TEMPE, Ariz., Jan. 10, 2024 /PRNewswire/ -- GoDaddy Inc. (NYSE: GDDY) today announced Go Daddy Operating Company, LLC and GD Finance Co, LLC (together with Go Daddy Operating Company, LLC, the "Borrowers") allocated a $1,752 million tranche (the "Replacement Term Loans") of term loans maturing in 2029, the proceeds of which will be used to refinance all outstanding Tranche B-5 Term Loans under the Second Amended and Restated Credit Agreement, dated as of February 15, 2017 (as amended, restated, supplemented ...

GoDaddy, Inc. (NYSE:GDDY) Q3 2023 Earnings Conference Call November 3, 2023 5:00 PM ET Company Participants Christie Masoner - Vice President, Investor Relations Aman Bhutani - Chief Executive Officer Mark McCaffrey - Chief Financial Officer Conference Call Participants Vikram Kesavabhotla - Baird Trevor Young - Barclays Matthew Pfau - William Blair Christopher Kuntarich - UBS Naved Khan - B. Riley Ella Smith - JPMorgan Ygal Arounian - Citi Ken Wong - Oppenheimer Deepak Mathivanan - Wolfe Christie Masoner G ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-36904 GoDaddy Inc. (Exact name of registrant as specified in its charter) (State or other jurisdictio ...

GoDaddy Inc. (NYSE:GDDY) Q2 2023 Earnings Call Transcript August 3, 2023 5:00 PM ET Company Participants Christie Masoner - Head, Investor Relations Aman Bhutani - Chief Executive Officer Mark McCaffrey - Chief Financial Officer Conference Call Participants Matt Pfau - William Blair Vikram Kesavabhotla - Baird Trevor Young - Barclays Naved Khan - B. Riley Ygal Arounian - Citi Christie Masoner Good afternoon, and thank you for joining us for GoDaddy's Second Quarter 2023 Earnings Call. I'm Christie Masone, H ...

Financial Performance - GoDaddy reported a significant increase in revenue, reaching $1.1 billion for the quarter ended June 30, 2023, representing a year-over-year growth of 10%[2]. - Total revenue for Q2 2023 was $1,048.1 million, a 3.0% increase from $1,015.5 million in Q2 2022[12]. - Net income attributable to GoDaddy Inc. for Q2 2023 was $82.9 million, compared to $90.4 million in Q2 2022, reflecting a decrease of 8.3%[12]. - Operating income for Q2 2023 was $119.6 million, a slight decrease from $124.6 million in Q2 2022, representing a decline of 4.0%[12]. - Comprehensive income attributable to GoDaddy Inc. for Q2 2023 was $104.7 million, compared to $114.5 million in Q2 2022, a decrease of 8.0%[14]. - Net income for the quarter ended June 30, 2023, was $82.9 million, an increase from the previous quarter's $47.3 million[18]. - Total revenue for the three months ended June 30, 2023, was $1,048.1 million, compared to $1,015.5 million in the same period last year[121]. - Net income decreased by 8.2% to $83.1 million[121]. Customer Metrics - The company added approximately 200,000 new customers during the quarter, bringing the total customer count to 20 million, which is a 5% increase compared to the previous year[2]. - GoDaddy's customer retention rate remains high at 80%, demonstrating strong customer loyalty and satisfaction[2]. - Total customers at period end reached 20,985 thousand, an increase from 20,876 thousand[122]. - Average revenue per user (ARPU) increased to $199 from $193 year-over-year[122]. Revenue Segmentation - Revenue from Applications and Commerce (A&C) segment was $351.7 million for the three months ended June 30, 2023, compared to $317.2 million for the same period in 2022, reflecting an increase of 10.9%[33]. - The Core Platform segment generated $492.7 million in revenue for the three months ended June 30, 2023, up from $485.0 million in the prior year, representing a growth of 1.4%[33]. - Core segment revenue for Q2 2023 was $696.4 million, slightly down from $698.3 million in Q2 2022, a decrease of 0.3%[110]. - A&C