GoDaddy Is On A Shopping Spree

The global internet domain name provider GoDaddy (NYSE: GDDY) reported mixed results for the fourth quarter of the year. While revenues surpassed market expectations, its earnings failed to do so. But a strong outlook sent the stock soaring 11% in the after-hours trading session.

GoDaddy’s Financials

GoDaddy’s Q4 revenues grew 12% to $780.4 million, ahead of the market’s forecast of $777.2 million. Net income was $60.5 million, compared with $42.5 million a year ago. On an adjusted basis, EPS was $0.34 per share missing analyst estimates of $0.37.

By segment, revenues from the Domain segment grew 12% to $352.3 million driven by strong liquid domain aftermarket and renewals. Hosting and Presence revenues improved 8% to $292.8 million due to improved feature engagements, bookings, and appointments within the segment. Business Applications revenues grew 21% to $135.3 million.

Among other operating metrics, its customer base reached 19.3 million at the end of the quarter, up 4% q-o-q. The growth was driven by the increased adoption in emerging markets. Average revenue per user was up 7% from last year’s at $158. The market had forecast $157.8 in average revenue per user. Total bookings grew 14% to $833.6 million for the quarter.

GoDaddy ended the year with revenues growing 12% to $2.99 billion and an EPS of $0.76.

For the first quarter, GoDaddy forecast revenues of $795 million, compared with the market’s estimates of $789.1 billion. It expects to end 2020 with revenues of $3.32 billion, ahead of the market’s forecast of $3.31 billion.

GoDaddy’s Acquisitions

GoDaddy appears to be counting on growing through acquisitions. Earlier this year, it announced the acquisition of social content startup Over. South Africa-based Over is a visual communications tool that lets users create content from their phones. Set up in 2012 as a simple text over photos app for sharing goals and inspirational quotes, Over has transformed into a content creation tool that lets businesses, graphic designers, entrepreneurs, bloggers, vloggers, influencers, and other users create visually appealing designs through a simple interface. Users have access to a library of hand-curated, professionally designed templates and layout for quick customization that can be used over a mobile phone to create content for various social media platforms. The service has more than 1 million monthly active users who work on over 150,000 projects daily.

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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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