Cloud Stocks: GoDaddy Restructures During COVID

Internet domain provider GoDaddy (NYSE: GDDY) recently announced its second quarter results. The company has been using the current crisis conditions to restructure its operations and financial position. The market is pleased with the actions it is taking.

GoDaddy’s Financials

GoDaddy’s Q2 revenues grew 9.4% to $806.4 million, ahead of the market’s forecast of $798 million. Total bookings improved 10.7% over the year to $936.3 million. Non GAAP loss was $4.06 per share, which was significantly worse than the market’s estimates of an EPS of $0.17. The increased loss was on account of GoDaddy settling its Termination and Release Agreement (TRA) obligation with KKR for a one-time payment of $850 million, compared with an estimated $1.8 billion payout over the next 10+ years.

By segment, revenues from the Domain segment grew 10.5% to $369.6. Hosting and Presence revenues improved 4.4% to $292.2 million due to higher subscriptions to Websites and Marketing. Business Applications revenues grew 17.6% to $144.6 million due to an increase in workspace renewals.

For the current quarter, GoDaddy forecast revenues of $835 million, compared with the market’s estimates of $793.74 million. It expects double-digit growth in its Domains segment, mid-single-digit growth in its Hosting and Presence segment, and high-teens growth in Business Applications.

GoDaddy’s Focus Areas

GoDaddy is making significant improvements in its business that are seeing improvements across various metrics. First, it crossed the milestone of 20 million paying customers. During the quarter, it added over 400,000 customers, making this one of the strongest quarter of net customer growth in more than twenty years. The growth was driven by stable retention rates and record gross customer adds in the quarter. GoDaddy believes that both of these trends were not only due to the higher market demand for online presence but also due to GoDaddy’s investments in marketing.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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