Roll-up’s numbers slip as it simplifies its business.
Endurance International Group (NASDAQ: EIGI) reported fourth quarter and full year 2018 earnings this morning.
Revenue, adjusted EBITDA and subscriber numbers were all down quarter-over-quarter and year-over-year.
2018 revenue was $1,145.3 million, compared to $1,176.9 million in 2017. Q4 revenue dropped from $294.2 million a year ago to $282.4 million in Q4 2018. Adjusted EBITDA dropped from $350.8 million in 2017 to $338.1 million in 2018. Q4 adjusted EBITDA dropped from $94.4 million in 2017 to $79.3 million in 2018. The subscriber base dropped from 5.051 million to 4.802 million at the end of 2018.
The drop was expected. Revenue was in line with the company’s expectations for the year and adjusted EBITDA topped forecasts. It’s all part of the company’s reckoning of a roll-up that became unwieldy.
Endurance rolled up much of the shared hosting market, acquired domain name companies and bought email marketing platform Constant Contact. It was a lot to chew on. Now the company is focusing on core brands and simplifying the business.
On the domain name side, the company is focusing on the Domain.com brand as well as BuyDomains and ResellerClub (which came with the Directi acquisition). Endurance is the third largest domain name registrar in terms of .com domains under management.
Domain revenue and customers fell slightly in 2018 although adjusted EBITDA flipped from negative to positive.
Its web presence business includes BlueHost and HostGator. Numbers were down across the board in 2018 in its hosting business although average revenue per subscriber ticked up slightly.
E-mail marketing–primarily ConstantContact–increased its revenue despite losing subscribers.
The company is hoping for a turnaround in revenue in 2019. It is guiding to $1.14 billion to $1.160 billion. However, it expects adjusted EBITDA to fall to $310 million to $330 million.