8-K: GoDaddy Reports Strong Q4 and Full Year 2023 Results, Driven by Applications & Commerce Growth

• GoDaddy reported its financial results for the fourth quarter and full year ended December 31, 2023, showcasing strong operational execution and financial performance.
• Full year 2023 total revenue reached $4.3 billion, a 4% increase year-over-year, or 5% on a constant currency basis.
• Total bookings for the full year were $4.6 billion, up 4% year-over-year, or 5% on a constant currency basis.
• Net income for the full year was $1.4 billion, a 295% increase year-over-year, representing a 33% margin.
• Normalized EBITDA for the full year was $1.1 billion, up 12% year-over-year, with a 27% margin.
• Net cash from operating activities for the full year was $1,047.6 million, a 7% increase year-over-year.
• Free cash flow for the full year was $1.1 billion, up 12% year-over-year.
• In Q4 2023, total revenue was $1.1 billion, a 6% increase year-over-year on both a reported and constant currency basis.
• Q4 bookings were $1.1 billion, up 7% year-over-year, or 6% on a constant currency basis.
• Net income for Q4 was $1.1 billion, a 1,107% increase year-over-year, representing a 103% margin.
• Normalized EBITDA for Q4 was $324.2 million, up 22% year-over-year, with a 29% margin.
• Net cash from operating activities in Q4 was $297.7 million, a 43% increase year-over-year.
• Free cash flow in Q4 was $305.1 million, up 51% year-over-year.
• Gross payments volume from commerce offerings grew to $1.7 billion, a 125% increase year-over-year.
• Gross merchandise volume was $36 billion, up 26% year-over-year.
• GoDaddy launched its AI experience, GoDaddy Airo, in the U.S., which helps users build and grow online ventures.
• GoDaddy expects Q1 2024 total revenue to be between $1.085 billion and $1.105 billion, representing 6% year-over-year growth at the midpoint.
• For full year 2024, GoDaddy targets total revenue between $4.480 billion and $4.560 billion, representing 6% year-over-year growth at the midpoint.
• GoDaddy expects a Normalized EBITDA margin of 27% for Q1 2024 and approximately 29% for full year 2024, with a Q4 margin of approximately 31%.
• The company anticipates unlevered free cash flow of at least $1.4 billion and free cash flow of at least $1.2 billion for full year 2024.

Score: 9

Explanation: The document presents a very positive outlook with strong financial results, significant growth in key areas, and a clear strategy for future growth. The company's focus on profitability and cash flow generation, along with the launch of AI-powered tools, indicates a strong position in the market.

• GoDaddy demonstrated strong operational execution and financial performance in 2023.
• The company's focus on empowering entrepreneurs is showing positive results.
• GoDaddy is successfully driving margin expansion through operational discipline.
• The company is committed to managing the business for both top-line growth and profitability.
• GoDaddy is delivering compounding free cash flow and creating shareholder value.
• The launch of GoDaddy Airo is a positive step in leveraging AI for customer benefit.
• The debt repricing is expected to reduce interest expenses significantly.
• The release of the valuation allowance on deferred tax assets is a positive non-cash benefit.

• The document does not explicitly mention any negative aspects of the results.
• The company has a significant amount of debt at $3.9 billion.

• The company's market is rapidly evolving and unpredictable.
• Fluctuations in financial and operating results could impact performance.
• Interruptions or delays in service or web hosting could affect customers.
• Dependence on payment card networks and acquiring processors poses a risk.
• Breaches of security measures could harm the company's reputation and financials.
• The company faces competition in the market.
• Technological, regulatory, and legal developments could impact the business.
• Macroeconomic conditions and geopolitical tensions could affect performance.
• Interest rates and inflationary pressures could impact the company's financials.
• The company's ability to manage growth and retain employees is crucial.

GoDaddy expects Q1 2024 total revenue to be between $1.085 billion and $1.105 billion, representing 6% year-over-year growth at the midpoint. For full year 2024, GoDaddy targets total revenue between $4.480 billion and $4.560 billion, representing 6% year-over-year growth at the midpoint. The company expects a Normalized EBITDA margin of 27% for Q1 2024 and approximately 29% for full year 2024, with a Q4 margin of approximately 31%. GoDaddy anticipates unlevered free cash flow of at least $1.4 billion and free cash flow of at least $1.2 billion for full year 2024.

• GoDaddy demonstrated strong operational execution and financial performance while also making significant progress in our mission of empowering entrepreneurs around the world, said GoDaddy CEO Aman Bhutani.
• We are excited and confident in our ability to deliver compelling solutions for our customers across our simplified software platform while continuing to strengthen our strategic positioning, said GoDaddy CEO Aman Bhutani.
• GoDaddy delivered strong 2023 financial results, showcasing our ability to provide a one-stop shop for our customers and drive margin expansion through operational discipline, said GoDaddy CFO Mark McCaffrey.
• We remain committed to managing our business to provide an optimal combination of top-line growth and profitability, delivering compounding free cash flow and creating enduring shareholder value, said GoDaddy CFO Mark McCaffrey.

GoDaddy's strong performance, particularly in Applications & Commerce, reflects the growing demand for online business solutions and the increasing importance of e-commerce. The launch of GoDaddy Airo aligns with the industry trend of leveraging AI to enhance customer experience and streamline business operations. The company's focus on margin expansion and cash flow generation is also a key trend in the tech industry.

• GoDaddy's revenue growth of 4% for the full year and 6% for Q4 is solid, but it is important to compare this to other web hosting and domain registration companies such as Wix, Squarespace, and Shopify.
• Shopify, for example, has shown higher revenue growth rates in recent quarters, but GoDaddy's focus on profitability and cash flow generation is a differentiator.
• The 125% year-over-year growth in gross payments volume is impressive and indicates strong adoption of GoDaddy's commerce offerings, which is a key area of competition with companies like Square and PayPal.
• GoDaddy's Normalized EBITDA margin of 27% for the full year and over 29% for Q4 is competitive, but it is important to compare this to the margins of other SaaS companies in the industry.
• The share repurchase program, reducing fully diluted shares by approximately 20%, is a significant return of capital to shareholders, which is a common practice among mature tech companies.

• Shareholders will benefit from the strong financial performance, share repurchases, and positive future outlook.
• Customers will benefit from the launch of new AI-powered tools and improved services.
• Employees may benefit from the company's growth and success.
• Creditors may view the company's strong cash flow and debt management positively.

• GoDaddy will hold an in-person Investor Day on March 6, 2024, to discuss long-term strategy, innovation initiatives, financial framework, and capital allocation strategy.
• The company will continue to focus on delivering compelling solutions for customers across its simplified software platform.
• GoDaddy will continue to manage the business to provide an optimal combination of top-line growth and profitability.

• January 1, 2022: Start date for share repurchases.
• January 1, 2024: GoDaddy's subsidiary holding company, Desert Newco, LLC, was converted from a partnership to a disregarded entity for U.S. income tax purposes.
• January 2024: GoDaddy repriced $1.8 billion of its term loans.
• February 1, 2024: End date for share repurchases.
• February 13, 2024: Date of the earnings release and conference call.
• March 6, 2024: GoDaddy will hold an in-person Investor Day at its Tempe, Arizona headquarters.
• March 31, 2024: End of the first quarter for which GoDaddy provided revenue and EBITDA guidance.
• December 31, 2024: End of the full year for which GoDaddy provided revenue, EBITDA, and free cash flow guidance.