GoDaddy Q2 results: total revenue was $557.8 million, up 22.3% year over year

GoDaddy Inc. (NYSE: GDDY), today reported financial results for the second quarter ended June 30, 2017.

“GoDaddy successfully delivered another solid quarter with continued organic customer, revenue and cash flow growth,” said GoDaddy CEO Blake Irving.

“We are making great progress on our 2017 product and strategic initiatives including growing the adoption of our new mobile-optimized website builder GoCentral, new security offerings and integration of HEG. We remain focused on leveraging our brand and scale to extend our global competitive advantages.”

Second Quarter Financial Highlights

Three Months Ended
June 30,

Six Months Ended
June 30,

2017

2016

Change

2017

2016

Change

(in millions, except customers in thousands and ARPU)

GAAP Results

Revenue

$

557.8

$

456.2

22.3

%

$

1,047.5

$

889.9

17.7

%

Income (loss) from continuing operations

$

23.4

$

(11.1)

NM

$

20.3

$

(29.4)

NM

Net income (loss)

$

18.1

$

(11.1)

NM

$

15.0

$

(29.4)

NM

Net cash provided by operating activities

$

113.3

$

92.4

22.6

%

$

239.9

$

197.7

21.3

%

Non-GAAP Results

Unlevered Free Cash Flow

$

135.0

$

83.9

60.9

%

$

249.1

$

184.5

35.0

%

Operating Metrics

Total Bookings

$

667.5

$

538.6

23.9

%

$

1,292.3

$

1,096.4

17.9

%

Total customers at period end

16,878

14,327

17.8

%

16,878

14,327

17.8

%

ARPU(1)

$

129

$

125

2.8

%

$

129

$

125

2.8

%

(1)

Our ARPU growth was muted by the impact of the acquisition of HEG as our trailing twelve month revenue included only three months of HEG’s results for this annual measure. GoDaddy organic Q2 2017 ARPU (excluding HEG) was $132, up 5.9% year over year.

 

  • Total revenue of $557.8 million, up 22.3% year over year, or 23.5% on a constant currency basis.
  • Total bookings of $667.5 million, up 23.9% year over year, or 25.8% on a constant currency basis.
  • Net cash provided by operating activities of $113.3 million, up 22.6% year over year.
  • Unlevered free cash flow of $135.0 million, up 60.9% year over year, and up 35.0% in the first half of 2017 vs. 2016.
  • Customers were nearly 17 million at quarter end, up 17.8% year over year, including HEG customers of over 1.6 million.
  • Average revenue per user (ARPU) of $129, up 2.8% year over year, and organic ARPU of $132, up 5.9% year over year.
  • Domains revenue of $263.3 million, up 14.6% year over year.
  • Hosting and Presence revenue of $214.9 million, up 28.3% year over year.
  • Business Applications revenue of $79.6 million, up 35.1% year over year.
  • International revenue of $187.7 million, up 56.7% year over year, or 61.2% on a constant currency basis.

Business Highlights

  • GoDaddy completed a secondary offering of approximately 27.6 million shares of its Class A common stock sold by certain of its stockholders at $38.50 per share in May 2017, increasing the publicly available float.
  • GoDaddy completed a $275 million share repurchase of 7.3 million LLC units of Desert Newco (together with a corresponding number of GoDaddy Class B shares) in May 2017, reducing the effects of share dilution.
  • GoDaddy completed the acquisition of HEG in April 2017, establishing a market leading position in Europe for small business cloud services.
  • GoDaddy signed a definitive agreement for the sale of the PlusServer business for an enterprise value of €397 million ($456 million USD).
  • GoDaddy’s new mobile-optimized website builder, GoCentral, is showing positive traction in new bookings growth, free to paid conversion, and increase in average order size with hundreds of thousands of sites currently published. The company intends to release additional new GoCentral verticals, markets and features throughout 2017.
  • GoDaddy launched GoDaddy Website Security, a cutting-edge website protection service to keep customers’ sites clean and free of malware on the following the April 2017 Sucuri acquisition.
  • GoDaddy launched WP Premium Support to provide access to WordPress expertise and help small businesses fix, update and optimize their WordPress sites more quickly and conveniently.

Balance Sheet

At June 30, 2017, total cash, cash equivalents and short-term investments were $591.2 million, total debt was $3,065.3 million and net debt was $2,474.1 million.

Business Outlook

For the third quarter ending September 30, 2017, GoDaddy expects total revenue in the range of $577 to $582 million including HEG. For the full year ending December 31, 2017, GoDaddy raised its revenue expectations to a range of $2.215 to $2.225 billion, representing approximately 20% growth at the midpoint.

For the full year 2017, GoDaddy raised its unlevered free cash flow expectations to a range of $475 to $485 million, representing approximately 35% growth at the midpoint versus the approximately $357 million in unlevered free cash flow generated in 2016.

Assuming continued organic growth in 2018, along with one incremental quarter of contribution from HEG, and expected acquisition synergies, GoDaddy expects unlevered free cash flow of $600 million next year.

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 presentation 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.

 

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About Konstantinos Zournas

Konstantinos studied Computer Engineering and Computer Science in London and lives in Athens, Greece. He works on domain names, websites and software development. Has been online since 1995 & domaining since 2002.

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