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CentralNic expects H1 revenue of $174 million

Kevin Murphy, July 28, 2021, Domain Services

A decade ago, CentralNic was scraping by selling domain names at the third level, and now it’s now on track to clear $300 million top line this year.

The domain industry consolidator said yesterday that it expects revenue for the first half of 2021 to be in the region of $174 million, which earnings before interest, tax, depreciation and amortization of $20 million.

Third-quarter revenue is expected to be about $90 million, which works out to 63% growth or roughly 25% organic growth, excluding the impact of recent acquisitions.

Organic growth was 16% for the first quarter 2021 and 9% for the full year 2020.

The company also said cash is up and debt is down.

It’s pretty good going for a company that, when it listed on London’s AIM market in 2013 had H1 revenue of about $2 million, based on not much more than its dubious business of selling 3LDs under the likes of .gb.com and .uk.com and a couple of low-volume ccTLD back-end contracts.

Since then, its acquisition streak has seen it branch out into registrars (where it owns a bunch, wholesale and retail, of various sizes, all over the world) new gTLD back-end services (where it runs at least 90 TLDs) and, more recently, domain monetization.

CentralNic gets into artificial intelligence

Kevin Murphy, July 9, 2021, Domain Tech

CentralNic has formed a business unit dedicated to big data and artificial intelligence.

The new Data and Artificial Intelligence Group will be headed by chief data scientist Pawel Rzeszucinski.

The company said that the group will be tasked with leveraging the “vast” amounts of data it generates as a registrar, registry, DNS resolution provider and domain monetization service.

CentralNic said in a press release:

CentralNic stores, manages, and is exposed to huge datasets that can be used for advanced analysis. Examples include; navigation data on tens of millions of daily DNS queries, ad-tech data on tens of millions of domain advertisements, site usage data on hundreds of millions of unique visits and millions of monthly clicks, and similarly extensive data on transactions and registrations.

These extremely large data sets lend themselves perfectly to AI and machine learning applications that can be used to provide a large array of initiatives which will benefit both the Company and our customers. These include; improved customer service, optimised business operations and decision making, enhanced marketing, reduced customer churn and automated detection of non-compliant customer activity.

There’s no mention of licensing its data to third parties, and the company notes that its initiatives will be compliant with current and future privacy rules from the public and private sectors, such as GDPR.

CentralNic trumpets organic growth as its registrars reverse shrinkage

While positioning itself as a consolidator for the last few years, CentralNic today boasted that it’s also growing organically by a healthy amount.

The company reported Q1 revenue up 48% compared to a year ago at $84.4 million. Organic revenue growth for the same period was reported at 16%. It made a loss after tax of $1.4 million, but adjusted EBITDA of $10.1 million.

CentralNic’s indirect segment, which includes its registry and wholesale registrar businesses, saw revenue up 24% to $25.4 million, led by the registrar. Organic growth was 13%.

The direct segment, which comprises customer-facing retail and corporate registrars and brand monitoring services, saw revenue up 29% to $13.7 million. Organic growth was also 13%.

That segment had seen a drag from the corporate segment in 2020 that was blamed on the coronavirus pandemic, but today CentralNic said “both the Retail business and the Corporate business have returned to growth”.

The company’s newest and already biggest revenue-generating segment is online marketing, which boils down to domain monetization services. Revenue there was up 76% or 19% organically at $45.3 million.

This was largely driven by PubTONIC, a traffic arbitrage platform it acquired with Team Internet last year. The service basically allows web site owners to buy redirect traffic from parked domains.

CentralNic wins .london back-end deal from Nominet

CentralNic today announced that it’s taking over back-end registry operations for .london.

It’s taking over from Nominet, which has run the technical aspects of the registry since 2016 when MMX dumped its registry business.

The contracted registry is London & Partners, the marketing arm of the London mayor’s office.

CentralNic is based in London, whereas Nominet, which runs .uk and .wales, is based in nearby Oxford. Original registry MMX was based in the British Virgin Islands.

.london currently has about 51,000 domains under management, down from a 2018 peak of about 86,000.

CentralNic buys German monetization firm for up to $13 million

Kevin Murphy, February 22, 2021, Domain Services

CentralNic today continued is diversification outside of its core domain business by acquiring Berlin-based monetization firm Wando.

The company said it will pay €5.4 million ($6.5 million) up front and up to €5.4 million more depending on performance through Q3 2022.

CentralNic said Wando makes €4.9 million ($5.6 million) in revenue a year, over half of which already comes through its partnership with CentalNic.

CentralNic more than doubles revenue as parking business thrives

Kevin Murphy, November 30, 2020, Domain Registrars

CentralNic today reported revenue growth of 118% for the nine months to September 30, largely on the back of its recently acquired domain monetization business.