segment revenue grew by 11% for the three months ended June 30, 2023, reaching $351.7 million, driven by a 10.5% increase in productivity applications revenue[153]. Expenses and Costs - Technology and development expenses for Q2 2023 were $219.2 million, up from $198.1 million in Q2 2022, an increase of 10.6%[12]. - Cost of revenue (excluding depreciation and amortization) increased by 7.7% to $388.4 million for the three months ended June 30, 2023, primarily due to higher software licensing fees and increased domain costs[137]. - Marketing and advertising expenses decreased by 11.1% to $89.5 million for the three months ended June 30, 2023, primarily due to lower discretionary spending[141]. - General and administrative expenses decreased by 2.1% to $92.7 million for the three months ended June 30, 2023, mainly due to decreased acquisition-related expenses[144]. - Depreciation and amortization expenses decreased by 10.1% to $43.5 million for the three months ended June 30, 2023, primarily due to certain acquired intangibles reaching the end of their useful lives[149]. Cash Flow and Assets - Cash and cash equivalents decreased to $582.6 million as of June 30, 2023, down from $774.0 million at the end of 2022, a decline of 24.7%[9]. - Total current assets decreased to $1,411.8 million as of June 30, 2023, down from $1,582.6 million at the end of 2022, a decline of 10.8%[9]. - Operating cash flow for the quarter was $468.3 million, a decrease from $501.8 million in the same quarter of the previous year, indicating a decline of approximately 6.6%[22]. - Net cash provided by operating activities decreased by 21.1% to $198.0 million[119]. Debt and Liabilities - Total liabilities increased to $6,793.9 million as of June 30, 2023, compared to $6,973.5 million at the end of 2022, a decrease of 2.6%[9]. - Long-term debt as of June 30, 2023, amounted to $3,888.7 million, slightly down from $3,901.3 million at the end of 2022[60]. - The company has a substantial level of indebtedness and must manage its ability to repay debt effectively[4]. Strategic Initiatives - GoDaddy is focusing on expanding its product offerings, with plans to launch three new solutions in the next quarter aimed at enhancing customer experience[2]. - The company has initiated a strategic partnership with a leading e-commerce platform to enhance its market presence and customer acquisition efforts[2]. - The restructuring plan announced in February 2023 aims to reduce future operating expenses and improve cash flows, involving a reduction in force and asset sales[38]. - The company is actively exploring potential acquisition opportunities to bolster its service offerings and market share[2]. Future Outlook - The company anticipates revenue growth of 8-10% for the upcoming quarter, projecting total revenue between $1.12 billion and $1.14 billion[2]. - Future expectations regarding revenue, cost of revenue, and operating expenses are subject to changes in technology and market conditions[4]. - The company plans to continue its efforts in international growth and managing foreign currency exchange rate fluctuations[4].

GoDaddy Inc. (NYSE:GDDY) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Christie Masoner - Head, Investor Relations Aman Bhutani - Chief Executive Officer Mark McCaffrey - Chief Financial Officer Conference Call Participants Matt Pfau - William Blair Trevor Young - Barclays John Byun - Jefferies Clarke Jeffries - Piper Sandler Aaron Kessler - Raymond James Mark Zgutowicz - The Benchmark Company Ygal Arounian - Citi Ella Smith - JPMorgan Christie Masoner Good afternoon, and than ...

Q1 2023 Financial Results May 4, 2023 Henry Ho Joyful Garden JOYFUL.BOSTON © 2023 GoDaddy Inc. Forward–looking statements and non-GAAP financial measures ...

