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GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2022 earnings of 56 cents per share surpassed the Zacks Consensus Estimate by 19.1%. The bottom line also jumped 36.6% sequentially and 107.4% year over year.
GDDY generated revenues of $1.016 million, which came slightly below the Zacks Consensus Estimate of $1.02 billion. Revenues were up 9% year over year or 10.1% on a constant-currency (CC) basis. The metric also increased 1.3% sequentially.
Revenue growth was driven by strong momentum across applications & commerce and the core platform. Growing demand for GoDaddy Payments remained positive. GoDaddy witnessed 80% adoption within the commerce tier of Websites + Marketing and 30% within Managed WordPress.
Expansion of presence & commerce suite and GoDaddy registry, strong demand for domain-based email attach, continuous renewals and registrations, and strength in domain registration, aftermarket and security businesses remained tailwinds.
GoDaddy has two revenue pillars, namely Applications & Commerce and Core Platform.
Applications & Commerce comprising Websites + Marketing, Managed WordPress, productivity applications, payments & commerce generated $317.2 million (accounting for 31% of total revenues), up 14.8% on a year-over-year basis.
Core Platform consisting of domains, aftermarket, hosting and security rose 6.6% from the prior-year quarter’s level to $698.3 million (accounting for 69% of total revenues).
Applications & Commerce revenues missed the Zacks Consensus Estimate of $317.7 million, while Core Platform revenues surpassed the consensus mark of $697.2 million.
In the second quarter, international revenues were $330.8 million, up 4.3% year over year or 7.4% at cc. The same missed the Zacks Consensus Estimate of $340.9 million.
Total bookings of $1.12 billion missed the Zacks Consensus Estimate of $1.15 billion. The same increased 6.1% year over year or 7.7% on CC basis.
For the reported quarter, applications and commerce annualized recurring revenues (ARR) were $1.2 billion, increasing 12% year over year. Also, core platform ARR climbed 5% from the prior-year quarter’s level to $2.3 billion.
GoDaddy’s commerce offerings with gross merchandise volume were up 12% year over year to $28 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $258.4 million, up 30.3% year over year. Normalized EBITDA for Application and Commerce rose 21.7% to $131.8 million, while normalized EBITDA for Core Platform was $198.4 million, increasing 25.4% from the same-quarter level last year.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $472.4 million increased 2.4% year over year. As a percentage of revenues, operating expenses contracted 300 basis points (bps).
For the reported quarter, operating income was $124.6 million. As a percentage of revenues, operating income expanded 280 bps from the year-ago quarter’s level to 12.3%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and cash equivalents were $770.4 million compared with $742.7 million on Mar 31, 2022. Accounts and other receivables were $60.5 million compared with $59.7 million in the prior quarter.
Total debt was $3.91 billion and net debt was $3.13 billion in the reported quarter. GoDaddy reported total debt of $3.91 billion and net debt of $3.17 billion in the previous quarter.
Net cash provided by operating activities was $250.9 million in the reported quarter, in line with the prior quarter’s figure.
Additionally, unlevered free cash flow was $274.3 million for the reported quarter.
Guidance
For third-quarter 2022, management expects revenues in the range of $1.030-$1.045 billion, indicating growth of 8% at the midpoint from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.04 billion.
For the September quarter, GDDY expects revenue growth of applications & commerce, and core platform in the band of 13-15% and 4-6%, respectively.
Normalized EBITDA is expected in the range of $250-$260 million, implying 12% growth at the mid-point from the year-ago comparable period’s actuals.
For 2022, management expects total revenues in the range of $4.10-$4.13 billion, suggesting growth of 8% 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 expects revenue growth of applications & commerce, and core platform in the band of 13-15% and 4-6%, respectively.
Normalized EBITDA margin for the full year is expected in the band of 24-25%.
For 2022, management expects unlevered free cash flow to be $1.1 billion, indicating 15% growth from the year-ago reported figure.
