Summary
GoDaddy's first quarter of fiscal 2021 showed strong top-line momentum. Revenue reached $901.1 million, up 13.8% year over year. Total bookings crossed $1 billion for the first time at $1,088.7 million, up 14.5% year over year. Unlevered free cash flow was $268.3 million, up 14.4%. The company said demand was strong across its product portfolio and that acquisitions completed after March 31, 2020 contributed to growth. Domains under management rose to 83.6 million as of March 31, 2021 from 79.5 million a year earlier. That is a concrete operating metric.
Profitability moved the other way. Operating income was $38.0 million, down 41.0% year over year. Net income attributable to GoDaddy Inc. was $10.8 million, down 74.8%. Operating margin was 4.2%, down 3.9 percentage points. The decline reflected higher costs, including acquisition-related compensation and increased marketing investments. The company also recorded $29.4 million in compensatory payments tied to the Poynt acquisition, which closed in February 2021 for $297.7 million in cash. Those payments weighed on operating cash flow, which was $221.3 million, down 5.1% year over year. Capital expenditures were $9.0 million, down 33.3%. Deferred revenue rose 12.4% to $1,806.2 million, and remaining performance obligations rose 12.1% to $2,568.5 million. Both measures suggest future revenue visibility.
GoDaddy continued to deploy capital. Year to date through May 5, the company repurchased 3.5 million shares for $275.8 million, or an average price of $78.81 per share, representing about a 2% reduction in fully diluted shares. The board approved an incremental $775 million repurchase authorization, bringing total capacity to $1 billion. In February 2021, GoDaddy issued $800 million of 3.5% senior notes due 2029. In April 2021, it signed four acquisition agreements for about $220 million in cash. Management also announced leadership changes: Mark McCaffrey will become CFO on June 2, 2021, and Michele Lau will become Chief Legal Officer on July 12, 2021, replacing retiring executives.
Guidance points to continued growth. For the second quarter ending June 30, 2021, GoDaddy expects revenue of approximately $920 million, or about 14% year-over-year growth. For the full year, the company raised revenue guidance by $45 million to $3.745 billion, representing approximately 13% year-over-year growth. It also raised full-year unlevered free cash flow guidance to approximately $955 million, which would be 16% growth versus 2020. By category, second-quarter revenue growth is expected to approximate high-teens growth in Domains and Business Applications, with high-single-digit growth in Hosting and Presence. Full-year category growth is expected to approximate double-digit growth in Domains, high-single-digit growth in Hosting and Presence, and high-teens growth in Business Applications.
Risks remain. The COVID-19 pandemic continues to create uncertainty, and remote work arrangements have increased cybersecurity risk. The company carries significant debt and has covenants that restrict certain actions. Integration of recent acquisitions, including Poynt and the four April deals, could prove challenging. Competition and foreign currency movements also pose risks. Management's strategy is to invest in growth while returning capital, but the quarter showed that higher spending can pressure margins and GAAP profitability even as bookings and revenue expand.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $901.1M | $873.9M | +3.1% | $792.0M | +13.8% |
| General & administrative | $95.2M | $79.7M | +19.4% | $85.5M | +11.3% |
| Total operating expenses | $863.1M | $781.4M | +10.5% | $727.6M | +18.6% |
| Operating income (loss) | $38.0M | $92.5M | -58.9% | $64.4M | -41.0% |
| Operating margin | 4.2% | 10.6% | -6.4 pp | 8.1% | -3.9 pp |
| Net income (loss) | $10.8M | $70.8M | -84.7% | $43.2M | -75.0% |
| Net margin | 1.2% | 8.1% | -6.9 pp | 5.5% | -4.3 pp |
Risks
GoDaddy disclosed an increased level of social engineering efforts and several successful social engineering efforts, including by a persistent threat actor, which attempted to transfer customer domain names and targeted domains related to cryptocurrency. In March 2020, a threat actor compromised hosting login credentials of approximately 28,000 hosting customers, and a malicious file distributed across hosting servers compromised a small number of customers' customers' credit cards.
On February 11, 2021, GoDaddy announced the retirements of its Chief Financial Officer and Chief Legal Officer, each effective June 30, 2021, and may face challenges identifying, recruiting, integrating and retaining successors. The loss of senior management or key employees could delay or prevent achievement of development and strategic objectives.
Substantially all personnel, including GoDaddy Guides, are working remotely through at least June 30, 2021, which has negatively affected and may continue to negatively affect productivity and new sales. GoDaddy Guides generated approximately 12% of total bookings in 2020, and if their productivity does not improve, business and operating results will continue to be adversely affected.
Operating income decreased 41.0% and operating margin decreased 3.9 pp in FY2021 Q1 versus FY2020 Q1, while net income decreased 74.8%. MD&A also reported technology and development expenses increased 38.6% and marketing and advertising expenses increased 42.5% in the quarter, partly due to approximately $29.0 million in compensation expense from acquisitions, primarily Poynt.
GoDaddy faces significant competition from companies such as Google, Amazon, Microsoft, Wix, Squarespace, Shopify and Cloudflare, and Verisign could become a registrar. Some competitors offer services at low or no cost, which could reduce market share, lower margins and increase marketing expenses.
Recent acquisitions include Poynt in February 2021 for $297.7 million, Neustar's registry business, Over, Uniregistry's registrar and brokerage business, and SkyVerge. Poynt represents entry into offline commerce and Neustar represents entry into the registry business, creating integration, unknown liability and new line of business risks.
General macroeconomic conditions and COVID-19 could reduce demand for GoDaddy's products, especially higher-priced do-it-for-you services, and make customers more price-conscious. In June 2020, GoDaddy restructured its U.S. outbound sales and operations due to soft customer demand for higher-priced services such as GoDaddy Social.
Bookings outside the U.S. represented approximately 32% of totals in 2020, and continued international expansion subjects GoDaddy to risks including Brexit, foreign laws, data localization requirements and operations in higher risk regions such as China, India, Russia and Ukraine.
Interest expense increased 35.4% in FY2021 Q1, primarily driven by the issuance of the 2027 Term Loans in August 2020 and the 2029 Senior Notes in February 2021. Significant long-term debt limits how GoDaddy conducts business and may require additional debt or equity financing.
Evolving technologies and customer behavior, including increased use of search engines, social media applications and mobile apps, may reduce the prominence and value of domain names. If search engine algorithms change or search engine marketing costs such as Google AdWords increase, GoDaddy may incur additional marketing expenses.
GoDaddy relies on partners such as Microsoft, Open-Xchange, PayPal, Stripe, Square, Mercado Libre, ProofPoint, SkyKick and Barracuda for product integrations and payment options. If partners fail to create integrations or change terms adversely, demand for GoDaddy's products could decrease.
GoDaddy is transitioning from company-owned and co-located data centers to third-party cloud computing and hosting providers, including AWS, increasing dependence on third parties. System failures, outages or third-party service interruptions could harm reputation, customer experience and financial results.
SaaS KPIs
All quarters →Total bookings
Domains under management
Unlevered free cash flow
Summary, forecast, risks and KPIs are extracted from GoDaddy Inc.'s SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.