Core Insights - GoDaddy Inc. will have its CEO Aman Bhutani and CFO Mark McCaffrey present at the Morgan Stanley Technology, Media & Telecom Conference on March 3, 2025 [1] - The presentation will be available via live audio webcasts and post-presentation audio replays on GoDaddy's investor relations website [1] Company Overview - GoDaddy assists millions of entrepreneurs worldwide in starting, growing, and scaling their businesses [2] - The company offers services such as domain naming, website building, logo creation, product sales, and payment processing [2] - GoDaddy Airo®, an AI-powered experience, aims to expedite the process of getting small businesses online and enhancing sales [2] - Expert guides from GoDaddy are available 24/7 to provide assistance to users [2]

Core Insights - GoDaddy's research indicates that small businesses are significantly contributing to job creation and economic growth through the use of AI tools like GoDaddy Airo, with measurable impacts observed in local economies [2][3][8] Group 1: Job Creation - For every website published using GoDaddy Airo, 20 jobs are created per county, with rural counties seeing an average of 4.2 jobs and urban counties experiencing a boost of 22 jobs [10] - The introduction of 10 new GoDaddy published websites per county is associated with a 0.017 percentage-point reduction in unemployment rates [10] Group 2: Economic Impact - GoDaddy Airo has led to a 43% increase in sales for small businesses and a 21% increase in traffic when a logo is added [4][10] - Microbusiness website activity surged to an all-time high in 2024, with GoDaddy's engagement index growing by 13% from January to September, surpassing pre-pandemic records [10][11] Group 3: Productivity and Revenue Growth - Among small business owners using AI tools like GoDaddy Airo, 72% reported increased productivity, and 61% reported higher revenues in the last six months [10] Group 4: Barriers to Entry - The number of websites published surged since the release of AI tools like Airo, although 38% of microbusiness owners cited a lack of knowledge about AI, indicating a need for education in 2025 [10]

Core Viewpoint - GoDaddy's stock experienced a significant decline following the release of its Q4 2024 financial results, despite reporting revenue growth that exceeded expectations [1][2]. Financial Performance - For Q4 2024, GoDaddy's revenue grew by 8% year over year to $1.2 billion, surpassing the expected growth of 7% [2]. - The company's full-year earnings per share (EPS) were reported at $6.45, which was a decline from the previous year, primarily due to a substantial tax benefit in 2023 that inflated profits [3]. - Analysts had anticipated a slightly higher EPS, contributing to the negative market reaction [3]. Stock Valuation - Over the past year, GoDaddy's stock has increased by 62%, while its price-to-sales (P/S) valuation rose by 48%, indicating that the stock's gains were largely driven by heightened investor expectations [4]. - Following the unmet expectations, the stock price experienced a crash, reflecting a recalibration of investor sentiment [4]. Future Outlook - Management projects a free cash flow of approximately $1.5 billion for 2025, suggesting a valuation of about 17 times those expectations, which is considered reasonable if the company can sustain growth [5]. - GoDaddy anticipates achieving annual top-line growth of 6% to 8% over the next few years, alongside improvements in profitability, which are viewed as achievable given the company's market position [6].

Core Insights - GoDaddy reported fourth-quarter 2024 earnings of $1.42 per share, missing the Zacks Consensus Estimate by 2.74%, but showing a 31.5% increase year-over-year from $1.08 [1] - The company generated revenues of $1.2 billion, exceeding the Zacks Consensus Estimate by 1.38%, with an 8.4% year-over-year increase [2] - GoDaddy's strong performance was driven by sustained customer demand and strategic initiatives, including optimized pricing and bundling strategies [3] Financial Performance - Applications and Commerce (A&C) segment revenues reached $441.2 million, contributing 37% to total revenues, and increased 16.9% year-over-year [4] - The Core Platform revenues were $751.4 million, contributing 63% to total revenues, with a 3.9% year-over-year increase [4] - International revenues were $380.4 million, up 7.5% year-over-year [5] - Total bookings increased 8.8% year-over-year to $1.2 billion, while Average Revenues Per User (ARPU) rose 8.4% to $220 [5] Operating Results - Normalized EBITDA for the fourth quarter was $384.7 million, reflecting a 32.3% year-over-year increase, with an expanded EBITDA margin of 280 basis points [6] - Operating income increased 34.6% year-over-year to $255.6 million, with an operating margin expansion of 420 basis points to 21.4% [7] Balance Sheet & Cash Flow - As of December 31, 2024, GoDaddy had cash and cash equivalents of $1.1 billion, up from $767.1 million as of September 30, 2024 [8] - Total debt remained unchanged at $3.9 billion, while free cash flow for the fourth quarter was $342 million [8] Guidance - For Q1 2025, GoDaddy expects revenues between $1.175 billion and $1.195 billion, indicating a year-over-year growth of 7% at the mid-point [9] - The company anticipates A&C revenue growth in the mid-teens and Core revenue growth in the low-single digits for Q1 [9] - For the full year 2025, total revenues are expected to be between $4.86 billion and $4.94 billion, with a normalized EBITDA margin expansion of 100 basis points [10]

