GoDaddy Beats Q4 Sales Targets, Forecasts 7.1% Growth in 2025
Key Highlights:
Financials:
* Revenue: $1.19 billion, surpassing analysts' estimates by 1.4%
* EPS (GAAP): $1.36, slightly below expectations by 5.5%
* Adjusted EBITDA: $384.7 million, exceeding estimates by 5.4%
Guidance:
* Revenue for fiscal year 2025 projected at $4.9 billion, in line with analysts' forecasts
* Implies 7.1% growth, lower than 7.5% in 2024
Operational Metrics:
* Annual Recurring Revenue: $4.04 billion, up 9.5% year-over-year
* Billings: $1.17 billion, a rise of 8.3%
* Operating Margin: 21.4%, an increase from 17.3% in Q4 2023
* Free Cash Flow Margin: 31.8%
Company Overview:
* GoDaddy empowers small and mid-sized businesses with domain registration, website creation, and management tools.
* E-commerce remains a significant growth driver, with over 80% of retail still ripe for online disruption.
Sales Growth:
* GoDaddy experienced modest sales growth of 6.2% compounded annually over the past three years.
* This quarter, revenue grew by 8.4%, exceeding estimates.
* Future revenue growth is forecasted at 6.6% over the next 12 months, suggesting minimal impact from new products and services.
Annual Recurring Revenue:
* GoDaddy's ARR reached $4.04 billion in Q4, but its growth rate of 7.8% year-over-year has been underwhelming.
* This indicates increased competition in securing long-term customer commitments.
Customer Acquisition Efficiency:
* GoDaddy's CAC payback period of 47.6 months reflects a relatively efficient sales cycle.
* Its self-serve model allows for onboarding small customers at scale, providing resources for software improvement.
Conclusion:
GoDaddy's strong revenue and EBITDA performance in Q4, coupled with its solid operational metrics, suggest a positive quarter. However, its EPS miss and modest growth projections may warrant further consideration.