GoDaddy's Earnings Reveal Mixed Results but Optimistic Growth Ahead
GoDaddy Inc. Reports Q4 Earnings Results
GoDaddy Inc. (NASDAQ: GDDY) has found itself on a rough road as shares declined following the announcement of its fourth-quarter results. Despite this dip, the company unveiled an exciting outlook for 2025, fueled by potential growth in AI technology and improved cash flow management.
Positive Revenue Figures Despite Missed EPS Target
In the fourth quarter, GoDaddy experienced an 8% increase in revenue year-over-year, achieving a total of $1.192 billion. This performance surpassed market expectations that estimated revenue would hover around $1.179 billion. While revenue growth was robust, the company reported earnings per share (EPS) of $1.36, which fell short of analyst predictions that anticipated an EPS of $1.43.
Bookings and Cash Flow Analysis
The company's financial health also reflected strong bookings, which increased by 9% year-over-year, totaling approximately $1.2 billion. Furthermore, GoDaddy's operating cash flow rose impressively to $340.5 million, marking a 14% increase from the previous year. Free cash flow also displayed a healthy growth trend at $342 million, a 12% increase.
Financial Position and Future Outlook
As of December 2024, GoDaddy's cash and cash equivalents, along with short-term investments, stood at $1.1 billion, while total debt was reported at $3.9 billion. This financial positioning lays a solid foundation as the company looks to the future.
Q1 and FY25 Projections
Looking ahead, GoDaddy aims for Q1 revenue estimates in the range of $1.175 billion to $1.195 billion, slightly below the consensus expectation of $1.186 billion. For the fiscal year 2025, the company targets total revenue between $4.860 billion and $4.940 billion, again indicating a cautious optimism compared to the street's $4.897 billion consensus.
EBITDA Margin and Cash Flow Goals
GoDaddy anticipates a normalized EBITDA margin of around 30% for the first quarter of 2025, with an upward adjustment expected throughout the year, projecting a margin expansion of roughly 100 basis points. Additionally, the firm is aiming for free cash flow to surpass $1.5 billion in 2025, significantly more than the $1.356 billion recorded last year.
CEO's Vision for 2025
CEO Aman Bhutani expressed enthusiasm about the future, stating, "Looking ahead to 2025, we are excited to further innovate around GoDaddy Airo, enhance our integrated technology platform and create even more value for our customers." This vision is intended to leverage AI advancements and integrate technologies aimed at boosting customer satisfaction and operational efficiency.
Analyst Reactions to the Earnings Report
In light of the recently announced figures, analysts have updated their price targets for GoDaddy. Piper Sandler's Clarke Jeffries maintained a Neutral stance, adjusting the price target from $176 to $177. Meanwhile, Elizabeth Elliott from Morgan Stanley opted to keep an Equal-Weight rating while slightly increasing the target from $227 to $228.
Investor Opportunities
For investors looking to gain exposure to GoDaddy, there are several ETF options available. The Global X E-Commerce ETF (NASDAQ: EBIZ) and the Collaborative Investment Series Trust Mohr Company Nav ETF (BATS: CNAV) both provide avenues for investment in GoDaddy alongside various e-commerce entities.
Current Stock Performance
As of the latest updates, GoDaddy shares (GDDY) have dropped by 12%, currently trading at approximately $187.09. This decline reflects investor reaction to the mixed earnings report, particularly the miss on the EPS target.
Frequently Asked Questions
What were GoDaddy's Q4 earnings results?
GoDaddy reported Q4 revenue of $1.192 billion but missed EPS expectations with a figure of $1.36.
What is GoDaddy's outlook for 2025?
The company projects revenue ranging from $4.860 billion to $4.940 billion for 2025, showcasing positive growth potential.
Who is the CEO of GoDaddy?
The CEO of GoDaddy is Aman Bhutani, who has emphasized innovation and customer value in their strategic outlook.
How much was GoDaddy's cash flow in Q4?
GoDaddy generated approximately $340.5 million in operating cash flow in the fourth quarter.
Which ETFs can investors use to invest in GoDaddy?
Investors can access GoDaddy through ETFs such as the Global X E-Commerce ETF (EBIZ) and the Collaborative Investment Series Trust Mohr Company Nav ETF (CNAV).
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