IE-Annual-Report-2023

Financial Statements The directors present their report and the financial statements for the financial year ended 31 December 2023. Principal Activity The company was incorporated on 16 November 1999 and commenced to trade on 1 July 2000. The principal activity of the company is the registry for .ie internet domain names. The company is the country code top level domain (ccTLD) Manager for the .ie namespace and is designated by the Irish government as an operator of essential services (OES). Results and Dividends The profit for the financial year amounted to €86,100 (2022 – €217,281), after providing for depreciation, taxation, the unrealised gains on financial investment and setup costs associated with implementing the company’s new strategic initiatives, within the parameters of the corporate reserves management policy. No dividends are payable as the company is limited by guarantee and does not have a share capital. Business Review Administrative expenses increased by €865k (21.8%) from €3.98 million to €4.84 million in 2023, in line with the company’s strategic plan and operational plans for 2024: ▶ Technical Services expenditure increased by €215k (32.7%) compared to the prior year, which reflected the ongoing costs of ISO compliance and improvements in cybersecurity defences and preparations for EU regulatory expansion. The company continued to provide funding for policy responses to technical abuse that uses the DNS. ▶ Marketing and promotion expenditures increased by €132k (27%), largely attributed to a niche advertising campaign and general media coverage for our programmes and reports. Financial investment continued for the .IE Digital Town awards programme, as part of a four-year €1 million programme to help digitalisation in Ireland’s towns. ▶ Employment costs increased by €469k (23%) in 2023 to €2.51 million reflecting a 17% increase in the number of employees during the year, being: the recruitment of new skill sets to implement the company’s new strategic initiatives; increased market rates associated with staff churn; and inflation-related cost of living salary increases for all staff. Turnover decreased by €95k (2%) to €4.21 million (2022 – €4.31 million). Activity in domains returned to 2019 pre-pandemic levels, as digital transformation initiatives slowed following the removal in January 2022 of pandemic-related restrictions. Year-on-year new registration numbers increased by 0.6%, after record years of new registrations in 2020 and 2021. The sales channel is managed by the company’s contracted accredited registrars, who are selected by individual domain holders to manage .ie domains on their behalf and provide other services such as hosting and email management. When non-renewals are considered, the net change in the number of .ie domain names registered in 2023/2022 was a reduction of 1,018 (-0.31%), compared to a net reduction of 842 in 2022/2021 and net growth of 20,339 in 2021/2020. The deferred revenue on the balance sheet was largely unchanged, increasing by just 2.2% in 2023, to €3.05 million (2022 – €2.99 million). This is because the invoiced value of registration fees decreased by 1%, reflecting an 85% renewal rate on the opening database and an increase of 0.6% in newly created registrations to 48,458 in 2023 (compared to 48,168 in 2022). The financial position of the company at 31 December 2023 is solid with Members’ Funds of €5.4 million. The market value of financial investments at 31 December 2023 is €7.66 million (2022 – €5.76 million). Future Developments The company continues to monitor international developments impacting ccTLD registries, particularly: the consequences of the slowdown in the rate of new digital adoption after two years of digital acceleration brought about by the Covid-19 pandemic restrictions; new EC cybersecurity regulations which are designed to address the dramatic increase in cyber-attacks by bad actors; private equity driven consideration of service providers and; the ICANN proposals for ongoing international expansion in the number top-level domains, which may increase choice for consumers, but bring more intensive competition amongst registries. These developments may result in some disruption in the global domain name market, and will also represent a challenge for data protection managers, trademark and patents holders, brand managers and the owners of intellectual property rights. Directors’ Report for the financial year ended 31 December 2023 IE Domain Registry CLG t/a .IE / Annual Report & Review 2023 29