VeriSign, Inc.
Aug 2, 2010
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VeriSign Reports 9% Year-Over-Year Revenue Growth in Second Quarter 2010

Company Achieves 4% Quarter-Over-Quarter Growth in Naming Services Deferred Revenue

MOUNTAIN VIEW, CA, Aug 02, 2010 (MARKETWIRE via COMTEX News Network) -- VeriSign, Inc. (NASDAQ: VRSN), the trusted provider of Internet infrastructure services for the networked world, today reported financial results for the second quarter ended June 30, 2010.

Second Quarter GAAP Financial Results

VeriSign, Inc. and subsidiaries ("VeriSign") reported revenue of $169 million from continuing operations for the second quarter of 2010, up 4% from the prior quarter and up 9% from the same quarter in 2009. Continuing operations consist primarily of the results of the Naming Services business which is comprised of Registry Services and Network Intelligence and Availability (NIA) Services. NIA includes iDefense and the Distributed Denial of Service (DDoS) mitigation business. Results related to the Authentication Services business for the second quarter have been reclassified as discontinued operations following the announced sale of this business to Symantec. VeriSign reported net income attributable to VeriSign, Inc. stockholders of $35 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.19 on a diluted basis for the second quarter of 2010, compared to net income attributable to VeriSign, Inc. stockholders of $35 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.18 on a diluted basis in the same quarter in 2009. The operating margin was 30.0% for the second quarter of 2010 compared to 27.8% for the same quarter in 2009.

VeriSign reported segment revenue for Naming Services of $168 million for the second quarter of 2010, up 4% from the prior quarter and up 9% from the same quarter in 2009. The non-core Content Portal Services (CPS) business reported $1 million of revenue as part of continuing operations during the second quarter of 2010.

"With the expected closing of the sale of the Authentication Services business to Symantec, VeriSign will be focused on the Naming Services business where we are the market leader and where, with increasing Internet usage globally, we see opportunities for growth," said Mark McLaughlin, president and chief executive officer of VeriSign. "Our second quarter results reflect continued positive Internet trends and continued operational discipline."

Second Quarter Non-GAAP Financial Results

For Naming Services, VeriSign reported net income attributable to VeriSign, Inc. stockholders of $43 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.24 on a diluted basis for the second quarter of 2010, compared to net income attributable to VeriSign, Inc. stockholders of $30 million and earnings per share attributable to VeriSign, Inc. stockholders of $0.16 on a diluted basis in the same quarter in 2009. The operating margin was 40.5% for the second quarter of 2010 compared to 33.9% for the same quarter in 2009. A table reconciling the GAAP to the non-GAAP results (which excludes items described below) is appended to this release.

"Continued quarter-over-quarter revenue growth in Naming Services led to a GAAP operating margin of 30% and non-GAAP operating margin of 40.5%," said Brian Robins, chief financial officer of VeriSign. "Our recurring revenue business model helped us to maintain a healthy balance sheet, and we returned more than $275 million to shareholders in the first half of 2010 through share repurchases."

Financial Highlights

--  Revenue from discontinued operations, consisting of the Authentication
    Services business, was $102 million during the second quarter.
--  On July 27, 2010, the Board of Directors approved an additional
    authorization for share repurchases of approximately $1.1 billion,
    which brings the total amount authorized and remaining under the plan
    to $1.5 billion.
--  VeriSign ended the second quarter with Cash, Cash Equivalents,
    Marketable Securities and Restricted Cash, excluding cash included as
    part of assets held for sale, of $1.339 billion, a decrease of $213
    million from the prior quarter and an increase of $28 million from the
    same quarter in 2009.
--  In the second quarter, VeriSign repurchased 8.1 million shares of its
    common stock for a cost of $227 million.
--  Cash flow from operations, on a consolidated basis, was $149 million
    for the second quarter, after giving effect to a classification of
    $4 million of excess tax benefits associated with stock-based
    compensation as financing cash flows.
--  Deferred revenue on June 30, 2010 totaled $641 million for Naming
    Services, an increase of $24 million from the prior quarter and $65
    million from the same quarter in 2009.
--  Capital expenditures, on a consolidated basis, were $23 million in the
    second quarter.

