Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36904 | |
Entity Registrant Name | GoDaddy Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5769934 | |
Entity Address, Address Line One | 2155 E. GoDaddy Way | |
Entity Address, City or Town | Tempe | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85284 | |
City Area Code | 480 | |
Local Phone Number | 505-8800 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Trading Symbol | GDDY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001609711 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 154,202,375 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 307,223 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 892.4 | $ 774 |
Accounts and other receivables | 68.7 | 60.1 |
Prepaid domain name registry fees | 456.2 | 435.7 |
Prepaid expenses and other current assets | 291.1 | 312.8 |
Assets held for sale | 21.7 | 0 |
Total current assets | 1,730.1 | 1,582.6 |
Noncurrent Assets | ||
Property and equipment, net | 216 | 225.6 |
Operating lease assets | 75.1 | 84.1 |
Prepaid domain name registry fees, net of current portion | 206.5 | 197.1 |
Goodwill | 3,549.1 | 3,536.9 |
Intangible assets, net | 1,203.4 | 1,252.2 |
Other assets | 112.1 | 95 |
Total assets | 7,092.3 | 6,973.5 |
Current liabilities: | ||
Accounts payable | 140 | 130.9 |
Accrued expenses and other current liabilities | 383.9 | 356.7 |
Deferred revenue | 2,043.2 | 1,954 |
Long-term debt | 18.3 | 18.2 |
Liabilities held for sale | 13.9 | 0 |
Total current liabilities | 2,599.3 | 2,459.8 |
Noncurrent Liabilities | ||
Deferred revenue, net of current portion | 795.5 | 770.3 |
Long-term debt, net of current portion | 3,809.6 | 3,812.9 |
Operating lease liabilities, net of current portion | 109.9 | 116.5 |
Other long-term liabilities | 86.9 | 87.1 |
Deferred tax liabilities | 46.6 | 56.2 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding | 0 | 0 |
Additional paid-in capital | 1,990.5 | 1,912.6 |
Accumulated deficit | (2,489.3) | (2,422.6) |
Accumulated other comprehensive income | 140.7 | 178 |
Total stockholders' deficit attributable to GoDaddy Inc. | (357.9) | (331.8) |
Non-controlling interests | 2.4 | 2.5 |
Total stockholders' deficit | (355.5) | (329.3) |
Total liabilities and stockholders' deficit | 7,092.3 | 6,973.5 |
Class A Common Stock | ||
Stockholders' deficit: | ||
Common stock | 0.2 | 0.2 |
Class B Common Stock | ||
Stockholders' deficit: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 154,114,000 | 153,830,000 |
Common stock, shares outstanding (in shares) | 154,114,000 | 153,830,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 307,000 | 312,000 |
Common stock, shares outstanding (in shares) | 307,000 | 312,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenue: | |||
Revenue | $ 1,036 | $ 1,002.7 | |
Costs and operating expenses | |||
Cost of revenue (excluding depreciation and amortization) | [1] | 386.1 | 370.2 |
Technology and development | [1] | 215 | 190.1 |
Marketing and advertising | [1] | 92.4 | 116.3 |
Customer care | [1] | 76.8 | 77.7 |
General and administrative | [1] | 94.1 | 90.6 |
Restructuring and other | [1] | 52.3 | 0 |
Depreciation and amortization | [1] | 48.5 | 48.2 |
Total costs and operating expenses | 965.2 | 893.1 | |
Operating income | 70.8 | 109.6 | |
Interest expense | (45.8) | (33.6) | |
Other income (expense), net | 22.6 | (1.1) | |
Income before income taxes | 47.6 | 74.9 | |
Provision for income taxes | (0.2) | (6.3) | |
Net income | 47.4 | 68.6 | |
Less: net income attributable to non-controlling interests | 0.1 | 0.2 | |
Net income attributable to GoDaddy Inc. | 47.3 | 68.4 | |
Applications & commerce | |||
Revenue: | |||
Revenue | 338 | 303.1 | |
Core platform | |||
Revenue: | |||
Revenue | $ 698 | $ 699.6 | |
Class A Common Stock | |||
Net income attributable to GoDaddy Inc. per share of Class A common stock: | |||
Basic (in USD per share) | $ 0.31 | $ 0.42 | |
Diluted (in USD per share) | $ 0.30 | $ 0.41 | |
Weighted-average shares of Class A common stock outstanding: | |||
Basic (in shares) | 154,124 | 164,323 | |
Diluted (in shares) | 156,644 | 166,811 | |
[1] Costs and operating expenses include equity-based compensation expense as follows: Three months ended March 31, 2023 2022 Cost of revenue $ 0.4 $ 0.3 Technology and development 39.0 32.9 Marketing and advertising 6.6 7.0 Customer care 5.4 4.2 General and administrative 20.2 16.8 General and administrative 20.2 16.8 Restructuring and other $ 2.3 $ — Total equity-based compensation expense $ 73.9 $ 61.2 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity-based compensation expense | $ 73.9 | $ 61.2 |
Cost of revenue | ||
Equity-based compensation expense | 0.4 | 0.3 |
Technology and development | ||
Equity-based compensation expense | 39 | 32.9 |
Marketing and advertising | ||
Equity-based compensation expense | 6.6 | 7 |
Customer care | ||
Equity-based compensation expense | 5.4 | 4.2 |
General and administrative | ||
Equity-based compensation expense | 20.2 | 16.8 |
Restructuring and other | ||
Equity-based compensation expense | $ 2.3 | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 47.4 | $ 68.6 | |
Foreign exchange forward contracts gain (loss), net | (6.9) | 3.2 | |
Unrealized swap gain (loss), net | [1] | (32.6) | 89.9 |
Change in foreign currency translation adjustment | 2.1 | (34.3) | |
Comprehensive income | 10 | 127.4 | |
Less: comprehensive income attributable to non-controlling interests | 0.2 | 0.3 | |
Comprehensive income attributable to GoDaddy Inc. | $ 9.8 | $ 127.1 | |
[1] Components of OCI are net of the tax effects reflected below: Unrealized swap gain (loss), net — (2.5) — (2.5) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized swap gain (loss), net | $ 0 | $ (2.5) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit (unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Class A Common Stock | Class B Common Stock | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non- Controlling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 166,901 | 320 | |||||||
Beginning balance at Dec. 31, 2021 | $ 83.2 | $ 0.2 | $ 0 | $ 1,594.7 | $ (1,474.6) | $ (38.6) | $ 1.5 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 68.6 | 68.4 | 0.2 | ||||||
Equity-based compensation, including amounts capitalized | 62.2 | 62.2 | |||||||
Stock option exercises (in shares) | 202 | ||||||||
Stock option exercises | 8.5 | 8.5 | |||||||
Repurchases of Class A common stock (in shares) | (6,532) | ||||||||
Repurchases of Class A common stock | (750.2) | (750.2) | |||||||
Impact of derivatives, net | 93.1 | 93.1 | |||||||
Change in foreign currency translation adjustment | (34.3) | (34.3) | |||||||
Vesting of restricted stock units and other (in shares) | 1,115 | (8) | |||||||
Vesting of restricted stock units and other | 0.2 | 0.2 | (0.1) | 0.1 | |||||
Ending balance (in shares) at Mar. 31, 2022 | 161,686 | 312 | |||||||
Ending balance at Mar. 31, 2022 | (468.7) | $ 0.2 | $ 0 | 1,665.6 | (2,156.4) | 20.1 | 1.8 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 153,830 | 312 | 153,830 | 312 | |||||
Beginning balance at Dec. 31, 2022 | (329.3) | $ 0.2 | $ 0 | 1,912.6 | (2,422.6) | 178 | 2.5 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 47.4 | 47.3 | 0.1 | ||||||
Equity-based compensation, including amounts capitalized | 74.5 | 74.5 | |||||||
Stock option exercises (in shares) | 132 | ||||||||
Stock option exercises | 3.2 | 3.2 | |||||||
Repurchases of Class A common stock (in shares) | (1,553) | ||||||||
Repurchases of Class A common stock | (113.9) | (113.9) | |||||||
Impact of derivatives, net | (39.5) | (39.5) | |||||||
Change in foreign currency translation adjustment | 2.1 | 2.1 | |||||||
Vesting of restricted stock units and other (in shares) | 1,705 | (5) | |||||||
Vesting of restricted stock units and other | 0 | 0.2 | (0.1) | 0.1 | (0.2) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 154,114 | 307 | 154,114 | 307 | |||||
Ending balance at Mar. 31, 2023 | $ (355.5) | $ 0.2 | $ 0 | $ 1,990.5 | $ (2,489.3) | $ 140.7 | $ 2.4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Operating activities | |||
Net income | $ 47.4 | $ 68.6 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | [1] | 48.5 | 48.2 |
Equity-based compensation expense | 73.9 | 61.2 | |
Non-cash restructuring charges | 21 | 0 | |
Other | (1.1) | 17.6 | |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Prepaid domain name registry fees | (29.5) | (19.8) | |
Deferred revenue | 114.8 | 94.6 | |
Other operating assets and liabilities | (4.7) | (19.5) | |
Net cash provided by operating activities | 270.3 | 250.9 | |
Investing activities | |||
Purchases of property and equipment | (22.8) | (12.3) | |
Other investing activities | 0 | (0.2) | |
Net cash used in investing activities | (22.8) | (12.5) | |
Proceeds received from: | |||
Stock option exercises | 3.2 | 8.5 | |
