ICANN has cut its budget forecast for the current year (which, according to US standards, ends on June 30, 2024). “ICANN faces an inflation of its costs and also happens to face a lack of inflation of its funding,” CFO Xavier Calvez said during a conference with representatives of the domain community at the end of April. He explained the situation by the poor state of affairs on the domain market.
ICANN's decision follows shortly after the release of first-quarter results from Verisign, which operates the gTLD .COM. Royalties from all registration operations are ICANN's main source of funding, and it is clear that .COM operations are leading the way as registrations continue to decline. As a result, ICANN expects that the amount of income received by the corporation at the end of the year will be $145 million - instead of the budgeted $148 million, Domain Incite reports. Accordingly, ICANN's budget deficit, which initially amounted to $5 million, increased by $3 million. The corporation said it intends to find ways to cut costs. The most obvious option in this situation seems to many observers to be cutting personnel costs. This is ICANN's largest expense, at about $90 million. However, next year's draft budget does not provide for staff reductions.
It is also worth noting that the draft budget for the 2025 fiscal year, which will begin on July 1, includes a 7% increase in revenue from registration operations in new generic top-level domains, while in December, the first version of the draft budget included much more a modest figure - 2%. This suggests that new domains are doing well overall. However, their royalties do not yet compare with royalties from operations in “old” domains and, above all, .COM, but here the situation is different. The draft budget for 2025 provides for a reduction in the total volume of deductions from registration operations by 4%.