Part I [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents GoDaddy's unaudited consolidated financial statements for Q1 2023, showing revenue growth to $1.04 billion but reduced net income of $47.4 million due to a restructuring charge [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to $7.09 billion, liabilities rose to $7.45 billion, and stockholders' deficit widened to $355.5 million Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $892.4 | $774.0 | | Goodwill | $3,549.1 | $3,536.9 | | Total Assets | $7,092.3 | $6,973.5 | | **Liabilities & Stockholders' Deficit** | | | | Deferred revenue (Current) | $2,043.2 | $1,954.0 | | Long-term debt, net | $3,809.6 | $3,812.9 | | Total Liabilities | $7,447.8 | $7,302.8 | | Total stockholders' deficit | $(355.5) | $(329.3) | - The company classified **$21.7 million** in assets and **$13.9 million** in liabilities as 'held for sale' as of March 31, 2023, related to its restructuring plan[19](index=19&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2023 total revenue increased to $1.036 billion, but operating income decreased to $70.8 million and net income to $47.4 million, primarily due to a restructuring charge Q1 2023 vs. Q1 2022 Performance (in millions, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $1,036.0 | $1,002.7 | | Operating Income | $70.8 | $109.6 | | Net Income | $47.4 | $68.6 | | Diluted EPS | $0.30 | $0.41 | - Revenue from the Applications & Commerce segment grew to **$338.0 million** from **$303.1 million**, while Core Platform revenue slightly decreased to **$698.0 million** from **$699.6 million**[21](index=21&type=chunk) - The company recorded a **$52.3 million** charge for 'Restructuring and other', which was not present in the prior-year period and significantly impacted operating income[21](index=21&type=chunk) [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2023 comprehensive income significantly decreased to $9.8 million, primarily due to a net loss on unrealized swaps Comprehensive Income (in millions) | Component | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Income | $47.4 | $68.6 | | Unrealized swap gain (loss), net | $(32.6) | $89.9 | | **Comprehensive Income** | **$10.0** | **$127.4** | [Consolidated Statements of Stockholders' Deficit](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Deficit) Total stockholders' deficit widened to $355.5 million, primarily due to share repurchases and negative derivative impacts offsetting net income - The company repurchased **1.55 million** shares of Class A common stock for **$113.9 million** during the quarter[27](index=27&type=chunk) - Equity-based compensation added **$74.5 million** to additional paid-in capital[27](index=27&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2023 operating cash flow increased to $270.3 million, while financing cash outflow significantly decreased due to lower share repurchases Cash Flow Summary (in millions) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $270.3 | $250.9 | | Net cash used in investing activities | $(22.8) | $(12.5) | | Net cash used in financing activities | $(124.2) | $(750.6) | | **Net increase (decrease) in cash** | **$118.4** | **$(513.0)** | - Payments for repurchases of Class A common stock were **$119.7 million** in Q1 2023, compared to **$750.1 million** in Q1 2022[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue breakdown, the February 2023 restructuring plan, long-term debt, and segment performance Revenue by Geography (Q1 2023 vs Q1 2022, in millions) | Geography | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | U.S. | $695.4 | $672.9 | | International | $340.6 | $329.8 | | **Total** | **$1,036.0** | **$1,002.7** | - In February 2023, the company initiated a restructuring plan, reducing its workforce by approximately **8% (550 employees)** and recording **$50.4 million** in pre-tax charges during the quarter[89](index=89&type=chunk) - As of March 31, 2023, the company had **$1.586 billion** remaining under its **$3.0 billion** share repurchase authorization[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial results, noting revenue growth to $1.04 billion driven by A&C, but profitability impacted by a $52.3 million restructuring charge [Consolidated First Quarter Financial Highlights](index=28&type=section&id=Consolidated%20First%20Quarter%20Financial%20Highlights) Q1 2023 highlights include total revenue of $1.036 billion and bookings of $1.199 billion, but operating and net income declined due to restructuring charges Q1 2023 Key Financial Metrics vs. Q1 2022 (in millions) | Metric | Q1 2023 | Change vs. Q1 2022 | | :--- | :--- | :--- | | Total Revenue | $1,036.0 | +3.3% | | Total Bookings | $1,199.2 | +3.7% | | Operating Income | $70.8 | -35.4% | | Net Income | $47.4 | -30.9% | | Normalized EBITDA | $249.7 | +10.5% | [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Total revenue grew 3.3% driven by Applications & Commerce, while Core Platform revenue slightly decreased, and operating expenses rose due to a restructuring charge - Applications & Commerce revenue growth was driven by a **10.1%** increase in productivity applications, **8.0%** in Websites + Marketing, and **104.2%** in commerce-related revenue[131](index=131&type=chunk) - Core Platform revenue was impacted by an **8.0%** decrease in aftermarket revenues and a **4.8%** decrease in hosting revenues, partially offset by a **4.9%** increase in domain registration