Group 1 - GoDaddy Inc. reported weaker-than-expected earnings for Q4, with earnings of $1.36 per share, missing the analyst consensus estimate of $1.43 per share [1] - The company achieved quarterly sales of $1.192 billion, surpassing the analyst consensus estimate of $1.179 billion [1] - GoDaddy's CEO highlighted strong operational execution and financial performance in 2024, with plans to innovate around GoDaddy Airo and enhance their integrated technology platform for 2025 [2] Group 2 - For Q1, GoDaddy anticipates revenue between $1.175 billion and $1.195 billion, compared to estimates of $1.186 billion [2] - Following the earnings announcement, GoDaddy shares increased by 2.4%, closing at $212.54 [3] - Analysts adjusted their price targets for GoDaddy, with Piper Sandler raising it from $176 to $177 and Morgan Stanley from $227 to $228, while maintaining their ratings [4]

Financial Data and Key Metrics Changes - GoDaddy reported total revenue growth of 8% for the full year 2024, reaching $4.6 billion, with normalized EBITDA margin expanding to 31%, an increase of nearly 400 basis points year-over-year [26][28][19] - Free cash flow grew 25% to $1.4 billion, exceeding guidance, while unlevered free cash flow for the year increased 20% to $1.5 billion [29][19] - In Q4 2024, total revenue was $1.2 billion, exceeding guidance, with normalized EBITDA margin expanding to 32% [21][22] Business Line Data and Key Metrics Changes - Applications and commerce (A&C) segment revenue grew 17% to $441 million, driven by strong performance across products including website plus marketing and managed WordPress [22][23] - Core platform segment revenue grew 4% to $751 million, with bookings also increasing by 4% [23][24] - A&C bookings grew 17%, while core platform bookings rose 4% [22][23] Market Data and Key Metrics Changes - Annualized gross payment volume (GPV) increased 55% to $2.6 billion, indicating strong growth in the commerce initiative [10] - The company expects revenue growth in the US to outpace international growth by approximately 200 basis points due to currency headwinds [36] Company Strategy and Development Direction - GoDaddy's strategy focuses on creating customer value and transforming it into shareholder value through better conversion, attach, and retention [3] - The company is targeting significant contributions to growth from pricing and bundling initiatives in 2025, particularly in presence products and specific customer populations within the hosting business [7][48] - The Aero initiative is seen as a key driver of future growth, with plans to enhance customer experience and engagement through AI and new product offerings [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to customer growth in 2025, driven by high-value customer acquisition and improved retention rates [32][56] - The company anticipates modest financial benefits from the Aero experience in the near term, with a focus on long-term growth [38] - Management highlighted the importance of maintaining operational discipline while pursuing innovation and customer engagement [40][41] Other Important Information - GoDaddy exited 2024 with $1.1 billion in cash and total liquidity of $2.1 billion, with net debt at $2.8 billion [33] - The company plans to maintain a disciplined approach to capital allocation, including covering dilution from share-based compensation through buybacks [44][45] Q&A Session Summary Question: Can you elaborate on the pricing and bundling strategy for 2025? - Management indicated that the focus will be on presence products and specific customer cohorts, emphasizing a customer cohort-based approach rather than a product-centric one [48][52] Question: What are the drivers for returning to customer growth in 2025? - Management highlighted the focus on high-quality customers and the positive signs from the Aero initiative, which is expected to improve customer engagement and retention [56][58] Question: Are there any one-off headwinds impacting revenue growth? - Management acknowledged that while bookings momentum is strong, there are transactional aspects that could impact revenue recognition, particularly in the aftermarket business [66][134] Question: What is the expected impact of the Aero initiative on monetization? - Management noted that Aero is entering the monetization phase earlier than planned, with positive metrics on customer engagement and retention [78][81] Question: How does the company view the growth potential of GPV? - Management expressed optimism about GPV growth, indicating that there is still significant room for penetration within the customer base [85][86] Question: What are the expectations for EBITDA margin in 2025? - Management projected a normalized EBITDA margin expansion of approximately 100 basis points, with continued focus on A&C growth contributing to this [41][157]

