GoDaddy Reports Strong Q3 Revenue in 2015


GoDaddy Reports Strong Q3 Revenue in 2015

GoDaddy reported its third quarter results with shares up 7.47 percent on the news. A focus on Small Business and international markets are responsible.

GoDaddy reported its third quarter results last week, with revenue increasing by 15.2 percent year on year to $411.1 million. Shares in GoDaddy were up 7.47 percent on the news. A focus on Small Business and Growth in international markets are thought to be responsible.

It is interesting that GoDaddy's ARPU (Average Revenue Per User) has risen 6.8 percent to $119 over the last year. We suspect this may have been partly boosted by the popularity of their premium products increasing, such as WordPress Hosting, or GoDaddy Pro.

godaddy stock price historyCompare this to EIG (the company behind many brands such as Bluehost, Hostgator, Arvixe, etc.) who reported an ARPU of $172.44 in their first quarter of 2015. This signals a higher investment in products, support and services by GoDaddy than EIG, and with the latest debacle at Arvixe (an EIG brand) it shows.

Highlights of the third quarter result

There are a few other results relating to their general revenue that is of interest:

  • Total Revenue increased by 15.2 percent to $411.1 million over the year.
  • Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) increased 22.5 percent to $87.7 million over the year.
  • The number of customers was increased by 8.8 percent to 13.6 million.
  • International revenue rose 17 percent to $105.3 million over the year.
  • Domains revenue grew by 10.5 percent to $215.0 million over the year
  • Hosting and Presence revenue increase by 14.7 percent to $150.8 million over the year.
  • Business Applications revenue was increased by 47.1 percent to $45.3 million over the year.
  • GoDaddy spent $49 million in marketing and advertising in just three months globally.

godaddy-stocks-up (imported #29621)The growth in revenue appears to be coming from all areas of the business. Particularly interesting, is the increasing profit in its overseas markets and we suspect this is one of the main drivers behind the significant increase in profits across the board. GoDaddy topped 4 million international customers this year, more than doubling its total international customer base over the last four years.

While the results are very positive, GoDaddy still made a loss of $51.1 million for the nine months to 30th September 2015. This consists of $29.7 million in connection with the IPO and $21.4 million in connection with the prepayment of a debt extinguishment.

You can see a copy of the results below:

GoDaddy Reports Strong Third Quarter 2015 Results

GoDaddy commented:

Our third quarter results demonstrate that consistent execution against our strategy yields positive results for our shareholders. We're growing revenue across all of our business lines by delivering products and services that meet the needs of our customers globally.

With 15 percent revenue growth and adjusted EBITDA up over 22 percent in the quarter, our combination of products, technology and care will continue to differentiate us and produce strong financial results.

Statistics about GoDaddy's Products

  • Domains — GoDaddy now represents 20 percent of the total trade in domain names, managing over 61 million domain names.
  • GoDaddy Pro — The product was created by to help web designers and developers manage their clients shows healthy growth. They now have over 50,000 users signed up, half of which are in international markets.
  • Online Store — GoDaddy expanded its Online Store with more than a dozen new features, including the integration of GoDaddy Email Marketing; Shippo, a customized shipping solution; and McAfee SECURE Certification.
  • Search Engine Visibility (SEV) service — Previously offered with GoDaddy's website Builder and Managed WordPress products, and is now available for use on any website, regardless of how it was built or how it is hosted. The product costs just $2.99 per month and helps suggests keywords to target to increase traffic, submits the website to search engines, and provide tips and other ranking reports.

Focus on Small Business

GoDaddy previously mentioned their commitment to Small Businesses when Arne Josefsberg took as Chief Infrastructure Operator at the beginning of last year. This was coupled with the change in advertising style to focus on small business rather than raunchy adverts. This is what CEO Blake Irving had to say in response to a question in last years Reddit AMA:

The GoDaddy of yore did polarizing ads and yes, they featured scantily clad women. They drove a boat load of attention, but totally alienated women and frankly made me uncomfortable. When I joined, I had a very different vision about telling people who our customers are and what we do for them.

In the GoDaddy earnings call, GoDaddy CEO Blake Irving reiterated this commitment:

In Hosting and Presence, we are expanding our penetration of the hosting market with a unique understanding of the needs of small businesses offering both hosting products and tools targeted at the professional, like our industry leading Managed WordPress offering and simple tools that allow a business owner to build the website on their own like our website builder and online store builder tools.

Looking Forward

GoDaddy is going from strength to strength, and future earnings forecasts reflect this. They predict revenue for the year at the end of the fourth quarter to be even higher at around $421 — $424 million, with revenues in the region of $1,603 — $1,606 million.

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