GoDaddy Inc. Debt jumped on 26.4% and Net Debt / EBITDA surged on 1.5x from 3.4x to 4.9x
02/11/2021 • About GoDaddy Inc. (
$GDDY) • By InTwits
GoDaddy Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- GoDaddy Inc. is a fast growth stock: 2020 revenue growth was 11.0%, 5 year revenue CAGR was 15.6% at 2020 ROIC 8.1%
- GoDaddy Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: $57m in FY2020, $69m in FY2019, $68m in FY2018, $44m in FY2017, $26m in FY2016
- In the last 5 years the company invested considerably less than D&A: $379m vs. $600m
- The company has business model with low profitability: ROIC is 8.1%
- It operates with high leverage: Net Debt/EBITDA is 4.9x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 11.0%. Revenue growth showed acceleration in 20Q4 - it increased 12.0% YoY. During the last 5 years Revenue growth topped in 2017 at 20.8% and was decelerating since that time. EBITDA Margin showed almost no change in 2020. EBITDA Margin grew at 1.2 pp per annum in 2016-2020.
Gross Margin decreased slightly on 0.57 pp from 65.6% to 65.1% in 2020. During 2016-2020 Gross Margin topped in 2018 at 66.4% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.70 pp from 23.7% to 23.0% in 2020. SG&A as a % of Revenue followed a declining trend at -0.31 pp per annum in 2016-2020.
Net Income margin dropped on 19.5 pp from 4.6% to -14.9% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 GoDaddy Inc. had CAPEX/Revenue of 2.0%. GoDaddy Inc. showed small CAPEX/Revenue decline of 1.7 pp from 3.7% in 2017 to 2.0% in 2020. It's average level of CAPEX/Revenue for the last three years was 2.7%. During the last 5 years CAPEX as a % of Revenue topped in 2017 at 3.7% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.9x and Debt / EBITDA is 6.3x. Net Debt / EBITDA jumped on 1.5x from 3.4x to 4.9x in 2020. Debt surged on 26.4% while cash dropped on 28.0%.
GoDaddy Inc. has no short term refinancing risk: cash is higher than short term debt (1,162.9%).
Management team
Amanpal S Bhutani "Aman" is a the company's CEO. Amanpal S Bhutani "Aman" has spent 1 year with the company. The company's CFO is Raymond E Winborne "Ray". Raymond E Winborne "Ray" has 4 years tenure at the company.
Financial and operational results
FY ended 12/31/2020
GoDaddy Inc. ($GDDY) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,848 | 2,232 | 2,660 | 2,988 | 3,317 | 11.0% |
| Gross Profit | 1,190 | 1,456 | 1,766 | 1,961 | 2,158 | 10.0% |
| SG&A | 450 | 536 | 625 | 708 | 762 | 7.7% |
| EBITDA | 210 | 273 | 384 | 465 | 525 | 12.9% |
| EBIT | 50 | 67 | 150 | | | |
| Interest expence | 57 | 83 | 98 | | | |
| Tax | 0 | -19 | -9 | | | |
| Net Income | -17 | 136 | 77 | 137 | -495 | -461.4% |
