Tech

GoDaddy quarterly profit falls short of estimates as costs still weigh

Key Points
  • GoDaddy reported first-quarter profit below Wall Street expectations on Thursday,
  • The web hosting company's results were weighed down by persistent rising costs and slower customer growth.
  • GoDaddy has been pressured by higher costs since it went public in 2015 as it expands its international customer base and spends on marketing and product development.
The GoDaddy banner hangs outside of the New York Stock Exchange as the website hosting service makes its initial public offering on April 1, 2015 in New York City.
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Web hosting company GoDaddy reported first-quarter profit below Wall Street expectations on Thursday, weighed down by persistent rising costs and slower customer growth, sending its shares 6% lower in after-hours trading.

GoDaddy has been pressured by higher costs since it went public in 2015 as it expands its international customer base and spends on marketing and product development.

GoDaddy, which manages roughly a fifth of all global domains, said total costs rose nearly 14% to $691.2 million, compared with average estimates of $436.93 million based on consensus from 12 analysts, according to Refinitiv Eikon data.

Shares fell as much as 6.3% to $76.

Net income attributable to the company rose to $12.9 million, or 7 cents per Class A share, in the quarter ended March 31, from $3.3 million, or 2 cents per Class A share, a year earlier.

Analysts on average had expected earnings of 10 cents per share, according to IBES data from Refinitiv.

Total revenue rose to $710 million from $633.2 million, but was short of analysts' expectations of $711.2 million.

GoDaddy added 6.4% more customers in the quarter, which was much lower than 17.4% new customers in the year-ago period. Average revenue per user grew to $150, up 8.5% from the last year.

For the second-quarter, GoDaddy said it expects revenue to be between $730 million to $740 million, the mid-point of which was above Wall Street expectations of $733.5 million.

The company reaffirmed full-year revenue forecast in the range of $2.97 billion to $3 billion.

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