Rightside Group, Ltd. (NAME) announced its financial results for the third quarter ended September 30, 2014.
Rightside is the company that was spun off from Demand Media, Inc, (DMD) which owns the domain name registrars Enom.com and Name.com, and owns a bunch of new gTLD’s and is the backend provider for Donuts which just passed one million domain name registrations
This is Rightside first earnings as a separate public company.
Here are the highlights:
Domain name services revenue for the three months ended September 30, 2014 increased 15% to $41.3 million compared to $36.0 million for the same period in 2013.
Organic growth of 10.5%, 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.
Aftermarket and other revenue for the three months ended September 30, 2014 decreased to $7.4 million compared to $9.5 million for the same period in 2013, primarily due to a decrease in the sales of domain names owned by Rightside.
Total revenue for the three months ended September 30, 2014 increased 7% to $48.8 million compared to $45.5 million for the same period in 2013.
During the third quarter of 2014, Rightside recorded a gain on other assets, net of $8.6 million representing the gain on withdrawals of its interest in seven gTLD applications during the period.
Net income for the three months ended September 30, 2014 was $4.1 million compared to a net loss of $2.6 million for the same period in 2013.
Adjusted EBITDA for the three months ended September 30, 2014 was ($0.6 million), compared to Adjusted EBITDA of $0.8 million for the same period in 2013. The change was primarily due to the decrease in Aftermarket and other revenue described above.
Business Highlights
Rightside has signed registry operator agreements with ICANN for 33 gTLDs to date, including four gTLDs added during the third quarter of 2014, and has an interest in approximately 40 additional gTLD applications that have yet to be awarded to their ultimate registry operator.
Rightside Registry launched eight new gTLDs into “general availability” during the third quarter of 2014 and now has distribution agreements with over 90 leading registrars to distribute its gTLDs.
As of September 30, 2014, 15 of Rightside’s owned and operated gTLDs were in “general availability” for an average of just 89 days each, but had generated over 80,000 registrations with almost $2.5 million in total cash sales.
Rightside expects to have 28 gTLDs in “general availability” by year-end 2014.
With 16 million total domains under management as of September 30, 2014, including over 2 million domain names registered through its own retail outlets, Rightside remains one of the world’s largest registrars.
As of September 30, 2014, Rightside had cash and cash equivalents of $50.9 million, compared to $26.1 million as of its spin-off from Demand Media, Inc. on August 1, 2014.
As of September 30, 2014, Rightside had $11 million of Letters of Credit outstanding under its $30 million revolving credit facility with Silicon Valley Bank, which was established on August 1, 2014 and matures in August 2017.
As of September 30, 2014, Rightside had fully drawn its $30 million term loan credit facility with certain funds managed by Tennenbaum Capital Partners, LLC, which was established on August 6, 2014 and matures in August 2019.