Financial Performance - GoDaddy's total bookings grew by 9% year-over-year, reaching $5 billion[9] - The company achieved a NEBITDA margin of 31%, with an expansion of approximately 400 bps[9] - Free cash flow increased by 25% year-over-year[9] - Q4 2024 revenue grew by 8% to $1.2 billion, with Applications & Commerce contributing $0.4 billion (17% growth) and Core Platform contributing $0.8 billion (4% growth)[33] - For the full year 2024, revenue grew by 8% to $4.6 billion, with Applications & Commerce contributing $1.7 billion (16% growth) and Core Platform contributing $2.9 billion (3% growth)[44] Strategic Initiatives - Pricing & bundling initiatives bolstered A&C bookings growth by 21% in 2024[19] - GoDaddy Airo contributed to over 50% of Q4 Websites + Marketing paid subscriptions[21] - Commerce initiatives drove a 55% growth in GPV to $2.6 billion in 2024[19] Capital Allocation - GoDaddy completed $3.2 billion in share buybacks under current authorizations, with $0.8 billion remaining[62] - The company repurchased 39.4 million shares, reducing gross shares outstanding by 23% since January 2022[62] Outlook - The company projects 2025 revenue between $4.860 billion and $4.940 billion[66] - The company expects a NEBITDA margin of approximately 30% for Q1 2025 and an expansion of +100 bps for the full year[66] - GoDaddy anticipates generating over $1.5 billion in free cash flow in 2025[66]

Financial Data and Key Metrics Changes - GoDaddy achieved annual bookings growth of over 9% and expanded normalized EBITDA margin to 31% for the full year [4][19] - Free cash flow increased by 25% for the year, reaching $1.4 billion [4][29] - Total revenue for Q4 grew to $1.2 billion, exceeding guidance, with annual revenue of $4.6 billion representing 8% growth [22][26] - Normalized EBITDA grew 23% to $1.4 billion, with a margin expansion of nearly 400 basis points [27][28] Business Line Data and Key Metrics Changes - Applications and commerce segment revenue grew 17% to $441 million, driven by strong performance in website plus marketing and managed WordPress [22][23] - Core platform segment revenue grew 4% to $751 million, with bookings also increasing by 4% [23][24] - The annualized gross payment volume for commerce grew 55% to $2.6 billion [10] Market Data and Key Metrics Changes - The company expects revenue growth in the US to outpace international growth by approximately 200 basis points, primarily due to currency headwinds [36] - The percentage of customers purchasing two or more products has trended upwards, with over 50% of total customers subscribing to multiple products [32] Company Strategy and Development Direction - GoDaddy's strategy focuses on creating customer value and transforming it into shareholder value through better conversion, attach, and retention [3][20] - The company is targeting significant contributions to growth from pricing and bundling initiatives in 2025, particularly in presence products and specific customer populations [7][48] - GoDaddy Aero is viewed as a key driver of future growth and customer lifetime value, with plans for further enhancements and monetization [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to customer growth in 2025, driven by high-value customer acquisition and improved engagement metrics [32][56] - The company anticipates modest financial benefits from Aero in the near term, with a focus on long-term growth [38] - Management highlighted the importance of maintaining operational discipline while pursuing innovation and customer engagement [40][41] Other Important Information - GoDaddy exited the year with $1.1 billion in cash and total liquidity of $2.1 billion, with net debt at $2.8 billion [33] - The company plans to maintain a disciplined approach to capital allocation, including covering dilution from share-based compensation through buybacks [44][45] Q&A Session Summary Question: Can you elaborate on the pricing and bundling strategy for presence products? - Management discussed the focus on customer cohorts rather than a product-centric approach, aiming to enhance value-based offers [52][53] Question: What are the drivers for returning to customer growth in 2025? - Management emphasized the importance of attracting high-value customers and noted positive signs in customer engagement and attachment rates [56][58] Question: Are there any one-off headwinds impacting revenue growth? - Management acknowledged small impacts from foreign exchange and noted that bookings are expected to outpace revenue growth [66][68] Question: How is the monetization phase for Aero progressing? - Management indicated that Aero is entering the monetization phase earlier than planned, with positive metrics in customer engagement and retention [78][80] Question: What is the outlook for GPV growth? - Management expressed optimism about continued GPV growth, highlighting that a small percentage of the customer base has been penetrated so far [85][86] Question: Can you provide insights on the renewal rate improvements for Aero cohorts? - Management noted that Aero customers are experiencing higher engagement and retention rates due to the value-added services provided [112][113]

