SCOTTSDALE, Ariz., May 6, 2020 /PRNewswire/ -- GoDaddy Inc. (NYSE:
GDDY), the company that empowers everyday entrepreneurs, today
reported financial results for the first quarter ended
March 31, 2020.
"GoDaddy delivered strong results in the first quarter," said
GoDaddy CEO Aman Bhutani. "In this
time of uncertainty for small businesses, we are laser-focused on
innovating for our customers, as their digital presence is now more
important than ever. We believe our focus on customer value remains
the best way to create value for our shareholders as well."
"First quarter results were strong despite the challenging macro
environment," said GoDaddy CFO Ray
Winborne. "The durability of our business model and strength
of our balance sheet position us well in times of uncertainty,
allowing us to focus on helping customers navigate the complexity
of the current reality."
|
Consolidated First
Quarter Financial Highlights
|
|
|
Three months ended
March 31,
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
(in
millions)
|
|
GAAP
Results
|
|
|
|
|
|
|
Revenue
|
$
|
792.0
|
|
$
|
710.0
|
|
11.5%
|
|
Net cash provided by
operating activities
|
$
|
233.3
|
|
$
|
199.7
|
|
16.8%
|
|
Non-GAAP
Results
|
|
|
|
|
|
|
Unlevered free cash
flow
|
$
|
234.5
|
|
$
|
198.8
|
|
18.0%
|
|
Operating
Metric
|
|
|
|
|
|
|
Total
bookings
|
$
|
951.1
|
|
$
|
870.5
|
|
9.3%
|
- Total revenue of $792.0 million,
up 11.5% year over year, or 12.3% on a constant currency
basis.
- Total bookings of $951.1 million,
up 9.3% year over year, or 10.1% on a constant currency basis.
- Net cash provided by operating activities of $233.3 million, up 16.8% year over year.
- Unlevered free cash flow of $234.5
million, up 18.0% year over year.
- Domains revenue of $355.9
million, up 11.4% year over year.
- Hosting and presence revenue of $297.2
million, up 10.5% year over year.
- Business applications revenue of $138.9
million, up 14.3% year over year.
- International revenue of $262.4
million, up 7.1% year over year, or 9.1% on a constant
currency basis.
Operating Highlights
- GoDaddy launched the #OpenWeStand initiative offering a number
of free tools, widgets, resources and blogposts at OpenWeStand.org
to help small businesses keep their digital doors open while their
physical doors are closed. Over 50 companies have joined the cause,
including American Express, Uber, Slack, Salesforce, PayPal,
Nextdoor, GoFundMe, DoorDash, and more.
- GoDaddy announced the acquisition of the registry business of
Neustar Inc. for $218.0 million in
cash, with expected closing in the coming months. This acquisition
will enable the Company to innovate at the domain registry level,
giving more choice to customers at competitive price points.
- Relocated over 7,500 GoDaddy Guides to home offices to continue
providing 24/7 assistance and sage guidance to our customers.
- GoDaddy quickly pivoted its Websites + Marketing platform to
begin offering freemium subscriptions to help small businesses get
started online for free during these challenging times.
- Websites + Marketing enabled and further enhanced additional
integrations with GoFundMe and Paypal, as well as introduced
virtual location appointment scheduling and gift card
functionality.
- GoDaddy launched Open Exchange in Indonesia, Thailand, Portugal and Vietnam, furthering its international reach
and enabling more customers access to affordable domain-based email
solutions.
- Year-to-date through May 5,
GoDaddy has repurchased 10 million shares of its common stock for
an aggregate purchase price of $542
million for an average price per share of $54.25. These repurchases represent an
approximately 6% reduction in fully diluted shares
outstanding.
Balance Sheet
At March 31, 2020, total cash, cash equivalents were
$851.4 million, total debt was
$2,426.1 million and net debt was
$1,574.7 million.
Share Repurchase
GoDaddy today announces that its Board of Directors has approved
the repurchase of up to $500 million
of the company's Class A common stock. GoDaddy may purchase shares
from time to time in open market purchases, block transactions and
privately negotiated transactions, in accordance with applicable
federal securities laws. The program has no time limit and may be
modified, suspended or terminated by the company at any time
without prior notice. The amount and timing of repurchases are
subject to a variety of factors including liquidity, share price,
market conditions and legal requirements.
