CentralNic earnings show shift from domain registration firm to ad firm

Ad revenue made up nearly half of CentralNic’s 2020 revenue.

Domain name industry rollup CentralNic (London AIM: CNIC) noted unaudited financials for 2020 today. The results show a significant shift in how the firm makes money.

CentralNic has three business segments:

Indirect – Revenue from the reseller registrar channel (e.g. Hexonet), registry services provider (e.g., providing the backend for .XYZ), and running the .sk country code.

Direct – Revenue is generated from sales to end consumers such as modest businesses, i.e., retail.

Monetization – This includes domain parking from its Team Internet/Parking Crew buyout, and more recently zero click and affiliate marketing firm CodeWise.

Monetization accounted for just $1.875 million, or less than 2%, of revenue in 2019. It accounted for a whopping $112.073 million, or 46% of revenue in 2020. It was 39% of the firm’s gross profit.

This was a good thing last year since domain monetization took off. The revenue per thousand (RPM) CentralNic received for parked domains was up 36%, primarily due to increased rates from Google. The firm credits this increase to better traffic quality following pruning some clients and to the firm’s SSL-page monetization. But I’ve heard that other parking firms also received sharp increases in RPM from Google last year, so at least part of the increase was not related to CentralNic itself.

The increased reliance on ad revenue means CentralNic might grow faster, although the revenue will not be as predictable and stable as domain registration revenue.

Overall, revenue at CentralNic was up 121% to $241.2 million last year. The firm states that taking out acquisitions and a few other items, the firm grew 9% organically last year.

Full results are available here.