GoDaddy Earnings Miss Estimates in Q1, Revenues Increase Y/Y

GoDaddy GDDY reported first-quarter 2025 earnings of $1.27 per share, which missed the Zacks Consensus Estimate by 5.93% but increased 17.6% on a year-over-year basis.

GDDY generated revenues of $1.2 billion, surpassing the Zacks Consensus Estimate by 0.6%. Revenues increased 7.7% year over year on a reported and 8% on a constant-currency (cc) basis. Total customers at the end of the first quarter were 20,484, down 2.4% year over year.

GDDY’s Quarterly Performance

Applications and Commerce (A&C), comprising websites, productivity applications, and payments and commerce, generated $446.4 million (contributing 37.4% to total revenues), up 16.5% on a year-over-year basis.

The Core Platform, consisting of domains, aftermarket, hosting and security, increased 3.1% year over year to $747.9 million (contributing 62.6% to total revenues).

GoDaddy Inc. Price, Consensus and EPS Surprise

 

GoDaddy Inc. price-consensus-eps-surprise-chart | GoDaddy Inc. Quote

International revenues in the first quarter reached $388.8 million, up 10.2% year over year on a reported and 11.4% on a cc basis.

Total bookings of $1.4 billion increased 7.9% year over year and 8.7% on a cc basis.

Average revenues per user (ARPU) were $225, up 9.2% year over year. 

Total annualized recurring revenues (ARR) were $4.05 billion, up 7.5% year over year. 

In the first quarter, GoDaddy launched GoDaddy Agency, a partner program designed to connect digital agencies with small and mid-sized business leads, offering robust tools, services and support to help expand its client offerings.

GDDY’s Operating Results

On a non-GAAP basis, normalized EBITDA in the first quarter was $364.4 million, up 16.4% year over year. The normalized EBITDA margin expanded 230 basis points (bps) year over year.

Operating expenses (technology and development, marketing and advertising, customer care, and general and administrative) of $473.6 million increased 3.3% year over year. As a percentage of revenues, operating expenses contracted 170 bps year over year to 39.7%.

Operating income was $247.3 million, up 40.6% year over year. The operating margin expanded 480 bps year over year to 20.7%.

GoDaddy’s Balance Sheet & Cash Flow

As of March 31, 2025, cash and cash equivalents were $719.4 million compared with $1.1 billion as of Dec. 31, 2024.

As of March 31, 2025, GoDaddy had a total debt of $3.8 billion, and net debt was $3.1 billion. 

The free cash flow was $411.3 million in the first quarter compared with the previous quarter’s $342 million, up 25.6% year over year.

GoDaddy Issues Q2 View & Maintains 2025 Guidance

For the second quarter of 2025, the company expects revenues of $1.195-$1.215 billion, indicating year-over-year growth of 7% at the mid-point.

The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $1.2 billion, suggesting 7.05% growth over the figure reported in the year-ago quarter. The consensus mark for second-quarter 2025 earnings is pegged at $1.49 per share, indicating 35.45% year-over-year growth. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

GoDaddy expects second-quarter A&C revenue growth in the mid-teens and Core revenue growth in the low-single digits.

For the second quarter, GDDY anticipates a normalized EBITDA margin of 31%.

For 2025, GoDaddy reaffirms its guidance and expects total revenues of $4.86-$4.94 billion, indicating year-over-year growth of 7% at the mid-point.

The company expects full-year A&C revenue growth in the mid-teens and Core revenue growth in the low-single digits.

The normalized EBITDA margin expansion for the year is expected to be more than 100 basis points.

For 2025, GoDaddy anticipates a free cash flow of $1.5 billion.

Zacks Rank & Stocks to Consider

GDDY currently carries a Zacks Rank #3 (Hold).

Synchronoss Technologies SNCR, Chegg CHGG, and Compass COMP are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. These three companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Synchronoss Technologies is scheduled to report first-quarter 2025 results on May 6. Chegg is set to post first-quarter 2025 results on May 12, whereas Compass is scheduled to report first-quarter 2025 results on May 8.

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This article originally published on Zacks Investment Research (zacks.com).

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