Business Outlook
For the second quarter ending June 30, 2020, GoDaddy
expects total revenue of approximately $790
million, or approximately 7% year over year growth,
including our estimate of the net impact of the COVID-19 pandemic.
Revenue growth by category is expected to approximate high
single-digit growth in Domains, mid single-digit growth in Hosting
and presence and mid-teens growth in Business Applications. We
expect changes in customer behavior from COVID-19 will
disproportionately impact the Hosting and presence category.
Our consolidated financial statements are prepared in accordance
with generally accepted accounting principles in the United States (GAAP). We do not provide
reconciliations from non-GAAP guidance to GAAP, because projections
of changes in individual balance sheet amounts are not possible
without unreasonable effort, and release of such reconciliations
would imply an inappropriate degree of precision. Our reported
results provide reconciliations of non-GAAP financial measures to
their nearest GAAP equivalents.
Quarterly Conference Call and Webcast
GoDaddy will host a conference call and webcast to discuss first
quarter 2020 results at 5:00 p.m. Eastern
Time on May 6, 2020. To hear the call, dial (833)
286-5800 in the United States or
(647) 689-4445 from international locations, with passcode 8990847.
A live webcast of the call, together with a slide presentation
including supplemental financial information and reconciliations of
certain non-GAAP measures to their nearest comparable GAAP
measures, will be available through GoDaddy's Investor Relations
website at https://investors.godaddy.net. Following the call, a
recorded replay of the webcast will be available on the
website.
GoDaddy Inc. uses its Investor Relations website at
https://investors.godaddy.net as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Accordingly, investors should
monitor GoDaddy's Investor Relations website, in addition to
following press releases, Securities and Exchange Commission (SEC)
filings, public conference calls and webcasts.
Forward-Looking Statements
This press release contains forward-looking statements which are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on
estimates and information available to us at the time of this press
release and are not guarantees of future performance. Statements in
this release involve risks, uncertainties and assumptions. If the
risks or uncertainties materialize or the assumptions prove
incorrect, our results may differ materially from those expressed
or implied by such forward-looking statements. All statements other
than statements of historical fact could be deemed forward-looking
statements, including, but not limited to: launches of new or
expansion of existing products or services, any projections of
product or service availability, technology developments and
innovation, customer growth, or other future events; any statements
about historical results that may suggest future trends for our
business; any statements regarding our plans, strategies or
objectives with respect to future operations, including
international expansion plans and marketing strategy; any
statements regarding integration of recent or planned acquisitions,
any statements regarding our future financial results; statements
concerning GoDaddy's ability to integrate its recent acquisitions
of Over and Uniregistry and the expected acquisition of Neustar's
registry business; the length and severity of the COVID-19 pandemic
and its impact on our business, customers, employees and
third-party partners; and any statements of assumptions underlying
any of the foregoing.
Actual results could differ materially from our current
expectations as a result of many factors, including, but not
limited to: the unpredictable nature of our rapidly evolving
market; fluctuations in our financial and operating results; our
rate of growth; interruptions or delays in our service or our web
hosting; breaches of our security measures; the impact of any
previous or future acquisitions; our ability to continue to
release, and gain customer acceptance of, our existing and future
products and services; our ability to manage our growth; our
ability to hire, retain and motivate employees; the effects of
competition; technological, regulatory and legal developments;
intellectual property litigation; developments in the economy,
financial markets and credit markets; and execution of share
repurchases.
Additional risks and uncertainties that could affect GoDaddy's
financial results are included in the other filings we make with
the SEC from time to time, including those described in "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition" in our Annual Report on Form 10-K for the year ended
December 31, 2019, which is available
on GoDaddy's website at https://investors.godaddy.net and on the
SEC's website at www.sec.gov. Additional information will also be
set forth in other filings that GoDaddy makes with the SEC from
time to time. All forward-looking statements in this press release
are based on information available to GoDaddy as of the date
hereof. GoDaddy does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were
made.
