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GoDaddy Inc.’s GDDY second-quarter 2018 adjusted earnings of 11 cents per share surpassed the Zacks Consensus Estimate by 3 cents. Earnings increased sequentially but decreased 15.4% from the year-ago quarter.
Revenues of $651.6 million increased 2.9% sequentially and 16.8% year over year, beating the Zacks Consensus Estimate of $643 million. Moreover, the reported figure exceeded management’s guided range of $640-$645 million.
Management remains positive about strong product and marketing roadmap for 2018. The company’s mobile-optimized website builder, GoCentral, has been gaining momentum. GoDaddy has been making continuous efforts to enhance its features, thereby making the products more attractive.
Following the weaker-than-expected web hosting sales in the second quarter, the share price was down 4.64% in after-hours trading.
However, on a year-to-date basis, the stock has outperformed the industry it belongs to. It has gained 52.5% compared with the industry’s growth of 22% in the said period.
Top-Line Details
At the end of the second quarter, customers were nearly 18 million, increasing 6.5% from the prior-year quarter. Also, average revenue per user (ARPU) was $142, up 10.2% from the prior-year quarter.
Strong customer growth and expanding ARPU led to the improvement.
GoDaddy generates revenues from three segments — Domain, Hosting and Presence, and Business Applications.
Domain revenues of $304.8 million contributed 46.8% to the total revenues. Revenues were up 4.5% sequentially and 15.8% year over year.
Hosting and Presence revenues of $244.6 million accounted for 37.5% of the total revenues. The figure represented 2% sequential and 13.8% year-over-year growth.
Business Applications revenues of $102.2 million, accounting for 15.7% of the total revenues, increased 0.5% sequentially and 28.4% from the year-ago quarter.
Booking
GoDaddy uses total bookings as a performance measure, since payment is usually collected at the time of sale, and recognizes revenues ratably over the term of customer contracts. In the second quarter, total bookings of $754.2 million increased 13% year over year.
Operating Results
Gross margin was 66%, up 4 basis points (bps) sequentially and 125 bps from the prior-year quarter.
Operating expenses of $329.8 million increased 10% year over year.
The quarter’s GAAP net income was $18.1million compared with$20.8 million in the year-ago quarter.
Balance Sheet & Cash Flow
On Jun 30, 2018, total cash and cash equivalents, and short-term investments were $828.5 million compared with $729.5 million in the first quarter. Accounts and other receivables were $23.6 million compared with $24 million in the last reported quarter.