GoDaddy Inc. (NYSE:GDDY) Exceeds Estimates In First Quarter Revenues

In the first quarter revenues of cloud platform GoDaddy Inc. (NYSE:GDDY) rose by 29% while free cash flow went up by 42%. Adjusted earnings for 2018 are expected to come in at 2 cents a share. GoCentral, the mobile-optimized builder of GoDaddy, has now gained momentum. Additionally GoDaddy has been involved in efforts aimed at enhancing features in a bid to improve the attractiveness of its products. Consequently this fiscal year management of the cloud platform are positive with regards to the strong marketing and product roadmap.

“We feel confident about our ability to both acquire new customers in markets around the world, and deepen relationships with existing customers, which we believe can fuel solid growth for GoDaddy well into the future,” said the chief executive officer of GoDaddy, Scott Wagner.

Better than average

The release of the results led to a rise in the share price. For the last 12 months the stock of GoDaddy has outperformed peers. While the sector has seen the average share price rise by 40.3% GoDaddy has gained 71%. Though management had given a guidance of between $620 million and $625 million revenues came in at $633.2 million and this was an increase of 29.3% from a similar period a year ago and a rise of 5.1% from last quarter.

As the quarter came to a close the number of customers that GoDaddy had was 17.7 million and this was an incrase of 17.4% from a similar period the previous year. The ARPU or average revenue per user also increased by 5.8% from a similar quarter a year ago to reach a figure of $138.

The strong growth recorded in the number of customers was attributed to GoDaddy’s purchase of Host Europe last year in April as it resulted in the addition of 1.6 million customers. Additionally there was an expansion in the average revenue per user and this also contributed to the improvement. Currently GoDaddy manages domain names numbering more than 76 million which is roughly around 20% of world’s total.

Three main segments

The three main segments that GoDaddy generates revenues from are Business Applications, Hosting and Domains. In the first quarter revenues from the domains business reached a figure of $291.7 million and this was approximately 46.1% of the combined revenues. Year-over-year domain revenues increased by 21.1 while sequentially this was an increase of 3.6%.

Revenues generated from hosting came in at $239.8 million and this was approximately 37.9% of the combined revenues. This was a sequential growth of 4.8% and a year-over-year growth of 34.5%. The Business Applications business of GoDaddy generated revenues amounting to $101.7 million and this was approximately 16.1% of the combined revenues. This was an increase of 10.8% from the previous quarter and a rise of 44.1% from a similar period a year ago.

For the first quarter GoDaddy registered total bookings amounting to $783.1 million and this was a year-over-year increase of 25.3%. Gross margins on the other hand was 66% while operating expenses rose by 21% year-on-year to reach a figure of $252.9 million. For the 2018 fiscal year GoDaddy’s revenue guidance is between $2.62 billion and $2.64 billion.