Non-GAAP Financial Measures and Other Operating
Metrics
In addition to our results determined in accordance with GAAP,
this release includes certain non-GAAP financial measures and other
operating metrics. We believe that these non-GAAP financial
measures and other operating metrics are useful as a supplement in
evaluating our ongoing operational performance and enhancing an
overall understanding of our past financial performance. The
non-GAAP financial measures included in this release should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. A reconciliation
between each non-GAAP financial measure and its nearest GAAP
equivalent is included in this release following the financial
statements. We use both GAAP and non-GAAP measures to evaluate and
manage our operations.
Total bookings. Total bookings represents cash receipts
from the sale of products to customers in a given period adjusted
for products where we recognize revenue on a net basis and without
giving effect to certain adjustments, primarily net refunds granted
in the period. Total bookings provides valuable insight into the
sales of our products and the performance of our business since we
typically collect payment at the time of sale and recognize revenue
ratably over the term of our customer contracts. We report total
bookings without giving effect to refunds granted in the period
because refunds often occur in periods different from the period of
sale for reasons unrelated to the marketing efforts leading to the
initial sale. Accordingly, by excluding net refunds, we believe
total bookings reflects the effectiveness of our sales efforts in a
given period.
Unlevered Free Cash Flow. Unlevered free cash flow is a
measure of our liquidity used by management to evaluate our
business prior to the impact of our capital structure and after
purchases of property and equipment. Such liquidity can be used by
us for strategic opportunities and strengthening our balance sheet.
However, given our debt obligations, unlevered free cash flow does
not represent residual cash flow available for discretionary
expenses.
Net Debt. We define net debt as total debt less cash and
cash equivalents and short-term investments. Total debt consists of
the current portion of long-term debt plus long-term debt,
unamortized original issue discount and unamortized debt issuance
costs. Our management reviews net debt as part of its management of
our overall liquidity, financial flexibility, capital structure and
leverage and we believe such information is useful to investors.
Furthermore, certain analysts and debt rating agencies monitor our
net debt as part of their assessments of our business.
About GoDaddy
GoDaddy is empowering everyday entrepreneurs around the
world by providing all of the help and tools to succeed online.
With 19 million customers worldwide, GoDaddy is the place
people come to name their idea, build a professional website,
attract customers and manage their work. Our mission is to give our
customers the tools, insights and the people to transform their
ideas and personal initiative into success. To learn more about the
company visit www.GoDaddy.com.
|
GoDaddy
Inc.
Condensed
Consolidated Statements of Operations (unaudited)
(In millions,
except shares in thousands and per share amounts)
|
|
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
Revenue:
|
|
|
|
|
Domains
|
$
|
355.9
|
|
$
|
319.6
|
|
Hosting and
presence
|
297.2
|
|
268.9
|
|
Business
applications
|
138.9
|
|
121.5
|
|
Total
revenue
|
792.0
|
|
710.0
|
|
Costs and operating
expenses(1)
|
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
277.1
|
|
236.4
|
|
Technology and
development
|
134.5
|
|
124.0
|
|
Marketing and
advertising
|
93.1
|
|
90.3
|
|
Customer
care
|
85.2
|
|
90.3
|
|
General and
administrative
|
85.5
|
|
93.0
|
|
Depreciation and
amortization
|
52.2
|
|
57.2
|
|
Total costs and
operating expenses
|
727.6
|
|
691.2
|
|
Operating
income
|
64.4
|
|
18.8
|
|
Interest
expense
|
(21.2)
|
|
(24.4)
|
|
Tax receivable
agreements liability adjustment
|
—
|
|
8.7
|
|
Other income
(expense), net
|
(1.4)
|
|
6.2
|
|
Income before income
taxes
|
41.8
|
|
9.3
|
|
Benefit for income
taxes
|
1.4
|
|
3.9
|
|
Net income
|
43.2
|
|
13.2
|
|
Less: net income
attributable to non-controlling interests
|
0.3
|
|
0.3
|
|
Net income
attributable to GoDaddy Inc.
