GoDaddy Shares Rise on Q3 Earnings Beat, Revenues Increase Y/Y

Core Insights - GoDaddy (GDDY) reported Q3 2024 earnings of $1.32 per share, exceeding the Zacks Consensus Estimate by 5.6% and showing a year-over-year increase of 48.3% [1] - The company generated revenues of $1.15 billion, surpassing the Zacks Consensus Estimate by 0.4%, with a year-over-year growth of 7.3% [1] - GoDaddy's shares increased by over 1% in pre-market trading and have risen 52.2% year-to-date, outperforming the Zacks Computer & Technology sector's return of 28.4% [1] Quarterly Performance - Applications and Commerce (A&C) segment generated $423.1 million, contributing 36.9% to total revenues, with a year-over-year increase of 16.5% [2] - Core Platform revenues, which include domains, aftermarket, hosting, and security, rose 2.6% year over year to $724.5 million, contributing 63.1% to total revenues [2] International and Booking Performance - International revenues reached $369.4 million, up 6.9% year over year [3] - Total bookings amounted to $1.2 billion, reflecting a 9% year-over-year increase [3] - Average revenues per user were $215, up 7.5% year over year [3] Annualized Recurring Revenues (ARR) - Total annualized recurring revenues were $3.97 billion, up 8.1% year over year [4] - Applications & Commerce ARR was $1.6 billion, increasing 15% year over year, while Core platform ARR totaled $2.4 billion, moving up 4% year over year [4] - Total customers at the end of Q3 were 20,725, down 1.4% year over year [4] Operating Results - Normalized EBITDA for Q3 was $366.5 million, up 23.8% year over year, with a normalized EBITDA margin expansion of 420 basis points [5] - Operating income was $253.8 million, reflecting a 51.9% year-over-year increase, with an operating margin expansion of 650 basis points to 22.1% [6] Balance Sheet and Cash Flow - As of September 30, 2024, cash and cash equivalents were $767.1 million, up from $444.9 million as of June 30, 2024 [7] - Total debt remained unchanged at $3.9 billion [7] - Free cash flow was $362.7 million, compared to $323.4 million in the previous quarter [7] - The company repurchased 5.2 million shares for a total of $668.1 million during Q3 [7] Guidance - For Q4 2024, GoDaddy expects revenues between $1.165 billion and $1.185 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 Q4 [9] - For the full year 2024, total revenues are expected to be between $4.545 billion and $4.565 billion, also indicating a year-over-year growth of 7% at the mid-point [10] - The normalized EBITDA margin for the year is expected to be 30% [10] - GoDaddy anticipates a free cash flow of at least $1.325 billion for 2024 [10]