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GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2023 earnings of 63 cents per share beat the Zacks Consensus Estimate by 14.5%. The bottom line also increased 12.5% year over year.
GDDY generated revenues of $1.05 billion which missed the Zacks Consensus Estimate by 0.6%. Revenues were up 3.2% and 4.1% 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.
GoDaddy has two revenue pillars, namely, Applications & Commerce, and Core Platform.
Applications & Commerce, comprising Websites + Marketing, Managed WordPress, productivity applications, and payments & commerce, generated $351.7 million (accounting for 33.6% of the total revenues), up 10.9% on a year-over-year basis. The figure beat the consensus mark of $345 million.
Core Platform, consisting of domains, aftermarket, hosting and security, fell 0.3% from the prior-year quarter’s level to $696.4 million (accounting for 66.4% of total revenues). The figure missed the consensus mark of $708 million.
For the reported quarter, Applications & Commerce annualized recurring revenues (ARR) were $1.3 billion, increasing 10% year over year. Also, core platform ARR totaled $2.3 billion, flat year-over-year.
In the second quarter, international revenues were $341.1 million, up 3.1% year over year or 5.7% at cc.
Total bookings of $1.14 billion increased 2% year over year or 2.6% on a cc basis. The figure missed the consensus mark of $1.15 billion.
Average revenue per user were $199, up 3.1% year over year. The figure came in line with Zacks Consensus Estimate.
Total ARR was $3.62 billion, up 3.7% from the prior-year quarter.
GoDaddy’s gross merchandise volume was up 20% year over year to $33 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the second quarter was $264.6 million, up 2.4% year over year.
Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $479.1 million increased 1.4% year over year. As a percentage of revenues, operating expenses contracted 80 basis points (bps) to 45.7% from the year-ago quarter.
For the reported quarter, operating income was $119.6 million, down 4% year over year. As a percentage of revenues, operating income contracted 90 bps from the year-ago quarter’s level to 11.4%.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $582.6 million compared with $892.4 million as of Mar 31, 2022. Accounts and other receivables were $67.2 million compared with $68.7 million in the prior quarter.
GoDaddy had total debt of $3.8 billion and net debt of $3.2 billion in the current quarter. Total debt was $3.9 billion and net debt was $3 billion in the previous quarter.
Net cash provided by operating activities was $198 million in the reported quarter compared with the prior quarter’s figure of $270.3 million.
Additionally, unlevered free cash flow was $283.6 million in the reported quarter.
Guidance
For third-quarter 2023, management expects revenues of $1.055-$1.075 billion, indicating growth of 3% at the mid-point from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.08 billion.
For the third quarter, GDDY expects applications and commerce revenues to grow 9-11% year over year. Core platform revenues are anticipated to remain flat from the year-ago quarter.
The normalized EBITDA margin is expected to be 26%.
For 2023, management expects total revenues of $4.250-$4.325 billion. The Zacks Consensus Estimate for the same is pegged at $4.27 billion.
For 2023, GDDY expects applications and commerce revenues to grow in the band of 9-11%. The core platform revenues are expected to grow by 1%.
The normalized EBITDA margin for the full year is projected to be 26%.
Management expects to repurchase shares worth $1 billion.
Zacks Rank & Stocks to Consider
Currently, GoDaddy carries a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like CACI International (CACI - Free Report) and BILL Holdings, Inc. (BILL - Free Report) , each carrying a Zacks Rank #2 (Buy) and Super Micro Computer (SMCI - Free Report) , carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CACI is set to report fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, implying growth of 6.83% from the year-ago quarter’s reported figure.
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pegged at 41 cents per share.
Super Micro Computer is scheduled to release its fiscal fourth-quarter 2023 results on Aug 8. The Zacks Consensus Estimate for SMCI’s earnings is pegged at $2.94 per share, suggesting an increase of 12.21% from the year-ago quarter’s reported figure.
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GoDaddy (GDDY) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
GoDaddy Inc.’s (GDDY - Free Report) second-quarter 2023 earnings of 63 cents per share beat the Zacks Consensus Estimate by 14.5%. The bottom line also increased 12.5% year over year.
GDDY generated revenues of $1.05 billion which missed the Zacks Consensus Estimate by 0.6%. Revenues were up 3.2% and 4.1% 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.
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 $351.7 million (accounting for 33.6% of the total revenues), up 10.9% on a year-over-year basis. The figure beat the consensus mark of $345 million.
Core Platform, consisting of domains, aftermarket, hosting and security, fell 0.3% from the prior-year quarter’s level to $696.4 million (accounting for 66.4% of total revenues). The figure missed the consensus mark of $708 million.
For the reported quarter, Applications & Commerce annualized recurring revenues (ARR) were $1.3 billion, increasing 10% year over year. Also, core platform ARR totaled $2.3 billion, flat year-over-year.
In the second quarter, international revenues were $341.1 million, up 3.1% year over year or 5.7% at cc.
Total bookings of $1.14 billion increased 2% year over year or 2.6% on a cc basis. The figure missed the consensus mark of $1.15 billion.
Average revenue per user were $199, up 3.1% year over year. The figure came in line with Zacks Consensus Estimate.
Total ARR was $3.62 billion, up 3.7% from the prior-year quarter.
GoDaddy’s gross merchandise volume was up 20% year over year to $33 billion.
Operating Results
On a non-GAAP basis, normalized EBITDA for the second quarter was $264.6 million, up 2.4% year over year.
Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $479.1 million increased 1.4% year over year. As a percentage of revenues, operating expenses contracted 80 basis points (bps) to 45.7% from the year-ago quarter.
For the reported quarter, operating income was $119.6 million, down 4% year over year. As a percentage of revenues, operating income contracted 90 bps from the year-ago quarter’s level to 11.4%.
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $582.6 million compared with $892.4 million as of Mar 31, 2022. Accounts and other receivables were $67.2 million compared with $68.7 million in the prior quarter.
GoDaddy had total debt of $3.8 billion and net debt of $3.2 billion in the current quarter. Total debt was $3.9 billion and net debt was $3 billion in the previous quarter.
Net cash provided by operating activities was $198 million in the reported quarter compared with the prior quarter’s figure of $270.3 million.
Additionally, unlevered free cash flow was $283.6 million in the reported quarter.
Guidance
For third-quarter 2023, management expects revenues of $1.055-$1.075 billion, indicating growth of 3% at the mid-point from the year-ago quarter’s actuals. The Zacks Consensus Estimate for revenues is pegged at $1.08 billion.
For the third quarter, GDDY expects applications and commerce revenues to grow 9-11% year over year. Core platform revenues are anticipated to remain flat from the year-ago quarter.
The normalized EBITDA margin is expected to be 26%.
For 2023, management expects total revenues of $4.250-$4.325 billion. The Zacks Consensus Estimate for the same is pegged at $4.27 billion.
For 2023, GDDY expects applications and commerce revenues to grow in the band of 9-11%. The core platform revenues are expected to grow by 1%.
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 #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like CACI International (CACI - Free Report) and BILL Holdings, Inc. (BILL - Free Report) , each carrying a Zacks Rank #2 (Buy) and Super Micro Computer (SMCI - Free Report) , carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CACI is set to report fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, implying growth of 6.83% from the year-ago quarter’s reported figure.
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pegged at 41 cents per share.
Super Micro Computer is scheduled to release its fiscal fourth-quarter 2023 results on Aug 8. The Zacks Consensus Estimate for SMCI’s earnings is pegged at $2.94 per share, suggesting an increase of 12.21% from the year-ago quarter’s reported figure.