GoDaddy(US:GDDY)2024-05-03 01:34Financial Data and Key Metrics Changes - Total revenue grew to $1.1 billion, up 7% year-over-year, exceeding the high end of guidance [15][20] - Free cash flow increased by 26% to $327 million, with unlevered free cash flow growing 18% to $359 million [18][19] - Normalized EBITDA grew 25% to $313 million, with an expanded margin of 28%, up 400 basis points [17][21] Business Line Data and Key Metrics Changes - Applications and Commerce segment revenue reached $383 million, growing 13% [15][16] - Annualized Gross Payment Volume (GPV) for GoDaddy payments surpassed $2 billion, with segment EBITDA margin at 42%, up over 300 basis points [16][19] - Core platform revenue totaled $725 million, growing 4%, driven by strong demand for domains and aftermarket [16] Market Data and Key Metrics Changes - Customer retention rate remained stable at 85%, with customers holding two or more products above 50% [15] - The company experienced headwinds from divestitures, impacting revenue by approximately 100 basis points [15][20] Company Strategy and Development Direction - The company focuses on enhancing pricing and bundling capabilities, which contributed to the 22% bookings growth in the Applications and Commerce segment [7][8] - GoDaddy Airo is positioned as a key growth driver, enhancing customer engagement and discovery [10][12] - The strategic framework aims for 6% to 8% annual top-line growth, with a target of 33% normalized EBITDA margin by 2026 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the steady macro environment, which is expected to support customer growth [53][78] - The company raised its full-year revenue guidance, now expecting between $4.5 billion and $4.56 billion [20] - Management acknowledged ongoing headwinds from divestitures but remains optimistic about long-term growth prospects [66] Other Important Information - The company repurchased 2.8 million shares year-to-date, totaling $346 million, with a cumulative repurchase of $2.9 billion [19] - Capital expenditures for the quarter were down 81% due to data center divestitures [18] Q&A Session Summary Question: Strong bookings growth and its impact on revenue - Management noted that while bookings growth is strong, revenue recognition can vary, and some headwinds from divestitures will impact revenue growth in the near term [24][25] Question: Insights on Airo's performance and conversion rates - Management highlighted that Airo is performing well in terms of customer engagement and discovery, with expectations for future monetization [26][28] Question: Pricing power and SMB health - Management clarified that pricing changes are based on value-based bundling rather than simple price increases, and SMB sentiment remains optimistic despite challenges [76][78] Question: Drivers of aftermarket growth - Management indicated that the recent growth in the aftermarket is driven by larger transactions, although they expect steady-state growth to remain low single-digit [70][71]