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| Rightside (NASDAQ:NAME) Shares Down 46% Since Aug 1, 2014 (source: google.com) |
Rightside Q1 2016 Conference call / webcast May 10, 2016, at 4:30 p.m. ET
- LIVE and archived webcast and earnings here -- Listen to the webcast.
- Live conference call: (844) 413-1777 (domestic) or (716) 247-5761 (international)
- Conference call replay available through May 15, 2016: (855) 859-2056 (domestic) or (404) 537-3406 (international)
- Conference ID: 98913280
- Rightside Group's (NAME) CEO Taryn Naidu on Q1 2015 Results - Earnings Call Transcript | SeekingAlpha.com
Rightside shares ($NAME) DOWN After-hours: $8.34 Price decrease -0.24 (2.80%) 4:05pmET
*Note: NAME (Rightside) 10Q_20160331.htm: "Loss on other assets, net for the three months ended March 31, 2016 was $1,000 compared to a net gain of $7.2 million in 2015. During the three months ended March 31, 2015, we withdrew our interest in several gTLD applications resulting in a net gain of $7.2 million." (emphasis added)
*Question: Will Rightside ever be profitable without continuing to play newgTLDs "poker" in "ICANN's ngTLDs casino"?
From Rightside press release:
Financial Summary (in thousands)
Three months ended March 31, 2016 | 2015
Registrar services $ 44,018 | $41,999
Registry services 2,639 | 1,605
Aftermarket and other 9,269 | 7,332
Eliminations (1) (802 ) | (405 )
Total revenue $ 55,124 | $50,531
Loss (gain) on other assets, net $ 1 $ (7,223 )
(Loss) income before income tax $ (5,475 ) | $ 933
Income tax benefit (368 ) | (943 )
Net (loss) income $ (5,107 ) | $ 1,876
(1) Amounts in the eliminations line reflect the elimination of intercompany charges between our Registrar and Registry services businesses.
First Quarter 2016 Financial Highlights
(Unless otherwise noted, all comparisons are relative to the fiscal first quarter 2015.)
Registrar services revenue increased to $44.0 million compared to $42.0 million.
Registry services revenue increased 64% to $2.6 million compared to $1.6 million.
Aftermarket and other revenue grew 26% to $9.3 million compared to $7.3 million.
Total revenue increased 9% to $55.1 million compared to $50.5 million.
Net loss was $5.1 million, compared to net income of $1.9 million.
Adjusted EBITDA increased to $1.8 million, compared to $568,000.
Business Highlights
Three months ended March 31, 2016 / 2015 / Change
End of period domains (in millions) (1) 16.4 / 16.2 / 1.2 %
Average revenue per domain (2) $ 10.79 / $10.43 / 3.5 %
Renewal rate (3) 77.2 % 77.4 %
(1) A domain is defined as an individual domain name registered by a third-party customer on Rightside's registrar platforms for which Rightsidehas begun to recognize revenue.
(2) Average revenue per domain is calculated by dividing registrar services revenue for a period by the average number of domains registered on Rightside's registrar platforms in that period. Average revenue per domain for partial year periods is annualized.
(3) The renewal rate is defined as the percentage of domain names on Rightside's registrar platforms that are renewed after their original term expires.
Liquidity and Capital Resources
As of March 31, 2016, cash and cash equivalents increased to $47.0 million, compared to $45.1 million as of December 31, 2015.
At the end of the first quarter, the Company had letters of credit totaling $11 million outstanding with approximately $19 million of available borrowing capacity under its revolving credit facility with Silicon Valley Bank.
Business Outlook
(Unless otherwise noted, all comparisons are relative to the fiscal first quarter 2015.)
Registrar services revenue increased to $44.0 million compared to $42.0 million.
Registry services revenue increased 64% to $2.6 million compared to $1.6 million.
Aftermarket and other revenue grew 26% to $9.3 million compared to $7.3 million.
Total revenue increased 9% to $55.1 million compared to $50.5 million.
Net loss was $5.1 million, compared to net income of $1.9 million.
Adjusted EBITDA increased to $1.8 million, compared to $568,000.
Business Highlights
- Rightside recently added .GAMES to its owned and operated gTLD portfolio and now has 40 gTLDs in its portfolio, with 39 in general availability.
- Rightside's 39 gTLDs in general availability ended the quarter with over 470,000 registered domains, up 17% over Q4 2015.
