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GoDaddy (GDDY) Q4 Earnings and Revenues Outpace Estimates
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GoDaddy Inc. (GDDY - Free Report) reported fourth-quarter 2020 adjusted earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 33 cents. Also, the bottom line was up 7.9% from the year-ago quarter.
The company generated revenues of $873.9 million, up 12% both on a year-over-year and constant-currency (cc) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.01%.
The revenue growth was driven by strong performance of its product segments. Also, strong global expansion remained a positive.
International revenues were $293.2 million for the fourth quarter, up 12.2% year over year or 12.3% on a cc basis.
GoDaddy generates revenues from three segments — Domains, Hosting and Presence, as well as Business Applications.
Domains: The company generated revenues of $402.2 million (accounting for 46% of total revenues) from this segment. The figure improved 14.2% from the year-ago quarter on higher average selling price. The increase was driven by strong renewals and registrations.
Hosting and Presence: This segment generated revenues of $308.8 million (35% of revenues), which increased 5.5% on a year-over-year basis. The revenue growth can be primarily attributed to higher subscriptions to Websites and Marketing, as well as broad integrations. Also, partnerships aided revenue growth in this segment.
Business Applications: Revenues from this segment came in at $162.9 million (19% of revenues), increasing 12.2% year over year.
Operating Metrics
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. For the fourth quarter, total bookings of $943.1 million increased 13.1% year over year.
It gained more than 1.4 million new customers in the fourth quarter, nearly double the number added in 2019.
Operating Results
Gross margin was 65.5%, up 20 basis points from the prior-year quarter.
Operating expenses (technology and development, marketing and advertising, as well as general and administrative) of $353.9 million increased 17% year over year.
Balance Sheet & Cash Flow
At fourth quarter-end, total cash and cash equivalents, along with short-term investments were $765.2 million compared with $621.8 million in third-quarter 2020. Accounts and other receivables were $41.8 million compared with $38.7 million in the third quarter.
Total debt was $3.2 billion and net debt was $2.4 billion for the fourth quarter.
Net cash provided by operating activities was $165.9 million compared with $197.3 million in the third quarter. Capital expenditure was $27.4 million at fourth quarter-end.
Additionally, adjusted free cash flow was $181.1 million for the reported quarter.
Guidance
For the first quarter, management expects revenues to be $885 million, indicating year-over-year growth of 12%. The Zacks Consensus Estimate for revenues is pegged at $855.63 million for the quarter.
For 2021, management expects revenues to be $3.7 billion, indicating year-over-year growth of 12%.
Long-term earnings growth for Semtech, KLA Corp., and Garmin is currently projected at 12.5%, 11.6%, and 6.8%, respectively.
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GoDaddy (GDDY) Q4 Earnings and Revenues Outpace Estimates
GoDaddy Inc. (GDDY - Free Report) reported fourth-quarter 2020 adjusted earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 33 cents. Also, the bottom line was up 7.9% from the year-ago quarter.
The company generated revenues of $873.9 million, up 12% both on a year-over-year and constant-currency (cc) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.01%.
The revenue growth was driven by strong performance of its product segments. Also, strong global expansion remained a positive.
International revenues were $293.2 million for the fourth quarter, up 12.2% year over year or 12.3% on a cc basis.
GoDaddy Inc. Price, Consensus and EPS Surprise
GoDaddy Inc. price-consensus-eps-surprise-chart | GoDaddy Inc. Quote
Segmental Revenues
GoDaddy generates revenues from three segments — Domains, Hosting and Presence, as well as Business Applications.
Domains: The company generated revenues of $402.2 million (accounting for 46% of total revenues) from this segment. The figure improved 14.2% from the year-ago quarter on higher average selling price. The increase was driven by strong renewals and registrations.
Hosting and Presence: This segment generated revenues of $308.8 million (35% of revenues), which increased 5.5% on a year-over-year basis. The revenue growth can be primarily attributed to higher subscriptions to Websites and Marketing, as well as broad integrations. Also, partnerships aided revenue growth in this segment.
Business Applications: Revenues from this segment came in at $162.9 million (19% of revenues), increasing 12.2% year over year.
Operating Metrics
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. For the fourth quarter, total bookings of $943.1 million increased 13.1% year over year.
It gained more than 1.4 million new customers in the fourth quarter, nearly double the number added in 2019.
Operating Results
Gross margin was 65.5%, up 20 basis points from the prior-year quarter.
Operating expenses (technology and development, marketing and advertising, as well as general and administrative) of $353.9 million increased 17% year over year.
Balance Sheet & Cash Flow
At fourth quarter-end, total cash and cash equivalents, along with short-term investments were $765.2 million compared with $621.8 million in third-quarter 2020. Accounts and other receivables were $41.8 million compared with $38.7 million in the third quarter.
Total debt was $3.2 billion and net debt was $2.4 billion for the fourth quarter.
Net cash provided by operating activities was $165.9 million compared with $197.3 million in the third quarter. Capital expenditure was $27.4 million at fourth quarter-end.
Additionally, adjusted free cash flow was $181.1 million for the reported quarter.
Guidance
For the first quarter, management expects revenues to be $885 million, indicating year-over-year growth of 12%. The Zacks Consensus Estimate for revenues is pegged at $855.63 million for the quarter.
For 2021, management expects revenues to be $3.7 billion, indicating year-over-year growth of 12%.
Zacks Rank and Other Stocks to Consider
GoDaddy currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Semtech Corporation (SMTC - Free Report) , KLA Corporation (KLAC - Free Report) and Garmin Ltd. (GRMN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Semtech, KLA Corp., and Garmin is currently projected at 12.5%, 11.6%, and 6.8%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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