Business and Corporate Highlights

--  On May 19, 2010, VeriSign announced a definitive agreement to sell its
    Authentication Services business to Symantec for approximately $1.28
    billion in cash. The transaction is expected to close within 90 days of
    May 19, 2010.
--  VeriSign Naming Services ended the quarter with approximately 101.5
    million active domain names in the adjusted zone for .com and .net,
    representing a 9% increase year-over-year.
--  In the second quarter, VeriSign added 7.9 million new domain name
    registrations, representing a 13% increase year-over-year.
--  VeriSign experienced an average daily query load of 63 billion in the
    quarter, compared to 54 billion in the prior quarter and 49 billion in
    the same quarter in 2009.
--  VeriSign ended the second quarter of 2010 with approximately 2,225
    employees on a consolidated basis, compared to 2,200 employees at the
    end of the prior quarter. Approximately 1,100 employees were part of
    continuing operations as of the end of the second quarter, a number
    which is expected to be further reduced over approximately twelve
    months.

Non-GAAP Items

Non-GAAP financial results exclude the following items that are included under GAAP: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. A table reconciling the GAAP to non-GAAP net income is appended to this release. All non-GAAP figures for each period presented herein have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.

Today's Conference Call

VeriSign will host a live teleconference call today at 2:00 p.m. (PDT) to review the second quarter results. The call will be accessible by direct dial at (888) 676-VRSN (US) or (913) 312-1524 (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: 5120314) beginning at 5:00 p.m. (PDT) on August 2 and will run through August 9 at 5:00 p.m (PDT). 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) is the trusted provider of Internet infrastructure services for the networked world. Billions of times each day, VeriSign enables companies and consumers all over the world to connect online with confidence. 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 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. 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; the current global economic downturn; challenges to ongoing privatization of Internet administration; new or existing governmental laws and regulations; changes in customer behavior; the inability of VeriSign to successfully develop and market new services; the uncertainty of whether our new services will achieve market acceptance or result in any revenues; system interruptions; security breaches; attacks on the Internet by hackers, viruses, or intentional acts of vandalism; challenges to the building of trust on the Internet; the uncertainty of the expense and duration of transition services and requests for indemnification relating to completed divestitures; the uncertainty of whether Project Apollo will achieve its stated objectives; and the risk that the sale of VeriSign's Authentication Services business to Symantec may not be consummated or may be delayed as a result of the inability of the parties to obtain required governmental approvals, the assertion of claims by third parties or other reasons. 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, 2009, 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.

