CentralNic extends XYZ deal until 2032

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.

.xyz helps CentralNic double its revenue

CentralNic’s revenue almost doubled in 2014, helped by the launch of new gTLDs.
The UK-based registry today reported annual operating profit of £497,000 ($759,000), down from £694,000 ($1.05 million) in 2013, on the back of revenue up 99% at £6.06 million ($9.25 million).
Billings– money taken but not yet recorded as revenue — was up a whopping 154% at £9.89 million ($15.1 million).
Part of the reason for the growth was the launch of new gTLDs last year.
CentralNic acts as the registry back-end for eight TLDs that launched last year, including runaway volume leader .xyz, which has about 880,000 domains in its zone file today.
Another big contributor was Internet.bs, the Bahamas-based registrar that CentralNic acquired for $7.5 million last year.
The registrar had about 400,000 legacy gTLD domains under management at the end of the year, according to DI’s records.
Both new gTLDs and Internet.bs started contributing to revenue in the second half of the year.
CentralNic also said that its new “enterprise” division, which sells premium domains and offers consulting and software, was a growth factor.
CEO Ben Crawford told the markets that the new gTLD opportunity has so far been “softer” than expected.

Only a small number of retailers received their accreditations from ICANN to sell domains under the new TLDs in 2014, and a lack of public awareness pending the launches of the “superbrand TLDs” such as .google, .apple and .sony, meant that the market for new TLDs in 2014 was softer than had been projected by ICANN and other industry experts. It was essentially limited to domain investors and other early adopters.

Opinion in split in the industry on how much reliance can be put on what Crawford calls “super-brands” to do the heavy lifting when it comes to public awareness of new gTLDs.

CentralNic pays up to $7.5m for Internet.bs

CentralNic has acquired the unfortunately named Bahamas-based registrar Internet.bs for up to $7.5 million, in an effort to bolster its registrar business.
The deal is for a mixture of cash ($2.7 million), newly issued shares ($2.5 million) and a delayed performance-related payout of up to $2.3 million.
CentralNic is best known as a registry and back-end provider, but it also has a registrar, TLD Registrar Solutions, which is aimed primarily at registries that want to vertically integrate.
The acquisition means the company now has a medium sized ICANN-accredited retail registrar arm too.
Internet.bs has well over half a million gTLD names under management, according to registry reports. According to CentralNic, it has 28,000 customers in 199 countries.
The company made a profit of $730,000 last year, CentralNic said.

4Domains customers transferred to Internet.bs

Customers from the insolvent registrar 4Domains have had their domains transferred to Bahamas-based Internet.bs, only a few days after ICANN told 4Domains it was shutting them down.
In a notice posted last night, ICANN said that 4Domains had nominated Internet.bs as its registrar of choice for refugee customers, which likely speeded up the transaction.
ICANN’s letter telling 4Domains it was losing its accreditation, alleging multiple breaches of its contract, was sent September 30, last Thursday.
A 4Domains customer contacted me earlier this week to say she had received a renewal notice from Internet.bs (which she had never heard of) as early as Sunday, October 3.
That’s possibly the fastest turnaround between a registrar losing its accreditation and the new registrar taking over to date.
ICANN tells former 4Domains customers worried about fraud that any emails they receive from Internet.bs should link only to internet.bs or internetbs.net.
Customers should probably also be aware that their domains are now handled by a registrar subject to Bahamas law. 4Domains was US-based.