Payments made for: | |||
Repurchases of Class A common stock | (119.7) | (750.1) | |
Repayment of term loans | (6.3) | (8.1) | |
Other financing obligations | (1.4) | (0.9) | |
Net cash used in financing activities | (124.2) | (750.6) | |
Cash and cash equivalents classified within assets held for sale | (5.2) | 0 | |
Effect of exchange rate changes on cash and cash equivalents | 0.3 | (0.8) | |
Net increase (decrease) in cash and cash equivalents | 118.4 | (513) | |
Cash and cash equivalents, beginning of period | 774 | 1,255.7 | |
Cash and cash equivalents, end of period | 892.4 | 742.7 | |
Cash paid during the period for: | |||
Interest on long-term debt, including impact of interest rate swaps | 44.7 | 28.1 | |
Income taxes, net of refunds received | 2.2 | 4.5 | |
Amounts included in the measurement of operating lease liabilities | 12.1 | 13.7 | |
Supplemental disclosure of non-cash transactions | |||
Operating lease assets obtained in exchange for operating lease liabilities | 1.4 | 3 | |
Accrued purchases of property and equipment at period end | $ 2 | $ 5.9 | |
[1] Costs and operating expenses include equity-based compensation expense as follows: Three months ended March 31, 2023 2022 Cost of revenue $ 0.4 $ 0.3 Technology and development 39.0 32.9 Marketing and advertising 6.6 7.0 Customer care 5.4 4.2 General and administrative 20.2 16.8 General and administrative 20.2 16.8 Restructuring and other $ 2.3 $ — Total equity-based compensation expense $ 73.9 $ 61.2 |
Organization and Background
Organization and Background | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Background | Organization and Background Organization We are the sole managing member of Desert Newco, and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by other members. The calculation of non-controlling interests excludes any net income attributable directly to GoDaddy Inc. As of March 31, 2023, we owned approximately 99.8% of Desert Newco. Basis of Presentation Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated. Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2023. These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the 2022 Form 10-K). Prior Period Reclassifications Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation. Use of Estimates GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ. Segments |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Property and Equipment Property and equipment, net by geography was as follows: March 31, 2023 December 31, 2022 U.S. $ 162.7 $ 167.5 France 26.8 28.8 All other international 26.5 29.3 $ 216.0 $ 225.6 No other international country represented more than 10% of property and equipment, net in any period presented. Equity Investments We hold investments in privately held equity securities, which are recorded in other assets and totaled $54.9 million and $40.5 million at March 31, 2023 and December 31, 2022, respectively. These securities are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment. Investment gains and losses are recorded in other income (expense), net. During the three months ended March 31, 2023, we recorded a $14.4 million increase to the carrying value of one of our investments. Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available observable market data. A security's carrying value is not adjusted if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. In determining the estimated fair value of our investments, we utilize the most recent data available to us. We assess our investments for impairment at least quarterly using both qualitative and quantitative factors. If an investment is considered impaired, we recognize an impairment loss and establish a new carrying value for the investment. Our analysis did not indicate impairment of our investments as of March 31, 2023. Revenue Recognition Disaggregated Revenue Revenue by major product type was as follows: Three Months Ended March 31, 2023 2022 Applications and commerce $ 338.0 $ 303.1 Core platform: domains 492.1 483.9 Core platform: other 205.9 215.7 $ 1,036.0 $ 1,002.7 No single customer represented over 10% of our total revenue for any period presented. Revenue by geography is based on the customer's billing address and was as follows: Three Months Ended March 31, 2023 2022 U.S. $ 695.4 $ 672.9 International 340.6 329.8 $ 1,036.0 $ 1,002.7 No international country represented more than 10% of total revenue in any period presented. See Note 7 for information regarding our deferred revenue. Assets Recognized from Contract Costs Fees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the asset relates. Amortization expense of such asset was $185.1 million and $174.1 million for the three months ended March 31, 2023 and 2022, respectively. Restructuring and other Restructuring and other primarily represents charges related to the restructuring plan announced in February 2023, which was implemented to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets and liabilities of our hosting business within our Core segment. See Note 13 for further discussion of restructuring charges pursuant to our restructuring plan as of March 31, 2023. Assets and Liabilities Held for Sale We classify assets and liabilities as held for sale when our management, with the appropriate authority, approves and commits to a formal plan of sale with the expectation that such sale will be completed within one year. The net assets and liabilities of a disposal group designated as held for sale are then recorded at the lower of their current carrying value or their fair market value, less costs to sell. See Note 13 for further discussion of our assets and liabilities classified as held for sale as of March 31, 2023. Fair Value Measurements The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Commercial paper $ — $ 115.0 $ — $ 115.0 Time deposits 360.6 — — 360.6 Derivative assets — 168.1 — 168.1 Total assets $ 360.6 $ 283.1 $ — $ 643.7 Liabilities: Derivative liabilities $ — $ 3.8 $ — $ 3.8 Total liabilities $ — $ 3.8 $ — $ 3.8 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Commercial paper $ — $ 120.0 $ — $ 120.0 Time deposits 347.3 — — 347.3 Derivative assets — 218.5 — 218.5 Total assets $ 347.3 $ 338.5 $ — $ 685.8 Liabilities: Derivative liabilities $ — $ 4.9 $ — $ 4.9 Total liabilities $ — $ 4.9 $ — $ 4.9 We have no other material assets or liabilities measured at fair value on a recurring basis. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes changes in our goodwill balance by segment: A&C Core Total Balance at December 31, 2022 $ 1,497.0 $ 2,039.9 $ 3,536.9 Impact of foreign currency translation 6.2 8.6 14.8 Goodwill reclassified to assets held for sale (1) — (2.6) (2.6) Balance at March 31, 2023 $ 1,503.2 $ 2,045.9 $ 3,549.1 _________________________________ (1) See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan. Intangible assets, net are summarized as follows: March 31, 2023 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 242.4 n/a 242.4 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets (1) : Customer-related 451.6 $ (301.8) 149.8 Developed technology 244.9 (185.0) 59.9 Trade names and other 104.0 (54.5) 49.5 $ 1,744.7 $ (541.3) $ 1,203.4 _________________________________ (1) See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan. December 31, 2022 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 243.2 n/a 243.2 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets: Customer-related 487.7 $ (309.0) 178.7 Developed technology 243.9 (171.1) 72.8 Trade names and other 109.8 (54.1) 55.7 $ 1,786.4 $ (534.2) $ 1,252.2 Amortization expense was $32.7 million and $33.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the weighted-average remaining amortization period for amortizable intangible assets was 35 months for customer-related, 31 months for developed technology and 52 months for trade names and other, and was 37 months in total. Based on the balance of finite-lived intangible assets as of March 31, 2023, expected future amortization expense is as follows: Year Ending December 31: 2023 (remainder of) $ 70.9 2024 81.5 2025 74.2 2026 25.0 2027 4.5 Thereafter 3.1 $ 259.2 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Share Repurchases We have authority to repurchase up to $3,000.0 million of our Class A common stock. During the three months ended March 31, 2023, we repurchased a total of 1,553 shares, of our Class A common stock in the open market, which were retired upon repurchase, for an aggregate purchase price of $113.9 million. As of March 31, 2023, we had $1,586.0 million of remaining authorization available for repurchases. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: March 31, 2023 December 31, 2022 Derivative assets $ 168.1 $ 218.5 Prepaid software and maintenance expenses 44.5 29.5 Registry deposits 40.4 41.0 Usage-based prepaid expenses (1) 14.6 10.6 Other 23.5 13.2 $ 291.1 $ 312.8 _________________________________ (1) Usage-based prepaid expenses include various cost of sales, marketing, rent and other prepaid commitments that are amortized as the funds are used. |
