GoDaddy GDDY shares fell 4.96% in the pre-market trading as it reported fourth-quarter 2024 earnings of $1.42 per share on Feb. 13, lagging the Zacks Consensus Estimate by 2.74%. The company had registered earnings of $1.08 in the year-ago quarter, increasing 31.5% on a year-over-year basis.

Despite the earnings miss, GoDaddy demonstrated strong operational execution and financial performance throughout 2024, making significant progress across key strategic initiatives.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

GDDY generated revenues of $1.2 billion, surpassing the Zacks Consensus Estimate by 1.38%. Revenues increased 8.4% year over year on a reported and 8.5% on a constant-currency (cc) basis.

In the fourth quarter, GoDaddy benefited from sustained customer demand, driven by the expansion of its digital services and subscription offerings. Continued innovation at GoDaddy Airo, as well as strategic initiatives, including optimized pricing and bundling strategies, contributed to its strong performance and profitability. Operational efficiency has further supported the company's growth trajectory.

GDDY’s Quarterly Performance

Applications and Commerce (A&C), comprising websites, productivity applications, and payments and commerce, generated $441.2 million (contributing 37% to total revenues), up 16.9% on a year-over-year basis.

The Core Platform, consisting of domains, aftermarket, hosting and security, increased 3.9% year over year to $751.4 million (contributing 63% to total revenues).

International revenues in the fourth quarter reached $380.4 million, up 7.5% year over year on a reported and 7.8% on a constant-currency basis.

Total bookings of $1.2 billion increased 8.8% year over year and 8.9% on a cc basis.

Average revenues per user (ARPU) were $220, up 8.4% year over year. 

Total annualized recurring revenues (ARR) were $4.04 billion, up 8.4% year over year. 

Total customers at the end of the fourth quarter were 20,511, down 2.4% year over year.

GDDY’s Operating Results

On a non-GAAP basis, normalized EBITDA in the fourth quarter was $384.7 million, up 32.3% year over year. The normalized EBITDA margin expanded 280 basis points (bps) year over year.

Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $473.3 million increased 3.3% year over year. As a percentage of revenues, operating expenses contracted 200 bps year over year to 39.7%.

Operating income was $255.6 million, up 34.6% year over year. The operating margin expanded 420 bps year over year to 21.4%.

GoDaddy’s Balance Sheet & Cash Flow

As of Dec. 31, 2024, cash and cash equivalents were $1.1 billion compared with $767.1 million as of Sept. 30, 2024.

As of Dec. 31, 2024, GoDaddy had a total debt of $3.9 billion, unchanged sequentially.

The free cash flow was $342 million in the fourth quarter compared with the previous quarter’s $362.7 million.

GoDaddy Issues Q1 & 2025 Guidance

For the first quarter of 2025, the company expects revenues of $1.175-$1.195 billion, indicating year-over-year growth of 7% at the mid-point.

The company expects first-quarter A&C revenue growth in the mid-teens and Core revenue growth in the low-single digits.

For the first quarter, GDDY anticipates a normalized EBITDA margin of 30%.

For 2025, GoDaddy expects total revenues of $4.86-$4.94 billion, indicating year-over-year growth of 7% at the mid-point.

The company expects full-year A&C revenue growth in the mid-teens and Core revenue growth in the low-single digits.

The normalized EBITDA margin expansion for the year is expected to be 100 basis points.

For 2025, GoDaddy anticipates a free cash flow of $1.5 billion.

Zacks Rank & Stocks to Consider

GDDY currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.

Akamai Technologies AKAM, BWX Technologies BWXT and Innodata INOD are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Akamai Technologies shares have returned 4.2% year to date. AKAM is set to report fourth-quarter 2024 results on Feb. 20.

BWX Technologies shares have declined 2% year to date. BWXT is set to post fourth-quarter 2024 results on Feb. 24.

Innodata shares have gained 31.6% year to date. INOD is set to report fourth-quarter fiscal 2024 results on Feb. 20.

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