CentralNic expects revenue up 24% in Q1

CentralNic has disclosed its earnings expectations for the first quarter, and revealed it has diversified its pool of advertising partners.

The company expects revenue for the three months to March 31 to come it up 24% at $194.9 million, with adjusted EBITDA up 15% at $21.3 million. Excluding acquisitions, year-on-year organic growth for the trailing twelve months will be about 45%.

CentralNic started off as a domain registry, acquired its way into the registrar space, and nowadays makes most of its money from traffic arbitrage — buying Facebook ads, routing visitors through intermediary web sites to advertisers.

Mostly of the money it makes from advertising comes from Google’s ad network, but the company said today it has also signed up to Microsoft’s rival Bing platform, which reduces its exposure to a single partner.

CentralNic will report its full earnings May 15.

I let ChatGPT cover GoDaddy’s Q4 earnings for me

Living and working in the UK, it’s always a bit irritating that the major, public, US-based domain name companies report their earnings after New York market close, which is usually 2130 UTC, 9.30pm my time.

GoDaddy is one such company, and GoDaddy reported its fourth-quarter and full-year results about an hour ago, so it seemed like a great opportunity to test out ChatGPT’s ability to write a news story for me when I’m too tired and emotional to do so myself.

I primed the tool by asking: “Could you write a news story in the style of Domain Incite if I provide you with some source material?”.

It responded: “Certainly! Please provide me with the source material and I will create a news story in the style of Domain Incite.”

I then pasted the almost entire GoDaddy earnings release, everything from the beginning of the headline to the beginning of the paragraph that begins “GoDaddy’s consolidated financial statements…”

It produced:

Sure! Here’s a news story in the style of Domain Incite based on the provided source material:

GoDaddy reported 7.2% YoY revenue growth in 2022, amounting to $4.1 billion, and normalized EBITDA of $1 billion, up 16.1% YoY, representing 25% margin. This was despite macroeconomic challenges. CEO Aman Bhutani credited GoDaddy’s innovative product roadmap for the success. “As we enter 2023, we are excited about the full launch of our commerce offerings empowering customers to transact everywhere seamlessly,” he said. CFO Mark McCaffrey said GoDaddy had taken steps to align priorities and cost structure to maintain the strong financial results, while investing in long-term initiatives. Net cash provided by operating activities rose by 18.1% YoY to $979.7 million, and free cash flow by 13.2% YoY to $968.6 million. Unlevered free cash flow increased 14.2% YoY to $1.1 billion.

In Q4 2022, GoDaddy signed a significant partnership agreement with merchant services provider FIS Worldpay to sell its OmniCommerce solutions for US-based small business customers and bank partners. GoDaddy also launched Managed WooCommerce Stores solution, which allows entrepreneurs to sell in-person and across marketplaces and social channels through a single unified dashboard. GoDaddy’s premier payments platform is now automatically attached to its domains and website building plans, enabling customers to transact seamlessly. In Q4 2022, gross merchandise volume in GoDaddy’s Commerce offerings reached $28 billion, up 10% YoY, while gross payments volume was $760 million. ARR for the Create and Grow group of products, including Websites + Marketing, Managed WordPress, Sellbrite, and GoDaddy Studios, surpassed $445 million, growing 8% YoY in Q4 2022. Overall, annualized recurring revenue (ARR) for applications & commerce grew 9% YoY to $1.3 billion in Q4 2022, while ARR from GoDaddy’s Core Platform grew 1% YoY to $2.3 billion.

Since the launch of its current share buyback authorization in 2022, GoDaddy’s share count has reduced by 10%. The company aims to participate in its customers’ success and drive long-term value for shareholders.

I have not read the ChatGPT story pasted above. I don’t know how accurate it is. I don’t know whether it follows DI’s house style (though I can tell from the length of the paragraphs that it’s got at least one thing wrong).

Based on my previous experience with this tool, I assume it’s a load of bollocks.

What do you think? Should I use ChatGPT to help write articles in future?

GoDaddy to lay off hundreds

GoDaddy has become the latest big tech firm to announce huge layoffs, with hundreds of employees set to be let go.