Equity-Based Compensation Plans
Equity-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation Plans | Equity-Based Compensation Plans We have granted stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date. We have granted both stock options and restricted stock awards (RSUs) vesting solely upon the continued service of the recipient as well as performance-based awards (PSUs) with vesting based on either (i) our achievement of financial targets or (ii) our relative total stockholder return (TSR) as compared to an index of public internet companies. The following table summarizes stock option activity: Number of Weighted- Outstanding at December 31, 2022 1,426 44.38 Exercised (132) 24.17 Outstanding at March 31, 2023 1,294 46.45 Vested at March 31, 2023 1,248 45.72 The following table summarizes stock award activity: Number of Outstanding at December 31, 2022 7,632 Granted: RSUs 3,235 Granted: TSR-based PSUs 264 TSR-based PSU achievement above target 91 Vested (1,700) Forfeited (92) Outstanding at March 31, 2023 (1) 9,430 _________________________________ (1) Includes financial-based PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes. The balance of outstanding awards is comprised of the following: Number of Weighted-Average Grant-Date Fair Value Per Share ($) RSUs 8,617 78.16 TSR-based PSUs 788 119.07 Financial-based PSUs not yet granted for accounting purposes 25 N/A Outstanding at March 31, 2023 9,430 |
Deferred Revenue
Deferred Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consisted of the following: March 31, 2023 December 31, 2022 Current: A&C $ 664.0 $ 622.1 Core 1,379.2 1,331.9 $ 2,043.2 $ 1,954.0 Noncurrent: A&C $ 175.5 $ 173.1 Core 620.0 597.2 $ 795.5 $ 770.3 The increase in deferred revenue is primarily driven by payments received in advance of satisfying our performance obligations, offset by $757.4 million of revenue recognized during the three months ended March 31, 2023, which was included in deferred revenue as of December 31, 2022. Deferred revenue as of March 31, 2023 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are satisfied, and is expected to be recognized as revenue as follows: Remainder of 2023 2024 2025 2026 2027 Thereafter Total A&C $ 592.0 $ 173.9 $ 54.9 $ 10.9 $ 4.3 $ 3.5 $ 839.5 Core 1,189.7 478.5 152.0 76.7 43.5 58.8 1,999.2 $ 1,781.7 $ 652.4 $ 206.9 $ 87.6 $ 47.8 $ 62.3 $ 2,838.7 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued payroll and employee benefits $ 105.0 $ 116.3 Tax-related accruals 57.0 42.8 Accrued legal and professional 33.3 34.3 Accrued acquisition-related expenses and acquisition consideration payable 28.8 26.2 Current portion of operating lease liabilities 28.7 33.3 Accrued restructuring costs 20.7 — Accrued marketing and advertising 18.5 13.6 Derivative liabilities 3.8 4.9 Other 88.1 85.3 $ 383.9 $ 356.7 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: Maturity Date March 31, 2023 December 31, 2022 2027 Term Loans (effective interest rate of 6.9% at March 31, 2023 and 4.3% at December 31, 2022) August 10, 2027 $ 729.4 $ 731.3 2029 Term Loans (effective interest rate of 8.3% at March 31, 2023 and 4.1% at December 31, 2022) November 10, 2029 1,765.6 1,770.0 2027 Senior Notes (effective interest rate of 5.5% at March 31, 2023 and 5.4% at December 31, 2022) December 1, 2027 600.0 600.0 2029 Senior Notes (effective interest rate of 3.7% at March 31, 2023 and 3.6% at December 31, 2022) March 1, 2029 800.0 800.0 Revolver August 10, 2027 — — Total 3,895.0 3,901.3 Less: unamortized original issue discount and debt issuance costs (1) (67.1) (70.2) Less: current portion of long-term debt (18.3) (18.2) $ 3,809.6 $ 3,812.9 _________________________________ (1) Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method. Credit Facility As described in our 2022 Form 10-K, our secured credit agreement (the Credit Facility) includes two tranches of term loans (the 2027 Term Loans and the 2029 Term Loans) and a revolving credit facility (the Revolver). A portion of the term loans is hedged by interest rate swap arrangements, as discussed in Note 10. As of March 31, 2023, we had $1,000.0 million available for borrowing under the Revolver and we were not in violation of any covenants of the Credit Facility. Senior Notes As described in our 2022 Form 10-K, we have completed two offerings of senior notes (the 2027 Senior Notes and the 2029 Senior Notes). As of March 31, 2023, we were not in violation of any covenants of the senior notes. Fair Value The estimated fair values of our long-term debt instruments are based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of March 31, 2023: 2027 Term Loans $ 727.6 2029 Term Loans $ 1,765.6 2027 Senior Notes $ 586.0 2029 Senior Notes $ 694.2 Future Debt Maturities Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of March 31, 2023 were as follows: Year Ending December 31: 2023 (remainder of) $ 18.9 2024 25.2 2025 25.2 2026 25.2 2027 1,319.0 Thereafter 2,481.5 $ 3,895.0 |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging We utilize the following derivative instruments designated as cash flow hedges: • foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currencies; • cross-currency swaps used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and • pay-fixed rate, receive-floating rate interest rate swaps to effectively convert portions of our variable-rate debt to fixed. We also utilize cross-currency swaps designated as net investment hedges to mitigate the risk associated with exchange rate fluctuations on our net investment in certain foreign operations. The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments: Notional Amount Fair Value of Derivative Assets (2) Fair Value of Derivative Liabilities (2) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Cash flow hedges: Foreign exchange forward contracts $ 361.5 $ 364.7 $ 4.9 $ 9.4 $ 3.8 $ 2.0 Cross-currency swaps (1) 555.3 549.7 10.8 15.8 — 2.2 Interest rate swaps 1,975.3 1,980.5 138.5 173.0 — — Net investment hedges: Cross-currency swaps (1) 711.8 704.6 13.9 20.3 — 0.7 Total hedges $ 3,603.9 $ 3,599.5 $ 168.1 $ 218.5 $ 3.8 $ 4.9 _________________________________ (1) The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.08 and 1.07 as of March 31, 2023 and December 31, 2022, respectively. (2) In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets accrued expenses and other current liabilities The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI): Unrealized Gains (Losses) Recognized in Other Comprehensive Income Three Months Ended March 31, 2023 March 31, 2022 Cash flow hedges: Foreign exchange forward contracts (1) $ (6.9) $ 3.2 Cross-currency swaps 2.0 36.3 Interest rate swaps (34.6) 51.1 Net investment hedges: Cross-currency swaps (6.4) (26.4) Total hedges $ (45.9) $ 64.2 _________________________________ (1) Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI. The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Revenue Interest Expense Other Income (Expense), Net Revenue Interest Expense Other Income (Expense), Net Cash flow hedges: Foreign exchange forward contracts: Reclassified from AOCI into income $ 4.8 $ — $ — $ (1.6) $ — $ — Cross-currency swaps: Reclassified from AOCI into income (1) — 2.4 (7.1) — 6.1 22.5 Interest rate swaps: Reclassified from AOCI into income — 14.1 — — (10.8) — Net investment hedges: Cross-currency swaps: Reclassified from AOCI into income — 3.2 — — 0.8 — Total hedges $ 4.8 $ 19.7 $ (7.1) $ (1.6) $ (3.9) $ 22.5 _________________________________ (1) The amounts reflected in other income (expense), net include $7.0 million and $(22.7) million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by cross-currency swaps during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, we estimate that $72.6 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing. Risk Management Strategies Foreign Exchange Forward Contracts From time-to-time, we may enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in foreign currencies. