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I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4
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LEGAL DISCLAIMER
This overview is furnished solely for the purpose of providing you information about Rightside Group, Ltd. (the “Company”). The overview is only intended for the use of the
person to whom it is given and it is not to be reproduced or redistributed.
Under no circumstance shall the overview constitute or form part of an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, securities of the Company in
any jurisdiction in which such offer, solicitation or sale would be unlawful.
You should not construe the contents of the overview as investment, tax, legal, accounting, regulatory, financial or other advice. The overview does not purport to be all inclusive
and does not take into account your investment objectives or taxation, legal, accounting, regulatory or financial situation or particular needs. You are solely responsible for
forming your own opinions and conclusions as to such matters and for making your own independent assessment of the information contained in this overview
Certain statements in the overview are forward-looking statements, based on the Company’s current expectations, assumptions and estimates and that involve risks and
uncertainties. Any statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position;
historical results that may suggest ongoing trends for our business; the timing of the spin-off; any expectation of greater revenue, operating efficiencies or strategic benefits from
the spin-off; market opportunities with respect to any general Top Level Domains (gTLDs); any growth or change of the domain name or domain name services markets or our
ability to capitalize on such growth or change; the demand for premium and value-added domain services; the unit economics and demand for gTLDs; the viability of our
technology; our relationships with industry partners; our business strategy and our objectives for future operations (including, without limitation, statements to the effect that the
Company “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends” or “expects,” and similar expressions) are intended to be identified as forward-looking
statements. Actual results could differ materially and adversely from those projected or anticipated in the forward-looking statements as a result of a number of risks and
uncertainties pertaining to our business including those set forth in our Form 10 filed with the U.S. Securities and Exchange Commission on July 14, 2014. The statements in the
overview speak only as of the date hereof and the Company undertakes no obligation to update them after the date hereof.
Market and competitive position data in this overview has generally been obtained from industry publications and surveys or studies conducted by third-party sources. There are
limitations with respect to the availability, accuracy, completeness and comparability of such data. We have not independently verified such data and can provide no assurance
of its accuracy or completeness. Certain statements in this overview regarding the market and competitive position data are based on our internal analyses, which involve certain
assumptions and estimates. These internal analyses have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are
accurate.
None of the Company, their respective affiliates or any of their respective employees, directors, officers, contractors, advisors, members, successors, representatives or agents
makes any representation or warranty as to the accuracy or completeness of this overview, and shall have no liability for any statements (expressed or implied) contained in, or
for any omissions from, this overview or any other written or oral communications transmitted to you in the course of your evaluation of this overview.
The Company has filed a Form 10 with the SEC in connection with its proposed spin-off from Demand Media. You may access the Form 10 and other documents we file with the
SEC for free by visiting EDGAR on the SEC website at www.sec.gov. The information contained in this presentation is qualified in its entirety by reference to such documents.
3
INTRODUCTION
TARYN NAIDU
CEO
TRACY KNOX
CFO
4
OVERVIEW OF RIGHTSIDE SPIN-OFF
o Rightside Group, Ltd. (“Rightside” or the “Company”) currently conducts its business operations as a wholly owned
subsidiary of Demand Media
o Demand Media has announced the planned spin-off of Rightside as a separate public company
o The spin-off is currently expected to be completed on August 1, 2014
o The stock is expected to be in the when-issued market on or shortly prior to the record date for the distribution
o After the spin-off, Rightside will operate as an independent, publicly traded company
5
SPIN-OFF RATIONALE
o Capitalize on unique positioning as the only major pure play domain name services company with registrar and
registry businesses, each at scale
o Provide a clearer story for investors looking to invest in internet subscription services
o Allow for management to focus exclusively on domain name services goals and objectives, which requires a tailored
strategy given the different growth cycle of the gTLD opportunity
o Facilitate acquisitions / business development deals using dedicated resources and capital allocation – in line with
business / financial needs
RIGHTSIDE OVERVIEW
7
UNIQUE END-TO-END, VERTICALLY INTEGRATED
REGISTRAR-REGISTRY PLATFORM OPERATING AT SCALE
REGISTRY
(SUPPLY)
REGISTRAR
(DISTRIBUTION)
COMPLEMENTARY
PRODUCTS &
PREMIUM DOMAIN
SERVICES

Consumers
O&O Retail Registrar O&O Wholesale Registrar
END-TO-ENDDOMAINSERVICES


3rd-Party Registry
+
» In-House Brokerage Team
» Auction Services
» Third-Party Distribution Channels
O&O Registry
3rd-Party Registrar
» Website Builder Tools
» Email Hosting
» Website Security Services
Through
Resellers
8
RIGHTSIDE BUSINESS OVERVIEW
o Leading provider of domain name services
⟫ Largest wholesale Internet domain name registrar
⟫ Second largest registrar overall
o Major player in the historic expansion of general Top Level
Domains (gTLDs) with 30 gTLDs in the current portfolio and
an interest in 67 additional gTLD applications
o Unique end-to-end, vertically integrated registrar-registry
platform operating at scale
o Recurring revenue financial model
o Opportunity for strong margin expansion as Registry
business continues to scale
o Experienced management team with long history in the
domain name industry
Rightside’s comprehensive domain name services platform touches the entire life cycle of a domain name
10.6
12.3
13.6
14.8 15.2
2010 2011 2012 2013 Q1 2014
Number of Domains Under Management (Millions)
LARGE CUSTOMER BASE
>16 MILLION // domain names under management
>2.5 MILLION // retail domain names registered
>20 THOUSAND // active resellers
>250 THOUSAND // customers
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LARGE PORTFOLIO OF OWNED AND OPERATED (O&O) gTLDs
ACTIVE
APPLICATIONS
TO BE
RESOLVED
EXPECTED
Over 40
O&O
gTLDs
61
In partnership
with Donuts
6
Standalone
.Mortgage
.Degree
.Rehab
Pay Per Click Biz. Horizontal
.Gives
.Market
.Kaufen
Horizontal ConsumerSmall Business Vertical
.Software
.Haus
Professional
.RIP
.Lawyer
.Army
.Engineer
.Dentist
.Vet
.Attorney
.Airforce
.Navy
10
THE NEW gTLD PROGRAM PRESENTS NEW
OPPORTUNITIES FOR REGISTRY OPERATORS
Legacy gTLDs (e.g., .COM) New gTLDs (e.g., .NINJA)
Owned Distribution

Third Party Distribution
 
Ability to Variably Price Domains
(Premium Priced) 
Contractual Pricing Flexibility

gTLD Portfolio Diversification

11
STRONG EARLY ADOPTION VALIDATING THE NEW gTLD
OPPORTUNITY
EARLY GA PERFORMANCE TRENDS ARE STRONG
.NINJA
SUNRISE
» Launch Date: 2/19/2014
» Domains Reg.: 68
LANDRUSH / EAP
» Launch Date: 4/30/2014
» Domains Reg.: 198
GENERAL AVAILABILITY (GA)
» Launch Date: 5/28/2014
» Days in GA (1): 44
» Domains Reg. To Date: 11,856
NEW gTLD PROGRAM STATS
» 255 gTLDs launched into Sunrise and / or GA
» Over 150 registrars selling new gTLDs
» Over 1.5 million registrations since first GA launch
» Estimated revenue of over $60 million to date
Source: nTLDstats.com
(1) As of 7/11/14.
(Thousands)
0
200
400
600
800
1,000
1,200
1,400
1,600
2/7 2/21 3/7 3/21 4/4 4/18 5/2 5/16 5/30 6/13 6/27 7/11
Registrations to Date Weekly Registrations
12
RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON
THE NEW gTLD PROGRAM
Potential to be the only major domain name services company with both registrar and registry businesses each at scale
REGISTRY
REGISTRAR
13
$9.84 $9.85 $9.81 $9.98 $10.00
2010 2011 2012 2013 Q1 2014
RECURRING REVENUE FINANCIAL MODEL (*)
STEADY UNIT ECONOMICS
(1) Average revenue per domain is calculated by
dividing registrar services revenue for a period by
the average number of domain names registered in
that period. The average number of domain names
is the simple average of the number of domain
names at the beginning and end of the period. The
average revenue per domain name for partial year
periods is annualized.
Annual Revenue per Domain (1) Registration Renewal Rates
71%
74% 72% 70%
75%
2010 2011 2012 2013 Q1 2014
(*) These data do not conform to the data reported by Demand Media in its public filings due to differences in company rollups.
