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GoDaddy Inc. (GDDY)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.193B (+8.4% YoY), NEBITDA $384.7M (+18.7% YoY) with margin expanding 280 bps to 32.3%; free cash flow was $342.0M (+12.1% YoY). Revenue came in above the high end of the prior $1.165–$1.185B guide, which management called out explicitly on the call .
  • Applications & Commerce (A&C) delivered 17% revenue growth to $441.2M with 46.7% segment EBITDA margin; Core Platform grew 3.9% to $751.4M with 34.1% margin .
  • FY25 outlook introduced: Q1 2025 revenue $1.175–$1.195B (~7% YoY at midpoint) and NEBITDA margin ~30%; FY 2025 revenue $4.86–$4.94B (~7% YoY midpoint), ~100 bps NEBITDA margin expansion, free cash flow ≥$1.5B; modeling guide: CapEx ~$30M, cash interest ~$150M, cash taxes ~$30M .
  • Strategic execution: Airo became the largest funnel for Websites + Marketing with ~50% of paid subscriptions originating via Airo; Airo Plus monetization began testing; commerce GPV reached $2.6B (+55% YoY) .
  • Capital structure: Net debt was $2.765B and the company refinanced $1.5B of term loans, reducing the margin by 25 bps in December 2024, supporting lower cash interest in 2025 .

What Went Well and What Went Wrong

What Went Well

  • A&C strength and margin expansion: “Total revenue grew… to $1.2 billion, exceeding the high end of our guided range… A&C bookings grew 17%… Segment EBITDA margin improved to 47%” .
  • Airo adoption and monetization: “Airo… becoming the largest funnel for Websites + Marketing with 50% of paid subscriptions originating with the Airo experience… we began testing Airo Plus as an independent SKU in the fourth quarter” .
  • Cash generation and leverage improvement: Q4 free cash flow +12% to $342.0M; Q4 NEBITDA margin up ~300 bps YoY; net leverage ~1.7x and cumulative buyback reduced gross shares by 23% since 2022 .

What Went Wrong

  • GAAP net income comparability: Q4 GAAP net income fell 82% YoY due to a non‑routine, non‑cash tax benefit in Q4 2023; margin fell to 16.7% from 101.3% in the prior-year period .
  • Customer count dip: Customers declined to 20.5M (‑2.4% YoY) as the company ended deep discounting, executed divestitures/migrations; management expects a return to customer growth in 2025 .
  • Aftermarket variability and FX: Management cautioned transactional businesses (aftermarket) drive guide range variability and noted minor FX headwinds rolling from bookings into revenue in early 2025 .

Financial Results

MetricQ2 2024Q3 2024Q4 2024Q4 2023
Total Revenue ($USD Billions)$1.1245 $1.1476 $1.1926 $1.1003
Diluted EPS ($USD)$1.01 $1.32 $1.36 $7.72
NEBITDA ($USD Millions)$331.7 $366.5 $384.7 $324.2
NEBITDA Margin (%)29.5% 31.9% 32.3% 29.5%
Free Cash Flow ($USD Millions)$323.4 $362.7 $342.0 $305.1
Net Income ($USD Millions)$146.3 $190.5 $198.6 $1,114.1
Net Income Margin (%)13.0% 16.6% 16.7% 101.3%

Segment performance and margins:

Segment MetricQ2 2024Q3 2024Q4 2024
A&C Revenue ($USD Millions)$405.6 $423.1 $441.2
Core Platform Revenue ($USD Millions)$718.9 $724.5 $751.4
A&C Segment EBITDA Margin (%)43.5% 46.0% 46.7%
Core Segment EBITDA Margin (%)30.5% 33.0% 34.1%

KPIs and operating metrics:

KPIQ2 2024Q3 2024Q4 2024
Total Bookings ($USD Billions)$1.262 $1.242 $1.223
ARR ($USD Billions)$3.853 $3.975 $4.043
Average Revenue per User (ARPU) ($USD)$210 $215 $220
Total Customers (000s)20,866 20,725 20,511

Q4 actuals vs prior company guidance:

ItemPrior Guidance (Q4 2024)Actual Q4 2024Outcome
Revenue ($USD Billions)$1.165–$1.185 $1.1926 Above high end
NEBITDA Margin (%)~31% 32.3% Beat