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. At March 31, 2023, all such contracts had maturities of 18 months or less. Cross-Currency Swaps In April 2017, in order to manage variability due to movements in foreign currency rates related to a Euro-denominated intercompany loan, we entered into five-year cross-currency swaps. In March 2022, we entered into a transaction to extend the maturity of these swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new swaps (the 2022 Cross-Currency Swaps) were designated as either cash flow hedging relationships or net investment hedging relationships. The 2022 Cross-Currency Swaps had an aggregate amortizing notional amount of €1,184.2 million at inception (approximately $1,262.5 million). The swaps designated as cash flow hedging relationships convert the 3.00% fixed rate Euro-denominated interest and principal receipts on the intercompany loan into U.S. dollar interest and principal receipts at a fixed rate of 4.81%. The swaps designated as net investment hedging relationships hedge the foreign currency exposure of our net investment in certain Euro denominated functional currency subsidiaries. Pursuant to the contracts, the Euro notional value will be exchanged for the U.S. dollar notional value at maturity. Interest Rate Swaps In April 2017, we entered into a five-year pay-fixed rate, receive-floating rate interest rate swap arrangement to effectively convert a portion of the variable-rate borrowings under the 2024 Term Loans to a fixed rate of 5.44%. In March 2022, we entered into a transaction to extend the maturity of the swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new interest rate swaps (the 2022 Interest Rate Swaps) were designated. The 2022 Interest Rate Swaps, which had an amortizing notional amount of $1,262.5 million at inception, serve to convert a portion of the variable-rate borrowings under the 2029 Term Loans to a fixed rate of 4.81%. In November 2022, in conjunction with the Credit Facility refinancing discussed in our 2022 Form 10-K, we terminated these swaps and entered into new SOFR-based interest rate swaps. This modification impacted no critical terms other than the reference rate change from LIBOR to SOFR and thus had no impact on our hedging relationships or financial results. In August 2020, in conjunction with the issuance of the 2027 Term Loans, we entered into seven-year pay-fixed rate, receive-floating rate interest rate swaps to effectively convert the variable one-month LIBOR interest rate on the 2027 Term Loans borrowings to a fixed rate of 0.705%. These interest rate swaps, which mature on August 10, 2027, had an aggregate notional amount of $750.0 million at inception. The objective of these arrangements, which are designated as cash flow hedges and recognized as assets or liabilities at fair value, is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. The unrealized gains and losses on the swaps are included in AOCI and will be recognized in earnings within or against interest expense when the hedged interest payments are accrued each month. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LeasesOur operating leases primarily consist of office and data center space expiring at various dates through November 2036. Certain leases include options to renew or terminate at our discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2023, operating leases have a remaining weighted average lease term of 6.9 years and our operating lease liabilities were measured using a weighted average discount rate of 5.3%. The components of operating lease expense were as follows: Three Months Ended March 31, 2023 March 31, 2022 Operating lease costs $ 9.8 $ 12.8 Variable lease costs 3.8 2.7 Sublease income (2.3) (1.8) Total net lease cost $ 11.3 $ 13.7 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigations, other proceedings and consent decrees in the ordinary course of business, including intellectual property claims, putative and certified class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable. As described in our 2022 Form 10-K, as of December 31, 2022, we had accrued $8.1 million as our estimated loss provision related to the settlement of certain class action complaints alleging violation of the Telephone Consumer Protection Act of 1991. On January 19, 2021, a single objector to the settlement filed a notice of appeal to the 11th Circuit Court of Appeals (the 11th Circuit). On July 27, 2022, the 11th Circuit vacated the settlement approval order and remanded the case for further action due to standing issues among the class members. On August 18, 2022, the plaintiffs filed a petition for a rehearing before the 11th Circuit. On December 7, 2022, the 11th Circuit was notified of the death of one of the plaintiffs, Jason Bennett. The parties are currently briefing the effect, if any, of his death on the appeal. On March 13, 2023, the 11th Circuit granted the plaintiffs' petition for a rehearing before the 11th Circuit. Given the pending nature of the rehearing, and the possibility for one or more parties to seek relief from the Supreme Court, the finality and/or impact of the July 27, 2022 decision is uncertain. As a result, we have not adjusted our estimated loss provision for this settlement as of March 31, 2023. We have denied and continue to deny the allegations in the complaints. Nothing in the final settlement agreement is deemed to assign or reflect any admission of fault, wrongdoing or liability, or of the appropriateness of a class action in such litigation. We received a full release from the settlement class concerning the claims asserted, or that could have been asserted, with respect to the claims released in the final settlement agreement. Our legal fees associated with this matter have been recorded to general and administrative expense as incurred and were not material. As more fully described in the section titled “Risk Factors” located elsewhere in this Quarterly Report, in March 2020, we discovered that a threat actor had compromised the hosting login credentials of certain of our customers to their hosting accounts and the login credentials of a small number of our personnel. We have expended resources investigating and responding to this activity, notified the impacted customers, reported the activity to applicable regulatory authorities, and are responding to requests for information regarding our data privacy and security practices, including from the Federal Trade Commission (FTC) pursuant to Civil Investigative Demands issued in July 2020 and October 2021. The timing of resolution and the outcome of these matters are uncertain and could result in us being subject to substantial monetary or other costs to our business. The amounts currently accrued for other matters are not material. While the results of such normal course claims and legal proceedings, regardless of the underlying nature of the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely timing of resolution of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would not be material. However, the outcomes of claims, legal proceedings or investigations are inherently unpredictable and subject to uncertainty, and may have an adverse effect on us because of defense costs, diversion of management resources and other factors that are not known to us or cannot be quantified at this time. We may also receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. The final outcome of any current or future claims or lawsuits could adversely affect our business, financial condition or results of operations. We periodically evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued or the reasonably possible losses that we have disclosed, and make adjustments as appropriate. Indirect Taxes We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject communications and commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the U.S. and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the businesses of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generate based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals. Our accrual for estimated indirect tax liabilities was $18.9 million as of both March 31, 2023 and December 31, 2022, reflecting our best estimate of the probable liability based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations. Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits, litigation or settlements could be materially different than the amounts established for indirect tax contingencies. |
Restructuring and Other Charges