Image: Bigstock
GoDaddy (GDDY) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2022 earnings of 56 cents per share surpassed the Zacks Consensus Estimate by 19.1%. The bottom line also jumped 36.6% sequentially and 107.4% year over year.
GDDY generated revenues of $1.016 million, which came slightly below the Zacks Consensus Estimate of $1.02 billion. Revenues were up 9% year over year or 10.1% on a constant-currency (CC) basis. The metric also increased 1.3% sequentially.
Revenue growth was driven by strong momentum across applications & commerce and the core platform. Growing demand for GoDaddy Payments remained positive. GoDaddy witnessed 80% adoption within the commerce tier of Websites + Marketing and 30% within Managed WordPress.
Expansion of presence & commerce suite and GoDaddy registry, strong demand for domain-based email attach, continuous renewals and registrations, and strength in domain registration, aftermarket and security businesses remained tailwinds.
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 $317.2 million (accounting for 31% of total revenues), up 14.8% on a year-over-year basis.
Core Platform consisting of domains, aftermarket, hosting and security rose 6.6% from the prior-year quarter’s level to $698.3 million (accounting for 69% of total revenues).
Applications & Commerce revenues missed the Zacks Consensus Estimate of $317.7 million, while Core Platform revenues surpassed the consensus mark of $697.2 million.
In the second quarter, international revenues were $330.8 million, up 4.3% year over year or 7.4% at cc. The same missed the Zacks Consensus Estimate of $340.9 million.
Total bookings of $1.12 billion missed the Zacks Consensus Estimate of $1.15 billion. The same increased 6.1% year over year or 7.7% on CC basis.
For the reported quarter, applications and commerce annualized recurring revenues (ARR) were $1.2 billion, increasing 12% year over year. Also, core platform ARR climbed 5% from the prior-year quarter’s level to $2.3 billion.
GoDaddy’s commerce offerings with gross merchandise volume were up 12% year over year to $28 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $258.4 million, up 30.3% year over year. Normalized EBITDA for Application and Commerce rose 21.7% to $131.8 million, while normalized EBITDA for Core Platform was $198.4 million, increasing 25.4% from the same-quarter level last year.
Operating expenses (technology and development, marketing and advertising, customer care as well as general and administrative) of $472.4 million increased 2.4% year over year. As a percentage of revenues, operating expenses contracted 300 basis points (bps).
For the reported quarter, operating income was $124.6 million. As a percentage of revenues, operating income expanded 280 bps from the year-ago quarter’s level to 12.3%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and cash equivalents were $770.4 million compared with $742.7 million on Mar 31, 2022. Accounts and other receivables were $60.5 million compared with $59.7 million in the prior quarter.
Total debt was $3.91 billion and net debt was $3.13 billion in the reported quarter. GoDaddy reported total debt of $3.91 billion and net debt of $3.17 billion in the previous quarter.
Net cash provided by operating activities was $250.9 million in the reported quarter, in line with the prior quarter’s figure.
Additionally, unlevered free cash flow was $274.3 million for the reported quarter.
Guidance
For third-quarter 2022, management expects revenues in the range of $1.030-$1.045 billion, indicating growth of 8% at the midpoint from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.04 billion.
For the September quarter, GDDY expects revenue growth of applications & commerce, and core platform in the band of 13-15% and 4-6%, respectively.
Normalized EBITDA is expected in the range of $250-$260 million, implying 12% growth at the mid-point from the year-ago comparable period’s actuals.
For 2022, management expects total revenues in the range of $4.10-$4.13 billion, suggesting growth of 8% 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 expects revenue growth of applications & commerce, and core platform in the band of 13-15% and 4-6%, respectively.
Normalized EBITDA margin for the full year is expected in the band of 24-25%.
For 2022, management 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 Zacks Computer & Technology sector can consider some better-ranked stocks like Keysight Technologies (KEYS - Free Report) , ASE Technology (ASX - Free Report) and Asure Software (ASUR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Keysight Technologies has lost 19.9% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.
ASE technology has lost 24.6% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.
Asure Software has lost 32.3% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.