GoDaddy (GDDY) Earnings & Revenues Miss Estimates in Q1

GoDaddy Inc. (GDDY) reported first-quarter 2019 adjusted earnings of 7 cents per share, missing the Zacks Consensus Estimate by 5 cents. The bottom line was down 75% sequentially but up 250% year over year.

The company generated revenues of $710 million, increasing 2% sequentially and 12.1% year over year. However, the top line missed the Zacks Consensus Estimate of $711 million.

The sequential and year-over-year revenue growth was driven by strong performance of its product segments. Moreover, growing subscription of GoDaddy’s mobile-optimized website builder, GoCentral, contributed well to top-line growth during the reported quarter.

The company’s customer base reached 18.8 million at the end of the first quarter. Notably, the figure advanced 6.4% from the prior-year quarter. Growing website adoption in the emerging markets aided customer base growth. Average revenue per user (ARPU) was $150 in the reported quarter, up 8.5% on a year-over-year basis, attributable to solid momentum across the United States and international markets.

International revenues were $245.1 million in the first quarter, up 8.2% year over year or approximately 12.2% on a constant-currency basis.

Coming to share price performance, the stock has gained 24.9% in the past year against its industry’s decline of 16.3%.

Segment Details

GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.

Domain: The company generated revenues of $319.6 million (45% of the total revenues) from this segment. The figure improved 9.6% from the year-ago quarter driven by strong liquid domain aftermarket and renewals.

Hosting and Presence: This segment generated revenues of $268.9 million (37.9% of revenues), increasing 12.1% on a year-over-year basis during the reported quarter. The revenue growth can be primarily attributed to robust feature engagements, bookings and appointments within this segment. Further, well-performing GoCentral remained a major positive.

Business Applications: Revenues from this segment came in at $121.5 million (17.1% of revenues), increasing 19.5% year over year.


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 first quarter, total bookings of $870.5 million increased 11.2% year over year.

Operating Results

Gross margin was 66.7%, up 70 basis points from the prior-year quarter.

Operating expenses of $454.8 million increased 16.3% year over year.

Balance Sheet & Cash Flow

At the end of the first quarter, total cash and cash equivalents, along with short-term investments were $1.1 billion compared with $951.3 million in fourth-quarter 2018. Accounts and other receivables were $35.4 million compared with $26.4 million in the fourth quarter.

Total debt was $2,451.1 million and net debt was $1,342.1 million at the end of the first quarter.

Net cash provided by operating activities was $199.7 million compared with $128.5 million in the fourth quarter.

Additionally, adjusted free cash flow was $198.8 million during the reported quarter.


For second-quarter 2019, the company expects revenues within $730-$740 million. The Zacks Consensus Estimate for second-quarter revenues is pegged at $732.6 million.

For full-year 2019, management maintained its revenue and free cash flow guidance.

The company expects revenues within $2.97-$3 billion, indicating year-over-year growth of approximately 12-13%. The Zacks Consensus Estimate for full-year revenues is pegged at $2.99 billion.

Additionally, free cash flow for 2019 is projected between $730 million and $745 million, suggesting year-over-year growth of 18-20%.

GoDaddy Inc. Price, Consensus and EPS Surprise


GoDaddy Inc. Price, Consensus and EPS Surprise | GoDaddy Inc. Quote

Zacks Rank and Stocks to Consider

GoDaddy currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Facebook, Inc. FB, Shopify Inc. SHOP and AXT, Inc. AXTI, 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 Facebook, Shopify and AXT is currently projected at 20.2%, 23.7% and 15%, respectively.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

Click to get this free report

Shopify Inc. (SHOP): Free Stock Analysis Report

Facebook, Inc. (FB): Free Stock Analysis Report

GoDaddy Inc. (GDDY): Free Stock Analysis Report

AXT Inc (AXTI): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.