revenue[132](index=132&type=chunk) - Marketing and advertising expenses decreased **20.6%** to **$92.4 million**, attributed to lower discretionary spending and headcount reductions from the restructuring plan[140](index=140&type=chunk) - Technology and development expenses increased **13.1%** to **$215.0 million** due to higher personnel costs and technology investments for growth and cloud migration[138](index=138&type=chunk) [Segment Results of Operations](index=34&type=section&id=Segment%20Results%20of%20Operations) A&C segment revenue grew 11.5% to $338.0 million, while Core Platform revenue slightly decreased, but its EBITDA increased due to lower marketing spend Segment Performance (Q1 2023 vs Q1 2022, in millions) | Segment | Metric | Q1 2023 | Q1 2022 | Change % | | :--- | :--- | :--- | :--- | :--- | | **Applications & Commerce** | Revenue | $338.0 | $303.1 | +11.5% | | | Segment EBITDA | $132.4 | $119.8 | +10.5% | | **Core Platform** | Revenue | $698.0 | $699.6 | -0.2% | | | Segment EBITDA | $189.0 | $178.4 | +5.9% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) GoDaddy's liquidity is driven by operating cash flow of $270.3 million, with $113.9 million used for share repurchases and $1.586 billion remaining in authorization - Net cash from operating activities increased by **$19.4 million** year-over-year, primarily due to growth in bookings and lower discretionary marketing spend[168](index=168&type=chunk) - Net cash used in financing activities decreased by **$626.4 million**, mainly due to a **$630.4 million** decrease in share repurchases compared to Q1 2022[171](index=171&type=chunk) - The February 2023 restructuring plan resulted in **$6.4 million** in cash payments during the quarter, with an additional **$20.7 million** remaining to be paid[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) GoDaddy manages market risks from foreign currency and variable interest rates using derivatives, with currency movements negatively impacting Q1 2023 growth - The company's most significant foreign currency exposures are the British pound, the Euro, and the Canadian dollar[180](index=180&type=chunk) - In Q1 2023, constant currency total bookings growth would have been approximately **160 basis points** higher, and total revenue growth would have been **140 basis points** higher, than reported figures[180](index=180&type=chunk) - The company uses pay-fixed, receive-floating interest rate swaps to convert a significant portion of its variable-rate term loans to fixed rates, mitigating exposure to rising interest rates[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2023, the company's disclosure controls and procedures are effective at a reasonable assurance level[195](index=195&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[196](index=196&type=chunk) Part II [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to a shareholder derivative complaint alleging breach of fiduciary duty related to Tax Receivable Agreement settlements - A shareholder derivative complaint was filed against certain current and former officers and directors concerning the approval of the Tax Receivable Agreement (TRA) settlements[200](index=200&type=chunk) - The company filed a motion to dismiss the complaint, with a hearing scheduled for May 24, 2023[200](index=200&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant strategic, operational, financial, and legal risks, including intense competition, security breaches, substantial debt, and evolving regulations - The company faces significant competition from a wide range of providers, including domain registrars, hosting providers, e-commerce platforms (Wix, Shopify), and large tech companies (Google, Amazon, Microsoft)[219](index=219&type=chunk)[220](index=220&type=chunk) - The company has experienced and is frequently targeted by sophisticated network attacks and security breaches, including a multi-year campaign by a threat actor group, which could harm its reputation and result in liability[252](index=252&type=chunk)[256](index=256&type=chunk) - The February 2023 restructuring plan, which included an **8%** workforce reduction, may not achieve expected cost savings and could lead to operational disruptions or loss of institutional knowledge[222](index=222&type=chunk)[225](index=225&type=chunk) - The business is subject to complex and evolving regulations, including data privacy laws like GDPR and CCPA, and policies from ICANN, which could increase costs and restrict operations[321](index=321&type=chunk)[327](index=327&type=chunk)[329](index=329&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) GoDaddy repurchased 1.55 million shares for $113.9 million in Q1 2023, with $1.586 billion remaining under its repurchase authorization Share Repurchases in Q1 2023 | Period | Total Shares Purchased (in thousands) | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2023 | 407.8 | $74.22 | | Feb 2023 | 0.2 | $75.01 | | Mar 2023 | 1,144.6 | $73.09 | | **Total** | **1,552.6** | **N/A** | - As of March 31, 2023, the company had **$1,586.0 million** remaining under its share repurchase authorization[404](index=404&type=chunk) [Defaults Upon Senior Securities](index=99&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - The company reported no defaults upon senior securities[405](index=405&type=chunk) [Mine Safety Disclosures](index=99&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - This section is not applicable to the company[406](index=406&type=chunk) [Other Information](index=99&type=section&id=Item%205.%20Other%20Information) No other information was reported for this item - The company reported no other information for this item[407](index=407&type=chunk) [Exhibits](index=100&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[410](index=410&type=chunk)

