Expired domains lift Tucows results, despite client defection

Expired domains revenue continues to lift results at Tucows.

Tucows (NASDAQ: TCX) noted first-quarter earnings following the market closed yesterday.

Overall revenue increased 8% year over year to $94.6 million, with the domain business growing 6% to $65.3 million.

Gross margin for the domain business increased 9% to $20.2 million.

The increase came despite domains under management decreasing by 2% and total transactions falling by 6%. In prepared commentary, Tucows Domains CEO Dave Woroch stated that this was primarily due to one sizable client moving its domain business in-house rather than relying on Tucows’ reseller platform.

Value Added Services, which includes revenue Tucows generates from selling expired domains, grew from $4.7 million in Q1 2024 to $5.9 million in the latest quarter.

Echoing last quarter, Woroch stated this was driven by strong, high-margin sales from the firm’s expiry stream. Tucows sells its expired domains through GoDaddy Auctions, which also noted a strong quarter for domain sales.

Tucows has 24.3 million domains under management, counting those on its own accreditations and those of registrars that use its platform.