The company said it made a net loss after tax of $6.2 million, compared to $6 million, on revenue of $168.5 million.

Still casting itself as the domain industry’s consolidator, most of the growth came due to acquisitions made over the last couple of years, so CentralNic has also published pro forma results to give a better sense of organic growth.

On that basis, revenue was up a still-decent 17%.

The acquisition of Team Internet, which offers the ParkingCrew and Tonic monetization services, for $48 million just over a year ago was the biggest booster of growth.

Pro forma, CentralNic’s monetization segment was up 39% to $72.9 million in revenue, mostly due to a whopping 36% increase in RPMs.

Ninety-two percent of its monetization revenue comes from a single customer.

CentralNic’s indirect segment, which unhelpfully bundles together its registrar reseller channel with its registry service provider operation and .sk registry operator business, was up 51% to $63.5 million and up 8% to $65.2 million pro forma.

The company said the growth was mostly due to the acquisitions of TPP Wholesale and Hexonet Group last year.

The direct segment, which comprises its retail registrars as well as software and consultancy, dipped by 9% to $32.1 million, or 2% to $31.8 million pro forma.

CentralNic parking boosts revenue even as its registrars suffer

Kevin Murphy, September 2, 2020, Domain Registrars

CentralNic reported what it called “outstanding” first-half financial results yesterday, with growth from its new parking business more than offsetting a decline in its registrar business.

The company reported H1 revenue of $111.1 million, up 124% year over year. Adjusted EBITDA was up 64% to $15.1 million.

But these remarkable numbers were driven primarily by acquisitions — CentralNic made four in the second half of last year. Its estimated organic growth was more modest.

On an apples-to-apples basis, revenue was up 18% and adjusted EBITDA was up 16%.

The company has reorganized how it reports its various segments into “direct”, “indirect” and “monetization”. Two of those segments grew while one shrank.

The direct segment, which basically means CentralNic’s collection of retail registrars, saw revenue down 11% at $21.6 million, but a lot of that was due to rejiggering the reporting segments. Apples-to-apples, revenue was down 1% at $20.9 million.

Indirect, which bundles together its wholesale registrars, registry and registry back-end services, saw revenue up 62% at $41.2 million. Apples-to-apples, the growth was 9%.

But the standout performer was the new monetization segment — domain parking, which became a big deal after CentralNic acquired German outfit Team Internet last year — which saw revenue up 38% at $48.5 million.

The one worryingly dark spot in this segment is the fact that one customer is responsible for over 92% of revenue.

Schreiber really did sue you all, sorry

Kevin Murphy, August 31, 2020, Domain Policy

It seems the aggrieved domain registrant and troll Graham Schreiber really has filed a lawsuit against scores of current and former domain name industry and ICANN community members.

You may recall that last week I blogged about a purported lawsuit by Schreiber against many industry professionals, as well as people who’ve been heavily involved in ICANN over the last couple decades.

I noted that there was no independent confirmation that any complaint has actually been filed in any court, but it turns out a complaint has now actually been filed.

A search on the Canadian Federal Court system reveals:

Schreiber

That appears to be an intellectual property lawsuit filed August 25 by Schreiber against “Jeffrey Levee et al”.

That’s five days after the document started circulating among defendants and my original coverage.

Levee is the long-time outside counsel for ICANN, working for Jones Day for two decades. In the org’s early days, his name often popped up in conspiracy theories.

The Schreiber document that was circulated last week just happened to name Levee as his first defendant, followed by several dozen more, often far less influential, individuals and companies.

To see my original coverage of the pretty much incomprehensible complaint, along with a link to the document, go here.

It’s a CONSPIRACY! Canadian registrant “sues” pretty much everybody

Kevin Murphy, August 20, 2020, Domain Policy

Canadian domain registrant and noted industry troll Graham Schreiber has sued, or at least claims to have sued, just about every notable figure in the ICANN community.

A document purporting to be a lawsuit is being circulated today among some of the dozens of named defendants, which include several people who’ve not been involved with ICANN for many years.

It names 27 volunteers from ICANN’s Intellectual Property Constituency, 21 current and former senior executives of registries and registrars, several members of the US and UK governments, an FBI agent, an unnamed “White House Conspirator”, as well as lawyers for LinkedIn, Facebook, Twitter, ICANN, Google and the UK Intellectual Property Office.

It’s my job to tell you in simple terms what the alleged lawsuit alleges, but I’m afraid I’m at an utter loss with this one. It reads like the fever dream of a conspiracy theorist that would make the average Qanon believer appear the model of reason and clarity.

