GoDaddy, Tucows, CentralNic Announce Positive Financial Results Benefiting From Global Pandemic

The global COVID-19 pandemic is not hurting domain name registrars, with three of the largest, GoDaddy, CentralNic and Tucows, all announcing financial results to 30 June over the last week showing each company is doing well.

The results reflect growth in new and often total domain name registrations among many ccTLDs and legacy gTLDs, although new gTLDs have shown a decline in total registrations of over one million in the three months to 7 August, totalling 32.785 million, according to nTLDstats.

In the case of Arizona-based GoDaddy, last Wednesday they announced they have now surpassed 20 million paying customers, having added more than 400,000 net new customers during the second quarter. In the domain names area, they reported revenue of $369.6 million, up 10.5% year over year while hosting and presence revenue was $292.2 million, up 4.4% year over year. Total revenue was $806.4 million (up from an expected $790 million according to their first quarter financial results) for the second quarter, up 9.4% year over year, or 10.2% on a constant currency basis. And total bookings were $936.3 million, up 10.7% year over year, or 12.1% on a constant currency basis.

There were three major acquisitions commented on in the financial results. Their acquisition of Uniregistry is showing significant progress in integration with shorter sales cycles and early revenue synergies according to their announcement. Another acquisition, Over, GoDaddy’s content creation acquisition, sees acceleration in both monthly average users and subscribers since completion. And in August, GoDaddy completed the previously announced acquisition of the registry business of Neustar Inc. for $215.9 million in cash, subject to final adjustments.

Looking ahead, for the third quarter ending 30 September 2020, GoDaddy expects total revenue of approximately $835 million, or approximately 10% year over year growth. Revenue growth by category is expected to approximate double-digit growth in domains, mid-single-digit growth in Hosting and Presence, and high-teens growth in Business Applications. For the full year, GoDaddy expects revenue growth of approximately 10% versus 2019.

London-based CentralNic, which reported their results Monday for the first half of 2020 said “it has been comfortably trading in line with market expectations.” For the first half of 2020 CentralNic expects to report revenue in excess of US$110 million and adjusted EBITDA in excess of $15 million. This compares to $49.7m and $9.2m respectively in the same period last year. Cash increased to $27.6m from $24.1m as at 31 March 2020, whilst net debt decreased to $76.4m from $76.8m as at 31 March 2020.

CentralNic also announced they will publish their interim report for the six months ended 30 June 2020 on 1 September which will entail more detail on the above key figures.

“I am delighted that CentralNic has recorded more revenue in the first half of 2020 than in the full financial year 2019” said Ben Crawford, CEO of CentralNic. “This has been achieved through a combination of earnings accretive acquisitions and steady underlying growth across our businesses.”

Toronto-based Tucows reported their financial results [pdf] last Thursday for the second quarter with their business excluding their troubling Ting mobile division increasing gross margin by 4% for the quarter. For Domain Services, revenue increased marginally in the quarter to $60,487,000 from $60,141,000 while gross profit jumped to $18,676,000 from $17,376,000.

“The second quarter was once again demonstrative of the consistency and cash generating ability of the Tucows business,” said Elliot Noss, President and Chief Executive Officer, Tucows Inc. “Our Domains business had another solid quarter, as we benefited from significantly higher transaction activity as micro- and small-sized businesses and start-ups acted quickly to establish a web presence for the first time amid the pandemic, in addition to our continued success focusing on the quality of our customer base for gross margin contribution.”

“Although a somewhat challenging quarter for our Ting Mobile business, our recently announced transition to our new Mobile Services Enabler model, with DISH as our first customer, provides a much-improved near- and long-term outlook for this business, and strong visibility around cash flows, particularly amidst a rapidly changing industry dynamic. Finally, Ting Internet saw another quarter of steady progress across all facets of that business, meaningfully adding passed addresses, serviceable addresses and new customers, as we achieved a record quarter for capital expenditure on our network.”

Net revenue for the second quarter of 2020 was $82.1 million, a decrease of 2.4% from $84.1 million for the second quarter of 2019.  Gross profit for the second quarter of 2020 was $23.0 million, a decrease of 6.3%from $24.5 million for the second quarter of 2019.  The decreases in net revenue and gross margin were the result of decreases for each in the Ting Mobile business, with gross margin additionally impacted by anon-recurring asset impairment charge related to a change in strategy for the Ting Internet TV product. Excluding the impact of the asset impairment, gross margin for the second quarter of 2020 would have increased 4.0% compared to the second quarter of 2019.

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