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GoDaddy (GDDY) Beats Earnings & Revenue Estimates in Q2
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GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2018 adjusted earnings of 11 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Earnings increased sequentially but decreased 15.4% from the year-ago quarter.
Revenues of $651.6 million increased 2.9% sequentially and 16.8% year over year, beating the Zacks Consensus Estimate of $643 million. Moreover, the reported figure exceeded management’s guided range of $640-$645 million.
Management remains positive about strong product and marketing roadmap for 2018. The company’s mobile-optimized website builder, GoCentral, has been gaining momentum. GoDaddy has been making continuous efforts to enhance its features, thereby making the products more attractive.
Following the weaker-than-expected web hosting sales in the second quarter, the share price was down 4.64% in after-hours trading.
However, on a year-to-date basis, the stock has outperformed the industry it belongs to. It has gained 52.5% compared with the industry’s growth of 22% in the said period.
Top-Line Details
At the end of the second quarter, customers were nearly 18 million, increasing 6.5% from the prior-year quarter. Also, average revenue per user (ARPU) was $142, up 10.2% from the prior-year quarter.
Strong customer growth and expanding ARPU led to the improvement.
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
Domain revenues of $304.8 million contributed 46.8% to the total revenues. Revenues were up 4.5% sequentially and 15.8% year over year.
Hosting and Presence revenues of $244.6 million accounted for 37.5% of the total revenues. The figure represented 2% sequential and 13.8% year-over-year growth.
Business Applications revenues of $102.2 million, accounting for 15.7% of the total revenues, increased 0.5% sequentially and 28.4% 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 second quarter, total bookings of $754.2 million increased 13% year over year.
Operating Results
Gross margin was 66%, up 4 basis points (bps) sequentially and 125 bps from the prior-year quarter.
Operating expenses of $329.8 million increased 10% year over year.
The quarter’s GAAP net income was $18.1million compared with$20.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
On Jun 30, 2018, total cash and cash equivalents, and short-term investments were $828.5 million compared with $729.5 million in the first quarter. Accounts and other receivables were $23.6 million compared with $24 million in the last reported quarter.
Long-term debt was $16.7 million in the second quarter.
Net cash provided by operating activities in the second quarter was $128.9 million compared with $148.4 million in the last reported quarter.
Guidance
For the third quarter of 2018, the company expects revenues in the range of $670-$675 million. The Zacks Consensus Estimate for third-quarter revenues is pegged at $666.5 million.
For full-year 2018, GoDaddy raised its revenue guidance to $2.645-$2.655 billion, representing year-over-year growth of approximately 19%. The Zacks Consensus Estimate for full-year revenues is pegged at $2.63 billion.
Currently, GoDaddy has a Zacks Rank #2 (Buy). Other top-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and GrubHub Inc. . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), GrubHubholds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and GrubHubis currently projected to be 3%, 7.5% and 24%, respectively.
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GoDaddy (GDDY) Beats Earnings & Revenue Estimates in Q2
GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2018 adjusted earnings of 11 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Earnings increased sequentially but decreased 15.4% from the year-ago quarter.
Revenues of $651.6 million increased 2.9% sequentially and 16.8% year over year, beating the Zacks Consensus Estimate of $643 million. Moreover, the reported figure exceeded management’s guided range of $640-$645 million.
Management remains positive about strong product and marketing roadmap for 2018. The company’s mobile-optimized website builder, GoCentral, has been gaining momentum. GoDaddy has been making continuous efforts to enhance its features, thereby making the products more attractive.
Following the weaker-than-expected web hosting sales in the second quarter, the share price was down 4.64% in after-hours trading.
However, on a year-to-date basis, the stock has outperformed the industry it belongs to. It has gained 52.5% compared with the industry’s growth of 22% in the said period.
Top-Line Details
At the end of the second quarter, customers were nearly 18 million, increasing 6.5% from the prior-year quarter. Also, average revenue per user (ARPU) was $142, up 10.2% from the prior-year quarter.
Strong customer growth and expanding ARPU led to the improvement.
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
Domain revenues of $304.8 million contributed 46.8% to the total revenues. Revenues were up 4.5% sequentially and 15.8% year over year.
Hosting and Presence revenues of $244.6 million accounted for 37.5% of the total revenues. The figure represented 2% sequential and 13.8% year-over-year growth.
Business Applications revenues of $102.2 million, accounting for 15.7% of the total revenues, increased 0.5% sequentially and 28.4% 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 second quarter, total bookings of $754.2 million increased 13% year over year.
Operating Results
Gross margin was 66%, up 4 basis points (bps) sequentially and 125 bps from the prior-year quarter.
Operating expenses of $329.8 million increased 10% year over year.
The quarter’s GAAP net income was $18.1million compared with$20.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
On Jun 30, 2018, total cash and cash equivalents, and short-term investments were $828.5 million compared with $729.5 million in the first quarter. Accounts and other receivables were $23.6 million compared with $24 million in the last reported quarter.
Long-term debt was $16.7 million in the second quarter.
Net cash provided by operating activities in the second quarter was $128.9 million compared with $148.4 million in the last reported quarter.
Guidance
For the third quarter of 2018, the company expects revenues in the range of $670-$675 million. The Zacks Consensus Estimate for third-quarter revenues is pegged at $666.5 million.
For full-year 2018, GoDaddy raised its revenue guidance to $2.645-$2.655 billion, representing year-over-year growth of approximately 19%. The Zacks Consensus Estimate for full-year revenues is pegged at $2.63 billion.
GoDaddy Inc. Price, Consensus and EPS Surprise
GoDaddy Inc. Price, Consensus and EPS Surprise | GoDaddy Inc. Quote
Zacks Rank and Other Stocks to Consider
Currently, GoDaddy has a Zacks Rank #2 (Buy). Other top-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and GrubHub Inc. . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), GrubHubholds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and GrubHubis currently projected to be 3%, 7.5% and 24%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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