                VERISIGN, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED BALANCE SHEETS
         (In thousands, except share and per share data)
                           (Unaudited)
                                                    June 30,   December 31,
                                                      2010        2009
                                                  -----------  -----------
                           ASSETS
Current assets:
  Cash and cash equivalents                       $   862,923  $ 1,477,166
  Marketable securities                               474,356          185
  Accounts receivable, net                             16,194       63,133
  Prepaid expenses and other current assets            85,021      167,531
  Assets held for sale                                681,749        1,043
                                                  -----------  -----------
     Total current assets                           2,120,243    1,709,058
                                                  -----------  -----------
Property and equipment, net                           190,807      403,821
Goodwill                                               52,527      289,980
Other intangible assets, net                            3,266       22,420
Other assets                                           25,122       44,865
                                                  -----------  -----------
     Total long-term assets                           271,722      761,086
                                                  -----------  -----------
     Total assets                                 $ 2,391,965  $ 2,470,144
                                                  ===========  ===========
           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities        $   165,043  $   243,967
  Deferred revenues                                   437,288      642,507
  Liabilities related to assets held for sale         340,515            -
                                                  -----------  -----------
     Total current liabilities                        942,846      886,474
                                                  -----------  -----------
Long-term deferred revenues                           203,911      245,734
Convertible debentures, including contingent
 interest derivative                                  575,933      574,378
Other long-term liabilities                           193,133      164,894
                                                  -----------  -----------
     Total long-term liabilities                      972,977      985,006
                                                  -----------  -----------
     Total liabilities                              1,915,823    1,871,480
                                                  -----------  -----------
Commitments and contingencies
Stockholders' equity:
  VeriSign, Inc. 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: 174,907,760
      excluding 134,801,346 held in treasury, at
      June 30, 2010; and 183,299,463, excluding
      124,434,684 held in treasury, at
      December 31, 2009                                   310          308
     Additional paid-in capital                    21,519,042   21,736,209
     Accumulated deficit                          (21,107,866) (21,194,435)
     Accumulated other comprehensive income            12,404        7,659
                                                  -----------  -----------
     Total VeriSign, Inc. stockholders' equity        423,890      549,741
  Noncontrolling interest in subsidiary                52,252       48,923
                                                  -----------  -----------
     Total stockholders' equity                       476,142      598,664
                                                  -----------  -----------
     Total liabilities and stockholders' equity   $ 2,391,965  $ 2,470,144
                                                  ===========  ===========
                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,
                                --------------------  --------------------
                                   2010      2009       2010       2009
                                ---------  ---------  ---------  ---------
Revenues                        $ 168,684  $ 154,338  $ 331,178  $ 303,990
                                ---------  ---------  ---------  ---------
Costs and expenses:
     Cost of revenues              40,590     42,977     80,322     88,221
     Sales and marketing           23,182     18,116     44,630     34,075
     Research and development      13,824     12,985     26,194     26,805
     General and administrative    32,957     37,339     67,980     75,881
     Restructuring and other
      charges, net                  7,539        (61)     7,838      2,814
                                ---------  ---------  ---------  ---------
        Total costs and expenses  118,092    111,356    226,964    227,796
                                ---------  ---------  ---------  ---------
Operating income                   50,592     42,982    104,214     76,194
  Other loss, net                  (8,116)   (10,485)   (15,276)   (15,433)
                                ---------  ---------  ---------  ---------
Income from continuing
 operations before income taxes    42,476     32,497     88,938     60,761
Income tax expense                (16,211)   (15,593)   (32,905)   (22,812)
                                ---------  ---------  ---------  ---------
Income from continuing
 operations, net of tax            26,265     16,904     56,033     37,949
Income from discontinued
 operations, net of tax            10,109     18,868     32,781     63,338
                                ---------  ---------  ---------  ---------
Net income                         36,374     35,772     88,814    101,287
Less: Income from discontinued
 operations, net of tax,
 attributable to noncontrolling
 interest in subsidiary            (1,161)      (898)    (2,245)    (1,393)
                                ---------  ---------  ---------  ---------
Net income attributable to
 VeriSign, Inc. stockholders    $  35,213  $  34,874  $  86,569  $  99,894
                                =========  =========  =========  =========
Basic income per share
 attributable to VeriSign, Inc.
 stockholders from:
     Continuing operations      $    0.15  $    0.09  $    0.31  $    0.20
     Discontinued operations         0.04       0.09       0.17       0.32
                                ---------  ---------  ---------  ---------
     Net income                 $    0.19  $    0.18  $    0.48  $    0.52
                                =========  =========  =========  =========
Diluted income per share
 attributable to VeriSign, Inc.
 stockholders from:
     Continuing operations      $    0.14  $    0.09  $    0.31  $    0.20
     Discontinued operations         0.05       0.09       0.16       0.32
                                ---------  ---------  ---------  ---------
     Net income                 $    0.19  $    0.18  $    0.47  $    0.52
                                =========  =========  =========  =========
Shares used to compute net
 income per share attributable
 to VeriSign, Inc.
 stockholders:
     Basic                        181,120    192,649    182,121    192,481
                                =========  =========  =========  =========
     Diluted                      182,753    193,426    183,480    193,116
                                =========  =========  =========  =========
Amounts attributable to
 VeriSign, Inc. stockholders:
     Income from continuing
      operations, net of tax    $  26,265  $  16,904  $  56,033  $  37,949
     Income from discontinued
      operations, net of tax        8,948     17,970     30,536     61,945
                                ---------  ---------  ---------  ---------
     Net income attributable to
     VeriSign, Inc.
     stockholders               $  35,213  $  34,874  $  86,569  $  99,894
                                =========  =========  =========  =========
The following table presents
 the classification of
 stock-based compensation:
