GoDaddy Inc.’s (GDDY - Free Report) first-quarter 2022 earnings of 41 cents per share missed the Zacks Consensus Estimate by 2.4%. The bottom line also decreased 21.2% sequentially. Nevertheless, it jumped significantly from 6 cents reported in the year-ago quarter.
GDDY generated revenues of $1 billion, up 11.3% year over year or 11.5% on constant-currency (CC) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.5%. However, the metric decreased 1.6% sequentially.
Revenue growth was driven by strong momentum across applications & commerce and the core platform. Growing demand for GoDaddy Payments remained a positive. GoDaddy witnessed 70% adoption within the commerce tier of Websites + Marketing and 25% within Managed WordPress.
Quarter in Detail
GoDaddy has two revenue pillars, namely Applications & Commerce and Core Platform.
Applications & Commerce comprising Websites + Marketing, Managed WordPress, productivity applications, payments & commerce generated $303.1 million (accounting for 30% of total revenues), up 15.7% on a year-over-year basis.
Core Platform consisting of domains, aftermarket, hosting and security rose 9.5% from the prior-year quarter’s level to $699.6 million (accounting for 60% of total revenues).
In the first quarter, international revenues were $329.8 million, up 8.8% year over year or 9.5% at cc.
Total bookings of $1.16 billion for the reported quarter increased 6.2% year over year or 7.2% on CC basis.
For the reported quarter, applications and commerce annualized recurring revenues (ARR) were $1.2 billion, increasing 14% year over year. Also, core platform ARR climbed 5% from the prior-year quarter’s level to $2.2 billion.
GoDaddy’s commerce offerings with gross merchandise volume were up more than 20% year over year to $24 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $225.9 million, up 17.5% year over year. Normalized EBITDA for Application and Commerce rose 18.7% to $119.8 million while normalized EBITDA for Core Platform was $178.4 million, increasing 19.3% from the same-quarter level last year.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $474.7 million decreased 3.7% year over year. As a percentage of revenues, operating expenses contracted 740 basis points (bps).
For the reported quarter, operating income was $109.6 million. As a percentage of revenues, operating income expanded 670 bps from the year-ago quarter’s level to 10.9%.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash and cash equivalents were $742.7 million compared with $1.26 billion on Dec 31, 2021. Accounts and other receivables were $59.7 million compared with $63.6 million in the prior quarter.
Total debt was $3.91 billion and net debt was $3.17 billion in the reported quarter. GoDaddy reported total debt of $3.92 billion and net debt of $2.67 billion in the previous quarter.
Net cash provided by operating activities was $250.9 million compared with $172.2 million in the fourth quarter of 2021.
Additionally, unlevered free cash flow was $286.8 million for the reported quarter.
Guidance
For second-quarter 2022, management expects revenues in the range of $1.01-$1.02 billion, indicating growth of 9% at the midpoint from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.02 billion.
GDDY also expects revenue growth of applications & commerce and core platform in the band of 14-16% and 5-7%, respectively.
Normalized EBITDA is expected in the range of $232-$237 million, implying 18% growth at the mid-point from the year-ago comparable period’s actuals.
For 2022, management expects total revenues in the range of $4.14-$4.16 billion, suggesting growth of 9% at the mid-point from the year-ago reading. The Zacks Consensus Estimate for 2022 revenues is pegged at $4.15 billion.
For 2022, GDDY also expects revenue growth of applications & commerce and core platform in the band of 14-16% and 5-7%, respectively.
Normalized EBITDA for the full year is expected to be in the band of 23-24%.
For 2022, management also expects unlevered free cash flow to be $1.1 billion, indicating 15% growth from the year-ago reported figure.
Zacks Rank & Stocks to Consider
Currently, GoDaddy has a Zacks Rank #4 (Sell).
Investors interested in the broader technology sector can consider stocks like Jabil (JBL - Free Report) , Jack Henry & Associates (JKHY - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Jack Henry & Associates and Broadcom carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jabil has gained 5.5% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.
Jack Henry & Associates has gained 16.9% over a year. The long-term earnings growth rate for JKHY is currently projected at 17%.
Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.
