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GoDaddy (GDDY) Q2 Earnings Miss, Revenues Outpace Estimates

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GoDaddy Inc. (GDDY - Free Report) reported second-quarter 2021 earnings of 27 cents per share, missing the Zacks Consensus Estimate by 10%. Notably, the company reported a loss of $4.06 per share in the year-ago quarter.

The company generated revenues of $931.3 million, up 15.5% year over year or 14.3% on a constant-currency (CC) basis. The reported figure also surpassed the Zacks Consensus Estimate of $920 million.

Revenue growth was driven by solid demand for products across all segments. New product introductions including GoDaddy Payments, GoDaddy Studios and Job Postings function remained tailwinds.

International revenues were $317.2 million for the second quarter, up 19.2% year over year or 15.8% on a CC basis.

Further, total bookings of $1.05 billion in the reported quarter increased 12.7% year over year or 10.6% on a CC basis.

GoDaddy Inc. Price and EPS Surprise

GoDaddy Inc. Price and EPS Surprise

GoDaddy Inc. price-eps-surprise | 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 $436.7 million (accounting for 47% of total revenues) from this segment. The figure improved 18.2% from the year-ago quarter, driven by strong renewals and registrations, expansion of GoDaddy Registry, and the broadest and deepest domain aftermarket.

Hosting and Presence: This segment generated revenues of $318.5 million (34% of revenues), which increased 9% 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 $176.1 million (19% of revenues), increasing 21.8% year over year. The increase was driven by new customer inclusion, strong renewals, and addition of additional seats of email and productivity solutions by existing customers.

Operating Results

Gross margin was 64.4%, up 24 basis points from the prior-year quarter.

Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $461.3 million increased 13.5% year over year.

In the second quarter, operating income of $88 million was up from $22.9 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Jun 30, 2021, total cash and cash equivalents were $1.37 billion compared with $1.29 billion on Mar 31, 2021. Accounts and other receivables were $54.6 million compared with $48.3 million in the first quarter.

Total debt was $3.93 billion and net debt was $2.56 billion for the second quarter.

Net cash provided by operating activities was $209.4 million compared with $221.3 million in the first quarter. Capital expenditure was $56.9 million at second quarter-end.

Additionally, free cash flow was $237 million for the reported quarter.

Guidance

For the third-quarter 2021, management expects revenues to be $945 million, indicating year-over-year growth of 12%. The Zacks Consensus Estimate for revenues is pegged at $947.3 million for the quarter.

For 2021, management expects revenues to be $3.75 billion, suggesting year-over-year growth of 13%. The Zacks Consensus Estimate for 2021 revenues is pegged at $4.7 billion.

Zacks Rank & Other Stocks to Consider

Currently, GoDaddy has a Zacks Rank #2 (Buy).

Some similar-ranked stocks in the broader technology sector include Carrier Global Corporation (CARR - Free Report) , Agilent Technologies (A - Free Report) and Ametek (AME - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Carrier, Agilent and Ametek are currently projected at 14.5%, 13% and 10.2%, respectively.