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Billions)Q1 2025N/A$1.175–$1.195 New
NEBITDA Margin (%)Q1 2025N/A~30% New
Total Revenue ($USD Billions)FY 2025N/A$4.86–$4.94 New
NEBITDA Margin Expansion (bps)FY 2025N/A~100 bps New
Free Cash Flow ($USD Billions)FY 2025N/A≥$1.500 New
Capital Expenditures ($USD Millions)FY 2025N/A~$30 New
Cash Interest ($USD Millions)FY 2025N/A~$150 New
Cash Income Taxes ($USD Millions)FY 2025N/A~$30 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/Airo initiativesAiro discovery >1M, ~0.5M engaged; monetization paywalls started; #1 AI website builder cited Airo discovery ~3M and >40% of Websites+Marketing paid subs origin; scaling plans and marketing Airo now ~50% of paid Websites+Marketing origin; Airo Plus testing; Agentic AI plans; Super Bowl campaign boost Accelerating
Pricing & BundlingLed A&C bookings (+24%); multiyear effort across products Expanding to Core cohorts in Q4; methodology detailed 2025 focus on presence products and hosting cohorts; material contribution targeted Expanding scope
Commerce/GPVSaaS plans launched (POS Plus, Invoicing Plus); GPV growing fast GPV growth continuing; transactional mix commentary; bookings outpace revenue GPV reached $2.6B (+55% YoY); runway remains long, base penetration still low Strong growth
Cost optimization/AI in CareGABI expanded; focus on efficiency and better experience Generative AI bot in 20 markets; double-digit containment improvement; cost leverage Continued AI investments; expect more internal efficiency from AI/GABI Improving
Aftermarket dynamicsDouble-digit growth in Q2; larger transactions returned but not guided Flattish in Q3; volatility highlighted Low single-digit grower over time with quarterly volatility; tough comps after larger 2024 transactions Volatile
Customer cohorts/retention85% retention; >50% multi-product customers; attach faster than prior years 85%+ retention on integrated platform; customer count down as “quality over quantity” ARPU $220 (+8%); avg order size +16%; expect customer growth return in 2025 Quality mix improving

Management Commentary

  • “Total revenue grew… to $1.2 billion, exceeding the high end of our guided range… A&C bookings grew 17%… Segment EBITDA margin also improved to 47%” — CFO .
  • “Airo… becoming the largest funnel for Websites + Marketing with 50% of paid subscriptions originating with the Airo experience… We began testing Airo Plus as an independent SKU in the fourth quarter” — CEO .
  • “We are targeting… total revenue of $4.86B to $4.94B [FY25]… normalized EBITDA margin expansion of ~100 bps… free cash flow of at least $1.5B” — CFO .
  • “Pricing and bundling delivered impactful results… In 2025, we are targeting a meaningful contribution… focusing on presence products and hosting cohorts” — CEO .
  • “Annualized GPV increased 55% to $2.6 billion… largest contributor remains our base… with plenty of runway” — CEO/CFO .

Q&A Highlights

  • Pricing & bundling strategy: Shift from product-led to cohort-led pricing; 2025 focus on presence and hosting cohorts; material contribution expected .
  • Bookings vs revenue convergence and FX: Bookings expected to outpace revenue in 2025; small FX headwinds move from bookings into revenue in H1 2025 .
  • Aftermarket variability: Low single-digit grower over time; larger transactions create quarterly swings; tough comps after 2024 .
  • Airo monetization and Airo Plus: Monetization pulled forward due to strong discovery/engagement; Airo Plus SKU testing underway; marketing emphasis to scale .
  • Customer growth: Management expects return to positive customer growth in 2025 as prior headwinds (divestitures, migrations, discounting) lap; ARPU and attach improving .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable due to request limits; therefore, comparison to Street consensus could not be retrieved at this time. Management noted Q4 revenue exceeded the high end of company guidance, and NEBITDA margin beat the guided ~31% exit rate .
  • As estimates were unavailable, investors should anchor near-term expectations on the company’s guidance (Q1 2025 and FY 2025) until consensus can be refreshed .

Key Takeaways for Investors

  • Mix shift to higher-margin A&C with sustained double-digit growth and segment margin at ~47% is expanding consolidated profitability; expect continued tailwind in 2025 as A&C approaches ~40% of revenue by year-end .
  • Airo has become a primary on-ramp (50% of paid Websites + Marketing subs), with early monetization via Airo Plus and evidence of improved attach, conversion, and renewal “green shoots” — key medium-term LTV driver .
  • Q4 beat vs company guidance and FY25 guide for ~7% revenue growth, ~100 bps NEBITDA margin expansion, and ≥$1.5B FCF supports a durable FCF compounding narrative; refinancing reduces interest expense friction .
  • Watch transactional aftermarket volatility and FX as sources of near-term revenue variability around the guide range; management does not build larger transactions into outlook .
  • Customer count decline reflects a quality-over-quantity strategy; ARPU rose to $220 and average order size +16% YoY; management expects customer growth to resume in 2025 .
  • Commerce GPV growth (+55% YoY to $2.6B) remains underpenetrated in the base, indicating long runway for payments and SaaS monetization (POS Plus, Invoicing Plus) .
  • Near-term trading: Focus on sustained A&C momentum, Airo Plus monetization cadence, and Q1 execution vs guide; medium-term thesis hinges on cohort-led pricing/bundling and AI-driven experience/efficiency gains (GABI, conversational bots) driving margin and FCF expansion .