One-off sales go to nearly zero in the first half of 2020.
Domain name registry company MMX (London AIM: MMX) reported earnings for the first half of 2020.
Revenue and profit were down compared to the first half of 2019, but the makeup of the revenue seemed to improve.
Gross revenue came in at $8.4 million, down 5% year-over-year. Profit after tax fell $0.5 million to $1.2 million.
The revenue drop was due to the near elimination of one-off brokered sales. Brokered sales revenue dropped $0.8 million to $0.1 million in the half. Revenue from these brokered sales is recognized right away, whereas revenue from typical registrations is recognized over the registration term.
MMX made up for the fall with a sharp increase in revenue from new registrations. This is “healthier” revenue than one-off brokered sales. At the same time, renewal revenue fell by $0.4 million. Generally speaking, renewal revenue is more reliable than new registration data.
The company blamed the renewal revenue drop on ICM Registry domains (.xxx and other adult domains):
It should be noted that the reduction in renewal revenue relates to the decreased ICM renewal billings experienced in 2018 and 2019. However, Group renewal billings in the period were 17% ahead of H1 2019 and therefore Management expects that renewal revenue will increase going forward.
MMX previously announced plans to return profits to shareholders via a dividend, but now plans to return capital via share purchases.