Restructuring and Other Charges and Assets and Liabilities Held for Sale | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges and Assets and Liabilities Held for Sale | Restructuring and Other Charges and Assets and Liabilities Held for Sale In February 2023, we announced a restructuring plan to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets. As part of this plan, we announced a reduction in our current workforce of approximately 550 employees, representing approximately 8% of our total employees. During the three months ended March 31, 2023, we recorded $50.4 million of pre-tax restructuring charges in our statements of operations related to the restructuring plan. The aggregate charges primarily include $29.4 million in severance, employee benefits and equity-based compensation, and a $21.0 million charge in connection with the planned disposition of certain assets, as described below. We estimate that we will incur up to an additional $5.5 million in restructuring charges primarily during the second quarter of 2023. We do not expect to incur additional restructuring charges beyond the fourth quarter of 2023. Cash payments of $6.4 million related to the restructuring were made during the three months ended March 31, 2023. The following table shows the total amount incurred and the accrued restructuring costs, which are recorded in accrued expenses and other current liabilities in our balance sheet, for severance and employee benefits as of March 31, 2023: Accrued Restructuring Costs Accrued restructuring costs as of December 31, 2022 $ — Restructuring costs incurred during the three months ended March 31, 2023 (1) 27.1 Amount paid during the three months ended March 31, 2023 (6.4) Accrued restructuring costs as of March 31, 2023 $ 20.7 ________________________________ (1) Excludes $2.3 million in equity-based compensation expense associated with our restructuring plan, which was recorded within additional paid-in capital. We expect to make substantially all remaining restructuring payments in the second and third quarters of 2023. In connection with the restructuring, we committed to a formal plan to sell certain assets and liabilities of our hosting business within our Core segment, which we expect to close during the second half of 2023. Accordingly, we have separately presented these assets and liabilities as held for sale in our balance sheet. The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities held for sale to the amounts presented in our balance sheet. March 31, 2023 Assets: Cash $ 5.2 Goodwill 2.6 Intangible assets 18.2 Property and equipment 7.9 Other assets 8.8 Total assets $ 42.7 Valuation allowance (1) (21.0) Total assets held for sale $ 21.7 Liabilities: Accrued expenses 5.4 Deferred tax liabilities 4.8 Other liabilities 3.7 Total liabilities held for sale $ 13.9 Net assets held for sale $ 7.8 _________________________________ (1) Upon classification as held for sale, we recognized a valuation allowance of $21.0 million to adjust the carrying value of the disposal group to fair value less cost to sell. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to U.S. federal, state and foreign income taxes with respect to our allocable share of any taxable income or loss of Desert Newco, as well as any stand-alone income or loss we generate. Desert Newco is treated as a partnership for U.S. income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions. Instead, Desert Newco's taxable income or loss is passed through to its members, including us. Despite its partnership treatment, Desert Newco is liable for income taxes in certain foreign jurisdictions in which it operates, in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities. We have acquired the outstanding stock of various domestic and foreign entities taxed as corporations, which are now wholly-owned by us or our subsidiaries. Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for U.S. federal and state income tax purposes and internationally, primarily within the United Kingdom (UK), Germany and India. We anticipate this structure to remain in existence for the foreseeable future. Our effective tax rates differ from the U.S. federal statutory rate primarily due to changes in valuation allowances based on current year earnings and the impact of foreign earnings primarily related to the United Kingdom, Germany and India jurisdictions. In determining the need for a valuation allowance, we prepare quarterly estimates using historical and forecasted future operating results, based upon approved business plans, including a review of the eligible carryforward periods and tax planning strategies. Based primarily on the negative evidence outweighing the positive evidence as of March 31, 2023, we believe there is uncertainty as to when we will be able to utilize certain of our domestic net operating losses (NOLs), credit carryforwards and other deferred tax assets (DTAs). This negative evidence includes our historical tax losses, the difficulty in forecasting excess tax benefits related to equity-based compensation and the difficulty in forecasting profits due to the current uncertain macroeconomic conditions, such as inflation and the possibility of recession or an economic slowdown. Therefore, we have recorded a valuation allowance against the DTAs for which we have concluded it is more-likely-than-not they will not be realized. If the current uncertain macroeconomic conditions dissipate making it easier to forecast in the long-term, our operating results continue to improve and our projections show sufficient utilization of tax attributes, we will consider that as significant positive evidence and our future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. If this were to occur, any reversal of the valuation allowance would result in a corresponding non-cash income tax benefit, thereby increasing total DTAs. Uncertain Tax Positions The total amount of gross unrecognized tax benefits was $144.2 million as of March 31, 2023, of which $42.5 million, if fully recognized, would decrease our effective tax rate. Although we believe the amounts reflected in our tax returns substantially comply with applicable U.S. federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision or benefit for income taxes in the period in which a final determination is made. |
Income Per Share
Income Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Income Per Share | Income Per Share Basic income per share is computed by dividing net income attributable to GoDaddy Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted income per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive. A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per share is as follows: Three Months Ended March 31, 2023 2022 Numerator: Net income $ 47.4 $ 68.6 Less: net income attributable to non-controlling interests 0.1 0.2 Net income attributable to GoDaddy Inc. $ 47.3 $ 68.4 Denominator: Weighted-average shares of Class A common stock outstanding—basic 154,124 164,323 Effect of dilutive securities: Class B common stock 309 313 Stock options 535 822 RSUs, PSUs and ESPP shares 1,676 1,353 Weighted-average shares of Class A Common stock outstanding—diluted 156,644 166,811 Net income attributable to GoDaddy Inc. per share of Class A common stock—basic $ 0.31 $ 0.42 Net income attributable to GoDaddy Inc. per share of Class A common stock—diluted (1) : $ 0.30 $ 0.41 _________________________________ (1) The diluted income per share calculations exclude net income attributable to non-controlling interests unless the effect is antidilutive. The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income per share because the effect of including such potentially dilutive shares would have been antidilutive: Three Months Ended March 31, 2023 2022 Accelerated share repurchase agreement (ASR) shares (1) — 2,814 Stock options 20 280 RSUs, PSUs and ESPP shares 554 1,922 574 5,016 _________________________________ (1) If the ASRs had been settled as of March 31, 2022, based on the volume-weighted average price per share since their effective date, the counterparties would have been required to deliver these additional estimated shares to us. Shares of Class B common stock are not participating securities, and therefore, do not have rights to share in our earnings. Accordingly, separate presentation of income per share of Class B common stock under the two-class method is not required. Each share of Class B common stock is exchangeable for one share of Class A common stock. