3.6 million .xyz registrations in June boost billings, but revenue remains elusive.
Domain name company CentralNic (London AIM: CNIC) posted a big loss in the first half of 2016 after turning a profit in the same period a year ago.
The company posted a loss of £1.306 million after tax, compared to a profit of £0.287 million in the same period last year.
However, its billings were up almost 5x over that period thanks to the .xyz anniversary sale and the integration of Instra, which it acquired in January.
The wholesale division on CentralNic houses new top level domain names, and it reported first half billings of £37.83m compared to £4.92m in the same period last year.
Language in its earnings statement suggests it will recognize very little revenue from the .XYZ promotion, potentially only reaping benefits if the domain names are renewed a year later:
This included the .xyz domain, which had a very large scale 2-year anniversary marketing campaign in June 2016. The disruptive campaign stimulated significant interest in .xyz, resulting in over 1.9 million domain names registered within a single day and over 3.6 million new domain name registrations in June. While the impact on billings and working capital balances was significant, increasing the billings in the division to £37.83m in the first half of the year (2015: £4.92m), the first year revenue share for CentralNic was minimal although the potential for future renewals is enhanced.
As far as revenue recognized in the first half is concerned, wholesale revenue was £1.638 — up just slightly from £1.606 in the first half of 2015.
Two customers represent 10% of or more of wholesale domain sales, and both were down compared to the same period last year:
Customer A: £0.177 million down from £0.209 million
Customer B £0.096 million down from £0.264 million
My reading of this is that customers A and B are TLD companies, not registrars, since registrar payments would be counted as revenue by the TLD operators themselves. Update: my reading was wrong. These customers are actually registrars.
Financials were also negatively affected by a drop in premium domain name sales. The company is banking on notable premium domain sales in the second half of 2016.