🌐 GoDaddy: Better sales weren't enough, shares fall due to lower profits! 💻
GoDaddy $GDDY, a well-known domain and web hosting services provider, posted mixed results for Q4 2024. Although revenue beat expectations, lower-than-expected earnings per share (EPS) caused the stock to fall more than 14% on Friday.
📌 Q4 Key Results:
Revenue: $1.19 billion (+8.4% YoY, beating estimates)
Earnings per share (EPS): $1.36 (vs. expectations of $1.43)
Total bookings: $1.22 billion (+8.8% YoY)
EBITDA Margin: 32.3% (vs. 29.5% a year ago)
Earnings fell short of expectations, raising questions about the company's costs and efficiency.
The outlook for 2025 was in line with estimates, which did not help investor sentiment.
Revenues are up, but lower profitability may mean pressure on margins and increased spending.
🔮 2025 outlook: what to expect next?
Revenue for Q1 2025: Expected USD 1.175 to 1.195 billion (Consensus $1.187 billion)
Full Year 2025 Revenue: $4.86-4.94 billion (consensus $4.897 billion)
Free cash flow: USD 342 million (+12.1% year-on-year)
CEO Aman Bhutani emphasized that GoDaddy in the year 2024 achieved strong operational performance and progress on strategic initiatives.
GoDaddy is a leader in domain and web hosting, helping businesses and entrepreneurs launch and manage online services.
Offers e-commerce solutions, marketing tools and cloud services to help businesses go digital.
Competes with companies such as Wix $WIX, Squarespace and Google Domains.
GoDaddy's strengths:
Steady revenue growth through expanding services.
Improving margins and growing free cash flow.
High level of recurring revenue through domain subscriptions and web hosting packages.
Risks and challenges:
Increasing competition - Wix and other players expanding their offerings.
Pressure on margins - Higher operating costs reduce profitability.
Macroeconomic uncertainty - A weaker economy could slow growth for small businesses, which are key customers of GoDaddy.
Is the stock slump a buying opportunity? How do you see the future of GoDaddy?
The stock is pretty cheap right now, but I'd be worried about the competition as they could lose their position quickly.
The company is thriving and Tohoe looks like an overreaction and perhaps a good buying opportunity.