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GoDaddy Inc.’s (GDDY - Free Report) first-quarter 2022 earnings of 41 cents per share missed the Zacks Consensus Estimate by 2.4%. The bottom line also decreased 21.2% sequentially. Nevertheless, it jumped significantly from 6 cents reported in the year-ago quarter.
GDDY generated revenues of $1 billion, up 11.3% year over year or 11.5% on constant-currency (CC) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.5%. However, the metric decreased 1.6% sequentially.
Revenue growth was driven by strong momentum across applications & commerce and the core platform. Growing demand for GoDaddy Payments remained a positive. GoDaddy witnessed 70% adoption within the commerce tier of Websites + Marketing and 25% within Managed WordPress.
Quarter in Detail
GoDaddy has two revenue pillars, namely Applications & Commerce and Core Platform.
Applications & Commerce comprising Websites + Marketing, Managed WordPress, productivity applications, payments & commerce generated $303.1 million (accounting for 30% of total revenues), up 15.7% on a year-over-year basis.
Core Platform consisting of domains, aftermarket, hosting and security rose 9.5% from the prior-year quarter’s level to $699.6 million (accounting for 60% of total revenues).
In the first quarter, international revenues were $329.8 million, up 8.8% year over year or 9.5% at cc.
Total bookings of $1.16 billion for the reported quarter increased 6.2% year over year or 7.2% on CC basis.
For the reported quarter, applications and commerce annualized recurring revenues (ARR) were $1.2 billion, increasing 14% year over year. Also, core platform ARR climbed 5% from the prior-year quarter’s level to $2.2 billion.
GoDaddy’s commerce offerings with gross merchandise volume were up more than 20% year over year to $24 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $225.9 million, up 17.5% year over year. Normalized EBITDA for Application and Commerce rose 18.7% to $119.8 million while normalized EBITDA for Core Platform was $178.4 million, increasing 19.3% from the same-quarter level last year.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $474.7 million decreased 3.7% year over year. As a percentage of revenues, operating expenses contracted 740 basis points (bps).
For the reported quarter, operating income was $109.6 million. As a percentage of revenues, operating income expanded 670 bps from the year-ago quarter’s level to 10.9%.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash and cash equivalents were $742.7 million compared with $1.26 billion on Dec 31, 2021. Accounts and other receivables were $59.7 million compared with $63.6 million in the prior quarter.
Total debt was $3.91 billion and net debt was $3.17 billion in the reported quarter. GoDaddy reported total debt of $3.92 billion and net debt of $2.67 billion in the previous quarter.
Net cash provided by operating activities was $250.9 million compared with $172.2 million in the fourth quarter of 2021.
Additionally, unlevered free cash flow was $286.8 million for the reported quarter.
Guidance
For second-quarter 2022, management expects revenues in the range of $1.01-$1.02 billion, indicating growth of 9% at the midpoint from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.02 billion.
GDDY also expects revenue growth of applications & commerce and core platform in the band of 14-16% and 5-7%, respectively.
Normalized EBITDA is expected in the range of $232-$237 million, implying 18% growth at the mid-point from the year-ago comparable period’s actuals.
For 2022, management expects total revenues in the range of $4.14-$4.16 billion, suggesting growth of 9% at the mid-point from the year-ago reading. The Zacks Consensus Estimate for 2022 revenues is pegged at $4.15 billion.
For 2022, GDDY also expects revenue growth of applications & commerce and core platform in the band of 14-16% and 5-7%, respectively.
Normalized EBITDA for the full year is expected to be in the band of 23-24%.
For 2022, management also expects unlevered free cash flow to be $1.1 billion, indicating 15% growth from the year-ago reported figure.
Zacks Rank & Stocks to Consider
Currently, GoDaddy has a Zacks Rank #4 (Sell).
Investors interested in the broader technology sector can consider stocks like Jabil (JBL - Free Report) , Jack Henry & Associates (JKHY - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Jack Henry & Associates and Broadcom carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jabil has gained 5.5% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.
Jack Henry & Associates has gained 16.9% over a year. The long-term earnings growth rate for JKHY is currently projected at 17%.
Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.
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Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
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