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MMX revenue slips despite domain growth

Kevin Murphy, September 26, 2017, Domain Registries

MMX today posted a smaller loss for the first half of the year, despite managing to grow domains under management and hit some important financial milestones.

The new gTLD registry formerly known as Mind + Machines, which announced a few months ago that it’s looking to be acquired, reported an H1 loss of $526,000 compared to a loss of $1.9 million a year earlier.

Revenue and billings were both down due to the lack of any big launches in the period; H1 2016 had benefited from the strong launch of .vip in China.

Revenue, which is recognized over the duration of the domain registrations, was $5.3 million compared to $7.4 million in 2016. Billings, a measure of cash sales, were $5.6 million compared to $8.1 million.

Despite these dips, MMX is happy enough that the “quality” of its revenue is getting better.

The company said that revenue from domain renewals more than doubled to $2.4 million and represented 45% of revenue. A year ago, it was 15%.

As another measure of the health of its business, it also said that its renewal billings was greater than its operating expenditure for the first time, after cost-cutting.

Domains under management went into seven figures for the first time, to 1.1 million. That was up from 821,000 at the start of the year.

It processed 318,000 new registrations in the six months, compared to 452,000 a year earlier (when .vip’s launch provided a boost).

CentralNic extends XYZ deal until 2032

Kevin Murphy, September 7, 2017, Domain Registries

CentralNic and XYZ.com have extended their registry services pact for the next fifteen years, according to CentralNic.

Announcing its first-half 2017 financial results today, CentralNic said the back-end contract has been extended until 2032.

It’s an unusually long duration for a registry services contract, which are usually much more likely to run about five years.

It even lasts 10 years beyond the expiration of XYZ.com’s own ICANN contracts (though renewal of these is a near-certainty).

The deal covers all .xyz domains, as well as all of the other TLDs in XYZ.com’s portfolio. That currently includes the likes of .rent, .storage and .college.

CentralNic said it “will receive a fixed fee based on the volume of .xyz registrations and subscriptions managed” under the new deal.

In a statement to the markets, CEO Ben Crawford said the relationship “has been updated to normalise the Company’s revenues and profits going forward.”

I believe the previous contract contained a per-domain component, which exposed CentralNic’s revenue to .xyz’s erratic pricing-influenced growth trajectory.

.xyz’s zone file has shrunk by a whopping four million domains since this time last year, causing it to lose the crown of highest-volume new gTLD, due to it offering free or almost free domains that expired without renewing after a year.

However, CentralNic disclosed that the proportion of its own wholesale transaction volumes that were renewals (rather than adds and transfers, I assume) was 18% in the first half, up from 2% in the same 2016 period.

For the six months ended June 30, the company had overall revenue of £10.6 million ($13.9 million), up 18.5% year over year.

Its net loss after tax was £619,000 ($810,000), down from £1.3 million. At the EBITDA level, profit was £1.4 million ($1.8 million) compared to $900,000 in H1 2016.

While I still stubbornly think of CentralNic as primarily a registry play, in fact the company now gets about three quarters of its revenue today from its retail registrar division, which contributed just shy of £8 million to the total in H1.

Instra, the Australian registrar it acquired at the end of 2015, contributed £5.83 million.

The wholesale division, registry back-end services — contributed £1.82 million to revenue and £450,000 to EBITDA in the half.

That’s despite CentralNic being the back-end for six of the top 20 new gTLDs by volume — .website, .space, .tech, .site, .online, and .xyz

If we tally up the number of domains in only those six TLDs, we get to about 4.2 million, per their zone files.

The company’s third reporting unit, Enterprise, contributed £800,000 ($1 million) in the half, of which £360,000 ($471,000) came from premium domain sales.

Endurance losing founder-CEO next week

Kevin Murphy, August 16, 2017, Domain Registrars

Endurance International, the parent company of registrar brands including Public Domain Registry, BuyDomains, Domain.com and BigRock, will see its founding CEO resign next week.

The company said this week that Hari Ravichandran will be replaced by Jeff Fox, most recently chair of customer relationship management software vendor Convergys, on August 22.

Endurance, which makes about 12% of its revenue from domain registrations, had disclosed Ravichandran’s plan to move on back in April, when it was characterized as an effort to move the company to the next stage of growth.

But it comes in the context, as the company has acknowledged, of an ongoing Securities and Exchange Commission investigation into its 2015 acquisition of Constant Contact.

The SEC probe has been going on since at least December 2015.

Endurance is also facing flattening top-line growth — revenue of $292.3 million, up 1% on last year, in the second quarter — and deepening losses.

Fox was CEO of Convergys from 2010 to 2012. He is also principal of The Circumference Group, his own investment/advisory firm.

Tucows revenue rockets after Enom buy

Kevin Murphy, August 10, 2017, Domain Registrars

Tucows saw its revenue from domain names more than double in the second quarter, following the acquisition of rival Enom.

The company this week reported domain services revenue for the three months ending June 30 of $62.8 million, compared to $28.4 million a year ago.

That was part of overall growth of 78%, with revenue rising from $47.2 million in 2016 to $84.2 million this year.

Net income for the quarter was up 29% at $5.2 million.

Enom, which Tucows bought from Rightside for $76.7 million earlier this year, now accounts for a little under half of Tucows’ wholesale domains business, the larger portion going through its OpenSRS channel.

Sales from Tucows’ premium portfolio rose to $968,000 from $885,000 a year ago.

Its retail business, Hover, did $7.6 million of revenue, up from $3.6 million.

GoDaddy domains business grows 15% in Q2

Kevin Murphy, August 10, 2017, Domain Registrars

GoDaddy saw its revenue from domain name sales increase by almost 15% in the second quarter, the company announced this week.

Its domains revenue was $263.3 million, up 14.6% on the same quarter last year.

That was part of an overall growth trend at the company, which saw revenue for the quarter up 22.3% at $557.8 million.

Revenue growth would have been a point higher but for currency fluctuations. GoDaddy now does about a third of its business outside its native US, helped a deal by its acquisition of Host Europe Group, which closed at the start of the quarter.

Net income for the period was $18.1 million, reversing a loss of $11.1 million a year ago.

Domains account for about 47% of overall revenue at the company.

GoDaddy said it had 17 million customers at the end of the quarter, June 30, adding about a million organically compared to a year earlier and 1.6 million from the HEG acquisition.

At the end of the quarter, the company had $591.2 million in cash and equivalents and debt of $3 billion.