                                 Three Months Ended    Six Months Ended
                                       June 30,             June 30,
                                --------------------  --------------------
                                   2010      2009        2010      2009
                                ---------  ---------  ---------  ---------
                                              (In thousands)
Stock-based compensation:
  Cost of revenues              $   1,365  $     995  $   2,311  $   1,887
  Sales and marketing               1,488      1,171      2,624      2,102
  Research and development          1,240        774      2,316      1,532
  General and administrative        5,256      5,547     10,494     10,692
  Restructuring and other
   charges, net                         -         38        133        548
                                ---------  ---------  ---------  ---------
Stock-based compensation for
 continuing operations              9,349      8,525     17,878     16,761
Discontinued operations             3,876      5,644      7,432     11,335
                                ---------  ---------  ---------  ---------
Total stock-based compensation  $  13,225  $  14,169  $  25,310  $  28,096
                                =========  =========  =========  =========
                      VERISIGN, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In thousands)
                               (Unaudited)
                                                      Six Months Ended
                                                          June 30,
                                                  ------------------------
                                                      2010         2009
                                                  -----------  -----------
Cash flows from operating activities:
  Net income                                      $    88,814  $   101,287
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation of property and equipment and
     amortization of other intangible assets           39,806       41,398
    Stock-based compensation                           25,310       28,096
    Excess tax benefit associated with stock-based
     compensation                                     (12,453)     (94,529)
    Other, net                                         12,949       17,406
    Changes in operating assets and liabilities,
     excluding the effects of acquisitions and
     divestitures:
      Accounts receivable                              10,084        8,802
      Prepaid expenses and other assets                27,397      (27,559)
      Accounts payable and accrued liabilities         (2,867)      14,284
      Deferred revenues                                61,280       32,080
                                                  -----------  -----------
        Net cash provided by operating activities     250,320      121,265
                                                  -----------  -----------
Cash flows from investing activities:
  Proceeds from maturities and sales of
   marketable securities and investments              196,045      117,901
  Purchases of marketable securities and
   investments                                       (662,275)        (750)
  Purchases of property and equipment                 (42,772)     (40,815)
  Proceeds received from divestiture of
   businesses, net of cash contributed                 15,583      235,500
  Other investing activities                           (3,773)      (2,716)
                                                  -----------  -----------
        Net cash (used in) provided by investing
         activities                                  (497,192)     309,120
                                                  -----------  -----------
Cash flows from financing activities:
  Proceeds from issuance of common stock from
   option exercises and employee stock purchase
   plans                                               28,002       20,945
  Repurchases of common stock                        (281,943)     (22,637)
  Excess tax benefit associated with stock-based
   compensation                                        12,453       94,529
  Other financing activities                             (736)        (101)
                                                  -----------  -----------
     Net cash (used in) provided by financing
      activities                                     (242,224)      92,736
                                                  -----------  -----------
Effect of exchange rate changes on cash and cash
 equivalents                                           (1,791)      (3,837)
Cash and cash equivalents included in assets held
 for sale                                            (123,356)           -
                                                  -----------  -----------
Net (decrease) increase in cash and cash
 equivalents                                         (614,243)     519,284
Cash and cash equivalents at beginning of period    1,477,166      789,068
                                                  -----------  -----------
Cash and cash equivalents at end of period        $   862,923  $ 1,308,352
                                                  ===========  ===========
Supplemental cash flow disclosures:
  Cash paid for interest, net of capitalized
   interest                                       $    19,811  $    19,521
                                                  ===========  ===========
              VERISIGN, INC. AND SUBSIDIARIES
         STATEMENTS OF OPERATIONS RECONCILIATION
           (In thousands, except per share data)
                      (Unaudited)
                               Three Months Ended    Three Months Ended
                                June 30, 2010           June 30, 2009
                            ----------------------- ----------------------
                                        Net Income              Net Income
                                       attributable            attributable
                                       to VeriSign,            to VeriSign,
                            Operating      Inc.     Operating      Inc.
                              Income   Stockholders   Income   Stockholders
                            ----------- ----------  ----------  ----------
GAAP as reported            $    50,592 $   35,214  $   42,982  $   34,874
  Discontinued operations                   (8,948)                (17,970)
  Non-core business in
   continuing operations
   (1) (2)                          231        300         559         633
  Adjustments:
    Stock-based compensation      9,302      9,302       8,323       8,323
    Amortization of other
     intangible assets              323        323          85          85
    Restructuring costs           7,539      7,539         (13)        (13)
    Non-cash interest expense                1,810                   1,648
  Tax adjustment (3)                        (2,362)                  2,642
                            ----------- ----------  ----------  ----------
Non-GAAP as adjusted        $    67,987 $   43,178  $   51,936  $   30,222
                            =========== ==========  ==========  ==========
Diluted shares                             182,753                 193,426
Per diluted share, non-GAAP
 as adjusted                            $     0.24              $     0.16
                                        ==========              ==========
(1) As of June 30, 2010, the Company's business consists of the following
reportable segments: (a) Naming Services, which consists of Registry
Services and Network Intelligence and Availability ("NIA") Services; and
(b) Other Services, which consists of the continuing operations of Content
Portal Services ("CPS"), our remaining non-core business. NIA Services was
formerly known as VeriSign Internet Defense Services.
(2) Results of the non-core business in continuing operations during the
three months ended June 30, 2010 and 2009 includes stock-based compensation
of $47 and $145, respectively.
(3) Non-GAAP tax is calculated as 30% of income from continuing operations.

