Rightside Group, Ltd. (NAME), today announced financial results for the second quarter ended June 30, 2014.
Rightside became an independent, publicly traded company on August 1, 2014 as a result of the completion of its spin-off from Demand Media, Inc.(R) (DMD) so this is the first earnings report by Rightside as a separate operating public company.
Shares of Rightside fell over 3% in trading today closing at $14 a share.
Rightside now owns and operates the former domain name services business of Demand Media, and Demand Media does not hold any ownership interest in Rightside.
Domain name services revenue for the three months ended June 30, 2014 increased 13% to $39.6 million compared to $34.9 million for the same period in 2013.
Organic growth of 7%, which excludes the acquisition related benefit from Name.com, was primarily due to an increase in domain name registrations.
Aftermarket and other revenue for the three months ended June 30, 2014 decreased to $7.1 million compared to $13.3 million for the same period in 2013, primarily due to a decrease in the sales of domain names owned by Rightside and our decision to eliminate low quality advertising traffic in the second half of 2013.
On a sequential quarterly basis, the Aftermarket business began to stabilize at $7 million for the first two quarters of this year.
Adjusted EBITDA for the three months ended June 30, 2014 was ($0.8 million), compared to Adjusted EBITDA of $4.4 million for the same period in 2013, primarily due to the decrease in Aftermarket and other revenue described above.
Rightside has signed registry operator agreements with ICANN for 32 gTLDs, including three gTLDs added during the second quarter of 2014, and has an interest in over 60 additional gTLD applications that have yet to be awarded to their ultimate registry operator.
Rightside Registry launched seven new gTLDs into “general availability” during the second quarter of 2014 and has signed agreements with over 80 leading registrars to distribute its gTLDs.
Rightside’s registrars, eNom and Name.com, are among the largest distributors of new gTLDs. With over 200 new gTLDs supported, Rightside’s registrars offer one of the broadest selections.
New products were launched on eNom and Name.com to better enable usage of domain names, including new website creator tools and branded email services.
As of the spin-off date of August 1, 2014, Rightside had cash and cash equivalents of $26.1 million.
On August 1, 2014, Rightside entered into a $30 million revolving credit facility with Silicon Valley Bank which matures in August 2017.
On August 6, 2014, Rightside entered into a $30 million term loan credit facility with certain funds managed by Tennenbaum Capital Partners, LLC, which matures in August 2019.
These new credit facilities provide Rightside with additional flexibility and liquidity to pursue its strategic objectives, including the acquisition of additional gTLDs.
In 2014, Rightside expects the following:
Total revenue of $185 million to $195 million for 2014
Adjusted EBITDA at break-even for Q4 2014
Registry Services revenue in the low single-digit millions of dollars for 2014