|
$
|
42.9
|
|
$
|
12.9
|
|
Net income
attributable to GoDaddy Inc. per share of Class A common
stock:
|
|
|
|
|
Basic
|
$
|
0.25
|
|
$
|
0.08
|
|
Diluted
|
$
|
0.24
|
|
$
|
0.07
|
|
Weighted-average
shares of Class A common stock outstanding:
|
|
|
|
|
Basic
|
173,113
|
|
171,001
|
|
Diluted
|
177,857
|
|
183,148
|
|
___________________________
|
|
|
|
|
(1) Costs and
operating expenses include equity-based compensation expense as
follows:
|
|
Cost of
revenue
|
$
|
0.1
|
|
$
|
—
|
|
Technology and
development
|
21.1
|
|
20.0
|
|
Marketing and
advertising
|
4.6
|
|
4.3
|
|
Customer
care
|
2.6
|
|
2.6
|
|
General and
administrative
|
17.0
|
|
20.0
|
|
Total equity-based
compensation expense
|
$
|
45.4
|
|
$
|
46.9
|
|
GoDaddy
Inc.
Condensed
Consolidated Balance Sheets (unaudited)
(In millions,
except per share amounts)
|
|
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
851.4
|
|
$
|
1,062.8
|
|
Short-term
investments
|
—
|
|
23.6
|
|
Accounts and other
receivables
|
31.6
|
|
30.2
|
|
Registry
deposits
|
21.7
|
|
27.2
|
|
Prepaid domain name
registry fees
|
391.3
|
|
382.6
|
|
Prepaid expenses and
other current assets
|
69.6
|
|
48.9
|
|
Total current
assets
|
1,365.6
|
|
1,575.3
|
|
Property and
equipment, net
|
254.4
|
|
258.6
|
|
Operating lease
assets
|
191.9
|
|
196.6
|
|
Prepaid domain name
registry fees, net of current portion
|
181.5
|
|
179.3
|
|
Goodwill
|
2,994.6
|
|
2,976.5
|
|
Intangible assets,
net
|
1,151.9
|
|
1,097.7
|
|
Other
assets
|
22.3
|
|
17.2
|
|
Total
assets
|
$
|
6,162.2
|
|
$
|
6,301.2
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
92.2
|
|
$
|
72.3
|
|
Accrued expenses and
other current liabilities
|
407.0
|
|
366.0
|
|
Deferred
revenue
|
1,606.4
|
|
1,544.4
|
|
Long-term
debt
|
18.4
|
|
18.4
|
|
Total current
liabilities
|
2,124.0
|
|
2,001.1
|
|
Deferred revenue, net
of current portion
|
685.0
|
|
654.4
|
|
Long-term debt, net
of current portion
|
2,372.3
|
|
2,376.8
|
|
Operating lease
liabilities, net of current portion
|
189.4
|
|
192.9
|
|
Payable pursuant to
tax receivable agreements
|
175.3
|
|
175.3
|
|
Other long-term
liabilities
|
33.1
|
|
17.7
|
|
Deferred tax
liabilities
|
94.0
|
|
100.9
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.001 par value
|
—
|
|
—
|
|
Class A common stock,
$0.001 par value
|
0.2
|
|
0.2
|
|
Class B common stock,
$0.001 par value
|
—
|
|
—
|
|
Additional paid-in
capital
|
1,066.9
|
|
1,003.5
|
|
Accumulated
deficit
|
(509.2)
|
|
(153.5)
|
|
Accumulated other
comprehensive loss
|
(77.2)
|
|
(78.2)
|
|
Total stockholders'
equity attributable to GoDaddy Inc.
|
480.7
|
|
772.0
|
|
Non-controlling
interests
|
8.4
|
|
10.1
|
|
Total stockholders'
equity
|
489.1
|
|
782.1
|
|
Total liabilities and
stockholders' equity
|
$
|
6,162.2
|
|
$
|
6,301.2
|
|
GoDaddy
Inc.