| Stock Based Compensation | 57 | 76 | 126 | | | |
Balance Sheet
|
|---|
| Cash | 566 | 583 | 932 | 1,063 | 765 | -28.0% |
| Accounts Receivable | 8 | 18 | 26 | | | |
| Accounts Payable | 62 | 60 | 62 | | | |
| Short Term Debt | 4 | 17 | 17 | 58 | 66 | 13.6% |
| Long Term Debt | 1,036 | 2,411 | 2,394 | 2,570 | 3,257 | 26.7% |
Cash flow
|
|---|
| Capex | 54 | 83 | 88 | 88 | 67 | -24.1% |
| Dividends | 19 | 40 | | | | |
| Acquisitions | 119 | 1,877 | 147 | | | |
Ratios
|
|---|
| Revenue growth | 15.0% | 20.8% | 19.2% | 12.3% | 11.0% | |
| EBITDA growth | 64.5% | 29.7% | 40.7% | 21.2% | 12.9% | |
|
|---|
| Gross Margin | 64.4% | 65.3% | 66.4% | 65.6% | 65.1% | -0.6% |
| EBITDA Margin | 11.4% | 12.2% | 14.4% | 15.6% | 15.8% | 0.3% |
| EBIT Margin | 2.7% | 3.0% | 5.6% | | |
| SG&A, % of revenue | 24.4% | 24.0% | 23.5% | 23.7% | 23.0% | -0.7% |
| SBC, % of revenue | 3.1% | 3.4% | 4.7% | | |
| Net Income Margin | -0.9% | 6.1% | 2.9% | 4.6% | -14.9% | -19.5% |
| CAPEX, % of revenue | 2.9% | 3.7% | 3.3% | 2.9% | 2.0% | -0.9% |
|
|---|
| ROIC | 2.9% | 2.7% | 4.6% | 6.0% | 8.1% | 2.1% |
| ROE | -3.3% | 26.0% | 12.1% | 17.5% | | |
| Net Debt/EBITDA | 2.3x | 6.8x | 3.9x | 3.4x | 4.9x | 1.5x |
| Interest coverage ratio (ICR) | 0.9x | 0.8x | 1.5x | | |
| Interest expence / Average debt | 5.5% | 4.8% | 4.1% | | | |
People
|
|---|
| Insider ownership | 0.5% | 0.5% | 0.5% | | | |
| Employees | 4,749 | 5,990 | 6,821 | | | |
| Revenue/Employee, th. $ | 389 | 373 | 390 | | | |
GoDaddy Inc. ($GDDY) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 792 | 806 | 844 | 874 | | 11.5% | 9.4% | 11.0% | 12.0% |
| EBITDA | 129 | 84 | 155 | 156 | | 46.7% | -0.1% | -0.2% | 14.4% |
| Net Income | 43 | -673 | 65 | 71 | | 232.6% | - | -15.1% | 16.5% |
Balance Sheet
|
|---|
| Cash | 851 | 773 | 622 | 765 | | -21.9% | -35.5% | -35.7% | -28.0% |
| Short Term Debt | 60 | 60 | 63 | 66 | | 10.7% | 5.5% | 12.0% | 13.6% |
| Long Term Debt | 2,562 | 2,549 | 3,271 | 3,257 | | 2.1% | 1.1% | 27.4% | 26.7% |
Ratios
|
|---|
| Gross Margin | 65.0% | 64.1% | 65.6% | 65.5% | | -1.7% | -1.4% | 0.5% | 0.2% |
| EBITDA Margin | 16.3% | 10.5% | 18.4% | 17.9% | | 3.9% | -1.0% | -2.1% | 0.4% |
| Net Income Margin | 5.4% | -83.5% | 7.7% | 8.1% | | 3.6% | -81.8% | -2.4% | 0.3% |
Peers in Internet Services & Infrastructure
Below we provide GoDaddy Inc. benchmarking against other companies in Internet Services & Infrastructure industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MongoDB, Inc. ($MDB) | - | 55.3% | 63.8% | 60.8% | 57.9% |
| Twilio Inc. ($TWLO) | - | 43.9% | 62.9% | 74.5% | 55.3% |
| Okta, Inc. ($OKTA) | - | 86.6% | 60.0% | 55.6% | 46.8% |
| Wix.com Ltd. ($WIX) | - | 46.7% | 41.8% | 26.1% | 29.9% |
