“We are seeing years of economic transformation jammed into weeks or months,” Tucows CEO Elliot Noss says.
Domain name, fiber and mobile company Tucows (NASDAQ: TCX) reported earnings after the bell today.
The company pulled in $84.0 million in revenue for the first year of 2020, up 6% year-over-year. Its adjusted EBITDA number soared 34% to $12.7 million and net cash from operating activities was up 57% to $14.1 million.
Tucows’ Domain Services segment accounted for $59.5 million revenue, up from $55.7 million a year ago. Its gross margin in the Wholesale domain business increased 20%.
The Ascio acquisition helped bolster these numbers.
Tucows even had a good quarter for selling domains from its surname portfolio ($409,000), which is all that remains of its owned-and-operating domain portfolio after selling the rest to GoDaddy. The company offers email addresses using its surname domains but sometimes sells the names.
Beyond the numbers, it’s worth reading Tucows’ report on the quarter (pdf). Tucows CEO Elliot Noss does a great job explaining what he sees happening in the world due to Covid-19.
On domain names:
The domains business has seen the most remarkable immediate impact, which will not really show up until the second quarter. New domain registrations are way up in the past month or so. We are seeing first-hand the rush for offline businesses to market, transact and fulfill online. We are seeing years of economic transformation jammed into weeks or months…
…In the last few weeks we have seen a significant bump in transactions as businesses globally try to quickly move online, and as displaced workers look to entrepreneurship as the next stage in their career paths. We saw this begin to emerge in late March and it is still going strong. With tens of thousands of resellers and millions of end user customers, our Domains business has proven resilient through several economic cycles, but we are seeing something singular in this current, unprecedented environment. It feels like years of change being crammed into weeks or months. This is more interesting for what it says about the economy than it is material to our business, as new registrations make up only 20% of total transactions historically.
On the economy and future:
…We are planning for the current circumstances, with minor variability, to persist for the foreseeable future. And we are planning accordingly. We are rethinking our installation practices, our marketing practices, our human resources practices, our product offerings and more; and in almost every case, we believe the changes we are making and will continue to make, are more or less permanent.
We believe this because we believe that the changes wrought by this pandemic are not new. Rather they are significant accelerations of previously existing trends.
So what are the changes that we believe we have some certainty about?
It seems obvious that work from home, a trend we were fortunate to be in front of, will greatly accelerate. This has implications not only for the amount of office space a company needs, but also the shape of that space. It also opens up the world as a source of talent. Thus a significant rethink in the way we approach technical talent, and in fact a rethink of all of our people practices.
There will be less business travel, and in fact travel of all types. I have travelled 10-12 weeks a year consistently for the last twenty years. I will never travel that much in a year again. The whole retail, travel and hospitality industries are reconfiguring before our eyes and will never be the same.
We see equally significant and permanent changes in automotive and fashion. And combining those with retail, travel and hospitality, and the whole world of marketing as we knew it changes…
You can read Noss’ complete comments here (pdf).
I predicted pandemic wouldn’t affect domains / websites much. I’d of thought that would be a given.
I think domaining should focus more on ‘little guy’ domains. -> Blogger domains. Instead they go from niche to niche, holo, drones, this that…CV (lol).
They have the mindset to target big companies. Those domains are long gone (at least for .coms). Unless you have 2-5 of the absolute bomb EMD, don’t waste your time attaching a word to be cute.
If you want to be cute, target girly domains IMO. It’s easy because they all blog about 1 of 4 things, and usually all 4:
1) lifestyle
2) beauty
3) fashion
4) travel
This Tucows report is exactly the kind of intel I’ve been watching out for. The pandemic is transforming society and the world and many changes will be permanent.
I’m trying to figure out what impact it is having on domain sales. Also what domain themes will be in demand in the future. Such as teleworking and health. This report is quite reassuring.
“We are seeing first-hand the rush for offline businesses to market, transact and fulfill online. We are seeing years of economic transformation jammed into weeks or months…
“…In the last few weeks we have seen a significant bump in transactions as businesses globally try to quickly move online…”
Since the middle of 2019 I have been selling on average close to one domain per week. My sales seemed to “suddenly” stop in the middle of March, but then they seemed to resume again in mid April as though nothing had happened!
(Of course there are often big gaps between sales, but this time I felt worried.)
So I’ve now had four sales since 16 April on the Uniregistry Market.
– – – – –
The following is certainly a valuable and thought provoking observation.
“It also opens up the world as a source of talent.”
The implication is that if a traditional non-distributed commercial office is no longer essential in some fields, companies will be able to outsource part of their workforce to anywhere in the world which has lower wages.
Could someone give me an advice?
Blue Host (Public Domain Registry / Endurance), disappeared from Brazil, with money from customers and took the domains.
When accessing br.bluehost.com, the Brazilian customer is informed that Blue Host Brasil has ended activities and that he would migrate to Bluehost.com, however I cannot access my panel at Blue Host Brasil and I cannot access it through Bluehost.com either.
The company simply disappeared taking the money from customers and their domains.
The Blue Host Brasil support team does not answer and the Bluehost.com team says that they cannot find the accounts of their Brazilian branch customers.
Since the beginning of May, I have lost access to my domains.
I contacted ICANN support, but did not respond.