LONDON (Alliance News) - Minds + Machines Group Ltd on Tuesday said it experienced significant billings growth during 2015 as it moves into 2016 with hopes of achieving "operational profitability".
The owner and operator of Internet domains said standard name billings totalled USD2.7 million in the last quarter of 2015, rising from only USD940,000 in the third quarter, while premium name billings soared quarter-on-quarter to USD1.5 million from USD480,000.
"During the fourth quarter of 2015, the company saw significant unaudited billings growth in both standard and premium names as a result of the company's ongoing transition into a sales-led business, the launches of .law, .abogado and .miami, and the first-year renewals of .london previously reported," said the company.
Total billings for the full year rose 57% to USD7.9 million from USD5.0 million in 2014, broken down into standard name billings of USD4.9 million and premium name billings of USD2.9 million. However, additional gross receipts from one-off private generic top-level domain auctions (gTLD) fell significantly to USD9.2 million from USD37.5 million.
Minds + Machines stressed that billing figures should not be viewed as revenue for the year, as payment is typically collected at the time of invoice with revenue then recognised over the term of a domain, highlighting that revenue in 2014 only totalled USD1.9 million despite billings totalling USD5.0 million.
At the end of 2015, Minds + Machines had 278,523 domains under its management, an increase of 28% from the 216,820 domains being managed at the end of September and a huge rise from the 108,000 domains being managed at the end of 2014.
"We have seen exceptional growth in the new gTLD market in 2015 and we are pleased that our emphasis on sales and commercial partnerships has allowed us to significantly grow our domains under management while delivering on a range of key revenue metrics as we drive towards crossing over into operational profitability in 2016," said Antony Van Couvering, chief executive of the company.
"Looking forward, we anticipate setting up a range of sales and marketing initiatives that will allow us to significantly increase domains under management, while protecting our long-term revenue streams in each of our top-level domains," he added.
Van Couvering said the company's entry into the Chinese market has the potential to produce a "step-change" in its market penetration, with significant growth in China during the second half fuelling most of the growth in the general gTLD market.
Minds + Machines announced a partnership with two companies late last month to help the company break into the Chinese market, selecting Chinese firm ZDNS as its local infrastructure partner and Allegravita LLC to advise the company on its market entry strategy.
Management plan to visit China during February, and the company expects to make its first domain sales in China before the end of the first quarter of 2016 by initially offering .beer, .fashion, .fit, .law, .wedding, .work and .yoga, before launching .VIP in the second quarter.
Average revenue per standard name rose to USD15.54 at the end of 2015 from USD12.41 at the end of September, hitting the lower end of the company's guidance range of USD15 to USD22 for the year.
Average revenue per premium name at the end of the year was USD241.73 compared to only USD125.85 at the end of September - ahead of the company's guidance range of USD200 to USD225 for the year.
Minds + Machines said it will continue to focus on improving the efficiency of its operating structure and said management is continuing to talk to third-party partners to drive greater cost efficiencies and scalability.
Cash at the end of 2015 stood at USD34.7 million, and the company also provided an update on its share buyback programme launched in September. Minds + Machines said it has purchased 72.9 million shares to date at a cost of GBP6.3 million, and it will continue to repurchase shares "as and when its sees value in doing so", it said.
Minds + Machines originally said it planned to spend up to GBP15.0 million on repurchasing shares over a 12 month period, and on Tuesday clarified that it will buy a maximum of 125.4 million shares in total under the programme, which represents around 15% of the company's issued share capital, or about GBP8.6 million. That suggests the company will purchase up to a maximum of 52.5 million more shares over the next nine months, worth about GBP4.0 million.
Minds + Machines shares were up 2.8% to 7.58 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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