- Rightside's retail registrar, Name.com, grew revenue 24% year-over-year with approximately 40% of that growth driven by higher margin new gTLDs.
- With over 16.6 million total domains under management as of March 31, 2016, including over 2.9 million domain names registered through its retail outlets, Rightside remains one of the world's largest registrars.
- Rightside's most recent launches have shown strong momentum - with .FAMILY's registrations exceeding 7,500 to date. .LIVE and .STUDIO have now reached over 50,000 combined registrations and .NEWS, the top performing gTLD in Rightside's portfolio, now has 75,000 registrations to date.
Three months ended March 31, 2016 / 2015 / Change
End of period domains (in millions) (1) 16.4 / 16.2 / 1.2 %
Average revenue per domain (2) $ 10.79 / $10.43 / 3.5 %
Renewal rate (3) 77.2 % 77.4 %
(1) A domain is defined as an individual domain name registered by a third-party customer on Rightside's registrar platforms for which Rightsidehas begun to recognize revenue.
(2) Average revenue per domain is calculated by dividing registrar services revenue for a period by the average number of domains registered on Rightside's registrar platforms in that period. Average revenue per domain for partial year periods is annualized.
(3) The renewal rate is defined as the percentage of domain names on Rightside's registrar platforms that are renewed after their original term expires.
Liquidity and Capital Resources
As of March 31, 2016, cash and cash equivalents increased to $47.0 million, compared to $45.1 million as of December 31, 2015.
At the end of the first quarter, the Company had letters of credit totaling $11 million outstanding with approximately $19 million of available borrowing capacity under its revolving credit facility with Silicon Valley Bank.
Business Outlook
- For the full year ending December 31, 2016, Rightside reaffirms its revenue and Adjusted EBITDA guidance:
- Total revenue of $218 million to $228 million, inclusive of $12 million to $15 million of GAAP revenue from our Registry Services Business.
- Total Adjusted EBITDA of $8 million to $11 million, inclusive of approximately $2 million of incremental discretionary marketing spend for the year.
Rightside Group, Ltd., provides domain name registry and registrar services. Brands include eNom and Name.com.
Investor Relations: investors.rightside.co
Headquartered in Kirkland, WA, Rightside has offices in North America, Europe, and Australia.
Upcoming Investor Conferences:
Rightside Group, Ltd.'s Chief Executive Officer, Taryn Naidu, and Chief Financial Officer, Tracy Knox, are scheduled to present at the following upcoming investor conferences:
Jefferies 2016 Technology Conference*
Date: Wednesday, May 11, 2016
Location: Mandarin Oriental Brickell, Miami, FL
Presentation Time: 10:30 a.m. Eastern time (7:30 a.m. Pacific time)
Presenting and Hosting One-on-One Investor Meetings
B. Riley & Co. 17th Annual Investor Conference*
Date: Wednesday, May 25, 2016
Location: Loews Hollywood Hotel, Los Angeles, CA
Presentation Time: 2:00 p.m. Pacific time (5:00 p.m. ET)
*Both presentations will be available through a live audio webcast accessible from the Investors section of Rightside's website at http://investors.rightside.co/. An archived replay of the webcast will also be available for 90 days following the live presentation.
Rightside's new gTLDs portfolio:
See on Domain Mondo:
"I am troubled by the pivot toward, and unrelenting propaganda about, new generic top-level domain names (“GTLDs”). Whilst I concede that new GTLDs are one of many opportunities in the emerging market for second generation domain names, Rightside Group, Ltd. (“Rightside”, “NAME”, or our “Company”) is the second-largest domain name registrar, a business that is here and now. I don’t hear Rightside speaking to this strength. Our Company glosses over this critical revenue component and plays up new GTLDs at the expense of the revenue contribution made by the traditional registrar business.
"The user interfaces at eNom and Namejet look and feel clumsy and stale. Looking past the main page of NAME’s sites, the logged-in front-end infrastructure is untouched and acts like time capsule to what existed half a decade ago. Most of our growth in names under management is coming from a reseller channel that is out-executing your own in-house registrar eNom.
"While I am a believer in new GTLDs, it is going to be many years before their revenue in any way materially approaches the revenue potential of our registrar operations. In my view, NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.
