How Verisign hit its Q1 growth numbers

Verisign called on China to deliver Q1 domain growth.

.Com registry Verisign (NASDAQ:VRSN) provides guidance each quarter for how much it expects its total base of .com and .net domain names to grow. The company hardly misses because it’s quite easy for the company to pull some levers to hit the numbers.

Consider Q1 of this year. Verisign forecasted 1.5 million to 2.0 million net adds for the quarter. The company was pretty far behind at the end of February, as you’ll see:

.Net Domains
End of Q4 2017: 14.95 million
Jan 14.79
Feb 14.75
March 14.73

.Com Domains
End of Q4 2018: 135.03 million
Jan 135.52
Feb 135.78
March 136.83

By the end of February, .Net was down 0.20 million and .com was up 0.75 million based on the official data Verisign provides to ICANN. That meant Verisign had grown the combined base by 0.55 million domains with one month to go, well below what it promised the street. (Verisign has many measures for domains under management, so the numbers here are off slightly from what the company reported to the street.)

What do to? Verisign can throw “marketing dollars” at registrars to move the needle. It can pay them to promote .com and .net domains. What really moves the needle is offering discounts if the registrar hits certain growth targets.

For example, with time running out, Verisign could go to its Chinese domain name registrars and offer them steep discounts if they hit certain registration targets for the quarter. The registrar then informs top customers (which are sometimes the registrar itself) and passes a discount to them.

Presto–lots of last-minute registrations and the numbers hit.

Take a look at the three Chinese registrars that landed in the top 10 in terms of new .com registrations in March based on the final tally Verisign provided to ICANN.

In March, these were the top 10 registrars in terms of new .com registrations. (Keep in mind that there were three additional days in March than in February.)

1. GoDaddy.com* 975,008 (846,327 in February)
2. HiChina Zhicheng Technology Ltd. 252,159 (81,015)
3. Tucows** 217,900 (206,361)
4. Xin Net Technology Corporation 173,893 (52,388)
5. Endurance+ 170,700 (149,255)
6. NameCheap Inc. 131,423 (117,911)
7. Web.com++ 109,275 (103,383)
8. Google Inc. 96,621 (87,990)
9. West.cn 81,838 (not in top 10)
10. NameSilo 65,566 (60,550)

Do you think that demand in China for new .com domain names suddenly tripled? Or was it pushed?

Verisign’s official domain growth in Q1 was 1.91 million, neatly tucked into the high end of its forecast.

As for where registrars ended up at the end of Q1, here’s the current leaderboard of the top registrars in terms of total .com registrations as of the end of March 2018. :

1. GoDaddy* 47,815,002 (47,490,250 in February)
2. Tucows** 12,960,646 (13,014,976)
3. Endurance+ 7,793,869 (7,844,339)
4. Web.com++ 6,721,816 (6,705,866)
5. HiChina 5,156,343 (4,999,217)
6. NameCheap 4,195,705 (4,085,262)
7. 1&1 3,771,035 (3,766,579)
8. GMO 2,097,311 (2,111,351)
9. Xin Net Technology Corporation 1,928,276 (1,778,658)
10. Google 1,603,663 (1,534,162)

Many domain companies have multiple accreditations and I’ve tried to capture the largest ones. See the notes below.

* Includes GoDaddy and Wild West Domains
** Includes Tucows and Enom
+ Includes PDR, Domain.com, FastDomain and Bigrock. There are other Endurance registrars, but these are the biggest.
++ Includes Network Solutions and Register.com