GoDaddy Inc. ( GDDY Quick Quote GDDY - Free Report) reported fourth-quarter 2019 adjusted earnings of 34 cents per share, missing the Zacks Consensus Estimate of 37 cents. However, the bottom line was up 21.4% from the year-ago quarter.
The company generated revenues of $780.4 million, up 12.2% year over year or 13% on a constant-currency basis. The reported figure surpassed the Zacks Consensus Estimate by 0.4%.
The revenue growth was driven by strong performance of its product segments on a year-over-year basis. Also, the increase in revenue per user aided growth.
International revenues were $261.4 million in the fourth quarter, up 8.8% year over year or approximately 11.2% on a constant-currency basis.
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, & Business Applications.
Domain: The company generated revenues of $352.3 million (45% of total revenues) from this segment. The figure improved 12.1% from the year-ago quarter, driven by strong liquid domain aftermarket and renewals. Hosting and Presence: This segment generated revenues of $292.8 million (38% of revenues), increasing 8.4% on a year-over-year basis. The revenue growth can be primarily attributed to robust feature engagements, bookings and appointments within this segment. Further, the well-performing GoCentral remained a major positive. Business Applications: Revenues from this segment came in at $135.3 million (17% of revenues), increasing 21.3% year over year. GoDaddy Inc. Price, Consensus and EPS Surprise
The company’s customer base reached 19.3 million at the end of the fourth quarter. Notably, the figure was up 4.1% from the prior-year quarter. Growing website adoption in emerging markets aided the growth of its customer base. Average revenue per user was $158 in the reported quarter, up 6.6% on a year-over-year basis, attributable to solid momentum across international markets served by the company.
GoDaddy uses total bookings as a performance measure, since payment is usually collected at the time of sale, and recognizes revenues ratably over the term of customer contracts. In the fourth quarter, total bookings of $833.6 million increased 13.8% year over year or 14.1% on a constant-currency basis.
Gross margin was 65.3%, down 160 basis points from the prior-year quarter.
Operating expenses (technology and development, marketing and advertising, & general and administrative) of $302.5 million increased 7.7% year over year.
Balance Sheet & Cash Flow
At the end of the fourth quarter, total cash and cash equivalents, along with short-term investments were $1.09 billion compared with $990.2 million in third-quarter 2019. Accounts and other receivables were $30.2 million compared with $29 million in the third quarter.
Long-term debt was $18.4 billion at the end of the fourth quarter.
Net cash provided by operating activities was $162.2 million compared with $200.2 million in the third quarter. Capital expenditure was $16.5 million at the end of fourth quarter.
Additionally, adjusted free cash flow was $177.7 million during the reported quarter.
For full-year 2020, management expects revenues to be $3.315 billion, indicating year-over-year growth of 11%. The Zacks Consensus Estimate for full-year revenues is pegged at $3.31 billion.
Additionally, free cash flow in 2019 is projected at $835 million, suggesting year-over-year growth of 14%.
Zacks Rank and Stocks to Consider
GoDaddy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Itron, Inc.
ITRI, Splunk Inc. SPLK and Agilent Technologies A, each carrying a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Long-term earnings growth for Itron, Splunk, and Agilent is currently projected at 25%, 31.2% and 12.5%, respectively.
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