252    248,880    247,745
(2) Includes tax from discontinued operations of $698 and $1,468 for the
three and six months ended June 30, 2007, respectively, and $560 and
$767 for the three and six months ended June 30, 2006 respectively.
VeriSign provides quarterly and annual financial statements that are
prepared in accordance with generally accepted accounting principles
(GAAP).  Along with this information, we typically disclose and discuss
certain non-GAAP financial infromation in our quarterly earnings release,
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:
amortization of intangible assets, acquired in-process research and
development, stock-based compensation, former CEO severance, non-recurring
legal costs and settlements, restructuring, impairments and other charges
(reversals), net (gain) loss on sale of investments, net gain on sale of
subsidiary, unrealized gain on Jamba JV call option and stock option
investigation costs. Non-GAAP financial information is also adjusted for a
30% tax rate which differs from the GAAP tax rate.
Management believes that this non-GAAP financial data supplements our GAAP
financial data by providing investors with additional information that
allows them to have a clearer picture of the company's core operations.
The presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP. We believe that the non-GAAP information enhances
the investors' overall understanding of our financial performance and the
comparability of the company's operating results from period to period.
Above, we have provided a reconciliation of the non-GAAP financial
information that we provide each quarter with the comparable financial
information reported in accordance with GAAP for the given period.

SOURCE: VeriSign, Inc.

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