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GoDaddy (GDDY) Q3 Earnings and Revenues Outpace Estimates
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GoDaddy Inc. (GDDY - Free Report) reported third-quarter 2021 earnings of 58 cents per share, beating the Zacks Consensus Estimate by 65.7%. The reported earnings also increased 52.6% on a year-over-year basis.
The company generated revenues of $964 million, up 14.2% year over year or 13.5% on a constant-currency (CC) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.9%.
Revenue growth was driven by solid demand for products across all segments. It introduced an OmniCommerce solution for Websites + Marketing, and a new feature in the Hub by GoDaddy Pro named Invoicing and Payments, which remained tailwinds.
International revenues were $319.7 million for the third quarter, up 12.7% year over year or 10.6% on a CC basis.
Total bookings of $1.04 billion for the reported quarter increased 9.9% year over year or 9.1% on a CC basis.
For the reported quarter, Websites + Marketing annualized recurring revenues (ARR) grew more than 20% year over year. Also, Commerce ARR increased more than 30%.
GoDaddy generates revenues from three segments — Domains, Hosting and Presence as well as Business Applications.
Domains: The company generated revenues of $453.2 million (accounting for 47% of total revenues) from this segment. The figure improved 17% from the year-ago quarter, driven by strong renewals on primary registrations and strong performance in the aftermarket.
Hosting and Presence: This segment generated revenues of $324.7 million (34% of revenues), which increased 7.4% on a year-over-year basis. The revenue growth can be primarily attributed to higher subscriptions to Websites + Marketing.
Business Applications: Revenues from this segment came in at $186.1 million (19% of revenues), increasing 20.4% 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 64.1%, down 150 basis points (bps) from the prior-year quarter, driven by product mix.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $451.6 million increased 11% year over year. As a percentage of revenues, operating expenses contracted 133 bps.
For the reported quarter, operating margin was 13.6%. It expanded 268 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2021, total cash and cash equivalents were $1.14 billion compared with $1.38 billion on Jun 30, 2021. Accounts and other receivables were $63.8 million compared with $54.6 million in the second quarter.
Total debt was $3.93 billion and net debt was $2.79 billion for the third quarter.
Net cash provided by operating activities was $226.4 million compared with $209.4 million in the second quarter.
On a trailing 12-month basis, capital expenditure was reported at $61.1 million.
Additionally, free cash flow was $251.5 million for the reported quarter.
Guidance
For fourth-quarter 2021, management expects revenues to be $970 million, indicating year-over-year growth of 11%. The Zacks Consensus Estimate for revenues is pegged at $970.5 million for the quarter.
For 2021, management has raised the guidance for revenues from $3.75 billion to $3.77 billion, suggesting year-over-year growth of 14%. The Zacks Consensus Estimate for 2021 revenues is pegged at $3.75 billion.
For 2021, it expects free cash flow to be $960 million, representing 16% year over year growth.
Zacks Rank & Other Stocks to Consider
Currently, GoDaddy has a Zacks Rank #2 (Buy).
Other similar-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , PerkinElmer and Mimecast Limited . While Advanced Micro Devices sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Mimecast carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Advanced Micro Devices, PerkinElmer, and Mimecast are currently projected at 46.2%, 41.7%, and 35%, respectively.
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GoDaddy (GDDY) Q3 Earnings and Revenues Outpace Estimates
GoDaddy Inc. (GDDY - Free Report) reported third-quarter 2021 earnings of 58 cents per share, beating the Zacks Consensus Estimate by 65.7%. The reported earnings also increased 52.6% on a year-over-year basis.
The company generated revenues of $964 million, up 14.2% year over year or 13.5% on a constant-currency (CC) basis. The reported figure also surpassed the Zacks Consensus Estimate by 1.9%.
Revenue growth was driven by solid demand for products across all segments. It introduced an OmniCommerce solution for Websites + Marketing, and a new feature in the Hub by GoDaddy Pro named Invoicing and Payments, which remained tailwinds.
International revenues were $319.7 million for the third quarter, up 12.7% year over year or 10.6% on a CC basis.
Total bookings of $1.04 billion for the reported quarter increased 9.9% year over year or 9.1% on a CC basis.
For the reported quarter, Websites + Marketing annualized recurring revenues (ARR) grew more than 20% year over year. Also, Commerce ARR increased more than 30%.
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 $453.2 million (accounting for 47% of total revenues) from this segment. The figure improved 17% from the year-ago quarter, driven by strong renewals on primary registrations and strong performance in the aftermarket.
Hosting and Presence: This segment generated revenues of $324.7 million (34% of revenues), which increased 7.4% on a year-over-year basis. The revenue growth can be primarily attributed to higher subscriptions to Websites + Marketing.
Business Applications: Revenues from this segment came in at $186.1 million (19% of revenues), increasing 20.4% 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 64.1%, down 150 basis points (bps) from the prior-year quarter, driven by product mix.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $451.6 million increased 11% year over year. As a percentage of revenues, operating expenses contracted 133 bps.
For the reported quarter, operating margin was 13.6%. It expanded 268 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2021, total cash and cash equivalents were $1.14 billion compared with $1.38 billion on Jun 30, 2021. Accounts and other receivables were $63.8 million compared with $54.6 million in the second quarter.
Total debt was $3.93 billion and net debt was $2.79 billion for the third quarter.
Net cash provided by operating activities was $226.4 million compared with $209.4 million in the second quarter.
On a trailing 12-month basis, capital expenditure was reported at $61.1 million.
Additionally, free cash flow was $251.5 million for the reported quarter.
Guidance
For fourth-quarter 2021, management expects revenues to be $970 million, indicating year-over-year growth of 11%. The Zacks Consensus Estimate for revenues is pegged at $970.5 million for the quarter.
For 2021, management has raised the guidance for revenues from $3.75 billion to $3.77 billion, suggesting year-over-year growth of 14%. The Zacks Consensus Estimate for 2021 revenues is pegged at $3.75 billion.
For 2021, it expects free cash flow to be $960 million, representing 16% year over year growth.
Zacks Rank & Other Stocks to Consider
Currently, GoDaddy has a Zacks Rank #2 (Buy).
Other similar-ranked stocks in the broader technology sector include Advanced Micro Devices (AMD - Free Report) , PerkinElmer and Mimecast Limited . While Advanced Micro Devices sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Mimecast carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Advanced Micro Devices, PerkinElmer, and Mimecast are currently projected at 46.2%, 41.7%, and 35%, respectively.