information Rightside reports $5 million Q1 loss

[garptrader]

https://finance.yahoo.com/news/rightside-announces-first-quarter-2016-200500277.html

Registrar stats (Name.com)....
16+ million domains under management (one line says 16.4 another 16.6)
77% renewal rate

40 GTLDs in portfolio w/ 470k registrations
Registry and Aftermarket service revenues growing at a rapid clip

Working capital (current assets 143.6 less current liabilities 135.1) is about $8.5 million
Total Q1 expenses (revenue plus reported loss) ~$60 million
Estimate of weekly expenses 60.2 million / 13 weeks~$4.6 million

Net tangible assets slightly negative

Given these results, it would seem plausible that pressure will be on to increase renewal prices for domains under management and/or reduce marketing and admin expenses.

 

[garptrader]

Conference call transcript...
https://finance.yahoo.com/news/edited-transcript-name-earnings-conference-153521144.html

 

[Soofi]

LOSS? OUCH!

 

[garptrader]

Notes from the conference call...
-in the next three to five years targeting annual registry revenue (new TLDs) between $50 and $75 million vs. $2.6 million in Q1? (or do you add Q1 aftermarket revenue of $9.3 million)
- new TLD renewal rates around 60% though higher with premium renewals (more end users perhaps)
-sales and marketing costs will continue to grow in 2016 so to become profitable they really need growth in registration or renewal rates
-a third of registry registration volume came from China
-new TLDs have an average sale price of two to three times that of .COM

 

[bmugford]

These numbers are not impressive. I think the future projections are rather dubious as well.

-in the next three to five years targeting annual registry revenue (new TLDs) between $50 and $75 million vs. $2.6 million in Q1? (or do you add Q1 aftermarket revenue of $9.3 million)

Pretty easy to project anything you want. There is often a gap between rosy projections and reality. Many new gTLD registries have been so far off with their projections in the past it is hard to lend any credibility to their future projections.

- new TLD renewal rates around 60% though higher with premium renewals (more end users perhaps)

I would expect that number to come down a huge amount over time. There has been so much garbage registered in a market that has not developed any liquidity.

-sales and marketing costs will continue to grow in 2016 so to become profitable they really need growth in registration or renewal rates

Could be throwing good money after bad. There is no guarantee any amount of marketing is going to yield great results, never mind even cover the cost.

-a third of registry registration volume came from China

These are going to get killed when renewals come up. Lots of irrational buying will be facing large renewal bills for largely worthless assets.

-new TLDs have an average sale price of two to three times that of .COM

It is much easier to have a higher sales price with much lower volume. This is probably true for almost any secondary extension.

 

[garptrader]

They mentioned that 39 of 40 strings are in general availability. I believe that most registration volume occurs by the first week or two after general availability. Afterwards new registrations grow at a much slower pace. If renewal rates are 60%, then for a 100-domain nTLD portfolio...

year 1 - 100
year 2 - 60
year 3 - 36
year 4 - 22
year 5 - 13
year 6 - 8
year 7 - 5

Of course we just don't know what the renewal rates will be in the future. However, since a large portion of nTLDs are being registered by individuals new to the industry and quite often newbies register domains of questionable value, it is quite possible a 60% renewal rate could occur in future years as well. That would result in the number of total registrations after a few years being well below year one levels. Of course there has always been considerable interest in backordering expired .COM domains. Perhaps nTLD backorders would partially offset the effect of a considerable drop ratio i.e. if expired nTLDs get registered by someone else.

 

[jmcc]

They mentioned that 39 of 40 strings are in general availability. I believe that most registration volume occurs by the first week or two after general availability. Afterwards new registrations grow at a much slower pace. If renewal rates are 60%, then for a 100-domain nTLD portfolio...

The more years a domain name is renewed, the more likely it is to continued being renewed in the future. This generally happens because the domain is associated with a business or is considered valuable. The baseline values for new TLDs generally emerge after the second or third year of operation. The one year renewal rate for .com is somewhere between 50% and 53%. I recently ran the renewal rates for all domain names in com/net/org/biz/info/mobi/asia since 2004 and the one year rates on the core TLDs have been falling from a high of around 70% or so in 2004. A lot of this is due to larger markets, more competition and discounting. One of the biggest negative factors in renewal rates is discounting. For some of the larger offers in the older TLDs, the renewal rates for discounted domains can be as low as 6%. The problem is that most domainers don't see this kind of stuff when looking at TLDs in which to register domain names.

Regards...jmcc

 

[Abdullah Abdullah]

That is a lot of money even with 77% renewal rate.

 

[Atta]

Increase in renewal price? Thanks God I don't have any domain with Name.com :D