Tucows reported its financial results for its second quarter ended June 30, 2008 today.
Net income per share fell to $.02 for the six months ending June 30, 2008 against $.05 per share profit for the first six months of last year.
Elliot Noss, President and CEO of Tucows. is quoted as saying:
“Our portfolio of high value domain names continued to make an impressive contribution. We note that the second quarter of 2007 included a large $3 million bulk sale of domain names.”
As you will recall we wrote several posts about Tucows keeping their own expired domains instead of releasing them. Now we see that this practice has gone right to their bottom line.
$3 Million dollars in sales in just the second quarter of 2007? All those are the domain that came off the expired domain list and Tucows grabbed them.
Parking revenues on Tucows owned domains seem to be $1,873,000 for the three months ending June 30, 2008 as opposed to $3,606,000 for the three months ending June 30, 2007.
So parking revenues appear to be following fabulous.com, in their quarterly report, and are down 50% since last year.
Shares of Tucows closed down $.03 at $.54 during trading, close to its 52 week low of $.50 a share. The quarterly report was was released after trading.
Here is the entire report:
Summary Financial Results (Numbers in Thousands of US Dollars, Except Per Share Data) ------------------------------------------------------------------------- 3 Months 3 Months 6 Months 6 Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Net Revenue $20,450 $20,815 $39,162 $38,586 ------------------------------------------------------------------------- EBITDA 3,689 4,572 4,194 6,544 ------------------------------------------------------------------------- Adjusted Net Income 1,779 4,686 2,732 7,128 ------------------------------------------------------------------------- Net (Loss)/Income 2,209 3,171 1,127 3,921 ------------------------------------------------------------------------- Net (Loss) Income/Share 0.03 0.04 0.02 0.05 ------------------------------------------------------------------------- Cash Flow from Operations 2,580 2,359 2,697 3,524 ------------------------------------------------------------------------- Summary of Revenue and Cost of Revenue (Numbers in Thousands of US Dollars) ------------------------------------------------------------------------- Revenue Cost of Revenue ------------------------------------------------------------------------- Three Three Three Three Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Traditional Domain Registration Services $13,269 $12,274 $10,505 $9,110 ------------------------------------------------------------------------- Domain Portfolio 1,873 3,606 181 158 ------------------------------------------------------------------------- Email Services 1,552 1,881 (24) 209 ------------------------------------------------------------------------- Retail Services 2,046 1,208 577 417 ------------------------------------------------------------------------- Other Services 1,711 1,845 421 413 ------------------------------------------------------------------------- Total $20,450 $20,815 $11,660 $10,307 -------------------------------------------------------------------------
Net revenue for the second quarter of fiscal 2008 was $20.5 million compared with $20.8 million for the second quarter of fiscal 2007.
Revenue for the second quarter of fiscal 2007 included the atypically large sale of a block of domain names from the Company’s portfolio of high value domain names in the amount of $3.0 million.
Adjusted net income for the second quarter of 2008 was $1.8 million, compared with $4.7 million for the corresponding quarter of last year. Net income was $2.2 million, or $0.03 per share, compared with $3.2 million, or $0.04 per share, for the second quarter of fiscal 2007.
Deferred revenue at the end of the second quarter of fiscal 2008 was $54.4 million, an increase of 11% from $49.0 million at the end of the second quarter of 2007 and an increase of 2% from $53.6 million at the end of the first quarter of fiscal 2008.
Cash and restricted cash at the end of the second quarter of fiscal 2008 was $2.9 million compared with $6.2 million at the end of the second quarter of fiscal 2007 and $7.5 million at the end of the first quarter of fiscal 2008. This decrease compared to the first quarter of this year is primarily the result of the repayment of the $6 million promissory note payable to the former shareholders of mailbank.com Inc., as well as payment of $1.4 million on the Company’s bank loan. These uses of funds were partially offset by the $2.6 million of cash flow generated from operations, as well as $1.4 million generated through the sale of 14,000 hosting accounts to Hostopia.
Update
At 5pm this afternoon Tucows had a discussion regarding its financial results known as a earnings call.
Reading the transcript of the call, brings these interesting points to light. (you can read the entire transcript at
http://seekingalpha.com/article/90637-tucows-inc-f2q08-qtr-end-06-30-08-earnings-call-transcript
“”We have a portfolio of over 39,000 surnames and we believe that this will be one of the stickiest internet services available and will help to drive renewal rates and growth amongst our reseller channel as well as in our retail offering.”””
“””On to the domain portfolio line of business, where I will remind you that we own more then 150,000 high value domain names. Our domain portfolio generates revenue in two ways. The first is direct navigation revenue. The second quarter saw a 40% increase in revenue from our direct navigation names compared to the same quarter last year. However, revenue was down 12% compared to last quarter in direct navigation or parking revenue.”””
“””This decrease is industry-wide as Google and Yahoo have started to decrease payouts to syndication partners. The second way we generate revenue from our portfolio of domain names is through the sale of those names. You will recall that in Q2 of last year we had one unusually large domain name transaction of just over $3 million.
In Q2 of this year we had another bundle sale of roughly 3,700 names for a little under $1 million. Outside of those two transactions revenue from the domain portfolio is up 61% year-over-year showing the growth we expected.”””
What they sell over $3 million?
Jody
They did not say, sounds like a portfolio of domains rather than 1 domain.
However all these domains came from expired domains of their customers that they decided to keep
Great post – thanks – the numbers do tell a story – let’s see what kind of story will the numbers tell in 12 months time – will it be a story of success or try harder
## we believe that this will be one of the
## stickiest internet services available
Perhaps by “stickiest” he means “most unreliable” in the context of e-mail and domain-service.