.IE Annual Report 2022

The directors present their report and the financial statements for the financial year ended 31 December 2022. 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. Results and Dividends The profit for the financial year, after providing for depreciation, taxation and the realised and unrealised gains or losses on financial investment amounted to €217,281 (2021 – €489,084). No dividends are payable as the company is limited by guarantee and does not have a share capital. Business Review Turnover increased by 4.6% to €4.31 million (2021 – €4.12 million). Volume growth in domains returned to 2019 pre-pandemic levels, as digital transformation initiatives slowed following the removal in January 2022 of pandemic-related restrictions. As a consequence, year-on-year new registration numbers decreased by 22.6%, after a 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 was a reduction of 842 (-0.3%), compared to net growth of 20,339 in 2021. Administrative expenses increased by 6.3% from €3.74 million to €3.98 million in 2022. Technical Services expenditure decreased by 11.5% compared to the prior year, which reflected the 2021 costs of preparations for certification and improvements in cyber security 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 decreased by 20%, largely attributed to lower take-up of supports for channel registrars in 2022 in relation to joint promotion initiatives to grow and develop the .ie namespace. Financial investment continued for the .IE Digital Town awards programme, which provided €100,000 in prize money to the winning towns, in recognition of their digital achievements online. There were also reductions under some marketing and promotion cost headings, following the completion of the .IE rebranding project in 2020. Employment costs increased by 21.7% in 2022 to €2 million reflecting the recruitment of new skill sets to implement the company’s new strategic initiatives, increased market rates associated with staff churn and cost of living salary increases for all staff. The deferred revenue on the balance sheet was largely unchanged, increasing by just 0.3% in 2022, to €2.99 million (2021 – €2.98 million). This is because the invoiced value of registration fees decreased by 1.1%, reflecting an 85% renewal rate on the opening database and a reduction of 29% in newly created registrations to 48,168 in 2022 (compared to 65,198 in 2021). The financial position of the company at 31 December 2022 is solid with Members’ Funds of €5.3 million. The market value of financial investments at 31 December 2022 is €5.76 million (2021 – €4.63 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 on physical movement of people, goods and service provision; new EC cyber security regulations which are designed to address the dramatic increase in cyber attacks by bad actors; and; the ICANN proposals for ongoing international expansion in the number top-level domains, which will 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. In technical terms, the company’s infrastructure and portfolio of services is up-to-date, matching the top ccTLD’s in the EU. Heretofore, the company has taken a national leadership role by introducing registry lock, secure DNS, secondary market, IDN’s, rule relaxations for geographic and place names, and the liberalisation of rules for new .ie domains. Financial Statements .IE is the trading name of IE Domain Registry CLG / Annual Report & Review 2022 29 Directors’ Report for the financial year ended 31 December 2022