Company generated less money per expired domain in 2022.
Last month I reported about Tucows (NASDAQ: TCX) generated less revenue from its expired domain stream. It added some color to this in its recently-published annual report (pdf).
Like many registrars, Tucows auctions off domain names that its customers do not renew. Its primary partner for expired domains is GoDaddy, which operates the largest expired domain auction platform.
The annual report explains a bump in expired domain revenue in 2021 and the subsequent decline in 2022. There are two levers: the number of expiring domains and how much they sell for, on average.
Here’s what the company said about expired domains in 2021:
Net revenues from value-added services increased by $2.4 million to $20.9 million compared to Fiscal 2020. The increase in value-added service revenue over Fiscal 2020 was primarily driven by an increase in expiry stream proceeds across our Domain Services brands. As a result of the normalization of renewal rates and domains under management discussed above in connection to COVID-19, Fiscal 2021 benefited from a significant volume of expired domain names registered in the past year being available for our expiry streams, which returned favorable proceeds at auction and drove our revenue growth for value added services.
In other words, the surge of domain registrations as Covid hit resulted in more expirations than usual the following year, which bolstered expired domain revenue.
The language for 2022 cites continued high expirations but adds the part bolded below (my emphasis).
Net revenues from value-added services decreased by $0.2 million to $20.7 million compared to Fiscal 2021. The decrease in value-added service revenue was
primarily driven by lower expiry stream proceeds across our Domain Services brands. As a result of the normalization of renewal rates and domains under management
discussed above in connection to COVID-19, Fiscal 2022 continued to benefit from a significant volume of expired domain names registered in the past year being
available for our expiry streams, which returned favorable proceeds at auction and drove revenue generation for value added services, albeit at a slower rate as the value of domain names sold at auction has declined relative to the prior period (emphasis added).
Tucows doesn’t quantify how much it generates from the typical expired domain. However, I believe most registrars with solid, aged inventory receive an average of low single-digit dollars per expired domain. If anyone has recent data on average revenue per expired domain, please let me know.