| Limelight Networks, Inc. ($LLNW) | - | 9.6% | 6.1% | 2.5% | 14.7% |
| |
|---|
| Median (9 companies) | 20.7% | 10.6% | 16.9% | 21.2% | 14.7% |
|---|
| GoDaddy Inc. ($GDDY) | - | 20.8% | 19.2% | 12.3% | 11.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 82.6% | 83.4% | 84.2% | 85.3% | 85.8% |
| Okta, Inc. ($OKTA) | 58.1% | 65.1% | 68.5% | 71.6% | 72.8% |
| MongoDB, Inc. ($MDB) | 68.0% | 70.5% | 74.2% | 72.4% | 70.3% |
| Crexendo Inc ($CXDO) | 60.2% | 67.9% | 67.9% | 69.9% | 69.8% |
| Wix.com Ltd. ($WIX) | 84.4% | 83.7% | 79.0% | 74.1% | 68.1% |
| |
|---|
| Median (9 companies) | 59.2% | 61.7% | 64.9% | 69.9% | 68.1% |
|---|
| GoDaddy Inc. ($GDDY) | 64.4% | 65.3% | 66.4% | 65.6% | 65.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 65.0% | 67.1% | 69.2% | 68.8% |
| Akamai Technologies, Inc. ($AKAM) | 33.9% | 27.6% | 29.4% | 39.5% | 41.0% |
| Crexendo Inc ($CXDO) | -28.7% | -6.2% | -1.0% | 10.6% | 7.8% |
| Brightcove Inc. ($BCOV) | -0.8% | -8.0% | -3.8% | -2.6% | 5.5% |
| Limelight Networks, Inc. ($LLNW) | -30.9% | 6.7% | 7.0% | 3.8% | 5.2% |
| |
|---|
| Median (9 companies) | -5.1% | -7.1% | 16.8% | -2.6% | 5.2% |
|---|
| GoDaddy Inc. ($GDDY) | 11.4% | 12.2% | 14.4% | 15.6% | 15.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 13.5% | 16.7% | 14.9% | 19.4% | 22.9% |
| Limelight Networks, Inc. ($LLNW) | 5.7% | 11.2% | 8.2% | 17.3% | 10.9% |
| Crexendo Inc ($CXDO) | 0.0% | 0.0% | 0.1% | 0.5% | 4.5% |
| VeriSign, Inc. ($VRSN) | 2.3% | 4.2% | 3.0% | 3.3% | 3.4% |
| Okta, Inc. ($OKTA) | 4.8% | 3.9% | 2.6% | 5.0% | 2.6% |
| |
|---|
| Median (9 companies) | 4.0% | 4.1% | 3.0% | 3.3% | 2.6% |
|---|
| GoDaddy Inc. ($GDDY) | 2.9% | 3.7% | 3.3% | 2.9% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 54.3% | 81.9% | 228.3% | 221.3% |
| Akamai Technologies, Inc. ($AKAM) | 11.9% | 7.9% | 8.2% | 10.8% | 10.9% |
| Crexendo Inc ($CXDO) | -114.0% | -44.3% | -10.5% | 35.4% | 7.3% |
| Brightcove Inc. ($BCOV) | -11.3% | -26.9% | -19.0% | -24.8% | -5.2% |
| Limelight Networks, Inc. ($LLNW) | -42.9% | -5.7% | -3.1% | -8.6% | -5.8% |
| |
|---|
| Median (9 companies) | -18.5% | -14.6% | 1.0% | -12.4% | -5.8% |
|---|
| GoDaddy Inc. ($GDDY) | 2.9% | 2.7% | 4.6% | 6.0% | 8.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Limelight Networks, Inc. ($LLNW) | - | -1.7x | -1.8x | -0.4x | 5.7x |
| Akamai Technologies, Inc. ($AKAM) | 0.4x | 0.5x | 0.7x | 2.0x | 1.8x |
| VeriSign, Inc. ($VRSN) | 2.2x | 2.6x | 1.8x | 1.5x | 1.6x |
| Brightcove Inc. ($BCOV) | - | - | - | - | -2.6x |
| Crexendo Inc ($CXDO) | - | - | - | -2.6x | -12.2x |
| |
|---|
| Median (5 companies) | 1.3x | 2.6x | 1.0x | 0.6x | 1.6x |
|---|
| GoDaddy Inc. ($GDDY) | 2.3x | 6.8x | 3.9x | 3.4x | 4.9x |
