Sedo’s Q1 2013 report: parked domains up 8%, parking revenue down 14.1%, domains at sedo up 11.4%

Sedo Holding AG published its first quarter 2013 report today that reveals that overall revenue is up by 7.3% but parking revenue is down 14.1%.

The number of domains tradable on the platform rose to 16.6 million as of March 31, 2013 compared with 14.9 million as of December 31, 2012. That is a 11.4% increase.

From this pool, around 4.1 million domains (December 31, 2012: 3.8 million) are parked at Sedo. That is an 8% increase.

Here is what the report says:

The Sedo Holding Group grew its sales revenue by 7.3% during the first three months of the 2013 financial year to reach €36.9 million (previous year: €34.4 million). This growth was particularly driven by the Affiliate Marketing segment, which can look back on a successful first quarter due to its internationalization and major customer strategy. The Domain Marketing segment remained confronted by the challenges of a falling market and growing competition, by contrast, as well as new and price-aggressive providers, which is why the revenue decline continued, as expected.
In the Domain Marketing segment, €7.3 million was generated in the period under review, a fall of 14.1% compared with the previous year’s €8.5 million of revenue. The number of domains tradable on the platform rose to 16.6 million as of March 31, 2013 compared with 14.9 million as of December 31, 2012. From this pool, around 4.1 million domains (December 31, 2012: 3.8 million) were available as of the reporting date for marketing in the area of performance-based domain parking. Both revenue and the related earnings decline within Domain Marketing reflect the overall fall in the domain parking market. The domain trading area remained at the previous year’s level, by contrast.
In the Affiliate Marketing segment, on the other hand, revenue reported marked growth of 14.7% during the first three months of 2013, rising from €25.9 million to €29.7 million. The number of partner programs increased by 3.1% to 2,961, and the number of connected websites was up by 0.9% to 566,000. This growth is attributable to the strategy change (expansion of the major customer business and our internationalization drive), which had already been introduced in 2012, as well as specific improvements in the operating business. Further progress was achieved especially in the quality leadership that is important for major customers in this context: significant added value was generated for our customers with our quality review of the Affiliate Marketing technical platform. In parallel with this, we started to develop a new external profile that is set to be launched in the second quarter of 2013. We also achieved major progress with the integration of our Dutch subsidiary Cleafs B.V. that we acquired last year. The migration of Cleafs customers to the modern and efficient affilinet platform will be concluded by the third quarter of this year.
Despite the positive revenue and earnings trends in Affiliate Marketing the effects of the fall in Domain Marketing couldn’t be offset at Group level as expected, which means that overall earnings figures in the period under review were below the previous year’s level. Specifically, earnings before interest, taxes, depreciation, amortization and write-downs on domains (EBITDA) fell from €2.4 million in the previous year to €1.7 million. Equally, earnings before taxes (EBT) were down from €2.2 million in the previous year to €1.5 million. Earnings per share amounted to €0.03, following €0.04 in the previous year.

We are within the scope of our budgets with the revenue and earnings growth trends that we achieved in the first quarter of 2013, and we continue to expect revenue growth of around 10% of the full 2013 year compared with the 2012 financial year (2012 revenue: €132.7 million), and earnings before taxes of between €4.0 million and €5.0 million – driven especially by the Affiliate Marketing business.