Sedo Holding AG published its Annual Report for the year 2012 today that reveals that while overall revenue is up by 6.6%, sellers and consequently buyers are leaving the Sedo domain platform for other services.
In the 2012 fiscal year, the Sedo Holding Group grew its sales revenue by 6.6% to a total of € 132.7 million (previous year: € 124.5 million). While the Affiliate Marketing segment boosted sales revenue by 17.7%, the Domain Marketing segment saw a decrease in sales, and Sedo blames the related drop in earnings, to the overall downtrend of the domain parking market. I don’t think that is the case. People are leaving Sedo because they are not satisfied with the service.
In the Domain Marketing segment, sales continued to decline, with € 31.7 million being generated in the 2012 fiscal year, compared with € 38.6 million in the previous year. (down 17.9%)
The number of domains tradable on the platform fell to 14.9 million as of December 31, 2012, following 15.7 million as of December 31, 2011. (down 5%)
In performance-based Domain Parking, around 3.8 million domains were available for marketing as of the balance sheet date (December 31, 2011: 4.4 million). (down 14%)
The 14% decrease in domain parking and the 17.9% decrease in domain sales is a result of the best domains leaving the Sedo parking platform.
As of December 31, 2012, the Sedo Holding AG share price stood at € 1.37, compared with € 2.65 at the end of the previous year. Reporting a 48.3% decline, the share consequently underperformed the overall market (DAX: +29.1%). The market capitalization reduced correspondingly from € 80.7 million at the end of 2011 to € 41.7 million at the end of the 2012 fiscal year.
For the 2013 fiscal year, the Management Board expects sales revenue to grow by around 10% compared with the 2012 fiscal year (2012 sales revenue: € 132.7 million), which is to be driven primarily by good growth in the Affiliate Marketing segment, and earnings before taxes between € 4.0 million and € 5.0 million. Based on an assessment of the current market, the management anticipates rising revenue and earnings contributions in the 2014 fiscal year.