Condensed
Consolidated Statements of Cash Flows (unaudited)
(In
millions)
|
|
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
Operating
activities
|
|
|
|
|
Net income
|
$
|
43.2
|
|
$
|
13.2
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
52.2
|
|
57.2
|
|
Equity-based
compensation expense
|
45.4
|
|
46.9
|
|
Other
|
7.1
|
|
(4.5)
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
|
Registry
deposits
|
5.4
|
|
0.4
|
|
Prepaid domain name
registry fees
|
(12.6)
|
|
(20.2)
|
|
Deferred
revenue
|
96.5
|
|
105.2
|
|
Other operating assets
and liabilities
|
(3.9)
|
|
1.5
|
|
Net cash provided by
operating activities
|
233.3
|
|
199.7
|
|
Investing
activities
|
|
|
|
|
Purchases of
short-term investments
|
—
|
|
(17.9)
|
|
Maturities of
short-term investments
|
23.7
|
|
18.3
|
|
Business
acquisitions, net of cash acquired
|
(146.4)
|
|
—
|
|
Purchases of property
and equipment
|
(13.5)
|
|
(29.4)
|
|
Other investing
activities
|
0.3
|
|
—
|
|
Net cash used in
investing activities
|
(135.9)
|
|
(29.0)
|
|
Financing
activities
|
|
|
|
|
Proceeds received
from:
|
|
|
|
|
Stock option
exercises
|
15.3
|
|
17.6
|
|
Payments made
for:
|
|
|
|
|
Repurchases of Class A
common stock
|
(315.7)
|
|
—
|
|
Repayment of term
loans
|
(6.2)
|
|
(6.2)
|
|
Contingent
consideration for business acquisitions
|
(0.2)
|
|
(22.2)
|
|
Other financing
obligations
|
(0.5)
|
|
(1.1)
|
|
Net cash used in
financing activities
|
(307.3)
|
|
(11.9)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1.5)
|
|
(0.9)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(211.4)
|
|
157.9
|
|
Cash and cash
equivalents, beginning of period
|
1,062.8
|
|
932.4
|
|
Cash and cash
equivalents, end of period
|
$
|
851.4
|
|
$
|
1,090.3
|
Reconciliation of Non-GAAP Financial Measures and Other
Operating Metric
The following tables reconcile each
non-GAAP financial measure and other operating metric to its most
directly comparable GAAP financial measure:
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(in
millions)
|
|
Total
bookings:
|
|
|
|
|
Total
revenue
|
$
|
792.0
|
|
$
|
710.0
|
|
Change in deferred
revenue
|
96.3
|
|
105.3
|
|
Net
refunds
|
63.3
|
|
55.2
|
|
Other
|
(0.5)
|
|
—
|
|
Total
bookings
|
$
|
951.1
|
|
$
|
870.5
|
|
|
|
Three Months
Ended
March 31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(in
millions)
|
|
Unlevered Free Cash
Flow:
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
233.3
|
|
$
|
199.7
|
|
Cash paid for
interest on long-term debt
|
11.2
|
|
21.4
|
|
Cash paid for
acquisition-related costs
|
3.5
|
|
7.1
|
|
Capital
expenditures
|
(13.5)
|
|
(29.4)
|
|
Unlevered free cash
flow
|
$
|
234.5
|
|
$
|
198.8
|
The following table provides a reconciliation of net debt:
|
March 31,
2020
|
|
|
|
(in
millions)
|
|
Net Debt:
|
|
|
Current portion of
long-term debt
|
$
|
18.4
|
|
Long-term
debt
|
2,372.3
|
|
Unamortized original
issue discount on long-term debt
|
12.5
|
|
Unamortized debt
issuance costs
|
22.9
|
|
Total debt
|
2,426.1
|
|
Less: cash and cash
equivalents
|
(851.4)
|
|
Net debt
|
$
|
1,574.7
|
Shares Outstanding
Shares of Class B common
stock do not share in our earnings and are not participating
securities. Total shares of common stock outstanding are as
follows:
|
March
31,
|
|
2020
|
|
2019
|
|
|
|
|
|
(in
thousands)
|
|
Shares
Outstanding:
|
|
|
|
|
Class A common
stock
|
167,627
|
|
175,115
|
|
Class B common
stock
|
1,286
|
|
1,653
|
|
Total common stock
outstanding
|
168,913
|
|
176,768
|
|
Effect of dilutive
securities(1)
|
3,384
|
|
7,482
|
|
172,297
|
|
184,250
|
|
_______________________________
|
|
(1) Calculated using
the treasury stock method, which excludes the impact of
antidilutive securities.
|
© 2020 GoDaddy Inc. All Rights Reserved.
Source: GoDaddy Inc.
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SOURCE GoDaddy Inc.