Customer Retention and Revenue Growth - GoDaddy's customer retention rate exceeded 85% for the five years ending December 31, 2022, with a 93% retention rate for customers over three years in 2022[17] - In 2022, GoDaddy generated $4,091 million in revenue, a 7.2% increase from $3,816 million in 2021, and total bookings reached $4,414 million, up 4.3% from $4,232 million in 2021[17] - Approximately 1.5 million customers spent over $500 annually on GoDaddy's products in 2022[17] - The company has 20.9 million paying customers with a customer retention rate of over 85% and operates in 54 global markets, with 47% of its customer base and a third of its revenue coming from international markets[52] - The company's revenue growth historically relies on sustained customer growth rates and strong subscription renewals[103] - The company focuses on the small business market, which is underserved, and aims to grow revenues by adding new small business customers and selling additional solutions to existing ones[106] - The company's future success depends on maintaining strong subscription renewals, as renewal costs are substantially lower than acquiring new customers[103] Customer Segments and Market Presence - GoDaddy's customer base includes 20.9 million everyday entrepreneurs, with 47% located in international markets such as the UK, Canada, Germany, India, and Australia[14][25] - GoDaddy's largest customer segment, Independents, consists of micro-businesses and noncommercial endeavors, most with fewer than five employees[20] - WebPros, the second-largest customer segment, account for an estimated 50% of global website builds through third-party services[21] - Domain Registrars and Investors, the third-largest customer segment, leverage GoDaddy's domain registration and management platform for strategic relationships and liquidity[22] - The company serves a significant market with over 32.5 million small businesses in the U.S., representing approximately 43.5% of total U.S. GDP in 2014[48] - Approximately 32% of total bookings were derived from international sales in 2022, with localized products and customer care available in 54 markets[77] - The company has made significant investments in international operations, including expanding offerings in India, Europe, Latin America, the Middle East, and Asia[128] Domain Management and Services - GoDaddy manages nearly 84 million domains as of December 31, 2022, holding 24% of the approximately 350 million domain names registered worldwide as of September 30, 2022[38] - Approximately 92% of GoDaddy's customers had purchased a domain from the company as of December 31, 2022[38] - GoDaddy manages over 200 top-level domains (TLDs) for corporate domain portfolio owners and other registry operators[23] - GoDaddy offers 424 generic TLDs and 58 country code TLDs as of December 31, 2022[39] - GoDaddy's aftermarket platform includes a portfolio of over 1.2 million previously registered domains[41] - The company operates back-end registry management for over 215 TLDs and continues to invest in domain search, discovery, and recommendation tools[70] - In July 2022, the company acquired Dan.com, expanding its domain marketplace with lease-to-own options and automation technology[72] Revenue Segments and Product Offerings - The company's revenue is divided into two segments: Applications and Commerce (A&C) and Core Platform (Core), focusing on proprietary software, commerce products, and domain-related services[25] - GoDaddy derived 31%, 30%, and 28% of its total revenue from Applications and Commerce (A&C) products in 2022, 2021, and 2020, respectively[35] - GoDaddy derived 69%, 70%, and 72% of its total revenue from Core Platform products in 2022, 2021, and 2020, respectively[47] - GoDaddy Payments enables customers to accept major payment methods with the lowest fees in the industry compared to leading providers[34] - GoDaddy's Managed WordPress hosting includes enhanced security, automatic daily backups, and integrated SSL[28] - GoDaddy's Websites + Marketing product includes Payable Domains, a default payments system for frictionless transactions[27] - GoDaddy's Smart Terminal POS system integrates with Websites + Marketing and Managed WooCommerce Stores for unified in-person and online sales[32] - The company launched Managed WooCommerce Stores, a fully managed platform for WordPress e-commerce, integrating GoDaddy Payments and POS devices[73] - The company expanded its commerce offerings in 2022 by enabling payments in all Websites + Marketing through 'Buy Buttons' and introduced on-the-go solutions like GoDaddy Mobile, Pay Links, and Virtual Terminal capabilities[107] Technology and Infrastructure - Technology and development expenses were $794 million in 2022, with a total investment of $2,987 million over the past five years to enhance customer experiences[61] - The company has 2,378 employees in technology and development, 353 issued patents, and 9 pending patent applications in the U.S. as of December 31, 2022[62] - The company employs 6,910 employees worldwide, including 