LARGE SUBSCRIPTION
REVENUE BASE
68% 69%
73%
76%
83%
2010 2011 2012 2013 Q1 2014
Subscription as % of Total Revenue
RENEWAL DRIVEN REVENUES
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ILLUSTRATIVE MARGIN POTENTIAL FROM NEW gTLDs
.COM on
Rightside
Registrar
.GURU on
Rightside
Registrar
.SOCIAL on
GoDaddy
.SOCIAL on
Rightside
Registrar
Annual Revenue per Domain $9 ~$30 $20 ~$30
Registration Fees Paid
to the Registry
~$8 $20 $0 $0
Registry Verisign Donuts Rightside Rightside
Direct Profit per Domain (1)
$1 $10 $20 $30
Direct Margin (2)
11% 33% ~100% ~100%
Fair………....…..…….…..Better………………………Best
(1) Direct profit defined as domain registration revenue less registration fees paid to the registry
(2) Direct margin defined as direct profit divided by revenue
New gTLD program offers potential for strong margin expansion
(For illustrative purposes
only, does not demonstrate
actual revenue potential)
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EXPERIENCED MANAGEMENT TEAM
Taryn Naidu CEO
Tracy Knox CFO
Wayne McLaurin CTO
Rick Danis General Counsel
David Ryan GM, Registry
Steve Banfield GM, Registrar
Matt Delgado SVP, Operations
Kelly Johnson SVP, Marketing
DOMAIN NAME
MARKET OVERVIEW
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RIGHTSIDE SERVES A LARGE GLOBAL MARKET
o Over 270MM domain names registered as of
December 31, 2013
» Over 7% increase YoY
» 9% CAGR since 2008
o Nearly 120MM ccTLD domain names
registered
» 12% YoY growth (more than 2x the growth of
.com & .net)
Source: Verisign Domain Name Industry Briefs and management estimates
REGISTERED DOMAIN NAME VOLUME (Millions)
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013
.com / .net ccTLDS other TLDs
ESTIMATED OVER 85 MILLION NEW DOMAIN
NAMES REGISTERED IN 2013
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INCREASING ADOPTION BY Small Business
FUNDAMENTAL SHIFT IN CONSUMER BEHAVIOR DRIVING
ONLINE DOMAIN GROWTH
Global Unique Internet Buyers (Millions)
Sources:
(1) IDC Worldwide New Media Market Model (May 2014).
(2) Wakefield Research (April 2013).
49%
49% OF SMALL BUSINESSES WITH A
WEB PRESENCE ARE NOT COMPLETELY
SATISFIED WITH THEIR DOMAIN NAME (2)
28.3
80.2
2009 2013
Global Hours Spent Online – Monthly (Billions)
MORE CONSUMERS ARE ONLINE (1) … … AND SPENDING MORE TIME ONLINE (1)
566
1,067
2009 2013
55%
55% SMBs SURVEYED BELIEVE THAT
THEY HAVE LOST CUSTOMERS DUE TO
LOW QUALITY DOMAIN NAMES (2)
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EXISTING DOMAINS
NEW gTLD
OPPORTUNITIES
NEW gTLDs OFFER MORE HIGH QUALITY & SPECIFIC DOMAINS
ICANN is expanding the universe of available gTLDs
FCBarcelona.com
zephyrsf.com
10bestwebsitehosting.com
kellsirish.com
sfcityattorney.org
newyorkcitylawyerlocator.com
Barcelona.futbol
sanfrancisco.realestate
webhosting.reviews
kellsirish.pub
sfcity.attorney
findNYC.lawyer
New gTLDs provide unprecedented
options and opportunities for
businesses and consumers to brand
their online presence and connect with
their audienceso More descriptive suffixes
o Better convey topic area or purpose
o Better connect with intended audience
o Inventory of high quality domain names
increases dramatically
o Allow registrants to find and register
domain names best suited to their
needs
o Allow domain names in other non-
English languages
o Audiences will be able to navigate
using their native language
o New business models are developed
that capitalize on the capabilities
presented by new gTLDs for enhanced
online identity and navigation
DOMAIN NAMES IN NEW LANGUAGES NEW WAVE OF CREATIVITY
MORE NATURAL
CATEGORIZATION SCHEME
INCREASED HIGH QUALITY
DOMAIN INVENTORY
RIGHTSIDE AND THE NEW
gTLD PROGRAM
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RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON
THE NEW gTLD OPPORTUNITY
» End-to-end domain name services platform enables Rightside to market, distribute and offer services
at every stage of a gTLD’s life cycle
» Large owned and operated portfolio of new gTLDs drives new opportunities
» Existing platform enables easy distribution of O&O and other gTLDs (more than 150 gTLDs)
» Complementary product offerings drive usage of new gTLDs
» Expertise in the identification and distribution of premium priced domain names
» Long operating history and industry expertise has enabled strong relationships with ICANN and other
industry partners
22
COMPREHENSIVE SUITE OF PRODUCTS & SERVICES
REGISTRY
» Plans to offer one of the largest
portfolios of new gTLDs
» 30 new gTLDs currently in portfolio
» 67 other active applications to be
resolved
REGISTRAR
» #1 Wholesale Registrar
» #2 Registrar Overall
» 20k+ resellers & 250k+ customers
» 16M+ domains under management
» Registrant domain privacy protection
» Email hosting
» Website builder tools
» Website hosting plans
» Marketing / promotional services
» Third-party website security services
» Experienced brokerage team
driving sales and distribution of
owned and third party premium
domain names
» Premium domain name expertise
to identify and price premium
domain names for new gTLDs
OFFERINGS
» Premium domain names
» Auction services
» Monetization services
DOMAIN NAME REGISTRATIONS PREMIUM DOMAIN SERVICES VALUE ADDED SERVICES
23
RIGHTSIDE – REGISTRAR DISTRIBUTION AT SCALE
WHOLESALE SOLUTIONS DIRECT TO CONSUMER PLATFORM
o Direct customer relationships
o Ability to control purchase path
» E.g.: Feature O&O gTLDs at renewal
o Incentivize through pricing and packaging
o Ability to influence offerings through API
» Feature O&O gTLDs in purchase path
o Incentivize through pricing and packaging
CUSTOMERS SERVED>250K
>2M NAMES REGISTERED
ACTIVE RESELLERS>20K
>14M DOMAINS UNDER MANAGEMENT
24
RIGHTSIDE REGISTRY PLATFORM MAKES IT EASY FOR
REGISTRARS TO DISTRIBUTE RIGHTSIDE gTLDs
» DPML
» Extended claims
» Tiered pricing
» Others
» SRS Module
» DNS Module
~200 gTLDs
» Built for Registrars
» Single technical certification
» 24/7 OT&E test scheduling
o Proven Platform:
» Over 150 gTLDs
launched on Rightside
back-end to date, across
Sunrise, Landrush/EAP
and GA
» All major registrars
distributing Rightside
gTLDs
o Distribution Efficiencies:
Registrars already plugged
in are fast tracked through
the onboarding process for
all registries leveraging
Rightside back-end
» 1 Bank Account for all gTLDs
» Pooled Registry connections
» Master Service Agreement
CORE CUSTOMIZABLE ADD-ONS
SCALABLE REGISTRY PLATFORM
25
DATA-DRIVEN APPROACH TO IDENTIFY gTLD INVESTMENTS
o .ATTORNEY
o .ENGINEER
o .ACTOR
o .DENTIST
o Over 400K ABA members
o Over 400K IEEE Members
o Over 2.4M actors listed on IMDB
o Over 150K dentists in the ADA
OPPORTUNITIES ADDRESSABLE MARKETS
o .IMMOBILIEN
o .KAUFEN
o 1.5MM houses available for sale or rent in Germany
o Nearly 500K retail stores in Germany and Austria
o ~285k domain names containing 'consulting'
o ~225k domain names containing ‘reviews'
o ~120k domain names containing ‘software'
o .CONSULTING
o .REVIEWS
o .SOFTWARE
o Consultants
o Review Sites
o Software Professionals
o .DEMOCRAT
o .REPUBLICAN
o Over 40MM Registered Democrats
o Over 30MM Registered Republicans
o Over 500K elected officials
RIGHTSIDE gTLDs
o 4.5MM Army veterans
o 650K active Air Force personnel
o 580K active Navy personnel
o .ARMY
o .AIRFORCE
o .NAVY
26
RIGHTSIDE: A LEADER IN THE NEW gTLD PROGRAM (1)
(1) Registration volume and revenue estimates as of July 11.
(2) Rightside revenue includes estimates for Rightside gTLD sales, new gTLD sales at eNom and Name.com and fees in connection with our registry back-end platform.
(3) Registrar channel distribution defined as the .COM market share (by registrar) that is distributing new gTLDs. For example, if eNom is ~10% of the .COM market and because eNom is distributing new
gTLDs, that 10% is part of the 90%+.
