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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 2023 earnings of 30 cents per share missed the Zacks Consensus Estimate by 42.3%. The bottom line also declined 26.8% year over year.
GDDY generated revenues of $1.04 billion, higher than the Zacks Consensus Estimate of $1.03 billion. Revenues were up 3.3% and 4.7% year over year on a reported basis and a constant-currency (CC) basis, respectively.
Revenue growth was driven by strong momentum across the Applications & Commerce business.
The company's expanding global footprint contributed well. Further, GDDY’s efforts to strengthen its portfolio aided quarterly results.
GoDaddy has two revenue pillars, namely Applications & Commerce, and Core Platform.
Applications & Commerce, comprising Websites + Marketing, Managed WordPress, productivity applications, and payments & commerce, generated $338 million (accounting for 32.6% of the total revenues), up 11.5% on a year-over-year basis.
Core Platform, consisting of domains, aftermarket, hosting, and security, fell 0.2% from the prior-year quarter’s level to $698 million (accounting for 67.4% of total revenues).
For the reported quarter, Applications & Commerce annualized recurring revenues (ARR) were $1.3 billion, increasing 9% year over year. Also, core platform ARR climbed 1% from the prior-year quarter’s level to $2.2 billion.
In the first quarter, international revenues were $340.6 million, up 3.3% year over year or 7.3% at CC.
Total bookings of $1.19 billion increased 3.7% year over year or 5.3% on a CC basis.
The average revenue per user was $197, up 4% year over year.
Total ARR was $3.54 billion, up 4% from the prior-year quarter.
GoDaddy’s gross merchandise volume was up more than 18% year over year to $28 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $249.7 million, up 10.5% year over year.
Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $478.3 million increased 0.76% year over year. As a percentage of revenues, operating expenses contracted 110 basis points (bps) to 46.2% from the year-ago quarter.
For the reported quarter, operating income was $70.8 million, down 35.4% year over year. As a percentage of revenues, operating income contracted 410 bps from the year-ago quarter’s level to 6.8%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $892.4 million compared with $774 million as of Dec 33, 2022. Accounts and other receivables were $68.7 million compared with $60.1 million in the prior quarter.
GoDaddy had total debt of $3.9 billion and net debt of $3 billion in the current quarter. Total debt was $3.9 billion and net debt was $3.1 billion in the previous quarter.
Net cash provided by operating activities was $270.3 million in the reported quarter compared with the prior quarter’s figure of $208 million.
Additionally, unlevered free cash flow was $303.9 million in the reported quarter.
Guidance
For second-quarter 2023, management expects revenues of $1.045-$1.065 billion, indicating growth of 4% at the mid-point from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.05 billion.
For the second quarter, GDDY expects applications and commerce revenues to grow 8-10% year over year. Core platform revenues are anticipated to grow 1-3% from the year-ago quarter.
Normalized EBITDA margin is expected to be 25%.
For 2023, management expects total revenues of $4.250-$4.325 billion, suggesting growth of 5% at the mid-point from the year-ago actuals. The Zacks Consensus Estimate for 2023 revenues is pegged at $4.24 billion.
For 2023, GDDY expects applications and commerce, and core platform revenue growth of 8-10% and 2-4%, respectively.
The normalized EBITDA margin for the full year is projected to be 26%.
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.
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GoDaddy (GDDY) Q1 Earnings Miss Estimates, Revenues Rise Y/Y
GoDaddy Inc.’s (GDDY - Free Report) first-quarter 2023 earnings of 30 cents per share missed the Zacks Consensus Estimate by 42.3%. The bottom line also declined 26.8% year over year.
GDDY generated revenues of $1.04 billion, higher than the Zacks Consensus Estimate of $1.03 billion. Revenues were up 3.3% and 4.7% year over year on a reported basis and a constant-currency (CC) basis, respectively.
Revenue growth was driven by strong momentum across the Applications & Commerce business.
The company's expanding global footprint contributed well. Further, GDDY’s efforts to strengthen its portfolio aided quarterly results.
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, and payments & commerce, generated $338 million (accounting for 32.6% of the total revenues), up 11.5% on a year-over-year basis.
Core Platform, consisting of domains, aftermarket, hosting, and security, fell 0.2% from the prior-year quarter’s level to $698 million (accounting for 67.4% of total revenues).
For the reported quarter, Applications & Commerce annualized recurring revenues (ARR) were $1.3 billion, increasing 9% year over year. Also, core platform ARR climbed 1% from the prior-year quarter’s level to $2.2 billion.
In the first quarter, international revenues were $340.6 million, up 3.3% year over year or 7.3% at CC.
Total bookings of $1.19 billion increased 3.7% year over year or 5.3% on a CC basis.
The average revenue per user was $197, up 4% year over year.
Total ARR was $3.54 billion, up 4% from the prior-year quarter.
GoDaddy’s gross merchandise volume was up more than 18% year over year to $28 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the reported quarter was $249.7 million, up 10.5% year over year.
Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $478.3 million increased 0.76% year over year. As a percentage of revenues, operating expenses contracted 110 basis points (bps) to 46.2% from the year-ago quarter.
For the reported quarter, operating income was $70.8 million, down 35.4% year over year. As a percentage of revenues, operating income contracted 410 bps from the year-ago quarter’s level to 6.8%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, cash and cash equivalents were $892.4 million compared with $774 million as of Dec 33, 2022. Accounts and other receivables were $68.7 million compared with $60.1 million in the prior quarter.
GoDaddy had total debt of $3.9 billion and net debt of $3 billion in the current quarter. Total debt was $3.9 billion and net debt was $3.1 billion in the previous quarter.
Net cash provided by operating activities was $270.3 million in the reported quarter compared with the prior quarter’s figure of $208 million.
Additionally, unlevered free cash flow was $303.9 million in the reported quarter.
Guidance
For second-quarter 2023, management expects revenues of $1.045-$1.065 billion, indicating growth of 4% at the mid-point from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.05 billion.
For the second quarter, GDDY expects applications and commerce revenues to grow 8-10% year over year. Core platform revenues are anticipated to grow 1-3% from the year-ago quarter.
Normalized EBITDA margin is expected to be 25%.
For 2023, management expects total revenues of $4.250-$4.325 billion, suggesting growth of 5% at the mid-point from the year-ago actuals. The Zacks Consensus Estimate for 2023 revenues is pegged at $4.24 billion.
For 2023, GDDY expects applications and commerce, and core platform revenue growth of 8-10% and 2-4%, respectively.
The normalized EBITDA margin for the full year is projected to be 26%.
For 2023, management expects unlevered free cash flow above $1.2 billion.
Management expects to repurchase shares worth $1 billion.
Zacks Rank & Stocks to Consider
Currently, GoDaddy carries a Zacks Rank #5 (Strong Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Agilent Technologies (A - Free Report) , DigitalOcean (DOCN - Free Report) and Paycor HCM (PYCR - 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.
Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, implying growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period.
DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period.
Paycor HCM is scheduled to report third-quarter fiscal 2023 results on May 10. The Zacks Consensus Estimate for PYCR’s earnings is pegged at 15 cents per share, suggesting an increase of 36.4% from the prior-year quarter’s reported figure. PYCR has gained 26% in the year-to-date period.