GoDaddy has released its Q2/2023 financial results.
Year-to-date through July 31, 2023, GoDaddy repurchased 10.2 million shares of its common stock for an aggregate purchase price of $745.9 million, with an average price per share of $73.04. Cumulatively, these repurchases represent an approximate 16% reduction in fully diluted shares from those outstanding at the inception of the current $3 billion buyback authorization. Additionally, GoDaddy announces an incremental $1 billion share buyback authorization through 2025.
Balance Sheet:
As of June 30, 2023, total cash and cash equivalents were $582.6 million, total debt was $3.9 billion and net debt was $3.3 billion.
Debt Refinancing:
In July 2023, GoDaddy refinanced $1.8 billion of the outstanding principal amount of its term loans to lower the interest rate margins by 0.75%, reducing annual cash interest by $13 million. The refinanced loans retain the original maturity date and other terms and conditions.
Restructuring:
In February 2023, GoDaddy announced a restructuring plan to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets. In the second quarter, GoDaddy closed on the sale of the previously announced non-core hosting brands for a net pre-tax loss on disposal of $16.8 million.
Business Outlook:
For the third quarter ending September 30, 2023, GoDaddy targets total revenue in the range of $1.055 billion to $1.075 billion, representing year-over-year growth of 3% at the midpoint, versus the same period in 2022.
For the third quarter ending September 30, 2023, GoDaddy targets Normalized EBITDA margin of approximately 26%. For the full year ending December 31, 2023, GoDaddy expects Normalized EBITDA margin of approximately 26%.
For the full year ending December 31, 2023, GoDaddy expects unlevered free cash flow of approximately $1.2 billion, representing growth of 9%, year-over-year, versus $1.1 billion of unlevered free cash flow generated in 2022. GoDaddy expects free cash flow of approximately $1.0 billion, representing growth of 3%, year-over-year, versus the $968.6 million of free cash flow generated in 2022.
GoDaddy’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (GAAP). GoDaddy does not provide reconciliations from non-GAAP guidance to GAAP equivalents because projections of changes in individual balance sheet amounts are not possible without unreasonable effort and presentation of such reconciliations would imply an inappropriate degree of precision. GoDaddy’s reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents.
Business highlights:
- Applications and Commerce revenue grew to $352 million in Q2, up 11% YoY.
- Annualized Recurring Revenue (ARR) increased to $1.3 billion in Q2, up 10% YoY.
- GoDaddy’s Create + Grow suite’s ARR reached $465 million, up 11% YoY in Q2.
- Gross Payments Volume (GPV) from GoDaddy’s Commerce offerings is on pace to more than double 2022 GPV by year-end.
- Gross Merchandise Volume (GMV) totaled $33 billion in Q2, up 20% YoY.
- Core Platform revenue remained flat YoY at $696 million in Q2, with ARR at $2.3 billion, also flat YoY.
- Powerful generative AI tools were integrated into Websites + Marketing, aiding micro businesses with auto-generated product descriptions, customer service messages, and social media ads.
- GoDaddy.AI, a free online resource, was released to provide tips and news on generative AI for small businesses.
- GoDaddy’s AI Assistant in the Pro Hub was launched for GoDaddy Pros, expediting tasks like generating site content, proposals, invoicing, and client communications.
- AI-powered conversational onboarding was introduced, simplifying the setup process for new WordPress sites.
- GoDaddy plans to host an in-person Investor Day in Q1 2024 at its Tempe, Arizona, office to showcase long-term strategy, innovation initiatives, financial framework, capital allocation strategy, and recently launched products. More details will be provided in winter 2024.