New TLD
Program
Rightside
Registry
Platform (2)
Rightside
Registrar
Rightside
Registry
Rightside
Total
TLDs in
Sunrise / GA:
255 / 161 152 / 108 207 / 156 15 / 9 207 / 156
Registrar
Channel
Distribution (3):
90%+ 90%+ N/A 90%+ 90%+
Domain
Registrations:
1.5m 758k 153k 36k 181k
27
THE NEW gTLD PROGRAM HAS CREATED REVENUE
GROWTH OPPORTUNITIES FOR RIGHTSIDE
1. Domain name registrations in Rightside O&O gTLDs
o Registration revenue driven by O&O and third party registrars
2. Domain name registrations on Rightside O&O Registrar
o Growth in registrations driven by O&O and third party gTLDs
o Average price of a domain name in a new gTLD is approximately 2x that of .com
3. Additional opportunities that take advantage of Rightside registry and
registrar platforms
o Infrastructure
o Value-added Services
o Premium domain names
28
ILLUSTRATIVE POTENTIAL UNIT ECONOMICS
Strong direct margin (1) potential on Rightside’s exclusively owned & operated gTLDs
RIGHTSIDE REGISTRAR
SELLS VERISIGN gTLDs
RIGHTSIDE REGISTRAR
SELLS RIGHTSIDE
REGISTRY NEW gTLDs
RIGHTSIDE REGISTRAR
SELLS THIRD-PARTY
REGISTRY NEW gTLDs
* For illustrative purposes only, does not demonstrate actual revenue
~10 - 15%+
~30%+
~100%
.COM .PHOTOGRAPHY .NINJA
(1) Direct margin defined as Registration revenue less fees paid to the Registry or ICANN.
EXAMPLES OF TLD USAGE
30
FULLY DEVELOPED WEBSITES
PERFORMLY.SOCIAL – A SOCIAL MEDIA ROI
SOFTWARE SITE FROM MEDIABRANDS
VIVA.SOCIAL – SOCIAL CONTENT CREATORS
TORINOFC.FUTBOL – OFFICIAL WEBSITE FOR TORINO FC
BRITISH.REVIEWS – REVIEWS ON ANYTHING
BY BRITISH REVIEWERS
31
FULLY DEVELOPED WEBSITES (CONT’D)
WASH.NINJA (AND CARWASH.NINJA WHICH REDIRECTS
TO WASH.NINJA) – STARTUP CAR CLEANING BUSINESS
SOAP.NINJA – MALAYSIAN SOAP MAKING COMPANY
ANALYZER.NINJA – ANALYZES WEBSITES FOR SEO
STATS, PAGE RANK, SOCIAL MEDIA STATS AND MORE
FINDMY.NINJA – TALENT SEARCH BUSINESS
32
SOCIAL MEDIA AGGREGATION
ANALYSIS.NINJA – A DATA AGGREGATION SITE BY
AVINASH KAUSHIK, DIGITAL MARKETING EVANGELIST AT
GOOGLE
SWIFT.SOCIAL – A SOCIAL NETWORK FOR SWIFT
PROGRAMMING LANGUAGE
MIXTAPE.NINJA – A HIP-HOP ORIENTED SOCIAL NETWORK
CRAFTS.SOCIAL – A WORDPRESS SITE THAT AGGREGRATES
CRAFT TRENDS FROM DIFFERENT SOCIAL NETWORKS
33
WORDPRESS / TUMBLR
THERECIPE.NINJA – A RECIPE SITE USING WORDPRESS
MOBILEGAMES.NINJA – APP REVIEWS FOR MOBILE
DEVICES USING WORDPRESS
PLAYPEN.NINJA – PERSONAL BLOG USING BLOGGER GOTH.NINJA – A GOTH NINJA FASHION BLOG USING TUMBLR
34
TLD REDIRECTS (1)
REDIRECTS TO AN ALTERNATIVE WEBSITE
o firephone.reviews – redirects to Amazon's fire phone page
o premierleague.futbol – redirects to the English Premier League website
o welshliberal.democrat – redirects to Welsh Liberal Democrats website
o manoloblahnik.social – redirects to Manolo Blahnik website
o tax.social – redirects to taxblog.com a wordpress tax blogging site with more than 60,000 members
o cubicle.ninja – redirects to cubicleninjas.com, a web development and creative design company
o michaelflatley.dance and flatley.dance – redirect to michaelflatley.com, the official website of Michael Flatley
o millerlite.pub and lite.pub – redirects to millerlite.com
o selfies.ninja – redirects to wikipedia page for Ninja
REDIRECTS TO SOCIAL MEDIA PAGES
o grainger.social – redirects to Grainger's facebook page
o gateprotect.social – redirects to Gateprotect's facebook page
o internetx.social – redirects to InternetX's (a German ISP) facebook page
o zumbafit.dance – redirects to an instructors page on zumba.com
o pics.ninja – redirects to a personal Google+ page
o trombone.ninja – redirects to a personal twitter page
OTHER REDIRECTS
o Microsoft registered sites (e.g. excel.ninja, msn.dance and xbox.reviews) redirect to a Bing search for the sld (excel, msn, xbox)
(1) TLD redirects offer a better name for a registrant to use in cases where the URL cannot be completely changed. TLDs offer the first point of entry for using / renaming existing sites: registrants have the
opportunity to change their name, but there's a process to go through before a full renaming due to SEO considerations, existing referrals, etc.
35
TLDs REGISTERED BY BRANDS
EXAMPLES OF BRANDS THAT HAVE REGISTERED DOMAINS BUT ARE NOT BEING USED YET
o amazon.consulting – Amazon
o wal-mart.reviews – Walmart
o yahoo.ninja – Yahoo
o foxmovies.reviews – 20th Century Fox
o nike.social – Nike
o hurley.moda – Hurley
o canon.reviews – Canon
o citibank.social – Citibank
o tylenol.reviews – Johnson & Johnson
FINANCIAL OVERVIEW
37
FINANCIAL HIGHLIGHTS
o Consistent, steady historical growth in the core registrar business
o Registry business expected to accelerate growth
o Recurring revenue financial model
o O&O gTLDs create margin expansion opportunity
o Strategic investments to capitalize on the new gTLD opportunity
o Attractive long-term business model
38
CONSISTENT, STEADY GROWTH IN THE CORE REGISTRAR BUSINESS
» Stable and consistent revenue
growth in the core registrar
business continued through 2013
» Overall growth historically impacted
by volatility in the aftermarket
segment
» Overall growth expected to
accelerate as the registry business
continues to scale
($ Millions)
Registry business expected to accelerate growth
$96 $113 $127 $142
$33 $38
11%
17%
13% 12%
12%
2010 2011 2012 2013 Q1 2013 Q1 2014
($ Millions)
$96 $113 $127 $142
$33 $38
$43
$48
$46
$44
$12 $7
$139
$160 $173 $185
$46 $45
8%
15%
8% 7%
(3%)
2010 2011 2012 2013 Q1 2013 Q1 2014
Domain Name Aftermarket
DOMAIN NAME REVENUE & GROWTH
TOTAL REVENUE & GROWTH
39
RECURRING REVENUE FINANCIAL MODEL
Strong recurring revenue with subscription accounting
for 70%+ of total revenue
$96
$113
$127
$142
$43
$48
$46
$44
$139
$160
$173
$185
2010 2011 2012 2013
Subscription Revenue Non-Subscription Revenue
69%
70%
73%
76%
40
STRATEGIC INVESTMENTS TO CAPITALIZE ON THE NEW
gTLD OPPORTUNITY
o Invested ~$18 million in application fees for new gTLDs
o Early onboarding of strategic resellers at lower margin to secure distribution of new O&O gTLDs
o Investment in gTLDs and distribution infrastructure ahead of the new gTLD program
o Investment in infrastructure required for being a standalone public company
o Acquisition of Name.com in Q4 2012 for $18 million
o Hired 33 FTEs to drive the new gTLD program and operations
o Operating expense investment for new registry business of $8.4 million in 2013 and $2.3 million in
Q1 2014
41
FINANCIAL SUMMARY
68%
69%
73%
Note: Please refer to the GAAP to Non-GAAP Reconciliation in the appendix for Adjusted EBITDA reconciliation.
($ Millions) Historical
CY2011A CY2012A CY2013A Q1 2013A Q1 2014A
Domain services $112.6 $126.9 $141.6 $33.5 $37.5
Aftermarket & Other 47.8 46.1 43.6 12.4 7.0
Total Revenue $160.5 $173.0 $185.2 $45.9 $44.6
Service costs $111.3 $127.5 $145.3 $35.6 $38.3
Sales and marketing 6.2 8.8 10.3 2.5 2.8
Product development 9.2 9.7 11.9 2.6 3.9
General and administrative 18.0 19.9 25.6 5.5 6.7
Amortization of intangible assets 9.4 8.3 7.9 2.0 1.7
Gain on other assets, net - - (4.2) - (4.9)
Other (income) expense, net 0.0 0.1 0.1 (0.0) (1.3)
Income (loss) before income taxes $6.4 ($1.2) ($11.6) ($2.3) ($2.6)
Income tax benefit (expense) (2.6) 0.2 0.9 0.6 (1.4)
Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9)
Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)
42
INVESTMENT HIGHLIGHTS
ESTABLISHED INDUSTRY LEADER
o Largest wholesale registrar and second largest gTLD registrar in the world
o Over 16 million domain names under management including 2.5 million names registered directly through the retail channel
o More than 20,000 active resellers in the wholesale network and over 250,000 consumers and small businesses served through retail outlets
FAVORABLE MARKET DYNAMICS AND A MULTI-BILLION DOLLAR OPPORTUNITY
o 271 million domain names registered worldwide as of 2013 (1)
o Estimated over 85 million customer registrations of new domain names in 2013 (2)
o Strong expansion opportunity in developed market with a large untapped opportunity in several developing markets globally
LEADING PROPRIETARY TECHNOLOGY PLATFORM
o Comprehensive registrar offering provides resellers with flexible integration options via Application Programming Interface
("API") or a turnkey white-label solution
o Turnkey reseller solution allows a reseller to quickly and easily integrate Rightside’s entire suite of products into its own website
o Additional value-added services include website hosting, email hosting, website building tools and domain privacy protection
o Aftermarket services to help customers buy, sell and monetize high value domain names
WELL POSITIONED TO CAPITALIZE ON ICANN’S NEW gTLD PROGRAM
o 30 signed operator agreements with an additional interest in applications or registry operator agreements for 67 new gTLDs
o Proprietary editorial and algorithmic processes to identify high-value domain names associated with Rightside’s gTLD initiative to sell at a premium
o Large and diverse distribution network provides channel to efficiently promote the emerging portfolio of exclusive gTLDs
o Registry operator status will provide differentiated position as the sole supplier of particular gTLDs allowing control of pricing, branding
and availability of such gTLDs
(1) Source: “The Domain Name Industry Brief”, Verisign (April 2014).
