Tucows sees rebound in expired domain sales

Q3 was strong for expired domain sales.

Tucows (NASDAQ: TCX) reported earnings after the market closed yesterday, including solid year-over-year performance in its domain name business.

Domain name revenue increased 6% year over year to $55.0 million in Q3.

Domains under management were up slightly to 24.6 million, including domains on other registrars’ accreditations that are managed by Tucows.

At the same time, new transactions were down 2% year over year, although stable compared to the previous quarter.

Of course, passing along wholesale price increases might have something to do with this. But Tucows also said gross margin was $19.8 million in Q3, up 8% from the same quarter last year.

A particularly bright spot was the Value-Added Services bucket, where Tucows puts the revenue it generates from auctioning expired domain names. It was up 26% year over year to $5.2 million. The company said it was helped in part by strong sales from the expiry stream. Of course, expiry sales revenue is non-recurring.

The domain business continues to be a bright spot for Tucows, which announced drastic personnel cuts last week in its fiber broadband service.