Group 1: Earnings Performance - GoDaddy reported quarterly earnings of $1.42 per share, missing the Zacks Consensus Estimate of $1.46 per share, but showing an increase from $1.08 per share a year ago, representing an earnings surprise of -2.74% [1] - The company posted revenues of $1.19 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.38%, compared to year-ago revenues of $1.1 billion [2] - Over the last four quarters, GoDaddy has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - GoDaddy shares have increased approximately 5.2% since the beginning of the year, outperforming the S&P 500's gain of 2.9% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $1.51 on $1.19 billion in revenues, and for the current fiscal year, it is $6.69 on $4.89 billion in revenues [7] Group 3: Industry Context - The Internet - Delivery Services industry, to which GoDaddy belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact GoDaddy's stock performance [5] - The Zacks Rank for GoDaddy is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - GoDaddy achieved a top line bookings growth of over 9% and expanded normalized EBITDA margin to 31% for the full year [6][14] - The company reported a 25% increase in free cash flow for the year, reaching $1,400,000,000 [14][19] - Annual revenue grew 8% to $4,600,000,000, with normalized EBITDA increasing 23% to $1,400,000,000, representing a 31% margin [18][19] Business Line Data and Key Metrics Changes - Applications and Commerce (A&C) segment revenue grew 17% to $1,700,000,000, with bookings also increasing by 17% [16][18] - Core platform segment revenue grew 4% to $2,900,000,000, with bookings rising 4% [16][18] - A&C segment EBITDA margin improved to 47%, while core platform segment EBITDA margin expanded to 34% [16] Market Data and Key Metrics Changes - Annualized gross payment volume (GPV) increased 55% to $2,600,000,000, indicating strong growth in the commerce initiative [9][18] - The company reported a customer base of 20,500,000, reflecting a strategic focus on high-value customers [19][20] Company Strategy and Development Direction - GoDaddy's strategy focuses on creating customer value and transforming it into shareholder value through better conversion, attach, and retention [5][14] - The company is targeting significant contributions to growth from pricing and bundling initiatives in 2025, particularly in presence products and specific customer populations within the hosting business [7][10] - GoDaddy Aero is viewed as a key driver of future growth, with plans to expand its capabilities and customer engagement [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to customer growth in 2025, driven by enhanced value propositions and strategic focus on high lifetime value customers [19][24] - The company anticipates total revenue growth of 7% for 2025, with A&C revenue growth in the mid-teens and core platform growth in low single digits [23][24] - Management highlighted the importance of maintaining operational discipline and pursuing opportunities for further leverage through technology and AI [25][26] Other Important Information - GoDaddy exited the year with $1,100,000,000 in cash and total liquidity of $2,100,000,000, with net debt at $2,800,000,000 [22] - The company plans to maintain a disciplined capital allocation approach, focusing on shareholder returns and evaluating all opportunities [26] Q&A Session Summary Question: Can you elaborate on the pricing and bundling strategy for 2025? - Management indicated excitement about the pricing and bundling program, which exceeded expectations in 2024, and plans to focus on presence products and customer cohorts in 2025 [33][35] Question: What are the drivers for returning to customer growth in 2025? - Management emphasized the focus on high-quality customers and the positive signs in the sales funnel, indicating a strategy that prioritizes high-value customers over sheer volume [39][40] Question: Any headwinds affecting revenue growth expectations for 2025? - Management acknowledged potential impacts from foreign exchange and the transactional business, which could affect revenue recognition timing [46][91] Question: What is the expected contribution from the ARROW initiative? - Management expects modest impacts from the ARROW launch in 2025, with a focus on attracting higher-value customers and enhancing their initial experience with GoDaddy [48][50] Question: Can you provide insights on the renewal rates for the Aero cohorts? - Management noted improvements in renewal rates for customers engaged with Aero, attributing this to the added value and multiple product interactions available through the Aero experience [77][78]