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GoDaddy (GDDY) Q1 Earnings In Line, Revenues Beat Estimates
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GoDaddy’s (GDDY - Free Report) first-quarter 2018 adjusted earnings of 2 cents per share were in line with the Zacks Consensus Estimate. Earnings increased 100% from the year-ago quarter.
Management remains positive about strong product and marketing roadmap for 2018. Also, the company’s mobile-optimized website builder, GoCentral, has been gaining momentum. Also, the company has been making continuous efforts to enhance its features, thereby making its products more attractive.
Following the better-than-expected earnings in the first quarter, the share price was up 1.59% in after-hours trading. Notably, on a 12-month basis, the stock has outperformed the industry it belongs to. It gained 71% compared with the industry’s growth of 40.3%.
Revenues
Revenues of $633.2 million increased 5.1% sequentially and 29.3% year over year, beating the Zacks Consensus Estimate of $622 million. Moreover, the reported figure came above management’s guidance of $620-$625 million.
At the end of the first quarter, customers were nearly 17.7 million, increasing 17.4% from the prior-year quarter. Also, average revenue per user (ARPU) was $138, up 5.8% from the prior-year quarter.
Strong growth in customers, contribution from HEG acquisition and expanding ARPU led to the improvement.
Segmental Revenues
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
Domain revenues of $291.7 million contributed 46.1% to the total revenues. Revenues were up 3.6% sequentially and 21.1% year over year.
Hosting and Presence revenues of $239.8 million accounted for 37.9% of the total revenues. The figure represented 4.8% sequential and 34.5% year-over-year growth.
Business Applications revenues of $101.7 million, accounting for 16.1% of the total revenues, increased 10.8% sequentially and 44.1% from the year-ago quarter.
Booking
GoDaddy uses total bookings as a performance measure, since payment is usually collected at the time of sale, and recognizes revenues ratably over the term of customer contracts. In the first quarter, total bookings of $783.1 million increased 25.3% year over year.
Margins
Gross margin was 66%, down 46 basis points (bps) sequentially but up 210 bps from the prior-year quarter.
Operating expenses of $252.9 million increased 21% year over year.
Net Income
The quarter’s GAAP net income was $3.3million compared with net income of $0.6 million in the year-ago quarter.
Pro-forma earnings were 2 cents compared with 1 cent reported in the prior-year quarter.
Balance Sheet & Cash Flow
On Mar 31, 2018, total cash and cash equivalents, and short-term investments were $729.5 million compared with $595 million in the fourth quarter. Accounts and other receivables were $24 million compared with $18.4 million in the last reported quarter.
Total long-term debt, including current portion, was $2.48 billion, while net debt was $1.75 billion in the first quarter.
Net cash provided by operating activities in the first quarter was $148.4 million compared with $104.3 million in the last reported quarter.
Guidance
For the second quarter of 2018, the company expects revenues in the range of $640-$645 million. The Zacks Consensus Estimate for second-quarter revenues is pegged at $635.3 million.
For full-year 2018, GoDaddy raised its revenue guidance to $2.620-$2.640 billion, representing year-over-year growth of approximately 18%. The Zacks Consensus Estimate for full-year revenues is pegged at $2.60 billion.
Long-term earnings per share growth rate forLittelfuse, Etsy and SMC Corporation is projected at 12%, 18% and 13.7%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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GoDaddy (GDDY) Q1 Earnings In Line, Revenues Beat Estimates
GoDaddy’s (GDDY - Free Report) first-quarter 2018 adjusted earnings of 2 cents per share were in line with the Zacks Consensus Estimate. Earnings increased 100% from the year-ago quarter.
Management remains positive about strong product and marketing roadmap for 2018. Also, the company’s mobile-optimized website builder, GoCentral, has been gaining momentum. Also, the company has been making continuous efforts to enhance its features, thereby making its products more attractive.
Following the better-than-expected earnings in the first quarter, the share price was up 1.59% in after-hours trading. Notably, on a 12-month basis, the stock has outperformed the industry it belongs to. It gained 71% compared with the industry’s growth of 40.3%.
Revenues
Revenues of $633.2 million increased 5.1% sequentially and 29.3% year over year, beating the Zacks Consensus Estimate of $622 million. Moreover, the reported figure came above management’s guidance of $620-$625 million.
At the end of the first quarter, customers were nearly 17.7 million, increasing 17.4% from the prior-year quarter. Also, average revenue per user (ARPU) was $138, up 5.8% from the prior-year quarter.
Strong growth in customers, contribution from HEG acquisition and expanding ARPU led to the improvement.
Segmental Revenues
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
Domain revenues of $291.7 million contributed 46.1% to the total revenues. Revenues were up 3.6% sequentially and 21.1% year over year.
Hosting and Presence revenues of $239.8 million accounted for 37.9% of the total revenues. The figure represented 4.8% sequential and 34.5% year-over-year growth.
Business Applications revenues of $101.7 million, accounting for 16.1% of the total revenues, increased 10.8% sequentially and 44.1% from the year-ago quarter.
Booking
GoDaddy uses total bookings as a performance measure, since payment is usually collected at the time of sale, and recognizes revenues ratably over the term of customer contracts. In the first quarter, total bookings of $783.1 million increased 25.3% year over year.
Margins
Gross margin was 66%, down 46 basis points (bps) sequentially but up 210 bps from the prior-year quarter.
Operating expenses of $252.9 million increased 21% year over year.
Net Income
The quarter’s GAAP net income was $3.3million compared with net income of $0.6 million in the year-ago quarter.
Pro-forma earnings were 2 cents compared with 1 cent reported in the prior-year quarter.
Balance Sheet & Cash Flow
On Mar 31, 2018, total cash and cash equivalents, and short-term investments were $729.5 million compared with $595 million in the fourth quarter. Accounts and other receivables were $24 million compared with $18.4 million in the last reported quarter.
Total long-term debt, including current portion, was $2.48 billion, while net debt was $1.75 billion in the first quarter.
Net cash provided by operating activities in the first quarter was $148.4 million compared with $104.3 million in the last reported quarter.
Guidance
For the second quarter of 2018, the company expects revenues in the range of $640-$645 million. The Zacks Consensus Estimate for second-quarter revenues is pegged at $635.3 million.
For full-year 2018, GoDaddy raised its revenue guidance to $2.620-$2.640 billion, representing year-over-year growth of approximately 18%. The Zacks Consensus Estimate for full-year revenues is pegged at $2.60 billion.
GoDaddy Inc. Price, Consensus and EPS Surprise
GoDaddy Inc. Price, Consensus and EPS Surprise | GoDaddy Inc. Quote
Zacks Rank and Stocks to Consider
Currently, GoDaddy has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the technology sector are Littelfuse, Inc. (LFUS - Free Report) , sporting a Zacks Rank #1 (Strong Buy), while Etsy, Inc. (ETSY - Free Report) and SMC Corporation (SMCAY - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings per share growth rate forLittelfuse, Etsy and SMC Corporation is projected at 12%, 18% and 13.7%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>