.com is shrinking but Verisign raises prices again anyway

Verisign has confirmed that it plans to exercise its fourth and final .com price-increasing power under its current registry contract, even as its domains under management continues to head south.

The company confirmed last night that it will increase the annual registration and renewal wholesale fee for a .com domain from $9.59 to $10.26 on September 1 this year. It’s the last of the four times it’s allowed to raise prices by up to 7% in its current contract with ICANN, which expires in November.

The news came as Verisign reported its fourth-quarter and full-year 2023 financial results, which were as profitable as we’ve come to expect.

But in terms of domains under management, .com and .net continued to decline, which CEO Jim Bidzos told analysts was all China’s fault. Domains managed by Chinese registrars shrank by 2.2 million in Q4, leading to an overall .com/.net shrinkage of 1.2 million names.

There were nine million new .com/.net registrations in Q4, down from 9.7 million in the same quarter in 2022.

Bidzos said the decline in China was due to factors such as stricter local regulations and a weaker economy, and said he expects those challenges to continue to hit Verisign’s numbers in 2024. He did not blamed higher prices for the drop.

Indeed, the .com zone file has been shrinking by about 1,500 domains per day on average since the start of the year. Zone numbers are usually a reliable predictor of DUM trends.

Revenue from China was down about $14.4 million, CFO George Kilguss said.

Bidzos said Verisign expects its DUM to be flat this year, with a possible 1% swing either way.

For Q4, the company reported revenue up 3% year over year at $380 million, with $265 million net income, up from $179 million a year earlier.

For the whole of 2023, revenue was up 4.8% at $1.49 billion and net income was $818 million, up from $674 million in 2022.

Team Internet says revenue beat estimates

Team Internet gave a preview of its 2023 earnings report this morning, saying that revenue grew faster than its own targets and analysts’ estimates.

The company, formerly CentraNic, expects to post revenue around $835 million, up 15% on 2022, and profit up 12% at $96 million for the year.

The firm’s Online Presence segment, which includes the domains business, had revenue up 16% at $179 million, while the far larger Online Marketing segment saw revenue up 14% at $656 million.

Team Internet will report its full results on March 18.

GoDaddy domains revenue crosses half a billion

GoDaddy sold more than half a billion dollars of domain names in the third quarter even as volumes slightly decreased, according to its latest earnings release.

The company had domains revenue of $508.2 million in Q3, compared to $494 million a year ago and $492.7 in the second quarter, according to regulatory filings. The aftermarket revenue component was down 2% at $107 million.

It had 84 million domains under management at the end of the quarter, compared to 84.2 million at the end of June. About three quarters of GoDaddy’s DUM are in gTLDs and about 60% are in .com, according to registry reports.

Overall, GoDaddy’s revenue was up 3.5% compared to a year ago at $1.07 billion. Net income was $131 million compared to $100 million a year ago.

China has .com’s growth by the balls

Verisign has downgraded its expectations for .com/.net growth for the year into potentially negative territory, citing — not for the first time — low demand from China.

The registry expects its domain name base to grow at a maximum of 0.4% or shrink as much as 0.4% by the end of the year. That compares to a prediction of between 0% and 2.25% growth at the start of the year.

“Low demand from China remains the primary source of drag on the overall domain name base growth,” CEO Jim Bidzos told analysts on Thursday. “Excluding registrars based in China, both our domain name base and new registrations are up year-over-year”.

The company’s regulatory filing for Q3 shows that China revenue was down from $26.8 million to $22 million over the year. It was the only one of the four geographic reporting segments to show a shrinkage.

Verisign ended Q3 173.9 million .com/.net domains under management, down 0.1% over the year and down half a million names in the quarter.

While DUM growth may be on the decline, price hikes compensate and keep Verisign’s dollar-growth going.

The company reported year-over-year revenue growth up 5.4% at $376 million for the quarter of 2023. Net income was $188 million, up from $169 million a year ago.

CentralNic starts returning cash to shareholders as revenue grows

CentralNic has started paying a dividend and has announced another share buyback as it focuses less on aggressive M&A and more on organic growth.

The company, which makes about a quarter of its revenue from domains, said it will spend £4 million of its cash reserves buying back shares between now and August and will pay a £0.01 dividend a month from now.

The news came as CentralNic confirmed its top line grew by 24% in the first quarter, to $194.9 million, driven largely by its traffic arbitrage business, which it calls Online Marketing.

Its revenue from Online Presence — domains and such — was up 14% at $45.2 million, and its number of domain-years processed was up 2% at 12.4 million. The company sells both as registry, registrar and back-end.

Overall, adjusted EBITDA was up 15% at $21.3 million.

Tucows and GoDaddy see weakness in big-ticket aftermarket sales

Two of the industry’s largest registrars saw weakness in their first-quarter revenues which they attributed largely to a lack of high-priced secondary market sales.

This lumpier and less-predictable side of the market saw Tucows overall domains revenue down 4% in the period, while GoDaddy saw its “core platform” revenue down a million bucks or 0.2%.

GoDaddy said a 5% increase in domains revenue was “offset by tough compares for our aftermarket business as well as the continued uneven flow of large transactions.”

Tucows said it has “experienced a weaker aftermarket for domain sales, most notably at the higher end of the price range”.

GoDaddy’s core services revenue was down to $698 million from $699.6 million a year ago. Overall revenue was $1.036 billion, up 3.3%. Its net income was down 30% at $47.4 million.

Tucows’ overall revenue was down 0.8% at $80.4 million, with a net loss of $19.1 million compared to a loss of $3 million a year ago.

Verisign narrows domain growth guidance

Verisign cast a slightly more optimistic light on the potential for .com and .net growth last week, as it reported a modest improvement in first-quarter sales.

Management told analysts that it’s now expecting domain growth of between 0.5% and 2.25% for the year — a boost to the low-end but a lowering of the high-end.

In February, it had predicted growth of between 0% and 2.5%.

For Q1, the company reported domain growth of just 0.1% There were 174.8 million .com and .net domains at the end of the quarter, up by a million from the start of the year.

Verisign reported net income of $179 million, up from $158 million a year ago, on revenue that increased 5.1% at $364 million.

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.