3,124 in care and services (GoDaddy Guides) and 2,378 in technology and development[58] - The company’s Managed WordPress solution simplifies CMS management with integrated security tools (WAF, CDN, SSL), design tools, and automatic updates[53] - The company’s Websites + Marketing platform unites marketing, content, commerce, and customer management tools into a single, intuitive experience[53] - The company leverages data and insights to personalize customer experiences and tailor solutions, aiming to improve website, marketing programs, and customer care[54] - The company’s physical infrastructure includes investments in peering architecture, automation, and migration to AWS to enhance speed, reliability, and scalability[63] - The company has developed and begun implementing a new e-commerce platform to enhance customer value proposition, offering comprehensive, flexible, and integrated solutions[65] - The data platform provides accurate and meaningful insights, enabling personalized customer experiences and driving innovation through instrumentation and experimentation[66] - The company's content and marketing platforms leverage advanced technology to deliver customer-centric digital experiences, focusing on content creation speed, localization, and self-service[67] - Product development investments have grown significantly, with key initiatives including Websites + Marketing, GoDaddy Studio, and tools for customer acquisition and retention[68] Competition and Market Risks - The company faces competition from providers of domain registration, web hosting, website creation, commerce capabilities, and cloud infrastructure services[79] - The company faces significant competition from providers like Google, Amazon, Microsoft, Meta, TikTok, and Shopify, which could impact market share and growth prospects[120] - Increased reliance on social media applications and mobile devices may reduce the prominence and value of domain names, potentially affecting the company's business[116] - The company's competitive position depends on its ability to develop technology and introduce new products, but there is no assurance that these investments will result in successful products[108] - The company's business could be adversely affected if it fails to attract and retain customers or increase sales to new and existing customers[102] - The company's new products or enhancements may fail to achieve customer acceptance due to factors like market demand misprediction, product defects, or negative publicity[109] International Operations and Risks - The company's international presence subjects it to additional risks, and its future growth depends partly on international bookings[99] - International bookings outside the U.S. represented approximately 32% of total bookings for 2022, 2021, and 2020[123] - The company is exposed to risks in higher-risk regions such as China, India, Russia, and Ukraine, which could impact growth prospects[126] - The company may incur additional costs or face delays in product launches due to geopolitical changes or conflicts, such as the Russia-Ukraine conflict[126] Acquisitions and Integration Challenges - The company has acquired businesses such as Dan.com, GoDaddy Studio, and Uniregistry's registrar and brokerage business to complement its offerings[133] - The company may face challenges in integrating acquired products and technologies, which could adversely affect operating results[133] - Challenges in integrating acquired companies, including potential issues with intellectual property, data protection, and security infrastructure, which could increase vulnerability to network attacks[135] - Difficulties in assimilating acquired companies' personnel, technologies, and operations, particularly if key personnel are geographically dispersed or choose not to work for the company[136] - Potential delays in integrating acquired companies onto the company's systems, leading to prolonged reliance on legacy systems or transition services agreements[137] - Entry into new lines of business, such as GoDaddy Payments and Dan.com, which may expose the company to additional risks, including regulatory burdens and customer acceptance challenges[138] Cybersecurity and Data Protection - Dependence on third-party cloud computing and hosting providers, particularly AWS, for critical infrastructure, with potential risks of service interruptions, delays, and outages[147][148] - Increased reliance on AWS for cloud infrastructure, with potential adverse effects on business operations if AWS services are disrupted or terminated[150] - Exposure to system failures and capacity constraints, which could negatively impact customer experience and financial results[143][144] - Vulnerability to network attacks, security breaches, and data security incidents, including sophisticated threats like advanced persistent threats and distributed denial-of-service (DDoS) attacks[152] - Risks associated with social engineering attacks targeting personnel or third-party vendors, potentially leading to unauthorized access to systems or customer data[153] - Inability to guarantee the effectiveness of current or future security measures, including backup systems, network protection mechanisms, and cybersecurity training, to prevent data breaches or system failures[155] - Cybersecurity incidents impacted approximately 28,000 hosting customers in March 2020 and up to 1.2 million Managed WordPress