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

• GoDaddy reported a 7% year-over-year increase in total revenue, reaching $1.15 billion for the third quarter of 2024.
• Applications and Commerce (A&C) revenue saw a significant 16% year-over-year growth, totaling $423.1 million, with an annualized recurring revenue (ARR) of $1.6 billion, up 15% year-over-year.
• Core Platform (Core) revenue grew by 3% year-over-year to $724.5 million, with Core ARR reaching $2.4 billion, a 4% year-over-year increase.
• Total bookings increased by 9% year-over-year to $1.2 billion.
• Net income for the quarter was $190.5 million, a 45% increase year-over-year, representing a 17% margin.
• Normalized EBITDA (NEBITDA) reached $366.5 million, a 24% increase year-over-year, with a 32% margin.
• Net cash provided by operating activities was $355.2 million, up 26% year-over-year.
• Free cash flow was $362.7 million, a 29% increase year-over-year.
• The company has raised its full-year revenue expectations to a range of $4.545 billion to $4.565 billion, representing 7% growth at the midpoint.
• GoDaddy also raised its full-year NEBITDA margin expectations to approximately 30%.
• The company expects fourth-quarter revenue to be between $1.165 billion and $1.185 billion, representing 7% year-over-year growth at the midpoint.
• GoDaddy raised its full-year unlevered free cash flow target to at least $1.475 billion and free cash flow target to at least $1.325 billion.

Score: 8

Explanation: The document presents a very positive outlook with strong financial results, increased guidance, and successful product launches. The company is showing strong growth and profitability, which is very encouraging for investors.

• GoDaddy demonstrated strong revenue growth, particularly in the Applications and Commerce segment.
• The company showed significant improvements in profitability, with a 45% increase in net income and a 24% increase in NEBITDA.
• Cash flow generation was robust, with a 26% increase in net cash from operations and a 29% increase in free cash flow.
• The company is successfully rolling out its GoDaddy Airo AI-powered experience globally.
• GoDaddy's share repurchase program has reduced fully diluted shares by approximately 23% since January 2022.
• The company has raised its full-year revenue and cash flow guidance, indicating positive future expectations.

• Total customers decreased by 1.4% year-over-year, indicating a potential challenge in customer acquisition.
• Core platform revenue growth was slower at 3% year-over-year compared to the 16% growth in Applications and Commerce.
• The company's total debt remains high at $3.9 billion, with net debt at $3.1 billion.

• The company faces risks related to the rapidly evolving market and competition.
• Fluctuations in financial and operating results could impact performance.
• Cyberattacks or breaches of security measures pose a threat.
• The company's ability to innovate and gain customer acceptance of new products is crucial.
• Macroeconomic conditions and geopolitical tensions could affect the business.
• The company must remediate a material weakness in internal control over financial reporting.

GoDaddy has raised its full-year revenue guidance to $4.545 billion to $4.565 billion, representing 7% growth at the midpoint, and expects a NEBITDA margin of approximately 30%. The company also raised its full-year unlevered free cash flow target to at least $1.475 billion and free cash flow target to at least $1.325 billion.

• GoDaddy CEO Aman Bhutani stated that the company delivered a solid third quarter with continued progress on key initiatives and is committed to empowering entrepreneurs with innovative solutions.
• GoDaddy CFO Mark McCaffrey noted that the company's results demonstrated continued progress in delivering durable top-line growth, expanded profitability, and strong cash generation.

GoDaddy's results reflect a broader trend in the tech industry where companies are focusing on recurring revenue streams and AI-driven solutions. The growth in the Applications and Commerce segment aligns with the increasing demand for online business tools and e-commerce platforms. The company's focus on AI with GoDaddy Airo is also in line with the industry's move towards leveraging artificial intelligence to enhance customer experience and business operations.

• GoDaddy's 7% revenue growth is solid, but it is important to compare this to peers like Wix and Squarespace, which have also been experiencing growth in the website building and e-commerce space.
• The 16% growth in Applications and Commerce is a strong indicator of GoDaddy's success in this area, which is comparable to the growth rates seen in other SaaS companies.
• The 24% increase in NEBITDA and 29% increase in free cash flow are positive signs of operational efficiency and are competitive with other established tech companies.
• GoDaddy's share repurchase program is a common practice among mature tech companies to return value to shareholders, similar to programs at companies like Microsoft and Apple.
• The company's focus on AI with GoDaddy Airo is similar to other tech companies investing in AI to improve their offerings, such as Google and Amazon.

• Shareholders will benefit from the increased profitability, share repurchases, and positive future outlook.
• Customers will benefit from the enhanced capabilities of the GoDaddy Airo experience.
• Employees may benefit from the company's growth and success.

• GoDaddy plans to demonstrate the expanded capabilities of its Airo experience at its Investor Dinner on December 3, 2024.
• The company will continue to focus on optimizing monetization pathways for GoDaddy Airo.
• GoDaddy will host a webcast to discuss third quarter 2024 results on October 30, 2024.

• October 28, 2024: Date through which share repurchases were tracked year-to-date.
• October 30, 2024: Date of the earnings release and conference call.
• December 3, 2024: Date of the Investor Dinner in Tempe, Arizona.
• December 31, 2024: End of the fiscal year and the fourth quarter.