Expired domain sales hurt Tucows again in Q1

Decline in aftermarket revenue hurts Tucows’ domain name business.

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Tucows (NASDAQ: TCX) released Q1 2023 earnings yesterday. For the second consecutive quarter, the company blamed decreased expired domain revenue for a decline in domain revenue.

For the quarter, Tucows Domains revenue was $59.2 million, down from $61.5 million in Q1 2022. Revenue from Value Added Services in the wholesale domains segment dropped from $5.6 million to $4.5 million, representing $1.1 million of the decline.

Value Added Services includes expired domain sales, and the company reports that it’s not making as much from these domains as it used to.

In prepared remarks, Tucows Domains CEO Dave Woroch stated:

…the last couple of quarters, we’ve experienced a weaker aftermarket for domain sales, most notably at the higher end of the price range. And we are actively working with our partner to test adjustments that could drive increased sales.

That partner is GoDaddy, where Tucows sends its expired domain inventory. GoDaddy has reported a similar decline, although its numbers include aftermarket sales through Afternic as well.

It’s not clear what tests Tucows and GoDaddy are running to drive more sales.

Woroch noted that Tucows also had a one-time portfolio sale in Q1 2022, which made the comparable harder.

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