customers in November 2021[156] - The company has spent significant resources investigating and responding to cybersecurity incidents, including reporting to regulatory authorities and responding to FTC inquiries[156] - The company relies on third-party and public-cloud infrastructures, such as AWS, increasing dependency on third-party security measures[159] - The risk of security breaches is likely to increase as the company expands its cloud-based products and operates in more countries[162] - The company maintains cyber liability insurance, but coverage for nation-state-led cyber attacks remains uncertain[161] - Fraudulent activity, such as domain name hijacking and revenue share fraud, could result in service interruptions and substantial costs[165] Financial Performance and Risks - Net income in 2022 was $353 million, compared to $243 million in 2021 and a net loss of $494 million in 2020[196] - Customer demand growth rates have slowed in the past 12 months due to COVID-19, inflation, and foreign currency headwinds[196] - Revenue recognition is deferred over subscription terms, averaging one year but ranging from monthly to up to 10 years[200] - Future profitability depends on sustained revenue growth and effective cost management, with potential risks from macroeconomic conditions and competition[197] - The company may require additional equity, debt, or other financing for growth, acquisitions, or refinancing, which could dilute existing stockholders[198] - Debt financing may be impacted by market volatility, interest rate increases, and credit rating changes[199] - Tax liabilities could increase due to changes in tax laws, audits, or unfavorable outcomes from tax authority examinations[202] - The company relies on distributions from Desert Newco to cover expenses, taxes, and dividends, with potential risks if distributions are restricted[206] - Future effective tax rates may be volatile due to changes in deferred tax assets, liabilities, and intercompany restructurings[203] - The company’s ability to raise funds may be constrained by market conditions, operating performance, and investor interest[199] Marketing and Advertising - Advertising expenses were $412.3 million, $503.9 million, and $438.5 million for the years ended December 31, 2022, 2021, and 2020, respectively[168] - Marketing and advertising expenses totaled $1,992 million over five years, contributing to 20.9 million customers as of December 31, 2022[75] Customer Support and Employee Relations - The company employs approximately 6,200 GoDaddy Guides worldwide, providing 24/7/365 customer support[25] - The company's ability to increase sales is highly dependent on the quality of customer care provided by GoDaddy Guides[169] - Approximately 10%, 11%, and 12% of total bookings in 2022, 2021, and 2020, respectively, were generated from product subscriptions sold by GoDaddy Guides[169] - Competition for highly skilled personnel, particularly in U.S. tech hubs, is intense, and U.S. immigration laws may limit the ability to recruit global talent[174] Partnerships and Third-Party Integrations - The company partners with Microsoft, Open-Xchange, Yelp, Google, Amazon, WhatsApp, and Instagram to offer integrated products and payment options through providers like PayPal, Stripe, Block, and Mercado Libre[176] - The company relies on third-party integrations for services like email encryption, backup, migration, and archiving, which could impact demand if integrations fail or terms change[176] Operational Risks and Challenges - The company faces risks related to domain name registration, including system failures, inaccurate data, and potential negative publicity, which could harm its business[178] - The company depends on the reliability and security of its internally developed systems, and any disruptions could damage its brand and increase costs[179] - The company operates data centers in Arizona, Virginia, France, the Netherlands, India, and Singapore, with potential risks from cyberattacks, natural disasters, and facility vulnerabilities[182][183] - The company's revenue is heavily reliant on credit card payments, and any increase in chargebacks or fraud could lead to higher fees, penalties, or loss of payment processing capabilities[187][188] - The company faces risks related to data breaches and payment information security, which could result in liability, fines, or reputational damage[189] - The company's operating results may be impacted by factors such as customer acquisition, product introductions, renewal rates, and changes in small business growth rates[192] - The company is exposed to risks from macroeconomic conditions, including inflation, deflation, and global conflicts, which could affect its financial performance[193] - The company's ability to forecast and achieve financial results may be impacted by variability in key metrics, fixed operating expenses, and revenue shortfalls[194]

GoDaddy Inc. (NYSE:GDDY) Q4 2022 Earnings Conference Call February 14, 2023 5:00 PM ET Company Participants Christie Masoner - Senior Director, Investor Relations Aman Bhutani - Chief Executive Officer Mark McCaffrey - Chief Financial Officer Conference Call Participants Aaron Kessler - Raymond James Financial, Inc. Matthew Pfau - William Blair & Company Trevor Young - Barclays Clarke Jeffries - Piper Sandler & Co. Ygal Arounian - Citigroup Inc. Elizabeth Porter - Morgan Stanley Mark Mahaney - Evercore Inc. ...