8-K: GoDaddy Reports Strong First Quarter 2024 Results, Driven by Growth in Applications and Commerce

• GoDaddy reported a 7% year-over-year increase in total revenue, reaching $1.1 billion for the first quarter of 2024.
• Applications and Commerce (A&C) revenue grew by 13% year-over-year to $383.1 million, with an annualized recurring revenue (ARR) of $1.5 billion, also up 13%.
• Core Platform revenue increased by 4% year-over-year to $725.4 million, with an ARR of $2.3 billion, up 3%.
• Total bookings were $1.3 billion, a 9% increase year-over-year.
• Net income was $401.5 million, a significant 747% increase year-over-year, which includes a $267.4 million non-cash tax benefit.
• Normalized EBITDA (NEBITDA) reached $313.0 million, a 25% increase year-over-year, with a margin of 28%, exceeding the guidance of 27%.
• Free cash flow was $327.4 million, up 26% year-over-year.
• The company repurchased 2.8 million shares for $345.6 million year-to-date through April 30, 2024.
• GoDaddy expects second quarter revenue between $1.10 billion and $1.12 billion, with a NEBITDA margin of approximately 28%.
• Full-year 2024 revenue is projected to be between $4.50 billion and $4.56 billion, with a NEBITDA margin of approximately 29% and unlevered free cash flow of at least $1.4 billion.

Score: 8

Explanation: The document presents a positive outlook with strong financial results, particularly in the Applications and Commerce segment, and increased free cash flow. The company also raised its full-year revenue expectations. However, the restructuring charges and high debt levels temper the overall sentiment slightly.

• GoDaddy's revenue growth was strong, with a 7% increase year-over-year.
• The Applications and Commerce segment showed impressive growth, with a 13% increase in revenue and ARR.
• Net income saw a significant increase of 747% year-over-year, although this was heavily influenced by a one-off tax benefit.
• Normalized EBITDA exceeded expectations, with a 25% increase year-over-year and a margin of 28%.
• Free cash flow increased by 26% year-over-year, indicating strong cash generation.
• The company is actively returning capital to shareholders through share repurchases.
• GoDaddy raised its full-year revenue expectations, indicating confidence in future performance.
• The company is focused on innovation with the rollout of the GoDaddy Airo experience.

• The company incurred $22.4 million in restructuring charges related to a reduction in force of approximately 180 employees.
• Core Platform revenue growth was slower at 4% year-over-year compared to the Applications and Commerce segment.
• The net income increase was significantly impacted by a non-cash tax benefit, which may not be repeatable.
• The company has a significant debt load of $3.9 billion, with net debt of $3.2 billion.

• The company operates in a rapidly evolving market, which could impact future performance.
• Fluctuations in financial and operating results could occur.
• Interruptions or delays in service or web hosting could negatively affect the business.
• The company is dependent on payment card networks and acquiring processors.
• Breaches of security measures could harm the company's reputation and financial results.
• The company faces competition from other players in the market.
• Macroeconomic conditions and geopolitical tensions could impact the business.
• The company needs to remediate a material weakness in its internal control over financial reporting.

GoDaddy expects second quarter revenue between $1.10 billion and $1.12 billion, with a NEBITDA margin of approximately 28%. Full-year 2024 revenue is projected to be between $4.50 billion and $4.56 billion, with a NEBITDA margin of approximately 29% and unlevered free cash flow of at least $1.4 billion.

• GoDaddy CEO Aman Bhutani stated, 'We are off to a great start in 2024, and we are excited to build on this momentum as we execute on our mission of empowering entrepreneurs everywhere and making opportunity more inclusive for all.'
• GoDaddy CFO Mark McCaffrey said, 'Our strong first quarter results underscore our commitment to sustainable growth and disciplined capital allocation.'

GoDaddy's results reflect a continued trend of growth in the digital services and e-commerce enablement space, with a particular focus on small business solutions. The company's emphasis on its Applications and Commerce segment aligns with the broader industry shift towards integrated platforms that offer a range of tools for online businesses.

• GoDaddy's 7% revenue growth is solid, but it lags behind some high-growth SaaS companies in the broader tech sector, which can see growth rates of 20% or more.
• The 13% growth in the Applications and Commerce segment is competitive with other companies focused on e-commerce and online business tools, such as Shopify, which has seen similar growth in its merchant solutions.
• GoDaddy's NEBITDA margin of 28% is healthy and in line with mature tech companies, but it is not as high as some pure-play software companies that can achieve margins of 30% or more.
• The company's free cash flow generation is strong, with a 26% increase year-over-year, which is a positive sign for investors.
• Compared to companies like Wix, which also offers website building and online business tools, GoDaddy's growth is more focused on its existing customer base and less on rapid customer acquisition.

• Shareholders will benefit from the strong financial results, share repurchases, and increased free cash flow.
• Employees may be impacted by the restructuring efforts, which included a reduction in force.
• Customers will benefit from the rollout of new features and services, such as the GoDaddy Airo experience.
• Creditors will be interested in the company's debt levels and ability to generate cash flow.

• GoDaddy will continue to roll out the GoDaddy Airo experience to its customer base.
• The company will host a webcast to discuss first quarter 2024 results on May 2, 2024.
• GoDaddy will focus on executing its key initiatives and innovation to drive profitable growth.
• The company will continue to monitor and manage its capital structure and leverage.

• May 2, 2024: Date of the press release and conference call announcing Q1 2024 financial results.
• March 31, 2024: End of the first quarter for which financial results are reported.
• April 30, 2024: Date through which share repurchases are reported year-to-date.
• June 30, 2024: End of the second quarter for which revenue and NEBITDA guidance is provided.