(2) Source: “The Domain Name Industry Brief”, Verisign (April 2014) and Management estimates.
43
INVESTMENT HIGHLIGHTS (CONTINUED)
RECURRING REVENUE FINANCIAL MODEL
o Strong subscription base accounting for ~70% of total revenue
o Stable unit economics of approximately $10 annual revenue per domain name
o Renewal-driven subscription revenue contributes to positive operating cash flow
MULTIPLE VECTORS TO DRIVE SIGNIFICANT GROWTH
o Expand the large and diversified distribution network
o Launch large offering of new gTLDs and establish the highly strategic registry business
o Significant upsell opportunities through value-added services and extensive aftermarket services
o International gTLD expansion opportunity via third-party registrars and resellers
EXPERIENCED MANAGEMENT TEAM WITH LONG HISTORY IN THE DOMAIN NAME INDUSTRY
o Long and successful track record in leadership positions across virtually every aspect of the domain name services business
o Diversified operating expertise spanning many of the largest and most successful registries, registrars, premium name service companies and hosting
companies
APPENDIX
45
OVERVIEW OF THE DOMAIN NAME ECOSYSTEM
o Maintain the system of record for the registration of domain names associated with a given
gTLD (e.g., .com, .org)
o Set wholesale pricing and establish key policies for the eligibility for registering a domain name
for the applicable gTLD
REGISTRIES
REGISTRARS
PREMIUM DOMAIN
SERVICES PROVIDERS
WHOLESALE
CUSTOMERS
o Register domain names on behalf of customers with the relevant registry
o Set wholesale and retail prices and maintain the ongoing business relationships with resellers
and registrants, but pay fees to the relevant registry, as well as to ICANN for the gTLDs
administered by ICANN, for each domain name registered
o Specialize in the sale or ongoing monetization of higher-value domain names through auctions,
domain name brokerage networks and advertising services
DOMAIN TECHNOLOGY
SERVICES PROVIDERS
o Provide specialized solutions to registrars and registries that enable them to deliver the complex
and high-availability services required to satisfy the requirements of registrants, ICANN and the
ecosystem of industry participants
o Not-for-profit corporation that manages the domain name registration system and the system for
routing Internet users to the correct domain name or website
ICANN
RETAIL CUSTOMERS
o Resellers including large e-commerce websites, Internet service providers, and web-hosting
companies
o Consumers and businesses that register domain names for personal or business use
46
INTERNET PERSONALIZATION CONTINUES TO EVOLVE
Category
Domain
Range Examples
Year
Introduced
# of
Domains
(000s)
Est.
Wholesale
Cost
Est. Annual
Registry Revenue
($M)
Legacy TLDs 1M+
o .com 1985 113,957 $7.85 $810 – $980
o .net 1985 15,278 6.93 100 – 120
o .biz 2001 2,674 8.63 20 – 25
o .info 2001 5,814 8.16 40 – 50
ccTLDs
100K –
1M+
o .uk 1985 8,544 5.86 45 – 55
o .de 1986 13,714 4.37 55 – 65
o .cn 1990 4,785 4.86 20 – 25
Existing gTLDs 100K – 1M
o .name 2000 193 5.77 0.8 – 1.2
o .mobi 2005 970 7.25 6 – 8
o .asia 2007 287 10.00 2.5 – 3.5
o .xxx 2011 109 62.00 6 – 7
New gTLDs < 100K
o .guru 2014 60 20.00 1 – 1.4
o .bike 2014 11 20.00 0.1 – 0.3
o .club 2014 61 8.05 0.4 – 0.6
Present2000s1980-90s
Source: ICANNWiki, DomainTools, Company estimates.
47
NEW gTLD MARKET OPPORTUNITY
1,300 // Applied for new gTLDs (50% Generic / 50% Brand)
1,900 // Applications for new gTLDs
>$350 million // Total initial investment in application fees for new gTLDs
~$18 million // Rightside’s initial investment in application fees for new gTLDs
255 // New gTLDs currently available online
~1.4 million // Domain names registered to date
Participation from a wide range of applicants including Rightside
Diversified Internet players such as Google and Amazon
Consumer brands such as Nike and Walmart
A Top Level Domain, or TLD, are the characters to the right of the last dot in a domain address (e.g., “.com”). In 2011, the Internet
Corporation for Assigned Names and Numbers (ICANN) unveiled the new generic TLD (gTLD) program to significantly expand the
universe of gTLDs available for businesses and consumers to register as part of a domain name.
48
gTLD LAUNCH PHASES
.Futbol, .Reviews,
.Social, .Dance,
.Democrat, .Immobilien,
.Ninja, .Pub, .Moda
.Consulting,
.Kaufen, .Rocks, .Actor
.Haus, .Republican
RIGHTSIDE’S REPRESENTATIVE gTLDs
Sunrise
TRADEMARK HOLDERS
(65-70 days)
o Trademark holders may register their trademarked
domain names during this phase
o Only rights holders who have registered with the
Trademark Clearing House (TMCH) may
purchase domain names during this time
o Both the TMCH and the registrar may require fees
for registration during this phase
o Pre-registration is also available during this time
Landrush
EARLY APPLICATION
(30 days)
o The general public including individuals and
companies may register for a domain name during
this phase
o A small application fee will apply during this early
registration opportunity
o If more than one party applies for the same
domain name during this phase, a private auction
will be held with the domain name going to the
highest bidder
o This phase is especially important for those
without a trademark looking to build a strong
online presence
o Pre-registration is also available during this time
General Availability
FIRST-COME, FIRST-SERVED
o Anyone may register for a domain name during
this period of open registration
o Domain names will be assigned on a first-come,
first-served basis
o Premium domain names which constitute popular
terms will also be available during this time
o They will be sold through “buy now” options and
periodic auctions
49
Non-GAAP FINANCIAL MEASURES
To provide investors, analysts and others with additional information regarding the Company’s financial results, this presentation includes adjusted earnings before interest, income taxes, depreciation and
amortization, or “Adjusted EBITDA”, a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure has been included in the
Appendix to this presentation. The Company’s non-GAAP Adjusted EBITDA financial measure differs from GAAP net income (loss) in that it excludes certain expenses such as taxes, gain on other assets,
net, depreciation, amortization, stock-based compensation, and the financial impact of acquisition costs.
The Company uses this non-GAAP financial measure to understand and evaluate it financial performance and operating trends, including period to period comparisons, to prepare and approve its annual
budget and to develop short and long term operational plans. The exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period comparisons of the
Company’s underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes
that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating
decisions.
Accordingly, the Company believes that this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the Company’s operating results in the same
manner as the Company’s management and in comparing financial results across accounting periods and to those of peer companies.
The use of this non-GAAP financial measure has certain limitations because it does not reflect all items of income and expense that affect the Company’s operations. The Company compensates for these
limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure as set forth in the Appendix to this presentation. This non-GAAP financial measure should be
considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies,
including peer companies, and therefore financial comparability may be limited. The Company encourages investors and others to review the Company’s financial information in its entirety and not rely on
a single financial measure.
50
GAAP TO Non-GAAP RECONCILIATION
(1) Net gains on sales and withdrawals of interest in gTLD applications included in gain on other assets, net.
(2) Represents the depreciation expense of our long-lived tangible assets.
(3) Represents the amortization expense of our finite lived intangible assets, including that related to our investment in media content assets, included in our GAAP results of operations.
(4) Represents the fair value of stock-based awards and certain warrants to purchase our stock included in our GAAP results of operations.
(5) Acquisition and realignment costs include such items, when applicable, as (a) legal, accounting and other professional fees directly attributable to acquisition activity and (b) employee severance and other payments attributable to
acquisition or corporate realignment activities.
