MMX results show healthier revenue
ICM buyout and focus on renewal revenue help improve the picture at MMX.
There are a couple of warning signs that a top level domain name firm is on shaky ground. One is if it’s dependent on one-time premium sales. The other is if it’s dependent on China for most of its revenue or growth.
Both of these applied to MMX (Minds + Machines) (London AIM: MMX) in the past. So two charts in the firm’s earnings release yesterday for H1 2019 are notable.
The first shows that reliance on one-off premium sales has decreased:
During this time, revenue (not counting one-time gains) has been fairly steady, so this is a real improvement. It’s not that everything has gone down with some taking more of a hit than others.
Sure, a big driver of this change was the buyout of ICM Registry counting .xxx. It wouldn’t have happened this quickly with the existing TLD portfolio. Nonetheless, this paints a picture of firm that now has healthier revenue. No hamster-wheel games of selling enough premiums to hit numbers.
MMX CEO Toby Hall has long preached the importance of covering operating costs with renewal revenue. The firm’s goal is for renewal revenue to surpass OPEX, Cost of Sales and Partner Payments within the next 12 months.
As for China:
This chart shows the first half of each year and it could be a bit misleading. Last year China accounted for 29% of revenue, so Chinese revenue was front-loaded that year. But in 2017, China accounted for more than half of the firm’s revenue. So any way you slice it, it is relying less on China.
The firm has healthier revenue. Now it needs to find a way to grow faster.
