ICANN Registers .CASHCOW with New gTLDs

This week, while everyone is preparing for the ICANN meeting to be held next week in Toronto, the June 30, 2012 Audited Financial Statements for ICANN were released.  Its clear, ICANN registers .cashcow with New gTLDs program.

ICANN New gTLDs Cashcow

With over 1,900 gTLD applications at $185,000 each, one would expect some significant figures and these financials do not disappoint.  Some of the highlights:

  • Cash and cash equivalents $383,018,000 ($383 million dollars).  An increase of $354 million over 2011.
  • Deferred revenue $369 million, which comes as no surprise, due to the gTLDs application process resulting in an increase of $358 million over 2011.
  • Total revenue remains relatively consistent over 2011 with a modest 4.5% increase.
  • Total expenses increased by 17.3% ($70.3 billion in 2012 and $60 million in 2011) with the largest increase due to Professional services with a 51% increase.

As per the notes to the financial statements:

New gTLD application fees are recognizable ratably as direct application processing costs are incurred.  The rate of recognition of the fees is determined by the proportion of the direct costs incurred versus the total costs.  The New gTLD application fees are refundable at a diminishing rate according to the processing phase in which the request for refund occurs.   

ICANN.  (2012). Report of Independent Auditors and Financial Statements for Internet Corporation for Assigned Names and Numbers. June 30, 2012 and 2011.   Retrieved from http://www.icann.org/en/news/announcements/announcement-2-08oct12-en.htm

By the time the first round of the gTLD applications are processed, $358 million in deferred revenue relating to the new gTLDs will be recognized.  The 2013 budget provides additional insight by projecting that 93% of all applications are to be reviewed and released by June 30, 2014.  This would result in ICANN recognizing revenue of $333 million over the next two years.  As the fiscal year ends on June 30th, this implies that 45% of all of the applications will be complete by June 30, 2013.

Additional gTLD insights from the 2013 Operating Plan and Budget include:

  • Projected revenues of  $153.8 million relating to 2,000 new gTLD applications – actual was 1,930.
  • Estimated refunds or rejections are estimated at 8.9% of all application revenues.
  • Budget reflects three years to process all of the first round of applications with 46% and 47% in years one and two respectively and 7% in fiscal year 2015.
  • gTLD variable costs of $65 million (93.6%) in 2013 with a total of $142 million over three years (91% of all gTLD expenses).
  • Fixed costs relating to gTLD applications are $4.4 million (6.4%) in 2013.  $14 million (9% of all gTLD expenses) over the three year period.
  • Each application fee of $185,000 contributes $25k to a maximum of $29.9 million for the recovery of the prior year’s development costs.  All development costs are expected to be recovered once 1,196 applications are completed. These funds are put into Reserve Fund.

With an estimated $233 million in projected revenues for 2013, ICANN will undoubtedly enter into the top 100 not-for-profit organizations in the United States.

Which leaves me wondering when the next round of cash cows will be brought into greener pastures…


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