GoDaddy earnings: AI, .com promo impact. Stock down following hours
GoDaddy’s Q4 results and guidance lead to following-hours decline.
GoDaddy (NYSE: GDDY) shares are trading lower in following-hours trading following today’s Q4 earnings note.
The firm noted Q4 revenue of $1.3 billion, up 7% year over year. Bookings were also $1.3 billion, but up only 5% year over year.
Since bookings precede revenue, this lower bookings growth is a concern.
Still, the firm stated there’s a simple explanation for the bookings decline: an inexpensive one-year .com promotion.
On the investor conference call, CEO Aman Bhutani stated:
We activated our marketing channels on this streamlined experience and introduced a promotional price for .com domains with a one-year term. The approach successfully increased fresh client volume that purchased domain units with one-year terms. But the demand for this offer was greater than we expected, and the shift in term mix combined with the promotional price reduced upfront bookings and near-term revenue.
The firm is tweaking the promotion to increase long-term client value.
The domain name business increased revenue by regarding 5% year over year. Primary domains revenue grew 5%, and Aftermarket revenue was up 8%. Still, Aftermarket revenue declined from $136 million to $127 million quarter over quarter.
Shares in GoDaddy have been under pressure lately amid concerns regarding how AI will affect its business. Bhutani spent most of his prepared remarks discussing how the firm is positioned to benefit from AI.
Bhutani stated AI now produces more than half of the code written at GoDaddy. AI is also used in sales and support, with one agent handling thousands of voice calls and text chats in the first six weeks of this year.
He stated, “…AI adoption gives us confidence that we can drive further efficiencies in our business,” suggesting the firm will be able to rely less on human capital.
Shares are off regarding 8% from the close as of 5 pm ET, but shares were up 5% in regular trading.
