ICANN’s net Funds Under Management dips in Q1 Fiscal 2023

The Internet Corporation for Assigned Names and Numbers (ICANN) has published the unaudited financial results for the first Quarter of Fiscal Year 2023. Along with ICANN, Public Technical Identifiers (PTI) also presented its financial figures. The figures correspond to the time period from July 2022 to September 2022.

The figures state mixed feelings for the domain name regulator of the world. Finances were affected by the trends in the global financial market. Net funds under management have declined slightly as compared to the previous quarter. 

At the end of June the funds under ICANN’s management aggregated at $505.6 million. The same in this quarter at the end of September amounted to $497.8 million. This is a fall of $7.8 million

A big contributor to this fall in net funds is the investment declines in the Reserve fund. The Reserve fund is invested and hence is a little volatile to the market fluctuations. However, the slight dip that has occurred is still low compared to the global situation currently.

We are seeing mass layoffs and put downs in almost every major brand. At some places even entire offices have been vacated. Hence, it’s totally natural to feel little shimmers of this global tide. 

The Corporation had established a criteria in 2018 for efficient maintenance of the Reserve Fund. The prescribed limit under the 8 year plan strategy was to match one year of the expense budget. Even with this little fall, the Reserve Fund is still ahead of that mark.

However, post this ICANN announced a policy update that aims to make investments in the Reserve Fund better. This was further supported by a transfer of $19 million from the Operating Fund to the Reserve Fund.

Also, interestingly the net Funding in this quarter was $40 million. It was in excess of both the budgeted Fundings and the previous quarter’s figures by $2 million. A major driver of this revenue was the boost in domain name registrations. The Funding consists of different elements that include Registry Transaction Fees, Registrar Transaction Fees, Registry Fixed Fees, Registrar other fees and sponsorships/contributions.

However, an alarming figure also popped out while examining the corporation’s figures that needed mention. Among ICANN’s total Expenses only 3% was allotted to IT infrastructure and Security improvements. In fact, this segment was the least expensive for the organisation!

We see frequent attacks on the internet infrastructure almost everyday. Knowing full well the loss it impedes on the whole global economy, it won’t be an unfair demand that the global regulator of domain names looks at it with a higher level of concern.

If the decline in the funding and the global market continues, the organisation might look towards cutting its expenses. Currently, the biggest chunk of company’s expenditure is allotted to compensation for the personnels working. A 56% of the share.

However, as compared to the previous quarter, the company’s total headcount has risen from 391 to 399. This doesn’t seem like ICANN is preparing for a cutdown in its costs, as of yet. The next quarter’s figures would be crucial for the company. An increase in Fundings might balance the figures for it. However, a decline might force it to cut on Expenses.

You can read the full report here.


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