($ Millions) Historical
CY2011A CY2012A CY2013A Q1 2013A Q1 2014A
Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9)
Add (deduct)
Income tax expense (benefit) 2.6 (0.2) (0.9) (0.6) 1.4
Interest & other expense, net 0.0 0.1 0.1 - (1.4)
Gain on gTLD application withdrawals, net
(1)
- - (4.2) - (4.9)
Depreciation (2)
5.8 5.2 6.5 1.6 2.5
Amortization of intangible assets
(3)
9.4 8.3 7.9 2.0 1.7
Stock-based compensation (4)
9.7 10.1 9.5 2.3 2.0
Acquisition and realignment costs
(5)
- 0.3 0.0 0.0 0.3
Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)

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Rightside Investor Presentation – July 2014

  • 1. I N V E S T O R P R E S E N T A T I O N / / J u l y 2 0 1 4
  • 2. 2 LEGAL DISCLAIMER This overview is furnished solely for the purpose of providing you information about Rightside Group, Ltd. (the “Company”). The overview is only intended for the use of the person to whom it is given and it is not to be reproduced or redistributed. Under no circumstance shall the overview constitute or form part of an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful. You should not construe the contents of the overview as investment, tax, legal, accounting, regulatory, financial or other advice. The overview does not purport to be all inclusive and does not take into account your investment objectives or taxation, legal, accounting, regulatory or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions as to such matters and for making your own independent assessment of the information contained in this overview Certain statements in the overview are forward-looking statements, based on the Company’s current expectations, assumptions and estimates and that involve risks and uncertainties. Any statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position; historical results that may suggest ongoing trends for our business; the timing of the spin-off; any expectation of greater revenue, operating efficiencies or strategic benefits from the spin-off; market opportunities with respect to any general Top Level Domains (gTLDs); any growth or change of the domain name or domain name services markets or our ability to capitalize on such growth or change; the demand for premium and value-added domain services; the unit economics and demand for gTLDs; the viability of our technology; our relationships with industry partners; our business strategy and our objectives for future operations (including, without limitation, statements to the effect that the Company “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends” or “expects,” and similar expressions) are intended to be identified as forward-looking statements. Actual results could differ materially and adversely from those projected or anticipated in the forward-looking statements as a result of a number of risks and uncertainties pertaining to our business including those set forth in our Form 10 filed with the U.S. Securities and Exchange Commission on July 14, 2014. The statements in the overview speak only as of the date hereof and the Company undertakes no obligation to update them after the date hereof. Market and competitive position data in this overview has generally been obtained from industry publications and surveys or studies conducted by third-party sources. There are limitations with respect to the availability, accuracy, completeness and comparability of such data. We have not independently verified such data and can provide no assurance of its accuracy or completeness. Certain statements in this overview regarding the market and competitive position data are based on our internal analyses, which involve certain assumptions and estimates. These internal analyses have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate. None of the Company, their respective affiliates or any of their respective employees, directors, officers, contractors, advisors, members, successors, representatives or agents makes any representation or warranty as to the accuracy or completeness of this overview, and shall have no liability for any statements (expressed or implied) contained in, or for any omissions from, this overview or any other written or oral communications transmitted to you in the course of your evaluation of this overview. The Company has filed a Form 10 with the SEC in connection with its proposed spin-off from Demand Media. You may access the Form 10 and other documents we file with the SEC for free by visiting EDGAR on the SEC website at www.sec.gov. The information contained in this presentation is qualified in its entirety by reference to such documents.
  • 4. 4 OVERVIEW OF RIGHTSIDE SPIN-OFF o Rightside Group, Ltd. (“Rightside” or the “Company”) currently conducts its business operations as a wholly owned subsidiary of Demand Media o Demand Media has announced the planned spin-off of Rightside as a separate public company o The spin-off is currently expected to be completed on August 1, 2014 o The stock is expected to be in the when-issued market on or shortly prior to the record date for the distribution o After the spin-off, Rightside will operate as an independent, publicly traded company
  • 5. 5 SPIN-OFF RATIONALE o Capitalize on unique positioning as the only major pure play domain name services company with registrar and registry businesses, each at scale o Provide a clearer story for investors looking to invest in internet subscription services o Allow for management to focus exclusively on domain name services goals and objectives, which requires a tailored strategy given the different growth cycle of the gTLD opportunity o Facilitate acquisitions / business development deals using dedicated resources and capital allocation – in line with business / financial needs
  • 7. 7 UNIQUE END-TO-END, VERTICALLY INTEGRATED REGISTRAR-REGISTRY PLATFORM OPERATING AT SCALE REGISTRY (SUPPLY) REGISTRAR (DISTRIBUTION) COMPLEMENTARY PRODUCTS & PREMIUM DOMAIN SERVICES  Consumers O&O Retail Registrar O&O Wholesale Registrar END-TO-ENDDOMAINSERVICES   3rd-Party Registry + » In-House Brokerage Team » Auction Services » Third-Party Distribution Channels O&O Registry 3rd-Party Registrar » Website Builder Tools » Email Hosting » Website Security Services Through Resellers
  • 8. 8 RIGHTSIDE BUSINESS OVERVIEW o Leading provider of domain name services ⟫ Largest wholesale Internet domain name registrar ⟫ Second largest registrar overall o Major player in the historic expansion of general Top Level Domains (gTLDs) with 30 gTLDs in the current portfolio and an interest in 67 additional gTLD applications o Unique end-to-end, vertically integrated registrar-registry platform operating at scale o Recurring revenue financial model o Opportunity for strong margin expansion as Registry business continues to scale o Experienced management team with long history in the domain name industry Rightside’s comprehensive domain name services platform touches the entire life cycle of a domain name 10.6 12.3 13.6 14.8 15.2 2010 2011 2012 2013 Q1 2014 Number of Domains Under Management (Millions) LARGE CUSTOMER BASE >16 MILLION // domain names under management >2.5 MILLION // retail domain names registered >20 THOUSAND // active resellers >250 THOUSAND // customers
  • 9. 9 LARGE PORTFOLIO OF OWNED AND OPERATED (O&O) gTLDs ACTIVE APPLICATIONS TO BE RESOLVED EXPECTED Over 40 O&O gTLDs 61 In partnership with Donuts 6 Standalone .Mortgage .Degree .Rehab Pay Per Click Biz. Horizontal .Gives .Market .Kaufen Horizontal ConsumerSmall Business Vertical .Software .Haus Professional .RIP .Lawyer .Army .Engineer .Dentist .Vet .Attorney .Airforce .Navy
  • 10. 10 THE NEW gTLD PROGRAM PRESENTS NEW OPPORTUNITIES FOR REGISTRY OPERATORS Legacy gTLDs (e.g., .COM) New gTLDs (e.g., .NINJA) Owned Distribution  Third Party Distribution   Ability to Variably Price Domains (Premium Priced)  Contractual Pricing Flexibility  gTLD Portfolio Diversification 
  • 11. 11 STRONG EARLY ADOPTION VALIDATING THE NEW gTLD OPPORTUNITY EARLY GA PERFORMANCE TRENDS ARE STRONG .NINJA SUNRISE » Launch Date: 2/19/2014 » Domains Reg.: 68 LANDRUSH / EAP » Launch Date: 4/30/2014 » Domains Reg.: 198 GENERAL AVAILABILITY (GA) » Launch Date: 5/28/2014 » Days in GA (1): 44 » Domains Reg. To Date: 11,856 NEW gTLD PROGRAM STATS » 255 gTLDs launched into Sunrise and / or GA » Over 150 registrars selling new gTLDs » Over 1.5 million registrations since first GA launch » Estimated revenue of over $60 million to date Source: nTLDstats.com (1) As of 7/11/14. (Thousands) 0 200 400 600 800 1,000 1,200 1,400 1,600 2/7 2/21 3/7 3/21 4/4 4/18 5/2 5/16 5/30 6/13 6/27 7/11 Registrations to Date Weekly Registrations
  • 12. 12 RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON THE NEW gTLD PROGRAM Potential to be the only major domain name services company with both registrar and registry businesses each at scale REGISTRY REGISTRAR