Schreiber variously refers to his defendants as “Kingpins” involved in a “Cartel” or “Conspiracy”, the factual details of which he never quite gets to.

Here’s a representative sample paragraph, unedited:

If and when, the “Defensive Registrations” obliged by ICANN’s R[r]egistry & R[r]egistrar “Stakeholders” = “Kingpins” and specifically CentralNic [ weren’t purchased ] assailants would strike; and Infringe, Dilute, Blur and Pass-Off as our online business, individually with identical and confusingly similar domain name, faking to be appointed or an authorized agent of the primary Registrant, in a country’s entrepreneurs Intellectual Property may or may not have been protectable at Common Law Trademark, under Madrid Protocol Rules, as it / they fulfilled the obligations of local National laws, to become a Registered Trademark, as I secured in the USA with USPTO, after the CIPO did their work.

At one point, he admits to trolling the defendants on social media since 2012, and points to their failure to sue him as evidence of a conspiracy:

I’ve made statements via those Social Media resources which would, if they were untrue, subject me to a singular lawsuit or multiple lawsuits from the Defendants listed, for: Defamation, Slander and Libel.

As yet, these well taunted Defendants have all conspired together, in collective silence, anticipating that their grandeur and my insignificance would, maintain safe passage, for them to continue.

As the vast majority of the Defendants are well schooled, powerful U.S. Attorneys, it’s my expectation that the Court oblige them to address the charges here stated, or collectively for their defence, they must File a lawsuit with this Court, charging me for what could be [ but aren’t ] remarks constituting Defamation, Slander & Libel against them, which again, I’ve posted on some of the Defendants own clients, Social Media Platforms

Schreiber was once a regular fixture in DI’s comments section too. Thankfully, we’ve not heard from him in years.

The root cause of the “lawsuit” appears to be an old beef Schreiber has with CentralNic.

He says he owns what he calls a “common law trademark” on the term “Landcruise” and he once used the matching .com domain to operate a motor-home rental business.

At some point in 2011, he became aware that a British registrant had registered landcruise.co.uk and landcruise.uk.com.

At the time, CentralNic was primarily in the business of selling domains at the third level in pseudo-gTLDs such as uk.com, gb.com and us.com.

Schreiber tried and failed (twice) to get the .uk domain transferred under Nominet’s Dispute Resolution Service, and then he took his beef to the courts.

In 2012, he sued CentralNic, ICANN, Verisign, eNom, and Network Solutions in a complaint that barely made much more sense than the “lawsuit” being circulated today.

That case was thrown out of court in 2013.

I expect the same fate to befall the current lawsuit, if indeed it has even been filed in a court.

Schreiber wants $5 million from every defendant.

If you want to check whether you’re one of them, read the PDF “complaint” here.

CentralNic does not expect big coronavirus impact as it posts almost-doubled revenue for 2019

Kevin Murphy, April 27, 2020, Domain Registrars

CentralNic has added its name to the list of domain name companies not expecting to see a significant financial hit from coronavirus.

The company this morning posted its full 2019 results and first-quarter 2020 trading update, saying it expects to be “resilient” to the pandemic.

For 2019, the company saw revenue grow by 95% to $109.2 million. Profits at the adjusted EBITDA level was $17.9 million, again almost double the 2018 results.

Pre-tax loss was $8.2 million, compared to $5 million for the previous year. At the operating level, CentralNic lost half a million bucks, but that was smaller than the $3.6 million it lost in 2018.

The first quarter trading update was even rosier. It expects revenue to come in at $56 million — the same revenue figure as for the whole of 2018 — with adjusted EBITDA of $8.1 million.

The growth is of course all coming from recent acquisitions. CentralNic sees itself as an industry consolidator. It has recently integrated the reseller-focused businesses Key-Systems, Hexonet, PartnerGate, TPP Wholesale and Toweb, as well as retail registrar Ideegeo and domain monetization outfit Team Internet.

The company said it has delayed a planned shareholder dividend — its first — in order to keep more cash on hand for even more acquisitions.

On coronavirus, CentralNic said:

Despite [the pandemic], trading for the Group in Q1 2020 was in line with expectations, despite the global business restrictions to slow the progress of COVID-19… As a profitable provider of online subscription services with high cash conversion and solid organic growth, we do not expect CentralNic to be severely affected by COVID-19, but we will take the necessary precautions to preserve our cash and review our acquisition pipeline and financing plans to ensure that we maintain stability and optimise our business strategies in the new global climate.

It’s the third domain company in recent days, after Verisignafter Verisign and Dutch ccTLD registry SIDNDutch ccTLD registry SIDN, to say that they don’t expect to be badly hit by the pandemic.