Reseller loss hits Tucows’ DUM but not revenue

Tucows reported revenue growth in its domains business in the second quarter, despite its domains under management going down due to a major reseller.

The company said last night that domains revenue was up 8% annually to $67.6 million at the end of June, with adjusted EBITDA for the segment going up 12% to $12.5 million.

But Tucows had 24.02 million domains under management at the end of the quarter, down from 24.3 million three months earlier. David Woroch, CEO of the domains business said in prepared remarks:

As anticipated, total domains under management and transaction volumes declined modestly—down 2% and 3%, respectively—reflecting the continued impact of one reseller that has moved a portion of its portfolio in-house.

Despite this, revenue for the wholesale/reseller domains channel rose 8% on last year to $57.3 million. Retail domains revenue was up 10% year over year to $10.3 million.

Including all of the company’s non-domains businesses, Tucows Q2 revenue was up 10.1% to $98.5 million and adjusted EBITDA was up 37% to $12.6 million, both compared to the year-ago quarter.

Team Internet loses Radix to Tucows

Tucows has scored a big win for its back-end registry services business, winning Radix and its portfolio of gTLDs over from rival Team Internet.

The companies said in a press release today that Radix will migrate its 11 TLDs, together comprising about 10 million domains, over to the Tucows platform.

This will bring Tucows’ total to about 17 million domains, following the migration of four million names in India’s .in, taking the deal from GoDaddy, which was the biggest single-TLD migration ever.

Radix’s portfolio comprises the 2012-round new gTLDs .store, .online, .tech, .site, .fun, .host, .press, .space, .uno and .website, as well as the Palau ccTLD .pw.

It’s a blow for Team Internet, which only recently boasted of winning the back-end business for Colombia’s .co, also from GoDaddy.

Tucows expects the Radix migration to go ahead in November.

Private Whois requests hit new low after Tucows quits RDRS

March saw the lowest number of requests for private Whois data via ICANN’s Registration Data Request Service since the system launched in late 2023.

ICANN’s latest stats show that there were just 91 requests last month, compared to February’s 143 and the previous low, from last November, of 103.

The dip can probably attributed at least in part to the departure of eight companies from the pool of participating registrars.

Notably, Tucows pulled its four accreditations from the service. Four shell registrars belonging to Tracer (Focus IP) also withdrew because their accreditations have been terminated.

Of the 1,307 domain lookups via RDRS in March, also a new low, 19% were for domains at non-participating registrars. That was up slightly from 17% in February and compares to 25% from the service’s launch.

The average time for a request to be approved was 3.3 days, the second-lowest of any monthly reporting period to date. Denials took on average just over a week. Both metrics were well below the lifetime average.

Intellectual property owners and law enforcement are still the largest categories of requestor, together accounting for almost half of requests in March.

Interestingly, UK cops have now submitted more requests for private data than police from any other country, including the US. Law enforcement requests since last October now stand at 30 for the UK and 29 for the US.

Tucows quits ICANN’s Whois disclosure pilot

Tucows has dramatically dropped out of ICANN’s Registration Data Request Service pilot.

The company said that RDRS provides a poor user experience that harms user privacy and causes ICANN to produce misleading usage statistics that show an artificially high request denial rate.

RDRS is a bit more than half way through a two-year pilot designed to gather data that will help ICANN decide whether to deploy a more permanent and probably more expensive long-term solution.

The service is essentially a clearinghouse that connects people who want to request private Whois data with the registrars that manage domains of interest.

Tucows said in a blog post:

Given that the RDRS Standing Committee has enough data to complete its report, as well as the customer experience challenges and data privacy concerns we’ve outlined above, Tucows Domains has decided to end our participation in the RDRS.

The move makes Tucows the highest-profile registrar to pull out of the service to date. Across its various brands (such as Ascio, Enom, EPAG, and OpenSRS) it has around 10 million domains under management.

As of the end of January, RDRS had 94 registrars on board, covering 60% of all registered gTLD domains.

Tucows said it will continue to offer its TACO service, which also allows entities such as intellectual property interests to request private Whois data but charges requesters at least $3,000 a year, which it calls a “cost recovery fee”.

The TACO fee can be waived for “single-use and non-commercial requestors”, Tucows noted. It has updated its terms accordingly.

Largest back-end switch EVER as GoDaddy loses deal

It’s going to be the largest ever migration of a single TLD between back-end registry service providers, but it was announced without fanfare late last week.

On page four of Tucows CEO Elliot Noss’s prepared fourth-quarter remarks to analysts last week, he revealed the company has beaten GoDaddy to take over the contract to run India’s .in ccTLD:

Tucows Domains was recently selected to be the technical services provider for the .IN country code domain, operated by the National Internet Exchange of India. Our teams are closely collaborating and we are establishing a dedicated team in India to support this initiative

Noss said that the migration involves “approximately 4 million domains” and will take place “later this year”.

While NIXI does not publish its registration numbers, Verisign’s Domain Name industry Brief put .in at 4.1 million names at the end of 2024.

Even accounting for upwards rounding by Noss, 4 million names would make the migration the largest in the history of the DNS.

The current record was set in 2018, when Afilias (now Identity Digital) took over Australia’s .au from Neustar (now GoDaddy. There were 3.1 million names in .au at that time.

When Neustar/GoDaddy took over .in from Afilias/Identity Digital in 2019, it was reportedly because it had bid $0.70 per domain, undercutting the incumbent’s offer of $1.10

But, while the deal is surely worth many millions (maybe $10 million over five years if we guess at a $0.50 bid) to Tucows’ top line, it may not be especially profitable.

