Verisign (VRSN)

Risks

• Attempted security breaches, including from the exploitation of vulnerabilities, cyber-attacks and Distributed Denial of Service (“DDoS”) attacks against our systems and services increase our costs, expose us to potentially material liability, and could materially harm our business and reputation.
• We may introduce undetected or unknown defects into our systems or services, which could materially harm our business and harm our vendors or our customers.
• Our infrastructure and services are subject to vulnerabilities in the global routing system for the internet, as well as risks arising from internet services providers’ increasing adoption of the Resource Public Key Infrastructure system.
• We could encounter system interruptions or systems failures resulting from activities beyond our direct control that could materially harm our business.
• Our data centers, our data center systems, including the Shared Registration Systems located at our data centers, and our resolution systems are vulnerable to damage or interruption, which could impede our ability to provide our services, expose us to material liability, and materially harm our reputation.
• We face risks from the operation of the root server system and our performance of the Root Zone Maintainer functions under the RZMA.
• Government regulation and the application of new and existing laws in the U.S. and internationally may slow business growth, increase our costs of doing business, create potential material liability and have a material adverse effect on our business.
• Changes in, or interpretations of, tax rules and regulations or our tax positions may materially and adversely affect our income taxes.
• Our business faces risks arising from ICANN’s consensus and temporary policies, technical standards and other processes.
• Claims, lawsuits, audits or investigations in which we are or could become involved may result in material adverse outcomes to our business.
• The effects of the COVID-19 pandemic have impacted how we operate our business, and the extent to which the effects of the pandemic will materially impact our business, operations, financial condition and results of operations remains uncertain.
• The business environment is highly competitive and, if we do not compete effectively, we may suffer material adverse impact to our business, including lower demand for our products, reduced gross margins, and loss of market share.
• The evolution of technologies or internet practices and behaviors, the adoption of substitute technologies, or wholesale price increases of domain names in our TLDs may materially and negatively impact the demand for the domain names for which we are the registry operator.
• If we fail to expand our services into developing and emerging economies in international locations, our business may not grow.
• Our business depends on registrars and their resellers maintaining their focus on marketing our products and services.
• We rely on our intellectual property rights to protect our proprietary assets, and any failure by us to protect or enforce, or any misappropriation of, our intellectual property could materially harm our business.