  • 13. 13 $9.84 $9.85 $9.81 $9.98 $10.00 2010 2011 2012 2013 Q1 2014 RECURRING REVENUE FINANCIAL MODEL (*) STEADY UNIT ECONOMICS (1) Average revenue per domain is calculated by dividing registrar services revenue for a period by the average number of domain names registered in that period. The average number of domain names is the simple average of the number of domain names at the beginning and end of the period. The average revenue per domain name for partial year periods is annualized. Annual Revenue per Domain (1) Registration Renewal Rates 71% 74% 72% 70% 75% 2010 2011 2012 2013 Q1 2014 (*) These data do not conform to the data reported by Demand Media in its public filings due to differences in company rollups. LARGE SUBSCRIPTION REVENUE BASE 68% 69% 73% 76% 83% 2010 2011 2012 2013 Q1 2014 Subscription as % of Total Revenue RENEWAL DRIVEN REVENUES
  • 14. 14 ILLUSTRATIVE MARGIN POTENTIAL FROM NEW gTLDs .COM on Rightside Registrar .GURU on Rightside Registrar .SOCIAL on GoDaddy .SOCIAL on Rightside Registrar Annual Revenue per Domain $9 ~$30 $20 ~$30 Registration Fees Paid to the Registry ~$8 $20 $0 $0 Registry Verisign Donuts Rightside Rightside Direct Profit per Domain (1) $1 $10 $20 $30 Direct Margin (2) 11% 33% ~100% ~100% Fair………....…..…….…..Better………………………Best (1) Direct profit defined as domain registration revenue less registration fees paid to the registry (2) Direct margin defined as direct profit divided by revenue New gTLD program offers potential for strong margin expansion (For illustrative purposes only, does not demonstrate actual revenue potential)
  • 15. 15 EXPERIENCED MANAGEMENT TEAM Taryn Naidu CEO Tracy Knox CFO Wayne McLaurin CTO Rick Danis General Counsel David Ryan GM, Registry Steve Banfield GM, Registrar Matt Delgado SVP, Operations Kelly Johnson SVP, Marketing
  • 17. 17 RIGHTSIDE SERVES A LARGE GLOBAL MARKET o Over 270MM domain names registered as of December 31, 2013 » Over 7% increase YoY » 9% CAGR since 2008 o Nearly 120MM ccTLD domain names registered » 12% YoY growth (more than 2x the growth of .com & .net) Source: Verisign Domain Name Industry Briefs and management estimates REGISTERED DOMAIN NAME VOLUME (Millions) 0 50 100 150 200 250 300 2008 2009 2010 2011 2012 2013 .com / .net ccTLDS other TLDs ESTIMATED OVER 85 MILLION NEW DOMAIN NAMES REGISTERED IN 2013
  • 18. 18 INCREASING ADOPTION BY Small Business FUNDAMENTAL SHIFT IN CONSUMER BEHAVIOR DRIVING ONLINE DOMAIN GROWTH Global Unique Internet Buyers (Millions) Sources: (1) IDC Worldwide New Media Market Model (May 2014). (2) Wakefield Research (April 2013). 49% 49% OF SMALL BUSINESSES WITH A WEB PRESENCE ARE NOT COMPLETELY SATISFIED WITH THEIR DOMAIN NAME (2) 28.3 80.2 2009 2013 Global Hours Spent Online – Monthly (Billions) MORE CONSUMERS ARE ONLINE (1) … … AND SPENDING MORE TIME ONLINE (1) 566 1,067 2009 2013 55% 55% SMBs SURVEYED BELIEVE THAT THEY HAVE LOST CUSTOMERS DUE TO LOW QUALITY DOMAIN NAMES (2)
  • 19. 19 EXISTING DOMAINS NEW gTLD OPPORTUNITIES NEW gTLDs OFFER MORE HIGH QUALITY & SPECIFIC DOMAINS ICANN is expanding the universe of available gTLDs FCBarcelona.com zephyrsf.com 10bestwebsitehosting.com kellsirish.com sfcityattorney.org newyorkcitylawyerlocator.com Barcelona.futbol sanfrancisco.realestate webhosting.reviews kellsirish.pub sfcity.attorney findNYC.lawyer New gTLDs provide unprecedented options and opportunities for businesses and consumers to brand their online presence and connect with their audienceso More descriptive suffixes o Better convey topic area or purpose o Better connect with intended audience o Inventory of high quality domain names increases dramatically o Allow registrants to find and register domain names best suited to their needs o Allow domain names in other non- English languages o Audiences will be able to navigate using their native language o New business models are developed that capitalize on the capabilities presented by new gTLDs for enhanced online identity and navigation DOMAIN NAMES IN NEW LANGUAGES NEW WAVE OF CREATIVITY MORE NATURAL CATEGORIZATION SCHEME INCREASED HIGH QUALITY DOMAIN INVENTORY
  • 20. RIGHTSIDE AND THE NEW gTLD PROGRAM
  • 21. 21 RIGHTSIDE IS UNIQUELY POSITIONED TO CAPITALIZE ON THE NEW gTLD OPPORTUNITY » End-to-end domain name services platform enables Rightside to market, distribute and offer services at every stage of a gTLD’s life cycle » Large owned and operated portfolio of new gTLDs drives new opportunities » Existing platform enables easy distribution of O&O and other gTLDs (more than 150 gTLDs) » Complementary product offerings drive usage of new gTLDs » Expertise in the identification and distribution of premium priced domain names » Long operating history and industry expertise has enabled strong relationships with ICANN and other industry partners
  • 22. 22 COMPREHENSIVE SUITE OF PRODUCTS & SERVICES REGISTRY » Plans to offer one of the largest portfolios of new gTLDs » 30 new gTLDs currently in portfolio » 67 other active applications to be resolved REGISTRAR » #1 Wholesale Registrar » #2 Registrar Overall » 20k+ resellers & 250k+ customers » 16M+ domains under management » Registrant domain privacy protection » Email hosting » Website builder tools » Website hosting plans » Marketing / promotional services » Third-party website security services » Experienced brokerage team driving sales and distribution of owned and third party premium domain names » Premium domain name expertise to identify and price premium domain names for new gTLDs OFFERINGS » Premium domain names » Auction services » Monetization services DOMAIN NAME REGISTRATIONS PREMIUM DOMAIN SERVICES VALUE ADDED SERVICES
  • 23. 23 RIGHTSIDE – REGISTRAR DISTRIBUTION AT SCALE WHOLESALE SOLUTIONS DIRECT TO CONSUMER PLATFORM o Direct customer relationships o Ability to control purchase path » E.g.: Feature O&O gTLDs at renewal o Incentivize through pricing and packaging o Ability to influence offerings through API » Feature O&O gTLDs in purchase path o Incentivize through pricing and packaging CUSTOMERS SERVED>250K >2M NAMES REGISTERED ACTIVE RESELLERS>20K >14M DOMAINS UNDER MANAGEMENT
  • 24. 24 RIGHTSIDE REGISTRY PLATFORM MAKES IT EASY FOR REGISTRARS TO DISTRIBUTE RIGHTSIDE gTLDs » DPML » Extended claims » Tiered pricing » Others » SRS Module » DNS Module ~200 gTLDs » Built for Registrars » Single technical certification » 24/7 OT&E test scheduling o Proven Platform: » Over 150 gTLDs launched on Rightside back-end to date, across Sunrise, Landrush/EAP and GA » All major registrars distributing Rightside gTLDs o Distribution Efficiencies: Registrars already plugged in are fast tracked through the onboarding process for all registries leveraging Rightside back-end » 1 Bank Account for all gTLDs » Pooled Registry connections » Master Service Agreement CORE CUSTOMIZABLE ADD-ONS SCALABLE REGISTRY PLATFORM
  • 25. 25 DATA-DRIVEN APPROACH TO IDENTIFY gTLD INVESTMENTS o .ATTORNEY o .ENGINEER o .ACTOR o .DENTIST o Over 400K ABA members o Over 400K IEEE Members o Over 2.4M actors listed on IMDB o Over 150K dentists in the ADA OPPORTUNITIES ADDRESSABLE MARKETS o .IMMOBILIEN o .KAUFEN o 1.5MM houses available for sale or rent in Germany o Nearly 500K retail stores in Germany and Austria o ~285k domain names containing 'consulting' o ~225k domain names containing ‘reviews' o ~120k domain names containing ‘software' o .CONSULTING o .REVIEWS o .SOFTWARE o Consultants o Review Sites o Software Professionals o .DEMOCRAT o .REPUBLICAN o Over 40MM Registered Democrats o Over 30MM Registered Republicans o Over 500K elected officials RIGHTSIDE gTLDs o 4.5MM Army veterans o 650K active Air Force personnel o 580K active Navy personnel o .ARMY o .AIRFORCE o .NAVY
  • 26. 26 RIGHTSIDE: A LEADER IN THE NEW gTLD PROGRAM (1) (1) Registration volume and revenue estimates as of July 11. (2) Rightside revenue includes estimates for Rightside gTLD sales, new gTLD sales at eNom and Name.com and fees in connection with our registry back-end platform. (3) Registrar channel distribution defined as the .COM market share (by registrar) that is distributing new gTLDs. For example, if eNom is ~10% of the .COM market and because eNom is distributing new gTLDs, that 10% is part of the 90%+. New TLD Program Rightside Registry Platform (2) Rightside Registrar Rightside Registry Rightside Total TLDs in Sunrise / GA: 255 / 161 152 / 108 207 / 156 15 / 9 207 / 156 Registrar Channel Distribution (3): 90%+ 90%+ N/A 90%+ 90%+ Domain Registrations: 1.5m 758k 153k 36k 181k
  • 27. 27 THE NEW gTLD PROGRAM HAS CREATED REVENUE GROWTH OPPORTUNITIES FOR RIGHTSIDE 1. Domain name registrations in Rightside O&O gTLDs o Registration revenue driven by O&O and third party registrars 2. Domain name registrations on Rightside O&O Registrar o Growth in registrations driven by O&O and third party gTLDs o Average price of a domain name in a new gTLD is approximately 2x that of .com 3. Additional opportunities that take advantage of Rightside registry and registrar platforms o Infrastructure o Value-added Services o Premium domain names
  • 28. 28 ILLUSTRATIVE POTENTIAL UNIT ECONOMICS Strong direct margin (1) potential on Rightside’s exclusively owned & operated gTLDs RIGHTSIDE REGISTRAR SELLS VERISIGN gTLDs RIGHTSIDE REGISTRAR SELLS RIGHTSIDE REGISTRY NEW gTLDs RIGHTSIDE REGISTRAR SELLS THIRD-PARTY REGISTRY NEW gTLDs * For illustrative purposes only, does not demonstrate actual revenue ~10 - 15%+ ~30%+ ~100% .COM .PHOTOGRAPHY .NINJA (1) Direct margin defined as Registration revenue less fees paid to the Registry or ICANN.
