Rightside reported its earnings for the 4th Quarter today and full year ended December 31, 2014 after the market closed.
Domain Name Services Revenue Increases 16% Year-over-Year
4Q Total Revenue Increases 13.5% Year-over-Year
Domain name services revenue for the three months ended December 31, 2014 increased 16% to $43.2 million compared to $37.2 million for the same period in 2013.
Organic growth of 15%, which excludes the acquisition related benefit from Name.com, was primarily due to an increase in domain name registrations associated with the continued onboarding of eNom wholesale partners, over 35% growth at Name.com, and $1.0 million of revenue from the new registry business.
Aftermarket and other revenue for the three months ended December 31, 2014 was $8.6 million compared to $8.4 million for the same period in 2013.
Total revenue for the three months ended December 31, 2014 increased 13.5% to $51.7 million compared to $45.6 million for the same period in 2013.
During the fourth quarter of 2014, Rightside recorded a gain on other assets, net of $7.8 million representing the gain on withdrawals of its interest in gTLD applications during the period.
Net income for the three months ended December 31, 2014 was $1.5 million compared to a net loss of $5.7 million for the same period in 2013.
Adjusted EBITDA for the three months ended December 31, 2014 was $0.6 million, compared to Adjusted EBITDA of ($0.9 million) for the same period in 2013.
Financial Highlights — Full Year 2014
- Domain name services revenue for the year ended December 31, 2014 increased 14% to $161.6 million compared to $141.6 million for the year ended December 31, 2013.
- Aftermarket and other revenue for the year ended December 31, 2014 was $30.2 million compared to $43.6 million for the year ended December 31, 2013, primarily due to a decrease in the sales of domain names owned by Rightside and the elimination of low quality advertising traffic in the second half of 2013.
- Total revenue for the year ended December 31, 2014 increased 3.5% to $191.7 million compared to $185.2 million for the year ended December 31, 2013.
- Rightside recorded an income tax benefit of $1.3 million for 2014 resulting from taxable losses in the U.S.
- Net loss decreased to $1.9 million for the year ended December 31, 2014 compared to $10.7 million for the year ended December 31, 2013.
- Adjusted EBITDA for the year ended December 31, 2014 was ($3.1 million), compared to Adjusted EBITDA of $8.0 million for the year ended December 31, 2013. Adjusted EBITDA loss for 2014 includes $6.9 million of investment in the new registry business, net of revenue contribution.
Business Highlights
- Rightside has signed registry operator agreements with ICANN for 36 gTLDs to date, including 3 since the third quarter of 2014, and has an interest in 29 additional gTLD applications that have yet to be awarded to their ultimate registry operator.
- As of December 31, 2014, 28 of Rightside’s owned and operated gTLDs were in “general availability” for an average of 120 days each. These have generated nearly 150,000 registrations with over $5.0 million in total cash sales as of December 31, 2014.
- Half of domain name services growth during the fourth quarter came from new gTLD registrations.
- During the fourth quarter, 15% of Name.com new registrations came from new gTLDs with an average selling price of the new gTLDs over three times that of legacy gTLDs. New gTLD revenue comprised over 40% of Name.com’s year-over-year growth for the fourth quarter of 2014
- With over 16 million total domains under management as of December 31, 2014, including over 2.7 million domain names registered through its own retail outlets, Rightside remains one of the world’s largest registrars.
For the full year ending December 31, 2015, Rightside currently expects the following:
- Total revenue of $210 million to $220 million, inclusive of $6 million to $9 million of GAAP revenue from the registry services business; and
- Total Adjusted EBITDA to break-even as Rightside invests margin generated by the business back into driving market development efforts.
Shares of Rightside closed at $7.24 a share down over 5% on trading today before earnings were released.