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 information 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: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.

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 nor 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.

SUPPLEMENTAL FINANCIAL INFORMATION
                                       Three months ended
                  ---------------------------------------------------------
                   June 30,  March 31,  December 31, September 30, June 30,
                     2010      2010        2009          2009        2009
                  ---------- ---------- ------------ ------------- --------
Revenues from Naming
 Services (1)     $  167,881 $  161,583 $    158,741 $     155,480 $153,418
                  ========== ========== ============ ============= ========
              VERISIGN, INC. AND SUBSIDIARIES
         STATEMENTS OF OPERATIONS RECONCILIATION
           (In thousands, except per share data)
                      (Unaudited)
                                Six Months Ended      Six Months Ended
                                 June 30, 2010          June 30, 2009
                            ----------------------- ----------------------
                                        Net Income              Net Income
                                       attributable            attributable
                                       to VeriSign,            to VeriSign,
                            Operating      Inc.     Operating      Inc.
                              Income   Stockholders   Income   Stockholders
                            ----------- ----------  ----------  ----------
GAAP as reported            $   104,214 $   86,570  $    76,194 $   99,894
  Discontinued operations                  (30,536)                (61,945)
  Non-core business in
   continuing operations
   (1) (2)                        1,392      1,383          242       (574)
  Adjustments:
    Stock-based compensation     17,623     17,623       15,868     15,868
    Amortization of other
     intangible assets              647        647          730        730
    Restructuring costs           7,773      7,773        3,474      3,474
    Non-cash interest expense                3,651                   3,298
  Tax adjustment (3)                        (3,101)                 (2,255)
                            ----------- ----------  ----------- ----------
Non-GAAP as adjusted        $   131,649 $   84,010  $    96,508 $   58,490
                            =========== ==========  =========== ==========
Diluted shares                             183,480                 193,116
Per diluted share, non-GAAP
 as adjusted                            $     0.46              $     0.30
                                        ==========              ==========
(1) As of June 30, 2010, the Company's business consists of the following
reportable segments: (a) Naming Services, which consists of Registry
Services and Network Intelligence and Availability ("NIA") Services; and
(b) Other Services, which consists of the continuing operations of Content
Portal Services ("CPS"), our remaining non-core business. NIA Services was
formerly known as VeriSign Internet Defense Services.
(2) Results of the non-core business in continuing operations during the
six months ended June 30, 2010 and 2009 includes stock-based compensation
of $135 and $297, respectively.
(3) Non-GAAP tax is calculated as 30% of income from continuing operations.