  • 30. 30 FULLY DEVELOPED WEBSITES PERFORMLY.SOCIAL – A SOCIAL MEDIA ROI SOFTWARE SITE FROM MEDIABRANDS VIVA.SOCIAL – SOCIAL CONTENT CREATORS TORINOFC.FUTBOL – OFFICIAL WEBSITE FOR TORINO FC BRITISH.REVIEWS – REVIEWS ON ANYTHING BY BRITISH REVIEWERS
  • 31. 31 FULLY DEVELOPED WEBSITES (CONT’D) WASH.NINJA (AND CARWASH.NINJA WHICH REDIRECTS TO WASH.NINJA) – STARTUP CAR CLEANING BUSINESS SOAP.NINJA – MALAYSIAN SOAP MAKING COMPANY ANALYZER.NINJA – ANALYZES WEBSITES FOR SEO STATS, PAGE RANK, SOCIAL MEDIA STATS AND MORE FINDMY.NINJA – TALENT SEARCH BUSINESS
  • 32. 32 SOCIAL MEDIA AGGREGATION ANALYSIS.NINJA – A DATA AGGREGATION SITE BY AVINASH KAUSHIK, DIGITAL MARKETING EVANGELIST AT GOOGLE SWIFT.SOCIAL – A SOCIAL NETWORK FOR SWIFT PROGRAMMING LANGUAGE MIXTAPE.NINJA – A HIP-HOP ORIENTED SOCIAL NETWORK CRAFTS.SOCIAL – A WORDPRESS SITE THAT AGGREGRATES CRAFT TRENDS FROM DIFFERENT SOCIAL NETWORKS
  • 33. 33 WORDPRESS / TUMBLR THERECIPE.NINJA – A RECIPE SITE USING WORDPRESS MOBILEGAMES.NINJA – APP REVIEWS FOR MOBILE DEVICES USING WORDPRESS PLAYPEN.NINJA – PERSONAL BLOG USING BLOGGER GOTH.NINJA – A GOTH NINJA FASHION BLOG USING TUMBLR
  • 34. 34 TLD REDIRECTS (1) REDIRECTS TO AN ALTERNATIVE WEBSITE o firephone.reviews – redirects to Amazon's fire phone page o premierleague.futbol – redirects to the English Premier League website o welshliberal.democrat – redirects to Welsh Liberal Democrats website o manoloblahnik.social – redirects to Manolo Blahnik website o tax.social – redirects to taxblog.com a wordpress tax blogging site with more than 60,000 members o cubicle.ninja – redirects to cubicleninjas.com, a web development and creative design company o michaelflatley.dance and flatley.dance – redirect to michaelflatley.com, the official website of Michael Flatley o millerlite.pub and lite.pub – redirects to millerlite.com o selfies.ninja – redirects to wikipedia page for Ninja REDIRECTS TO SOCIAL MEDIA PAGES o grainger.social – redirects to Grainger's facebook page o gateprotect.social – redirects to Gateprotect's facebook page o internetx.social – redirects to InternetX's (a German ISP) facebook page o zumbafit.dance – redirects to an instructors page on zumba.com o pics.ninja – redirects to a personal Google+ page o trombone.ninja – redirects to a personal twitter page OTHER REDIRECTS o Microsoft registered sites (e.g. excel.ninja, msn.dance and xbox.reviews) redirect to a Bing search for the sld (excel, msn, xbox) (1) TLD redirects offer a better name for a registrant to use in cases where the URL cannot be completely changed. TLDs offer the first point of entry for using / renaming existing sites: registrants have the opportunity to change their name, but there's a process to go through before a full renaming due to SEO considerations, existing referrals, etc.
  • 35. 35 TLDs REGISTERED BY BRANDS EXAMPLES OF BRANDS THAT HAVE REGISTERED DOMAINS BUT ARE NOT BEING USED YET o amazon.consulting – Amazon o wal-mart.reviews – Walmart o yahoo.ninja – Yahoo o foxmovies.reviews – 20th Century Fox o nike.social – Nike o hurley.moda – Hurley o canon.reviews – Canon o citibank.social – Citibank o tylenol.reviews – Johnson & Johnson
  • 37. 37 FINANCIAL HIGHLIGHTS o Consistent, steady historical growth in the core registrar business o Registry business expected to accelerate growth o Recurring revenue financial model o O&O gTLDs create margin expansion opportunity o Strategic investments to capitalize on the new gTLD opportunity o Attractive long-term business model
  • 38. 38 CONSISTENT, STEADY GROWTH IN THE CORE REGISTRAR BUSINESS » Stable and consistent revenue growth in the core registrar business continued through 2013 » Overall growth historically impacted by volatility in the aftermarket segment » Overall growth expected to accelerate as the registry business continues to scale ($ Millions) Registry business expected to accelerate growth $96 $113 $127 $142 $33 $38 11% 17% 13% 12% 12% 2010 2011 2012 2013 Q1 2013 Q1 2014 ($ Millions) $96 $113 $127 $142 $33 $38 $43 $48 $46 $44 $12 $7 $139 $160 $173 $185 $46 $45 8% 15% 8% 7% (3%) 2010 2011 2012 2013 Q1 2013 Q1 2014 Domain Name Aftermarket DOMAIN NAME REVENUE & GROWTH TOTAL REVENUE & GROWTH
  • 39. 39 RECURRING REVENUE FINANCIAL MODEL Strong recurring revenue with subscription accounting for 70%+ of total revenue $96 $113 $127 $142 $43 $48 $46 $44 $139 $160 $173 $185 2010 2011 2012 2013 Subscription Revenue Non-Subscription Revenue 69% 70% 73% 76%
  • 40. 40 STRATEGIC INVESTMENTS TO CAPITALIZE ON THE NEW gTLD OPPORTUNITY o Invested ~$18 million in application fees for new gTLDs o Early onboarding of strategic resellers at lower margin to secure distribution of new O&O gTLDs o Investment in gTLDs and distribution infrastructure ahead of the new gTLD program o Investment in infrastructure required for being a standalone public company o Acquisition of Name.com in Q4 2012 for $18 million o Hired 33 FTEs to drive the new gTLD program and operations o Operating expense investment for new registry business of $8.4 million in 2013 and $2.3 million in Q1 2014
  • 41. 41 FINANCIAL SUMMARY 68% 69% 73% Note: Please refer to the GAAP to Non-GAAP Reconciliation in the appendix for Adjusted EBITDA reconciliation. ($ Millions) Historical CY2011A CY2012A CY2013A Q1 2013A Q1 2014A Domain services $112.6 $126.9 $141.6 $33.5 $37.5 Aftermarket & Other 47.8 46.1 43.6 12.4 7.0 Total Revenue $160.5 $173.0 $185.2 $45.9 $44.6 Service costs $111.3 $127.5 $145.3 $35.6 $38.3 Sales and marketing 6.2 8.8 10.3 2.5 2.8 Product development 9.2 9.7 11.9 2.6 3.9 General and administrative 18.0 19.9 25.6 5.5 6.7 Amortization of intangible assets 9.4 8.3 7.9 2.0 1.7 Gain on other assets, net - - (4.2) - (4.9) Other (income) expense, net 0.0 0.1 0.1 (0.0) (1.3) Income (loss) before income taxes $6.4 ($1.2) ($11.6) ($2.3) ($2.6) Income tax benefit (expense) (2.6) 0.2 0.9 0.6 (1.4) Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9) Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)
  • 42. 42 INVESTMENT HIGHLIGHTS ESTABLISHED INDUSTRY LEADER o Largest wholesale registrar and second largest gTLD registrar in the world o Over 16 million domain names under management including 2.5 million names registered directly through the retail channel o More than 20,000 active resellers in the wholesale network and over 250,000 consumers and small businesses served through retail outlets FAVORABLE MARKET DYNAMICS AND A MULTI-BILLION DOLLAR OPPORTUNITY o 271 million domain names registered worldwide as of 2013 (1) o Estimated over 85 million customer registrations of new domain names in 2013 (2) o Strong expansion opportunity in developed market with a large untapped opportunity in several developing markets globally LEADING PROPRIETARY TECHNOLOGY PLATFORM o Comprehensive registrar offering provides resellers with flexible integration options via Application Programming Interface ("API") or a turnkey white-label solution o Turnkey reseller solution allows a reseller to quickly and easily integrate Rightside’s entire suite of products into its own website o Additional value-added services include website hosting, email hosting, website building tools and domain privacy protection o Aftermarket services to help customers buy, sell and monetize high value domain names WELL POSITIONED TO CAPITALIZE ON ICANN’S NEW gTLD PROGRAM o 30 signed operator agreements with an additional interest in applications or registry operator agreements for 67 new gTLDs o Proprietary editorial and algorithmic processes to identify high-value domain names associated with Rightside’s gTLD initiative to sell at a premium o Large and diverse distribution network provides channel to efficiently promote the emerging portfolio of exclusive gTLDs o Registry operator status will provide differentiated position as the sole supplier of particular gTLDs allowing control of pricing, branding and availability of such gTLDs (1) Source: “The Domain Name Industry Brief”, Verisign (April 2014). (2) Source: “The Domain Name Industry Brief”, Verisign (April 2014) and Management estimates.