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We report our operating results through two reportable segments: A&C and Core. Our chief operating decision maker (CODM), which, as of March 31, 2023, was our Chief Executive Officer, evaluates the performance of and allocates resources to our segments based on each segment's revenue and earnings before interest, taxes, depreciation and amortization (Segment EBITDA). Segment EBITDA is defined as segment revenues less costs and operating expenses, excluding depreciation and amortization, interest expense (net), provision or benefit for income taxes, equity-based compensation expense, acquisition-related costs, restructuring-related expenses and certain other items. We believe Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segments' performance on a consistent basis. Our CODM does not use assets by segment to evaluate performance or allocate resources; therefore, we do not provide disclosure of assets by segment. See Note 2 for property, plant, and equipment, net as well as revenue disaggregated by geography. The A&C and Core segments provide a view into the product-focused organization of our business and generate revenue as follows: • A&C primarily consists of sales of products containing proprietary software, commerce products and third-party email and productivity solutions as well as sales of certain products when they are included in bundled offerings of our proprietary software products. • Core primarily consists of sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component. There are no internal revenue transactions between our reportable segments. Corporate overhead primarily includes general and administrative expenses and items not allocated to either segment as well as those costs specifically excluded from Segment EBITDA, our segment measure of profitability, such as depreciation and amortization, interest expense and income and provision or benefit for income taxes. The following table presents our segment information for the periods indicated: Three Months Ended March 31, 2023 2022 Revenue: A&C $ 338.0 $ 303.1 Core 698.0 699.6 Total revenue $ 1,036.0 $ 1,002.7 Segment EBITDA: A&C $ 132.4 $ 119.8 Core 189.0 178.4 Total Segment EBITDA 321.4 298.2 Unallocated corporate overhead (71.7) (72.3) Depreciation and amortization (48.5) (48.2) Equity-based compensation expense (1) (71.6) (61.2) Interest expense, net of interest income (38.0) (33.2) Acquisition-related expenses (5.0) (7.7) Restructuring and other (2) (39.0) (0.7) Income before income taxes 47.6 74.9 Provision for income taxes (0.2) (6.3) Net income $ 47.4 $ 68.6 _________________________________ (1) Excludes $2.3 million of equity-based compensation expense associated with our restructuring plan, which is included within restructuring and other. (2) In addition to the restructuring and other in our statements of operations, this includes lease-related expenses associated with closed facilities, charges related to certain legal matters and adjustments to the fair value of our equity investments. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents AOCI activity in equity: Foreign Currency Translation Adjustments Net Unrealized Gains (Losses) on Cash Flow Hedges (1) Total AOCI Gross balance as of December 31, 2022 (2) $ (75.0) $ 253.4 $ 178.4 Other comprehensive income (loss) before reclassifications 2.1 (56.9) (54.8) Amounts reclassified from AOCI — 17.4 17.4 Other comprehensive income (loss) 2.1 (39.5) (37.4) $ (72.9) $ 213.9 141.0 Less: AOCI attributable to non-controlling interests (0.3) Balance as of March 31, 2023 $ 140.7 Gross balance as of December 31, 2021 (2) $ (52.9) $ 14.2 $ (38.7) Other comprehensive income (loss) before reclassifications (35.1) 76.9 41.8 Amounts reclassified from AOCI 0.8 16.2 17.0 Other comprehensive income (34.3) 93.1 58.8 $ (87.2) $ 107.3 20.1 Less: AOCI attributable to non-controlling interests — Balance as of March 31, 2022 $ 20.1 _________________________________ (1) Amounts shown for our foreign exchange forward contracts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI. (2) Beginning balance is presented on a gross basis, excluding the allocation of AOCI attributable to non-controlling interests. See Note 10 for the effect on net income of amounts reclassified from AOCI related to our hedging relationships. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated. Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2023. These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the 2022 Form 10-K). |
Prior Period Reclassification | Prior Period Reclassifications Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation. |
Use of Estimates | Use of Estimates GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ. |
Segments | SegmentsWe report our operating results through two reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 16. |
Equity Investments | Equity Investments We hold investments in privately held equity securities, which are recorded in other assets and totaled $54.9 million and $40.5 million at March 31, 2023 and December 31, 2022, respectively. These securities are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment. Investment gains and losses are recorded in other income (expense), net. During the three months ended March 31, 2023, we recorded a $14.4 million increase to the carrying value of one of our investments. Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available observable market data. A security's carrying value is not adjusted if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. In determining the estimated fair value of our investments, we utilize the most recent data available to us. We assess our investments for impairment at least quarterly using both qualitative and quantitative factors. If an investment is considered impaired, we recognize an impairment loss and establish a new carrying value for the investment. Our analysis did not indicate impairment of our investments as of March 31, 2023. |
Assets Recognized from Contract Costs | Assets Recognized from Contract CostsFees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the asset relates. Amortization expense of such asset was |
Impairment or Disposal of Long-Lived Assets, Policy | Restructuring and other primarily represents charges related to the restructuring plan announced in February 2023, which was implemented to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets and liabilities of our hosting business within our Core segment. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Property and Equipment, Net by Geography | Property and equipment, net by geography was as follows: March 31, 2023 December 31, 2022 U.S. $ 162.7 $ 167.5 France 26.8 28.8 All other international 26.5 29.3 $ 216.0 $ 225.6 |
Revenue by Product Type | Revenue by major product type was as follows: Three Months Ended March 31, 2023 2022 Applications and commerce $ 338.0 $ 303.1 Core platform: domains 492.1 483.9 Core platform: other 205.9 215.7 $ 1,036.0 $ 1,002.7 |
Revenue by Geography | Revenue by geography is based on the customer's billing address and was as follows: Three Months Ended March 31, 2023 2022 U.S. $ 695.4 $ 672.9 International 340.6 329.8 $ 1,036.0 $ 1,002.7 |
Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Commercial paper $ — $ 115.0 $ — $ 115.0 Time deposits 360.6 — — 360.6 Derivative assets — 168.1 — 168.1 Total assets $ 360.6 $ 283.1 $ — $ 643.7 Liabilities: Derivative liabilities $ — $ 3.8 $ — $ 3.8 Total liabilities $ — $ 3.8 $ — $ 3.8 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Commercial paper $ — $ 120.0 $ — $ 120.0 Time deposits 347.3 — — 347.3 Derivative assets — 218.5 — 218.5 Total assets $ 347.3 $ 338.5 $ — $ 685.8 Liabilities: Derivative liabilities $ — $ 4.9 $ — $ 4.9 Total liabilities $ — $ 4.9 $ — $ 4.9 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in our goodwill balance by segment: A&C Core Total Balance at December 31, 2022 $ 1,497.0 $ 2,039.9 $ 3,536.9 Impact of foreign currency translation 6.2 8.6 14.8 Goodwill reclassified to assets held for sale (1) — (2.6) (2.6) Balance at March 31, 2023 $ 1,503.2 $ 2,045.9 $ 3,549.1 _________________________________ (1) See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net are summarized as follows: March 31, 2023 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 242.4 n/a 242.4 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets (1) : Customer-related 451.6 $ (301.8) 149.8 Developed technology 244.9 (185.0) 59.9 Trade names and other 104.0 (54.5) 49.5 $ 1,744.7 $ (541.3) $ 1,203.4 _________________________________ (1) See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan. December 31, 2022 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 243.2 n/a 243.2 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets: Customer-related 487.7 $ (309.0) 178.7 Developed technology 243.9 (171.1) 72.8 Trade names and other 109.8 (54.1) 55.7 $ 1,786.4 $ (534.2) $ 1,252.2 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net are summarized as follows: March 31, 2023 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 242.4 n/a 242.4 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets (1) : Customer-related 451.6 $ (301.8) 149.8 Developed technology 244.9 (185.0) 59.9 Trade names and other 104.0 (54.5) 49.5 $ 1,744.7 $ (541.3) $ 1,203.4 _________________________________ (1) See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan. December 31, 2022 Gross Accumulated Net Carrying Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Domain portfolio 243.2 n/a 243.2 Contractual-based assets 256.8 n/a 256.8 Finite-lived intangible assets: Customer-related 487.7 $ (309.0) 178.7 Developed technology 243.9 (171.1) 72.8 Trade names and other 109.8 (54.1) 55.7 $ 1,786.4 $ (534.2) $ 1,252.2 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Based on the balance of finite-lived intangible assets as of March 31, 2023, expected future amortization expense is as follows: Year Ending December 31: 2023 (remainder of) $ 70.9 2024 81.5 2025 74.2 2026 25.0 2027 4.5 Thereafter 3.1 $ 259.2 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: March 31, 2023 December 31, 2022 Derivative assets $ 168.1 $ 218.5 Prepaid software and maintenance expenses 44.5 29.5 Registry deposits 40.4 41.0 Usage-based prepaid expenses (1) 14.6 10.6 Other 23.5 13.2 $ 291.1 $ 312.8 _________________________________ (1) Usage-based prepaid expenses include various cost of sales, marketing, rent and other prepaid commitments that are amortized as the funds are used. |
