Summary
GoDaddy reported $1,015.5 million of revenue for the second quarter of fiscal 2022, up 9.0% from the prior-year quarter. On a constant currency basis, revenue rose 10.1%. Operating income reached $124.6 million, up 41.6%. Net income attributable to GoDaddy Inc. was $90.4 million, up 93.2%. Operating margin came in at 12.3%, up 2.8 percentage points. Normalized EBITDA, a non-GAAP measure, was $258.4 million, up 30.3%. For the first half of fiscal 2022, revenue was $2,018.2 million, up 10.1%. Operating income for the first half was $234.2 million, up 85.9%. Net income attributable to GoDaddy Inc. for the first half was $158.8 million, up 175.7%. Operating margin for the first half was 11.6%, up 4.7 percentage points.
The operating story leaned on recurring revenue and commerce. Total bookings were $1,118.9 million, up 6.1%. Applications and commerce annualized recurring revenue grew 12% to $1.2 billion. Core platform annualized recurring revenue grew 5% to $2.3 billion. Gross merchandise volume was $28 billion, up 12%. GoDaddy Payments continued to gain traction: 80% of Websites + Marketing commerce customers and 30% of Managed WordPress customers in the WooCommerce tier selected GoDaddy Payments. The company launched a Payable Domains pilot, with full launch expected in the third quarter. It also started a beta WooSaas online store aimed at larger merchants. Domains under management slipped 0.5%, from 84.2 million at June 30, 2021 to 83.8 million at June 30, 2022.
Cash generation remained a bright spot. Operating cash flow was $250.9 million, up 19.8%. Capital expenditures were $17.9 million, up 47.9%. For the first half, operating cash flow was $501.8 million, up 16.5%, and capital expenditures were $30.2 million, up 43.1%. Unlevered free cash flow, a non-GAAP measure, was $274.3 million, up 15.7% for the quarter and $561.1 million, up 11.0% for the first half. Deferred revenue was $1,980.5 million, up 5.8%. Remaining performance obligations were $2,751.2 million, up 4.3%. GoDaddy returned $1 billion to shareholders year-to-date through repurchases of 12.8 million shares at an average price of $78.22, an approximately 8% reduction in fully diluted shares outstanding. The company had $2,013.7 million of remaining authorization for repurchases as of June 30, 2022.
Guidance points to slower growth but still healthy expansion. For the third quarter ending September 30, 2022, GoDaddy targets total revenue growth of 8% year-over-year at the midpoint of its range. It expects applications and commerce revenue growth of 13% to 15% and core platform revenue growth of 4% to 6% for that quarter. Third-quarter normalized EBITDA is targeted at $250 million to $260 million, representing 12% year-over-year growth at the midpoint. For the full year ending December 31, 2022, the company revised its targeted revenue range after an estimated adverse foreign exchange impact of approximately $35 million, and now points to 8% year-over-year growth at the midpoint. Full-year unlevered free cash flow is expected to be approximately $1.1 billion, representing 15% year-over-year growth versus $960 million generated in 2021.
Management flagged a challenging macroeconomic environment, foreign exchange headwinds, inflation, COVID-19, competition, security breaches, interest rates, debt covenants, and execution of share repurchases as risks. The company said it is using success-based marketing spend to drive demand where it sees opportunity and investing in technology and development to drive future growth. Marketing and advertising expense fell 20.4% in the quarter, which helped profitability but raises the question of how much of the margin gain is durable.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.02B | $1.00B | +1.3% | $931.3M | +9.0% |
| General & administrative | $94.7M | $90.6M | +4.5% | $84.5M | +12.1% |
| Total operating expenses | $890.9M | $893.1M | -0.2% | $843.3M | +5.6% |
| Operating income (loss) | $124.6M | $109.6M | +13.7% | $88.0M | +41.6% |
| Operating margin | 12.3% | 10.9% | +1.3 pp | 9.4% | +2.8 pp |
| Net income (loss) | $90.5M | $68.6M | +31.9% | $46.9M | +93.0% |
| Net margin | 8.9% | 6.8% | +2.1 pp | 5.0% | +3.9 pp |
Risks
MD&A attributes the quarter's 9.0% revenue increase and 6.1% bookings increase partly to adverse foreign currency movements, with revenue reduced by about 70 basis points and bookings by about 160 basis points in the quarter. Inflation, rising interest rates, recession risk and the Russia-Ukraine conflict could reduce customer spending and make forecasting difficult.
Risk factors state gross customer adds for 2021 declined relative to 2020 and there is uncertainty about customer demand and growth going forward. MD&A reports domains under management decreased 0.5% from 84.2 million at June 30, 2021 to 83.8 million at June 30, 2022, even as revenue grew.
The filing warns that failure to predict emerging technological trends such as artificial intelligence or to develop products timely could harm results. It names competitors including Google, Amazon, Microsoft, Wix, Squarespace, Shopify and Cloudflare, some with greater resources and low-cost or no-cost offerings.
GoDaddy disclosed past incidents including the November 2021 Managed WordPress breach affecting up to 1.2 million active and inactive customers and the September 2021 Confluence data exfiltration, and it is responding to FTC Civil Investigative Demands. It also notes heightened risk of retaliatory cyber attacks from Russia due to sanctions.
The filing highlights privacy and data protection laws, data localization requirements in India, Russia and China, and payments regulations for GoDaddy Payments, including payment card network fines and potential holdbacks. Failure to comply could lead to sanctions, penalties or suspension of payment processing.
The filing cites intense competition for technical and engineering personnel in U.S. tech hubs and limits from H-1B visa availability, plus dependence on senior management and key employees. Return-to-office and remote work transitions may affect culture and retention.
GoDaddy has substantial long-term debt with covenants restricting indebtedness, liens, dividends and other actions. Interest expense increased 7.1% in the quarter and 11.7% year to date, and the company repurchased $236.3 million of Class A common stock in the quarter, leaving $2,013.7 million of repurchase authorization.
A large part of operations focuses on small businesses that frequently have limited budgets and may cut spending in economic uncertainty. The company also aims to serve more diverse customer segments such as Web Pros and Domain Registrars, and failure to grow those segments could mean its addressable market is overstated.
Bookings outside the U.S. were approximately 32% of total bookings for 2021. The company shut down its GoDaddy website in Russia and removed Ruble support, and it has customers and contractors in Russia and Ukraine, so a prolonged conflict could delay product launches.
SaaS KPIs
All quarters →Total bookings
Domains under management
Unlevered free cash flow
Gross Merchandise Volume (GMV)
Normalized EBITDA
Annualized recurring revenue
Summary, forecast, risks and KPIs are extracted from GoDaddy Inc.'s SEC filings for Q2 FY2022 (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.