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 information 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: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.

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 nor 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.

              VERISIGN, INC. AND SUBSIDIARIES
         STATEMENTS OF OPERATIONS RECONCILIATION
           (In thousands, except per share data)
                      (Unaudited)
                               Three Months Ended     Three Months Ended
                                 March 31, 2010         March 31, 2009
                            ----------------------- ----------------------
                                        Net Income              Net Income
                                       attributable            attributable
                                       to VeriSign,            to VeriSign,
                            Operating      Inc.     Operating      Inc.
                              Income   Stockholders   Income   Stockholders
                            ----------- ----------  ----------  ----------
GAAP as reported            $    53,622 $   51,356  $   33,212  $   65,020
  Discontinued operations                  (21,588)                (43,975)
  Non-core business in
   continuing operations
   (1) (2)                        1,161      1,083        (317)     (1,207)
  Adjustments:
    Stock-based compensation      8,321      8,321       7,545       7,545
    Amortization of other
     intangible assets              324        324         645         645
    Restructuring costs             234        234       3,487       3,487
    Non-cash interest expense                1,841                   1,650
  Tax adjustment (3)                          (739)                 (4,897)
                            ----------- ----------  ----------  ----------
Non-GAAP as adjusted        $    63,662 $   40,832  $   44,572  $   28,268
                            =========== ==========  ==========  ==========
Diluted shares                             184,259                 192,804
Per diluted share, non-GAAP
 as adjusted                            $     0.22              $     0.15
                                        ==========              ==========
(1) As of March 31, 2010, the Company's business consists of the following
reportable segments: (a) Naming Services, which consists of Registry
Services and Network Intelligence and Availability ("NIA") Services; and
(b) Other Services, which consists of the continuing operations of Content
Portal Services ("CPS"), our remaining non-core business. NIA Services was
formerly known as VeriSign Internet Defense Services.
(2) Results of the non-core business in continuing operations during the
three months ended March 31, 2010 and 2009 includes stock-based
compensation of $88 and $152, respectively.
(3) Non-GAAP tax is calculated as 30% of income from continuing operations.

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 information 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: discontinued operations, non-core business in continuing operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring costs and non-cash interest expense. Non-GAAP financial information is also adjusted for a 30% tax rate which differs from the GAAP tax rate. All non-GAAP figures for each period presented above have been conformed to exclude the foregoing items under GAAP. Prior disclosures of non-GAAP figures do not exclude the same items and as such should not be used for comparison purposes.

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 nor 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.

Contacts
Investor Relations:
Nancy Fazioli
ir@verisign.com
650-426-5146

Media Relations:
Brad Williams
brwilliams@verisign.com
650-426-5298


SOURCE: VeriSign, Inc.

mailto:ir@verisign.com
mailto:brwilliams@verisign.com

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