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GoDaddy (GDDY) Q1 Earnings Miss Estimates, Revenues Rise Y/Y
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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.
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 (GDDY) Q1 Earnings Miss Estimates, Revenues Rise Y/Y
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.
GoDaddy Inc. Price, Consensus and EPS Surprise
GoDaddy Inc. price-consensus-eps-surprise-chart | GoDaddy Inc. Quote
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%.