Minds + Machines is still pulling in most of its cash from one-time new gTLD auction defeats, according to its latest trading update.
The company yesterday reported billings for 2015 of $7.92 million, up from $5.03 million in 2013.
But the company brought in $9.15 million by pulling out of private new gTLD auctions, where the winning bid is shared among the losers. That’s down from $37.5 million in 2014.
“Billings” is the money make at the point of sale, rather than audited revenue which is recognized over the life of the registration. Revenue numbers will come in April.
For the fourth quarter, sales of both premium and standard-fee names were up.
Premium names were up 215% at $1.52 million, which standard name billings were up 184% at $2.66 million.
The company said its registry business ended the year with 278,523 names under management, a 158% increase on year-ago numbers.
M+M met or beat its “key performance indicator” targets in terms of average revenue per name (both standard and premium) and sales growth.
However, the Chinese market boom caused it to miss its market share KPI.
It blamed missing the low end of its 3% to 5% new gTLD market share target by half a percentage point on the rapid growth of China.
The money being pumped into domain names from China in the second half of last year tends to favor the budget end of the new gTLD market, where names can be picked up for cents, whereas M+M’s TLD mix is skewed a little higher.
M+M said last week that it plans to open an office in China soon.
The Boston Globe newspaper decided to offload the gTLD after its new owners decided it was a “distraction”.
That’s according to a report yesterday in the newspaper itself.
Last week, it was announced that Minds + Machines, which already runs a handful of geo-gTLDs, is acquiring the .boston contract for an undisclosed sum.
Today, the Globe reports that its owners thought .boston would be “a distraction from the Globe’s central business of providing information through its print and online outlets”.
“The .boston domain business was inherited by the current management team and is not perceived as core to the mission of supporting the highest quality journalism in the region,” it quotes the Globe’s VP of marketing as saying.
The newspaper was acquired by Boston Red Sox owner John Henry in 2013, a year after the .boston application was filed, according to the report.
The acquisition, which sees M+M buy 99% the Globe subsidiary in control of the gTLD registry agreement, is subject to ICANN approving the contract reassignment.
Minds + Machines has added .boston to its stable of geo-gTLDs, buying the contract from the publisher of the Boston Globe newspaper.
The company said today that it has acquired 99% of Boston TLD Management, a new company into which the Globe plans to sign over its .boston ICANN contract.
The deal is contingent on ICANN approving the contract reassignment.
The ink is still moist on the .boston Registry Agreement, which was signed December 10.
The gTLD is officially in pre-delegation testing right now.
But the acquisition also means M+M will take over back-end duties for .boston. Originally, the Globe had intended to use OpenRegistry.
The gTLD was officially a “geographic” string under ICANN rules, and needed support from the local government in Boston.
.boston would become M+M’s fifth geographic gTLD — sixth if you include .london.
The company said it plans to launch the TLD later this year.
Minds + Machines has outlined its plan to refocus its business on sales and marketing, which has already resulted in a couple dozen job losses, as the latest stage of its profit runway.
The new gTLD company also outlined plans to return about half of its cash reserves — mostly obtained by losing new gTLD auctions — to its shareholders.
For the first half of the year, the London-listed company reported an EBITDA loss of $1.2 million, compared to income of $5.7 million a year earlier, on revenue that was up to $3.6 million from $113,000 in the comparable 2014 period.
The company said it is “committed to achieving its stated goal of crossing over into profitability in 2016” and blamed high operating costs for the loss, but said it has been restructuring to help it return to profit.
M+M said its headcount has been reduced from 58 to 44, but that it has added ten jobs in sales and marketing, which seems to indicate at least 24 people recently lost their jobs.
The bottom line was also affected by the fact that most of the company’s cashflow to date has been generated by auction losses, and there were more of those last year than this.
The company hit three of its six “key performance indicator” targets — domains under management market share, premium sales growth and standard sales growth — but fell short of the other three.
Average revenue per name for premiums was $184 versus a $200-$225 target, and average revenue per standard name was down from $28 to $10, largely due to a deep discount promotion for .work domains. Higher prices for soon-to-launch .law could increase the average, M+M said.
The company also announced that it will spent £15 million ($23.1 million) of its cash reserves on a share buyback.
That’s almost half of the $48.3 million is has in the bank. This time last year, M+M’s share price peaked at 12p; it’s currently at 8.55p.
The price saw a spike in May, shortly before then-chairman Fred Krueger was asked to resign by the board. Krueger has since sold off the majority of his substantial shareholding, despite explicitly saying that he would not.
Minds + Machines secured loser fees totaling $3.5 million from its participation in .art and .data new gTLD auctions, the company disclosed today.
It seems .data was auctioned recently. It was a three-applicant string and none of the applicants have yet withdrawn their applications.
It seems either Donuts or brand applicant Dish DBS won the string.
The .art auction happened well over a month ago, with the final losing applicant withdrawing on July 23.
UK Creative Ideas won .art. Whatever it paid for the string would have been shared between nine competing applicants.
M+M also said that “strong interest” (presumably no sales yet) has been expressed in its $15,000+ “super premium” registry-reserved names, and that it has sold 20 premium names in its .london auction last month.