The company said last week it is laying off 8% of its staff. This equates to more than 500 job losses, based on 6,800+ the company’s web site reports.

Employees at three brands are most-affected — Media Temple, Main Street Hub and 123 Reg — with the former two also set to disappear as independent brands.

Main Street Hub is social media marketing firm from Texas that GoDaddy acquired in 2018. Media Temple is a hosting provider from California that GoDaddy acquired in 2013.

123 Reg is a UK-based registrar brand that was part of Host Europe Group until GoDaddy bought it in 2017. GoDaddy says the brand will remain, but some roles will be terminated. Staff will find out who’s staying and who’s going before the end of the month.

GoDaddy CEO Aman Bhutani blamed growth hindered by the “uncertain macroeconomic environment” for the moves.

The company, which reported revenue up 7.2% at $1.03 billion and a $100 million profit in the third quarter, is due to report its fourth quarter and full-year earnings this evening.

.com shrinks again, but prices to go up again

Verisign plans to increase .com prices again this year, as its latest quarterly results show its top line and margins swelling despite renewals and overall domains under management shrinking.

The company ended 2022 with 173.8 million .com and .net regs in the domain name base, only up 0.2% from the start of the year. Only a quarter ago, it had predicted growth of between 0.25% and 1%.

A year ago, it had predicted that metric to grow between 2.5% and 4.5%, but it reduced its outlook every quarter and eventually missed even its barrel-bottom estimate. The two TLDs shrank by about 400,000 names in Q4.

For 2023, the company expects domain growth of between no growth at all and 2.5%.

The poor performance in volume terms came about as result of post-pandemic effects and China volatility, CEO Jim Bidzos told analysts. He did not blame the last few years of price increases for the dip.

The preliminary renewal rate for Q4 was 73.2% compared to 74.8% in the same quarter of 2021, but new regs were down across the two TLDs also — 9.7 million compared to 10.6 million over the same periods.

But of course domains under management alone is a poor way to measure Verisign’s cash-printing machine.

The company reported 2022 net income of $674 million which was down from $785 million a year earlier when it had benefited from a one off tax-related boost of $165.5 million.

Annual revenue was up 7.3% at $1.42 billion, a touch ahead of the 7% .com price increase it imposed during the year. Operating margin for 2022 was 66.2%, up from 65.3%.

For the quarter, net income was $179 million compared to $330 million (with the aforementioned tax benefit) on revenue that was up 8.5% at $369 million. Margin was 66.5% compared to 65.3% for Q4 2021.

The company said .com prices will go up again in September 1, from $8.97 to $9.59 per year.

CentralNic reports strong 2022

CentralNic grew faster than analysts’ expectations last year, the company said today.

The company expects to report EBITDA of “at least” $177 million, up 33%, on revenue up 77% at about $728 million, for 2022.

Factoring out acquisitions and currency fluctuations, organic growth is expected to be around 60%.

The growth has been driven by its domain monetization business, which CentralNic has been building through acquisitions over the last few years.

The company will report its results proper on February 27.

Verisign growth slows with post-Covid blues

Verisign sold fewer .com and .net domains than it did a year ago in the third quarter and has once again slashed its outlook for the year.

It had 174.2 million names across the two TLDs at the end of September, an increase of 1.2% over the year but down by around 100,000 names (rounded) on the quarter.

There were 9.9 million new domains sold. That compares to 10.1 million in the second quarter and 10.7 million in Q3 last year.

It now expects its total domains under management to increase by between 0.25% and 1% for the full year. That compares to the between 0.5% and 1.5% it predicted at the end of Q2, the 1.75% and 3.5% predicted in April, and the between 2.5% and 4.5% it predicted in February.

That equates to 2022 revenue of $1.418 billion to $1.426 billion, CFO George Kilguss told analysts. Verisign’s always jaw-dropping operating margin is expected to be between 65.75% and 66.25%.

CEO Jim Bidzos told analysts the slower growth can the attributed to the general macroeconomic malaise, Verisign coming off the lockdown bump experienced in 2020 and 2021, and the perennial issue of Chinese lumpiness.

