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CentralNic earnings show shift from domain registration company to ad company

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Ad revenue made up nearly half of CentralNic’s 2020 revenue.

Images of ParkingCrew ad landers

Advertising revenue , mostly from parked pages such as these, made up 46% of CentralNic’s revenue in 2020.

Domain name industry rollup CentralNic (London AIM: CNIC) reported unaudited financials for 2020 today. The results show a significant shift in how the company makes money.

CentralNic has three business segments:

Indirect – Revenue from the reseller registrar channel (e.g. Hexonet), registry services provider (e.g., providing the backend for .XYZ), and running the .sk country code.

Direct – Revenue is generated from sales to end consumers such as small businesses, i.e., retail.

Monetization – This includes domain parking from its Team Internet/Parking Crew acquisition, and more recently zero click and affiliate marketing company CodeWise.

Monetization accounted for just $1.875 million, or less than 2%, of revenue in 2019. It accounted for a whopping $112.073 million, or 46% of revenue in 2020. It was 39% of the company’s gross profit.

This was a good thing last year because domain monetization took off. The revenue per thousand (RPM) CentralNic received for parked domains was up 36%, primarily due to increased rates from Google. The company credits this increase to better traffic quality after pruning some clients and to the company’s SSL-page monetization. But I’ve heard that other parking companies also received sharp increases in RPM from Google last year, so at least part of the increase was not related to CentralNic itself.

The increased reliance on ad revenue means CentralNic might grow faster, although the revenue will not be as predictable and stable as domain registration revenue.

Overall, revenue at CentralNic was up 121% to $242.1 million last year. The company says that taking out acquisitions and a few other items, the company grew 9% organically last year.

Full results are available here.

Verisign reports earnings, 10.9 million new .com/.net registrations

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Versign reports earnings, including a strong quarter for new registrations.

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Verisign (NASDAQ: VRSN), the domain name registry for .com and .net domain names, announced third quarter earnings after the market closed today.

Revenue was up 3.1% year-over-year to $318 million. The company’s topline generally moves slowly but should spike next year as it implements a 7% price hike on .com domain names.

Profit increased from $154 million in Q3 2019 to $171 million in Q3 2020, aided by a $24 million income tax benefit. This suggests that profit would have actually decreased without the tax benefit. It will be interesting to see the P&L when it’s published.

The quarter ended with 163.7 million .com and .net domain names under management, up 4% year-over-year, and up by 1.65 million domains quarter-over-quarter. 10.9 million new domains were registered in .com and .net during the quarter. That’s a million more than were registered in Q3 2019.

The total base of .com domain names eclipsed 150 million last month.

Wix has record-setting Q2 thanks to Covid

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Company nearly doubles its marketing spend as businesses move online.

Image of an explosion with the words "Demand for websites and domain names is booming as businesses respond to COVID-19"

Website builder Wix (NASDAQ: WIX) reported second quarter earnings today, setting records thanks to the pandemic-induced rush to get online.

The company reported a remarkable 64% year-over-year increase in sign-ups with 9.3 million. Most of the new registrations use the free service or don’t convert, but the company grew its paid userbase to over 5 million by adding a net 346,000 subscribers during the quarter. That’s about double the number it added in the first quarter.

Collections—which other companies called bookings—were up 35% year-over-year.

“The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent,” said Wix CEO Avishai Abrahami.

Wix nearly doubled its advertising spend to take advantage of the situation. It plans to continue with elevated ad spend as long as it converts. This will suppress free cash flow but should pay long-term dividends.

 

Endurance experiences Covid tailwinds as revenue grows

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Increase is businesses going online helps Endurance in second quarter.

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Endurance International Group (NASDAQ: EIGI), a rollup of domain name, hosting and marketing services for small businesses, reported earnings this morning.

Its numbers were fairly strong in the second quarter as the company experienced a Covid boost like many of its peers that provide online services.

The company reported a slight uptick in revenue compared to the same quarter last year. Revenue came in at $274.0 million, which is up 1% year-over-year when you exclude revenue from SinglePlatform, a business it sold at the end of last year. While 1% isn’t a big jump, it’s a positive sign for a company that has mostly reported declining trends.

Bookings, adjusted EBITDA, and subscriber numbers were also up year-over-year.

Revenue for its Web Presence segment, which includes brands such as Domain.com and HostGator, was up slightly compared to both Q2 2019 and the first quarter of this year.

Endurance forecasts about $1.1 billion in revenue for the year, up slightly from last year when accounting for the SinglePlatform sale. Adjusted EBITDA guidance is about $300 million, down from $310 million last year excluding SinglePlatform.

MMX: Registrations and billings up, revenue down in H1

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Registrations at domain name registrars grew while one-off brokered sales dropped.

Picture of Toby Hall, CEO of domain company MMX

MMX CEO Toby Hall speaking at a domain name event.

Top level domain name registry MMX (aka Minds + Machines, London AIM: MMX) issued high-level earnings information today for the first half of 2020.

Year-on-year registrations grew 31% to 2.38 million as of 30 June 2020. Total first-half billings were up 7% year-over-year to $7.9 million.

One-off brokered transactions dropped by $0.8 million to $0.1 million. The company has been moving from these brokered deals to focusing on recurring registrations. And just in time, as evidenced by the precipitous fall in 2020 as the world reacted to the pandemic.

Because regular billings are recognized over the life of the registration but brokered transactions are recognized all at once, MMX’s recognized revenue dipped by 5% in the first half.

The company says that bookings for its brand-protection services also slowed in the first half in response to the pandemic, but it believes these will rebound in the second half of the year.

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