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Table of Contents
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial
statements and related notes included in "Financial Statements and Supplementary Data." Some of the information contained in this discussion and analysis,
including information with respect to our plans and strategy for our business, includes forward-looking statements involving significant risks and uncertainties. As
a result of many factors, such as those set forth in "Risk Factors," our actual results may differ materially from the results described in, or implied by, these
forward-looking statements.
(Throughout this discussion and analysis, dollars are in millions, unless otherwise noted.)
Overview
We are the global market leader in domain name registration. Securing a domain is a necessary first step to creating a digital identity and our domain
products often serve as the starting point in our customer relationships. As of December 31, 2015 , more than 93% of our customers had purchased a domain from
us and we had approximately 62 million domains under management. According to VeriSign’s Domain Name Industry Brief, we had 20% of the world’s domains
registered as of September 30, 2015 .
We also offer hosting, presence and business application products enhancing our value proposition to our customers by enabling them to create, manage and
syndicate their, or their customers', digital identities. While these products are often purchased in conjunction with, or subsequent to, an initial domain registration,
they are also frequently the starting points in our customer relationships. As we have grown, our hosting, presence and business applications products have become
increasingly important parts of our business, constituting over 48% of total bookings in 2015 .
Financial Highlights
Below are our key financial highlights for the year ended December 31, 2015 . All comparisons are to the year ended December 31, 2014 .
• Total revenue of $1,607.3 million , an increase of 15.9% , or approximately 17.3% on a constant currency basis (1) .
•International revenue of $414.7 million , an increase of 19.0% , or approximately 24.4% on a constant currency basis (1) .
• Total bookings (2) , a non-GAAP financial measure, of $1,914.2 million , an increase of 14.3% , or approximately 17.5% on a constant currency basis (1) .
• Net loss was $120.4 million .
• Adjusted EBITDA (1) , a non-GAAP financial measure, of $337.4 million increased 24.3% .
• Total customers of 13.8 million increased 8.7% .
• Average revenue per user of $121 increased 6.3% .
• Cash and cash equivalents were $348.0 million .
• Operating cash flow was $259.4 million .
• Capital expenditures were $55.8 million .
(1) Discussion of constant currency is set forth in "Quantitative and Qualitative Disclosures about Market Risk."
(2) Total bookings and adjusted EBITDA are non-GAAP financial measures. Reconciliations of total bookings to total revenue and adjusted EBITDA to net loss, the
most directly comparable GAAP financial measures, are set forth in "Selected Financial Data—Reconciliation of Non-GAAP Financial Measures."
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