Q4 2024 Earnings Summary
- GoDaddy is experiencing strong bookings momentum, which is expected to outpace revenue and continue through 2025.
- The company anticipates a return to customer growth in 2025, driven by investments in attracting high-value customers and the broader launch of the innovative Airo experience.
- GoDaddy's pricing and bundling initiatives have delivered results ahead of expectations in 2024, and are expected to make a meaningful contribution to growth in 2025, focusing on presence products and specific customer cohorts within the hosting business.
- Aftermarket domain sales growth is expected to be low single digits, and the company does not anticipate larger transactions, which can create volatility. This suggests a potential slowdown in high-margin aftermarket sales, making the year a tough compare and possibly affecting revenue growth.
- Foreign exchange headwinds are impacting bookings, with management noting a small impact that will roll over into the first part of the year. This could negatively affect revenue growth, particularly in international markets.
- Revenue growth trails bookings growth, and there is dependence on transactional businesses, especially the aftermarket segment. The lag in revenue recognition from bookings to revenue introduces uncertainty in achieving the higher end of revenue guidance, which may concern investors about the company's ability to convert bookings into realized revenue.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +8% (from $1,100.3M to $1,192.6M) | Total revenue increased by 8% YoY driven by overall sales growth across key segments, building on previous quarter initiatives that accelerated customer adoption in both domestic and international markets. |
Applications & Commerce | +16.9% (from $377.4M to $441.2M) | A&C revenue surged by 16.9% YoY as a result of boosted performance in productivity applications and commerce solutions, building on prior-period momentum from pricing, bundling initiatives, and increased subscription uptake that enhanced online presence for customers. |
Domains Revenue | +5.7% (from $525.5M to $555.6M) | Domains revenue grew by 5.7% YoY likely due to pricing actions, broad product offerings, and strong customer demand, showing consistent performance relative to previous gains in customer attachments and international market penetration. |
Operating Income | +34.7% (from $189.9M to $255.6M) | Operating income expanded by 34.7% YoY as higher revenue growth outpaced modest cost increases, benefiting from continued cost management and efficiency efforts that have also been evident in previous periods. |
Net Income | –82% (from $1,113.9M to $198.6M) | Net income plummeted by 82% YoY, in stark contrast to revenue and operating gains; this dramatic decline likely reflects heavy one-time charges, increased tax provisions, or non-operating expenses that were not present or were lower in the previous period. |
Basic EPS | –81.5% (from $7.54 to $1.40) | Basic EPS dropped by 81.5% YoY in line with the net income deterioration, with the decline further impacted by the same extraordinary expenses or tax effects that significantly reduced earnings per share relative to the prior period. |
U.S. Revenue | +8.9% (from $746.4M to $812.2M) | U.S. revenue increased by 8.9% YoY driven by robust domestic performance, particularly in the A&C and Core Platform segments which continued previous trends of growth observed in earlier quarters. |
International Revenue | +7.5% (from $353.9M to $380.4M) | International revenue grew by 7.5% YoY as global market performance improved through continued customer adoption and a diversified product strategy, reflecting consistency with earlier growth patterns in international zones. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenue | Q1 2025 | $1.165B–$1.185B, representing ~7% growth | $1.175B–$1.195B, representing ~7% growth | raised |
Normalized EBITDA Margin | Q1 2025 | 31% | ~30% | lowered |
Applications & Commerce Revenue Growth | Q1 2025 | Mid‑teens | Mid‑teens | no change |
Core Platform Revenue Growth | Q1 2025 | Low single digits | Low single digits | no change |
Elevated Marketing Spend | Q1 2025 | no prior guidance | Focused on the broader launch of the Airo experience and seasonal expenses | no prior guidance |
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Airo Monetization Acceleration
Q: Why is GoDaddy entering Airo's monetization phase earlier than planned?
A: Discovery and engagement metrics for Airo have exceeded expectations, leading GoDaddy to initiate monetization sooner than anticipated. Millions of customers have discovered Airo, with half engaging with it, and Airo now accounts for 50% of website starts. This success has bolstered confidence, prompting the early launch of the monetization SKU, Airo Plus, in Q4. -
GPV Growth and Potential
Q: What is the outlook for GoDaddy's Gross Payment Volume growth?
A: GoDaddy's GPV reached $2.6 billion, growing at mid-50% rates. The largest contributor to GPV growth is the existing customer base, with significant room for further penetration as only a small percentage has been reached so far. The company aims to maintain fast-paced growth while focusing on profitable models and expanding SaaS offerings for higher-margin revenue. -
Pricing and Bundling Strategy Evolution
Q: How is GoDaddy's pricing and bundling strategy evolving?
A: GoDaddy is transitioning from a product-centric to a customer cohort-based approach in its pricing and bundling strategy. After exceeding expectations in 2024, the company sees a material target for 2025. The focus is shifting toward presence products and specific cohorts within the hosting business to create unique value-based offers, capturing more value for shareholders. -
Customer Count Growth Expectations
Q: How confident is GoDaddy in returning to customer growth in 2025?
A: GoDaddy is confident about returning to customer growth in 2025, focusing on high-quality, high-intent customers. Past headwinds such as divestitures, ending deep discounting, and migrations have subsided. The company is seeing solid top-of-funnel traffic, with customers attaching faster and positive signs from Airo contributing to the strategy's effectiveness ,. -
Revenue and Bookings Growth and FX Impact
Q: What are the expectations for revenue growth and any FX impacts?
A: Bookings continue to outpace revenue, with momentum expected to carry through 2025. While there is a small impact from FX, particularly seen in bookings during the second half of the year, it's relatively minimal and factored into the 2025 model. The company anticipates ongoing strong performance, despite these minor headwinds.