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GoDaddy Inc. (GDDY): Powering Entrepreneurs with Innovative Solutions and Robust Financial Performance
Published on September 24, 2024

GoDaddy Inc. (NASDAQ:GDDY) is a leading provider of cloud-based technology products and services, empowering entrepreneurs and small businesses worldwide. With a relentless focus on creating customer value and translating it into shareholder value, GoDaddy has established itself as a dominant force in the domain registration, web hosting, and online commerce markets.

Financials

In the fiscal year 2023, GoDaddy reported impressive financial results, showcasing the strength and resilience of its business model. The company generated annual revenue of $4,237.8 million, a testament to its ability to meet the evolving needs of its diverse customer base. Net income for the year reached $1,374.8 million, underscoring the company's profitability and efficient operations. Additionally, GoDaddy's annual operating cash flow stood at $1,047.6 million, and its free cash flow reached $970.2 million, highlighting the company's robust cash generation capabilities.

The first quarter of 2024 continued this positive momentum, with GoDaddy reporting strong financial performance. Total revenue for the quarter reached $1,108.5 million, representing a 7.0% increase compared to the same period in the previous year. The company's net income for the quarter was $401.5 million, showcasing its ability to translate its operational success into bottom-line growth.

Business Overview

GoDaddy's financial success is underpinned by its strategic focus on two key business segments: Applications and Commerce (A&C) and Core Platform (Core). The A&C segment, which includes the company's website building, productivity, and commerce solutions, delivered revenue of $383.1 million in the first quarter of 2024, a 13.3% increase year-over-year. This growth was driven by strong demand for the company's productivity applications, website building products, and commerce solutions, which saw a 17.3%, 8.7%, and 41.1% increase in revenue, respectively.

The Core segment, which encompasses domain registration, aftermarket domain sales, and website hosting, generated revenue of $725.4 million in the first quarter of 2024, a 3.9% increase compared to the same period in the previous year. This growth was primarily driven by a 7.0% increase in domain-related revenue and a 12.1% increase in aftermarket revenue, partially offset by a 9.0% decrease in hosting revenue due to the divestiture of certain hosting assets.

GoDaddy's international operations continue to play a significant role in its overall performance. In the first quarter of 2024, international revenue accounted for $352.9 million, or 31.9% of total revenue, representing a 3.6% increase on a reported basis and a 3.5% increase on a constant currency basis.

Recent Developments

The company's focus on innovation and customer-centric solutions has been a key driver of its success. The launch of GoDaddy Airo, an AI-powered experience designed to automatically build the interconnected pieces of the Entrepreneur's Wheel, has been a significant milestone. GoDaddy Airo is opening up new avenues for discovery, engagement, and monetization, and the company is excited about the potential it holds for future growth.

Liquidity

GoDaddy's commitment to profitable growth is evident in its strong financial performance and disciplined capital allocation strategy. In the first quarter of 2024, the company's normalized EBITDA margin expanded by 400 basis points to 28%, and its free cash flow grew by 26% to $327 million. This robust cash generation has enabled GoDaddy to continue its share repurchase program, which has reduced its gross shares outstanding by 22% since the inception of the program.

Outlook

Looking ahead, GoDaddy remains optimistic about its future prospects. For the full year 2024, the company expects total revenue to be in the range of $4.5 billion to $4.56 billion, representing growth of 6.5% at the midpoint. Additionally, GoDaddy is targeting a normalized EBITDA margin of approximately 29% for the full year, demonstrating its ability to drive operational efficiency and profitability.

Conclusion

The company's strong financial performance, innovative product offerings, and disciplined capital allocation strategy position GoDaddy well to continue its growth trajectory and create long-term value for its shareholders. As the company navigates the evolving technology landscape, it remains committed to empowering entrepreneurs and small businesses worldwide, solidifying its position as a trusted partner in their digital transformation journeys.

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