With domains under management growing 67% to over 1.32 million as of 31 December 2017, compared to 800,000 12 months earlier, Minds + Machines announced they have shown their first annual profit.
As MMX anticipated when they released their interim results in September, MMX enjoyed a strong second half of the year building on the foundations laid in the first half. Billings for the second half of the year amounted to approximately $10 million (compared with $5.6 million in H1) resulting in total billings of approximately $15.6 million for the full year thereby enabling MMX to achieve its first year of profitability as an operating business.
“To have transformed the Company from a loss-making business to a profitable one on an ongoing basis within 24 months is an achievement the whole team should be proud of,” said Toby Hall, CEO of MMX. “2018 has started positively and I look forward to updating shareholders in April with our strategy for building on this profitable platform and delivering value to shareholders.”
As of today, there are 1.367 million domains under management across the 27 new generic top level domains managed by MMX. The largest of these is .vip with 907,000 DUM followed by .work (187,000) and .london (85,000), according to nTLDstats.
The mix of the billings has also continued to improve with renewal revenue now accounting for approximately $5.6 million (2016: $3.8 million). Importantly, recurring income for the first-time has exceeded fixed operating costs which have been reduced to below $5.5 million for 2017 (2016: $6.5 million).
As a result, with billings in line with market expectations, MMX expects EBITDA to be slightly ahead of market expectations, with profit being further boosted by $2.1 million through monies received by the Company from two contested TLD auctions that took place during 2017.
MMX has also continued to strengthen its balance sheet in the year. Net cash at 31 December 2017 had improved to $15.9 million (31 December 2016: $15.3 million) despite settling $3.1 million of balance sheet liabilities in the year associated with contracts restructured in 2016.
The strategic review continues to progress and the benefits of consolidation in the industry remain. Whilst the longevity of the discussions has been at times frustrating, it is hoped that the process can be brought to a successful conclusion by the time of the full year results which are expected to be released in April 2018.