Noss said in his remarks to analysts: “The pricing and margin contribution for this piece of business is typical of a large, high volume customer.”

But a demonstrable track record of handling large migrations often comes up in registry RFPs, so the .in deal puts Tucows in a strong position in future contract opportunities.

.my global relaunch starts slowly despite cheapo prices

Malaysia’s .my ccTLD has so far failed to attract the hoped-for thousands of new registrations since it relaunched to a global audience a few months ago, according to registry statistics.

MYNIC puts the total number of .my domains, including third-levels under the likes of .com.my and .biz.my, at 313,588 at the end of August, barely 3,500 above the end of May number.

Second-level domains directly under .my grew by about 3,000 over the same period to end August at 149,273.

June was when .my was due to go to general availability with scrapped local presence restrictions and a worldwide registrar channel under partnership with Internet Naming Co and Tucows.

Previously, .my domains were only available to Malaysia-based entities. Third-level domains continue to be available only to Malaysians.

MYNIC told the local Malaysian press in April, before the global launch was announced, that it hoped to hit the 400,000-domains mark by the end of the year. Its best monthly number so far was about 341,000, back in June 2018.

There’s not a great deal of retail registrar coverage outside of Asia right now, judging by the registry’s web site, but those registrars actually selling it are selling it cheap — around the $2 mark for the first year at Spaceship and Namecheap.

Tucows reports 2023 results

Tucows reported a domains business that was slightly stronger in the fourth quarter, as the company’s overall revenue grew by over 10%.

The registrar said its Tucows Domains unit grew by 2.6% at $61.8 million in the period, compared to Q4 2022. Gross profit was up 2.5% at $18.9 million and adjusted EBITDA was $10.8 million, up 2.1%.

For the full year, Domains brought in revenue down slightly at $242.1 million from $243.2 million in 2022. Gross profit was down from $78.2 million to $66.7 million and adjusted EBITDA was down to $42.6 million from $44.8 million in 2022.

CEO Elliot Noss said that he expects EBITDA for the domains business in 2024 to be $43 million.

Tucows’ domains under management was up at bit at the end of December, with 24.56 million names compared to 24.54 million at the end of Q3 and 24.39 million at the end of 2022.

Domains represents about 31% of the company’s overall business, with its Ting internet access services and Wavelo telecoms software unit making up the rest.

The company’s total revenue for Q4 was flat sequentially at $86.9 million, up from $78 million in the year-ago period. Full-year revenue was $339.3 million, up from $321.1 million in 2022.

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.

Registrars CAN charge for Whois, ICANN grudgingly admits

ICANN is powerless to prevent registrars from charging for access to non-public Whois data, the Org has reluctantly admitted.

In a recent advisory, ICANN said it is “concerned” that registrars including Tucows have been charging fees to process requests for data that would otherwise be redacted in the free public Whois.

But it said there’s nothing in the Registrar Accreditation Agreement, specifically the Temporary Specification governing Whois in the post-GDPR world, that bans such services:

While the RAA explicitly requires access to public registration data directory services to be provided free of charge, the Temporary Specification does not specifically address the issue of whether or not a registrar may charge a fee for considering requests for access to redacted registration data.

So basic Whois results, with all the juicy info redacted, has to be free, but registrars can bill organizations who ask for the veil to be lifted. ICANN wrote:

ICANN org is concerned that registrars’ imposition of fees for consideration of requests for access to nonpublic gTLD registration data may pose an access barrier. Access to registration data serves the public interest and contributes to the security and stability of the Internet

The advisory calls out Tucows’ Tiered Access Compliance and Operations system, TACO, as the primary example of a registrar charging for data, but notes that others are too.

Not long after the advisory was published, Tucows posted an article in which it explained that the fees are necessary to cover the cost of the “thousands” of automated requests it has received in the last four years.

Charging fees for compliance with other forms of legal process is not uncommon in the industry, and the vast majority of requests for registration data (approximately 90%) continue to come from commercial litigation interests and relate to suspected intellectual property infringement.

Facebook, now Meta, was at first, and may still well be, a frequent bulk filer.

Tucows said that it “frequently” waives its fees upon request for “single-use requestors and private parties”.

New new gTLD registry in town as Rostam buys UNR

UNR, the former Uniregistry, has emerged under new ownership, new leadership, and with another new name, apparently finalizing Frank Schilling’s piecemeal exit from the domain name industry.

The nine gTLD contracts remaining with UNR following its fire-sale auction 18 months ago are now owned by Internet Naming Company, which like UNR is based in Grand Cayman.

The new company, which appears to be a continuation of UNR yet promising a “clean slate”, is owned and run by Shayan Rostam, who was UNR’s chief growth officer and previously worked for XYZ.com and Intercap.

INC’s portfolio comprises .click, .country, .help, .forum, .hiv, .love, .property, .sexy, and the unlaunched .trust, which together have over 350,000 registered domains.

Registry-recommended retail pricing varies wildly between TLDs, from the .com-competitive, such as .click at $9.99, to the wallet-busting, such as .sexy at $2,999 and .forum at $1,199.

INC is also offering consulting, auction and management services for other TLDs, including dot-brands.

The emergence of INC means we now know where all 23 of the gTLDs UNR auctioned off last year ended up. XYZ.com wound up with 10, with GoDaddy, Top Level Design, Nova Registry and Dot Hip Hop all grabbing one or two each.

UNR sold its registrar business to GoDaddy and its registry back-end business to Tucows (which is supporting INC’s portfolio) last year, giving INC the ability to talk about going “back to basics”, unencumbered by any conflicts of interest.

The new company is using inaming.co for its web site. The individual TLDs’ sites still use UNR landing pages.