  • 43. 43 INVESTMENT HIGHLIGHTS (CONTINUED) RECURRING REVENUE FINANCIAL MODEL o Strong subscription base accounting for ~70% of total revenue o Stable unit economics of approximately $10 annual revenue per domain name o Renewal-driven subscription revenue contributes to positive operating cash flow MULTIPLE VECTORS TO DRIVE SIGNIFICANT GROWTH o Expand the large and diversified distribution network o Launch large offering of new gTLDs and establish the highly strategic registry business o Significant upsell opportunities through value-added services and extensive aftermarket services o International gTLD expansion opportunity via third-party registrars and resellers EXPERIENCED MANAGEMENT TEAM WITH LONG HISTORY IN THE DOMAIN NAME INDUSTRY o Long and successful track record in leadership positions across virtually every aspect of the domain name services business o Diversified operating expertise spanning many of the largest and most successful registries, registrars, premium name service companies and hosting companies
  • 45. 45 OVERVIEW OF THE DOMAIN NAME ECOSYSTEM o Maintain the system of record for the registration of domain names associated with a given gTLD (e.g., .com, .org) o Set wholesale pricing and establish key policies for the eligibility for registering a domain name for the applicable gTLD REGISTRIES REGISTRARS PREMIUM DOMAIN SERVICES PROVIDERS WHOLESALE CUSTOMERS o Register domain names on behalf of customers with the relevant registry o Set wholesale and retail prices and maintain the ongoing business relationships with resellers and registrants, but pay fees to the relevant registry, as well as to ICANN for the gTLDs administered by ICANN, for each domain name registered o Specialize in the sale or ongoing monetization of higher-value domain names through auctions, domain name brokerage networks and advertising services DOMAIN TECHNOLOGY SERVICES PROVIDERS o Provide specialized solutions to registrars and registries that enable them to deliver the complex and high-availability services required to satisfy the requirements of registrants, ICANN and the ecosystem of industry participants o Not-for-profit corporation that manages the domain name registration system and the system for routing Internet users to the correct domain name or website ICANN RETAIL CUSTOMERS o Resellers including large e-commerce websites, Internet service providers, and web-hosting companies o Consumers and businesses that register domain names for personal or business use
  • 46. 46 INTERNET PERSONALIZATION CONTINUES TO EVOLVE Category Domain Range Examples Year Introduced # of Domains (000s) Est. Wholesale Cost Est. Annual Registry Revenue ($M) Legacy TLDs 1M+ o .com 1985 113,957 $7.85 $810 – $980 o .net 1985 15,278 6.93 100 – 120 o .biz 2001 2,674 8.63 20 – 25 o .info 2001 5,814 8.16 40 – 50 ccTLDs 100K – 1M+ o .uk 1985 8,544 5.86 45 – 55 o .de 1986 13,714 4.37 55 – 65 o .cn 1990 4,785 4.86 20 – 25 Existing gTLDs 100K – 1M o .name 2000 193 5.77 0.8 – 1.2 o .mobi 2005 970 7.25 6 – 8 o .asia 2007 287 10.00 2.5 – 3.5 o .xxx 2011 109 62.00 6 – 7 New gTLDs < 100K o .guru 2014 60 20.00 1 – 1.4 o .bike 2014 11 20.00 0.1 – 0.3 o .club 2014 61 8.05 0.4 – 0.6 Present2000s1980-90s Source: ICANNWiki, DomainTools, Company estimates.
  • 47. 47 NEW gTLD MARKET OPPORTUNITY 1,300 // Applied for new gTLDs (50% Generic / 50% Brand) 1,900 // Applications for new gTLDs >$350 million // Total initial investment in application fees for new gTLDs ~$18 million // Rightside’s initial investment in application fees for new gTLDs 255 // New gTLDs currently available online ~1.4 million // Domain names registered to date Participation from a wide range of applicants including Rightside Diversified Internet players such as Google and Amazon Consumer brands such as Nike and Walmart A Top Level Domain, or TLD, are the characters to the right of the last dot in a domain address (e.g., “.com”). In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) unveiled the new generic TLD (gTLD) program to significantly expand the universe of gTLDs available for businesses and consumers to register as part of a domain name.
  • 48. 48 gTLD LAUNCH PHASES .Futbol, .Reviews, .Social, .Dance, .Democrat, .Immobilien, .Ninja, .Pub, .Moda .Consulting, .Kaufen, .Rocks, .Actor .Haus, .Republican RIGHTSIDE’S REPRESENTATIVE gTLDs Sunrise TRADEMARK HOLDERS (65-70 days) o Trademark holders may register their trademarked domain names during this phase o Only rights holders who have registered with the Trademark Clearing House (TMCH) may purchase domain names during this time o Both the TMCH and the registrar may require fees for registration during this phase o Pre-registration is also available during this time Landrush EARLY APPLICATION (30 days) o The general public including individuals and companies may register for a domain name during this phase o A small application fee will apply during this early registration opportunity o If more than one party applies for the same domain name during this phase, a private auction will be held with the domain name going to the highest bidder o This phase is especially important for those without a trademark looking to build a strong online presence o Pre-registration is also available during this time General Availability FIRST-COME, FIRST-SERVED o Anyone may register for a domain name during this period of open registration o Domain names will be assigned on a first-come, first-served basis o Premium domain names which constitute popular terms will also be available during this time o They will be sold through “buy now” options and periodic auctions
  • 49. 49 Non-GAAP FINANCIAL MEASURES To provide investors, analysts and others with additional information regarding the Company’s financial results, this presentation includes adjusted earnings before interest, income taxes, depreciation and amortization, or “Adjusted EBITDA”, a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure has been included in the Appendix to this presentation. The Company’s non-GAAP Adjusted EBITDA financial measure differs from GAAP net income (loss) in that it excludes certain expenses such as taxes, gain on other assets, net, depreciation, amortization, stock-based compensation, and the financial impact of acquisition costs. The Company uses this non-GAAP financial measure to understand and evaluate it financial performance and operating trends, including period to period comparisons, to prepare and approve its annual budget and to develop short and long term operational plans. The exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period to period comparisons of the Company’s underlying recurring revenue and operating costs which is focused more closely on the current costs necessary to utilize previously acquired long-lived assets. In addition, management believes that it can be useful to exclude certain non-cash charges because the amount of such expenses is the result of long-term investment decisions in previous periods rather than day-to-day operating decisions. Accordingly, the Company believes that this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as the Company’s management and in comparing financial results across accounting periods and to those of peer companies. The use of this non-GAAP financial measure has certain limitations because it does not reflect all items of income and expense that affect the Company’s operations. The Company compensates for these limitations by reconciling the non-GAAP financial measure to the most comparable GAAP financial measure as set forth in the Appendix to this presentation. This non-GAAP financial measure should be considered in addition to, not as a substitute for, measures prepared in accordance with GAAP. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore financial comparability may be limited. The Company encourages investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure.
  • 50. 50 GAAP TO Non-GAAP RECONCILIATION (1) Net gains on sales and withdrawals of interest in gTLD applications included in gain on other assets, net. (2) Represents the depreciation expense of our long-lived tangible assets. (3) Represents the amortization expense of our finite lived intangible assets, including that related to our investment in media content assets, included in our GAAP results of operations. (4) Represents the fair value of stock-based awards and certain warrants to purchase our stock included in our GAAP results of operations. (5) Acquisition and realignment costs include such items, when applicable, as (a) legal, accounting and other professional fees directly attributable to acquisition activity and (b) employee severance and other payments attributable to acquisition or corporate realignment activities. ($ Millions) Historical CY2011A CY2012A CY2013A Q1 2013A Q1 2014A Net income (loss) $3.8 ($1.0) ($10.7) ($1.7) ($3.9) Add (deduct) Income tax expense (benefit) 2.6 (0.2) (0.9) (0.6) 1.4 Interest & other expense, net 0.0 0.1 0.1 - (1.4) Gain on gTLD application withdrawals, net (1) - - (4.2) - (4.9) Depreciation (2) 5.8 5.2 6.5 1.6 2.5 Amortization of intangible assets (3) 9.4 8.3 7.9 2.0 1.7 Stock-based compensation (4) 9.7 10.1 9.5 2.3 2.0 Acquisition and realignment costs (5) - 0.3 0.0 0.0 0.3 Adjusted EBITDA $31.4 $22.8 $8.0 $3.6 ($2.3)