New TLD revenues not growing as fast as you might expect.
Domain name company CentralNic (LSE:CNIC) reported its audited 2015 results today.
The company reported (pdf) £10.4 revenue in 2015, compared to £6.1 million the year before. Some of the jump is attributed to the acquisition of Internet.bs, which contributed £3.3 million revenue in its first full year as part of CentralNic. In 2014, after it was acquired in June, it contributed £1.51m. Another chunk was thanks to higher sales of premium domain names.
The company’s adjusted EBITDA was £3.2M and profit after tax of £0.9M.
As always with domain name companies, it’s important to note that they have to recognize revenue over the life of a domain registration. That’s why billings/cash sales/cash flow are important.
CentralNic had 2015 billings of £26.87m, a 172% increase over 2014.
Given that CentralNic is the registry behind .xyz and Radix’s TLDs, it is surprising to see that its wholesale division (which includes new TLD revenue) had revenue of £3.13m last year, only about £0.3 million more than the prior year.
New TLDs operated on CentralNic’s platform hit 4 million in February.
This chart is particularly interesting:
This suggests that none of its new TLD clients generated more than £0.4 million for the company last year. Remember, this is revenue, not sales. Still, it seems that CentralNic is charging its larger registry customers well under $1 per name, perhaps with very high discounts once they hit a certain threshold.
On the domain name resale/premium side, the company disclosed that it currently owns about 37,000 domain names available for resale. Last year it pulled in £3.22m from selling premium domain names.
David says
“Given that CentralNic is the registry behind .xyz and Radix’s TLDs, it is surprising to see that its wholesale division (which includes new TLD revenue) had revenue of £3.13m last year, only about £0.3 million more than the prior year.”
This is easily explained; the XYZ tld is new and as you will see if you try to register such a domain, they are virtually giving away the first year at £0.60/year. but in year 2 the renewal Price is £6.73/year
namecheap.com/domains/registration/results.aspx?domain=sdfsfsd.xyz
XYZ domains will not have the same “possess” factor at the leading tld’s but if say 50% of domains renew then one could see better profits over the next year.
The remaining may be snapped up in the domain aftermarket expiry process but most importantly those domains being available in aftermarket auctions will add to the brand and a percentage of those will generate revenue too.
If you look at the Stock Exchange declarations of recent share ownership by venture capital hedge funds it suggests they intend to grow further by acquisition.
The question is who else will they buy?