Renewal rates for Q3 are expected to be 73.8%, the same as Q2 but down from 75% a year-ago.

But the company continues to make money hand over fist. Revenue was up 6.8% compared to Q3 last year at $357 million and net income was up to $169 million compared to $157 million a year ago.

CentralNic expects to blow past revenue estimates

CentralNic has updated its financial projections for the year, saying it expects to “materially exceed” the current analysts’ estimates.

The London-listed company expects to next month report revenue for the nine months to September 30 up 86% at $525 million and adjusted EBITDA of “at least” $61 million, up 89% compared to last year.

That’s just for three quarters. The latest analyst consensus estimate was for revenue of $626.6 million and EBITDA of $72.5 million for the entire year, the company said.

Twelve-month organic growth, excluding the effect of acquisitions, to September 30 is estimated at 66%.

CentralNic said growth is being “driven predominantly by the growth of the Online Marketing Segment, which continues to win market share as a result of the ever-increasing demand for online customer acquisition services that are privacy-safe.”

ICANN finished year $24 million ahead but loses $29 million on the markets

ICANN came out of fiscal 2022 $24 million ahead of its budget due to lower travel expenses and greater domain sales than expected, but blew $29 million on poor investments, according to financial results published today.

The Org ended June having received $150 million, mostly from registries and registrars, which was $5 million more than it had budgeted for.

Fixed, variable and transaction-based fees accounted for most of the difference. Registrars sold more domains than ICANN predicted, and fewer registries and registrars cancelled their contracts.

Verisign of course was the biggest contributor, accounting for over a third of revenue — $49 million for .com/.net fees alone. On the registrar side, GoDaddy contributed over $11.2 million.

GoDaddy’s contribution is actually a little higher than all the 131 participating ccTLDs’ voluntary donations combined, which came in at $11 million.

Expenses were $125 million, against a budget of $143 million. That was mostly due to the fact that two of its three meetings were held entirely online, so ICANN didn’t have to pay its staff and volunteers’ travel expenses.

It spent $3 million on meetings in the year, against a $10 million budget.

When the budget was passed in May 2021, ICANN had expected all three meetings to take place in person, with international travel “unrestricted” despite the pandemic.

Expenses were also affected by a lower-than-expected headcount. Average headcount was down by three on FY21 at 389, compared to the 405 predicted by the budget.

Despite the over-performance at the operating level, ICANN’s balance sheet actually declined compared to a year earlier.

It had funds under management of $505.5 million compared to $520 million, having lost $29 million due to “investment declines in the Reserve Fund due to volatility in the financial markets”. Its portfolio is still $9 million ahead compared to five years ago, however.

CentralNic revenue almost doubles

CentralNic has reported its first-half financial results, showing revenue up 93% to $334.6 million when compared to the same period last year.

Given the company’s acquisitive nature, some of the growth of course came from companies it has recently bought, but CentralNic said trailing 12-month organic revenue growth was a health 62%.

Adjusted EBITDA for the period was $38.6 million, up 97% on the first half of 2021.

Domain names, what the company calls its Online Presence segment, now account for a minority of CentralNic’s revenue, $76.8 million in the half, down a bit on last year due to currency exchange rates.

The company said it has been shaking up its strategy by reducing the amount of discounted domains it sells. Average revenue-per-domain went up from $8.90 to $9.60, but volumes were down from 6.5 million to 6 million as a result.

The Online Marketing segment grew 167% to $257.8 million. Organic revenue growth was 98%, “predominantly driven by CentralNic’s TONIC media buying business”.

Visitor sessions was up from 1.1 billion to 2 billion and RPM was up 87% from $106.

NameSilo reports revenue up 33%

Canadian registrar NameSilo this week reported its second-quarter financial results, showing revenue up 33.7% compared to the year-ago period.

The company said it now has 4.61 million domains under management and had revenue of $11.2 million for the quarter. It reported a net loss of $683,000.

Bookings, the best indicator of future revenue, were up 22% to $12 million. The company had $25.3 million of deferred revenue on its balance sheet at the end of the quarter.

NameSilo said “an increase in domains under management, marketplace revenues, and from the sale of ancillary services” all contributed to the growth.