"Rightside is a gem in that it has many assets which are unique or difficult to duplicate. Cannell Capital LLC would not have acquired 1,389,953 shares otherwise. We have some good new domain-endings as well, with .news being one example, but this particular domain-ending and a clutch of others like it do not constitute enough of a “front” to gloss over the majority of your extensions which are low in value and should be spun-off. I believe that we should sell or even abandon some of our worst extensions. They should not consume all the resources of our Company at the expense of the assets that are currently profitable.
"The current members of the Board of Directors and indeed many of your shareholders don’t seem to recognize this. I do. Today I stand up to be that paladin. To wit, I submit both a plan and a request: (i) Unify all Company products under the eNom.com brand; (ii) Terminate no less than 20% of your weaker staff; (iii) Move the Name.com entity to Seattle under the eNom.com brand and close expensive ancillary offices; (iv) Rebuild and relaunch the front-end infrastructure at eNom.com to bring it to the current standard expected by consumers; (v) Refinance all debt; and (vi) Add two new board members with a suggestion, but not a requirement that two incumbents resign ..." (emphasis added)
Upcoming Investor Conferences:
Rightside Group, Ltd.'s Chief Executive Officer, Taryn Naidu, and Chief Financial Officer, Tracy Knox, are scheduled to present at the following upcoming investor conferences:
Jefferies 2016 Technology Conference*
Date: Wednesday, May 11, 2016
Location: Mandarin Oriental Brickell, Miami, FL
Presentation Time: 10:30 a.m. Eastern time (7:30 a.m. Pacific time)
Presenting and Hosting One-on-One Investor Meetings
B. Riley & Co. 17th Annual Investor Conference*
Date: Wednesday, May 25, 2016
Location: Loews Hollywood Hotel, Los Angeles, CA
Presentation Time: 2:00 p.m. Pacific time (5:00 p.m. ET)
*Both presentations will be available through a live audio webcast accessible from the Investors section of Rightside's website at http://investors.rightside.co/. An archived replay of the webcast will also be available for 90 days following the live presentation.
Rightside's new gTLDs portfolio:
- Rightside $NAME Q4 2015 Financial Results, LIVE Webcast Replay 16 Feb 2016
- ICANN Damaged a Competitive Domain Name Market With Its New gTLDs 16 Feb 2016
- Rightside, $NAME, Needham Conference, LIVE Webcast Replay 14 Jan 2015
"I am troubled by the pivot toward, and unrelenting propaganda about, new generic top-level domain names (“GTLDs”). Whilst I concede that new GTLDs are one of many opportunities in the emerging market for second generation domain names, Rightside Group, Ltd. (“Rightside”, “NAME”, or our “Company”) is the second-largest domain name registrar, a business that is here and now. I don’t hear Rightside speaking to this strength. Our Company glosses over this critical revenue component and plays up new GTLDs at the expense of the revenue contribution made by the traditional registrar business.
"The user interfaces at eNom and Namejet look and feel clumsy and stale. Looking past the main page of NAME’s sites, the logged-in front-end infrastructure is untouched and acts like time capsule to what existed half a decade ago. Most of our growth in names under management is coming from a reseller channel that is out-executing your own in-house registrar eNom.
"While I am a believer in new GTLDs, it is going to be many years before their revenue in any way materially approaches the revenue potential of our registrar operations. In my view, NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.
"Rightside is a gem in that it has many assets which are unique or difficult to duplicate. Cannell Capital LLC would not have acquired 1,389,953 shares otherwise. We have some good new domain-endings as well, with .news being one example, but this particular domain-ending and a clutch of others like it do not constitute enough of a “front” to gloss over the majority of your extensions which are low in value and should be spun-off. I believe that we should sell or even abandon some of our worst extensions. They should not consume all the resources of our Company at the expense of the assets that are currently profitable.
"The current members of the Board of Directors and indeed many of your shareholders don’t seem to recognize this. I do. Today I stand up to be that paladin. To wit, I submit both a plan and a request: (i) Unify all Company products under the eNom.com brand; (ii) Terminate no less than 20% of your weaker staff; (iii) Move the Name.com entity to Seattle under the eNom.com brand and close expensive ancillary offices; (iv) Rebuild and relaunch the front-end infrastructure at eNom.com to bring it to the current standard expected by consumers; (v) Refinance all debt; and (vi) Add two new board members with a suggestion, but not a requirement that two incumbents resign ..." (emphasis added)
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