Equity-Based Compensation Pla_2
Equity-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Award Activity | The following table summarizes stock option activity: Number of Weighted- Outstanding at December 31, 2022 1,426 44.38 Exercised (132) 24.17 Outstanding at March 31, 2023 1,294 46.45 Vested at March 31, 2023 1,248 45.72 The following table summarizes stock award activity: Number of Outstanding at December 31, 2022 7,632 Granted: RSUs 3,235 Granted: TSR-based PSUs 264 TSR-based PSU achievement above target 91 Vested (1,700) Forfeited (92) Outstanding at March 31, 2023 (1) 9,430 _________________________________ (1) Includes financial-based PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes. The balance of outstanding awards is comprised of the following: Number of Weighted-Average Grant-Date Fair Value Per Share ($) RSUs 8,617 78.16 TSR-based PSUs 788 119.07 Financial-based PSUs not yet granted for accounting purposes 25 N/A Outstanding at March 31, 2023 9,430 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Composition of Deferred Revenue | Deferred revenue consisted of the following: March 31, 2023 December 31, 2022 Current: A&C $ 664.0 $ 622.1 Core 1,379.2 1,331.9 $ 2,043.2 $ 1,954.0 Noncurrent: A&C $ 175.5 $ 173.1 Core 620.0 597.2 $ 795.5 $ 770.3 |
Expected Recognition of Deferred Revenue | Deferred revenue as of March 31, 2023 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are satisfied, and is expected to be recognized as revenue as follows: Remainder of 2023 2024 2025 2026 2027 Thereafter Total A&C $ 592.0 $ 173.9 $ 54.9 $ 10.9 $ 4.3 $ 3.5 $ 839.5 Core 1,189.7 478.5 152.0 76.7 43.5 58.8 1,999.2 $ 1,781.7 $ 652.4 $ 206.9 $ 87.6 $ 47.8 $ 62.3 $ 2,838.7 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Composition of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued payroll and employee benefits $ 105.0 $ 116.3 Tax-related accruals 57.0 42.8 Accrued legal and professional 33.3 34.3 Accrued acquisition-related expenses and acquisition consideration payable 28.8 26.2 Current portion of operating lease liabilities 28.7 33.3 Accrued restructuring costs 20.7 — Accrued marketing and advertising 18.5 13.6 Derivative liabilities 3.8 4.9 Other 88.1 85.3 $ 383.9 $ 356.7 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Composition of Long-Term Debt | Long-term debt consisted of the following: Maturity Date March 31, 2023 December 31, 2022 2027 Term Loans (effective interest rate of 6.9% at March 31, 2023 and 4.3% at December 31, 2022) August 10, 2027 $ 729.4 $ 731.3 2029 Term Loans (effective interest rate of 8.3% at March 31, 2023 and 4.1% at December 31, 2022) November 10, 2029 1,765.6 1,770.0 2027 Senior Notes (effective interest rate of 5.5% at March 31, 2023 and 5.4% at December 31, 2022) December 1, 2027 600.0 600.0 2029 Senior Notes (effective interest rate of 3.7% at March 31, 2023 and 3.6% at December 31, 2022) March 1, 2029 800.0 800.0 Revolver August 10, 2027 — — Total 3,895.0 3,901.3 Less: unamortized original issue discount and debt issuance costs (1) (67.1) (70.2) Less: current portion of long-term debt (18.3) (18.2) $ 3,809.6 $ 3,812.9 _________________________________ (1) Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method. |
Estimated Fair Values of Long-Term Debt Instruments | The estimated fair values of our long-term debt instruments are based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of March 31, 2023: 2027 Term Loans $ 727.6 2029 Term Loans $ 1,765.6 2027 Senior Notes $ 586.0 2029 Senior Notes $ 694.2 |
Aggregate Principal Payments Due on Long-Term Debt | Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of March 31, 2023 were as follows: Year Ending December 31: 2023 (remainder of) $ 18.9 2024 25.2 2025 25.2 2026 25.2 2027 1,319.0 Thereafter 2,481.5 $ 3,895.0 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Derivative Instruments | The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments: Notional Amount Fair Value of Derivative Assets (2) Fair Value of Derivative Liabilities (2) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Cash flow hedges: Foreign exchange forward contracts $ 361.5 $ 364.7 $ 4.9 $ 9.4 $ 3.8 $ 2.0 Cross-currency swaps (1) 555.3 549.7 10.8 15.8 — 2.2 Interest rate swaps 1,975.3 1,980.5 138.5 173.0 — — Net investment hedges: Cross-currency swaps (1) 711.8 704.6 13.9 20.3 — 0.7 Total hedges $ 3,603.9 $ 3,599.5 $ 168.1 $ 218.5 $ 3.8 $ 4.9 _________________________________ (1) The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.08 and 1.07 as of March 31, 2023 and December 31, 2022, respectively. (2) In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets accrued expenses and other current liabilities |
Summary of the Gains (Losses) Recognized within Earnings Related to Derivative Instruments | The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI): Unrealized Gains (Losses) Recognized in Other Comprehensive Income Three Months Ended March 31, 2023 March 31, 2022 Cash flow hedges: Foreign exchange forward contracts (1) $ (6.9) $ 3.2 Cross-currency swaps 2.0 36.3 Interest rate swaps (34.6) 51.1 Net investment hedges: Cross-currency swaps (6.4) (26.4) Total hedges $ (45.9) $ 64.2 _________________________________ (1) Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI. The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Revenue Interest Expense Other Income (Expense), Net Revenue Interest Expense Other Income (Expense), Net Cash flow hedges: Foreign exchange forward contracts: Reclassified from AOCI into income $ 4.8 $ — $ — $ (1.6) $ — $ — Cross-currency swaps: Reclassified from AOCI into income (1) — 2.4 (7.1) — 6.1 22.5 Interest rate swaps: Reclassified from AOCI into income — 14.1 — — (10.8) — Net investment hedges: Cross-currency swaps: Reclassified from AOCI into income — 3.2 — — 0.8 — Total hedges $ 4.8 $ 19.7 $ (7.1) $ (1.6) $ (3.9) $ 22.5 _________________________________ (1) The amounts reflected in other income (expense), net include $7.0 million and $(22.7) million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by cross-currency swaps during the three months ended March 31, 2023 and 2022, respectively. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Components of Lease Expenses | The components of operating lease expense were as follows: Three Months Ended March 31, 2023 March 31, 2022 Operating lease costs $ 9.8 $ 12.8 Variable lease costs 3.8 2.7 Sublease income (2.3) (1.8) Total net lease cost $ 11.3 $ 13.7 |
Restructuring and Other Charg_2
Restructuring and Other Charges and Assets and Liabilities Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Summary of the Activity in the Restructuring Related Accruals | The following table shows the total amount incurred and the accrued restructuring costs, which are recorded in accrued expenses and other current liabilities in our balance sheet, for severance and employee benefits as of March 31, 2023: Accrued Restructuring Costs Accrued restructuring costs as of December 31, 2022 $ — Restructuring costs incurred during the three months ended March 31, 2023 (1) 27.1 Amount paid during the three months ended March 31, 2023 (6.4) Accrued restructuring costs as of March 31, 2023 $ 20.7 ________________________________ (1) Excludes $2.3 million in equity-based compensation expense associated with our restructuring plan, which was recorded within additional paid-in capital. |
Summary of Reconciliation of Carrying Amounts | The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities held for sale to the amounts presented in our balance sheet. March 31, 2023 Assets: Cash $ 5.2 Goodwill 2.6 Intangible assets 18.2 Property and equipment 7.9 Other assets 8.8 Total assets $ 42.7 Valuation allowance (1) (21.0) Total assets held for sale $ 21.7 Liabilities: Accrued expenses 5.4 Deferred tax liabilities 4.8 Other liabilities 3.7 Total liabilities held for sale $ 13.9 Net assets held for sale $ 7.8 _________________________________ (1) Upon classification as held for sale, we recognized a valuation allowance of $21.0 million to adjust the carrying value of the disposal group to fair value less cost to sell. |
Income Per Share (Tables)
Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Numerator and Denominator Used in the Calculation of Basic and Diluted Net Income Per Share | A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per share is as follows: Three Months Ended March 31, 2023 2022 Numerator: Net income $ 47.4 $ 68.6 Less: net income attributable to non-controlling interests 0.1 0.2 Net income attributable to GoDaddy Inc. $ 47.3 $ 68.4 Denominator: Weighted-average shares of Class A common stock outstanding—basic 154,124 164,323 Effect of dilutive securities: Class B common stock 309 313 Stock options 535 822 RSUs, PSUs and ESPP shares 1,676 1,353 Weighted-average shares of Class A Common stock outstanding—diluted 156,644 166,811 Net income attributable to GoDaddy Inc. per share of Class A common stock—basic $ 0.31 $ 0.42 Net income attributable to GoDaddy Inc. per share of Class A common stock—diluted (1) : $ 0.30 $ 0.41 _________________________________ (1) The diluted income per share calculations exclude net income attributable to non-controlling interests unless the effect is antidilutive. |
Summary of Weighted Average Potentially Dilutive Shares | The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income per share because the effect of including such potentially dilutive shares would have been antidilutive: Three Months Ended March 31, 2023 2022 Accelerated share repurchase agreement (ASR) shares (1) — 2,814 Stock options 20 280 RSUs, PSUs and ESPP shares 554 1,922 574 5,016 _________________________________ (1) If the ASRs had been settled as of March 31, 2022, based on the volume-weighted average price per share since their effective date, the counterparties would have been required to deliver these additional estimated shares to us. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents our segment information for the periods indicated: Three Months Ended March 31, 2023 2022 Revenue: A&C $ 338.0 $ 303.1 Core 698.0 699.6 Total revenue $ 1,036.0 $ 1,002.7 Segment EBITDA: A&C $ 132.4 $ 119.8 Core 189.0 178.4 Total Segment EBITDA 321.4 298.2 Unallocated corporate overhead (71.7) (72.3) Depreciation and amortization (48.5) (48.2) Equity-based compensation expense (1) (71.6) (61.2) Interest expense, net of interest income (38.0) (33.2) Acquisition-related expenses (5.0) (7.7) Restructuring and other (2) (39.0) (0.7) Income before income taxes 47.6 74.9 Provision for income taxes (0.2) (6.3) Net income $ 47.4 $ 68.6 _________________________________ (1) Excludes $2.3 million of equity-based compensation expense associated with our restructuring plan, which is included within restructuring and other. (2) In addition to the restructuring and other in our statements of operations, this includes lease-related expenses associated with closed facilities, charges related to certain legal matters and adjustments to the fair value of our equity investments. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
OCI Activity in Equity | The following table presents AOCI activity in equity: Foreign Currency Translation Adjustments Net Unrealized Gains (Losses) on Cash Flow Hedges (1) Total AOCI Gross balance as of December 31, 2022 (2) $ (75.0) $ 253.4 $ 178.4 Other comprehensive income (loss) before reclassifications 2.1 (56.9) (54.8) Amounts reclassified from AOCI — 17.4 17.4 Other comprehensive income (loss) 2.1 (39.5) (37.4) $ (72.9) $ 213.9 141.0 Less: AOCI attributable to non-controlling interests (0.3) Balance as of March 31, 2023 $ 140.7 Gross balance as of December 31, 2021 (2) $ (52.9) $ 14.2 $ (38.7) Other comprehensive income (loss) before reclassifications (35.1) 76.9 41.8 Amounts reclassified from AOCI 0.8 16.2 17.0 Other comprehensive income (34.3) 93.1 58.8 $ (87.2) $ 107.3 20.1 Less: AOCI attributable to non-controlling interests — Balance as of March 31, 2022 $ 20.1 _________________________________ (1) Amounts shown for our foreign exchange forward contracts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI. (2) Beginning balance is presented on a gross basis, excluding the allocation of AOCI attributable to non-controlling interests. |
Organization and Background (De
Organization and Background (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Class of Stock [Line Items] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Desert Newco, LLC | |
Class of Stock [Line Items] | |
LLC units held (as a percent) | 99.80% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property and Equipment, Net by Geography (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 216 | $ 225.6 |
U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 162.7 | 167.5 |
France | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 26.8 | 28.8 |
All other international | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 26.5 | $ 29.3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Equity securities | $ 54.9 | $ 40.5 | |
Increase in investment fair value | 14.4 | ||
Amortization of contract costs | $ 185.1 | $ 174.1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue by Product Type (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,036 | $ 1,002.7 |
Applications & commerce | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 338 | 303.1 |
Core platform | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 698 | 699.6 |
Core platform | Domains | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 492.1 | 483.9 |
Core platform | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 205.9 | $ 215.7 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 1,036 | $ 1,002.7 |
U.S. | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 695.4 | 672.9 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 340.6 | $ 329.8 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - Measured on a Recurring Basis - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Derivative assets | $ 168.1 | $ 218.5 |
Total assets | 643.7 | 685.8 |
Liabilities: | ||
Derivative liabilities | 3.8 | 4.9 |
Total liabilities | 3.8 | 4.9 |
Commercial paper and other | ||
Assets: | ||
Cash and cash equivalents | 115 | 120 |
Time deposits | ||
Assets: | ||
Cash and cash equivalents | 360.6 | 347.3 |
Level 1 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total assets | 360.6 | 347.3 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Commercial paper and other | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 1 | Time deposits | ||
Assets: | ||
Cash and cash equivalents | 360.6 | 347.3 |
Level 2 | ||
Assets: | ||
Derivative assets | 168.1 | 218.5 |
Total assets | 283.1 | 338.5 |
Liabilities: | ||
Derivative liabilities | 3.8 | 4.9 |
Total liabilities | 3.8 | 4.9 |
Level 2 | Commercial paper and other | ||
Assets: | ||
Cash and cash equivalents | 115 | 120 |
Level 2 | Time deposits | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | Commercial paper and other | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | Time deposits | ||
Assets: | ||
Cash and cash equivalents | $ 0 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | $ 3,536.9 |
Impact of foreign currency translation | 14.8 |
Goodwill reclassified to assets held for sale | (2.6) |
Balance at March 31, 2023 | 3,549.1 |
Applications & commerce | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | 1,497 |
Impact of foreign currency translation | 6.2 |
Goodwill reclassified to assets held for sale | 0 |
Balance at March 31, 2023 | 1,503.2 |
Core platform | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | 2,039.9 |
Impact of foreign currency translation | 8.6 |
Goodwill reclassified to assets held for sale | (2.6) |
Balance at March 31, 2023 | $ 2,045.9 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (541.3) | $ (534.2) |
Net Carrying Amount | 259.2 | |
Gross Carrying Amount | 1,744.7 | 1,786.4 |
Net Carrying Amount | 1,203.4 | 1,252.2 |
Trade names and branding | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying Amount | 445 | 445 |
Domain portfolio | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying Amount | 242.4 | 243.2 |
Contractual-based assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying Amount | 256.8 | 256.8 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 451.6 | 487.7 |
Accumulated Amortization | (301.8) | (309) |
Net Carrying Amount | 149.8 | 178.7 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 244.9 | 243.9 |
Accumulated Amortization | (185) | (171.1) |
Net Carrying Amount | 59.9 | 72.8 |
Trade names and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 104 | 109.8 |
Accumulated Amortization | (54.5) | (54.1) |
Net Carrying Amount | $ 49.5 | $ 55.7 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 32.7 | $ 33.2 |
Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 37 months | |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 35 months | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 31 months | |
Trade names and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining amortization period | 52 months |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Amortization of Finite Lived Intangible Assets (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remainder of) | $ 70.9 |
2024 | 81.5 |
2025 | 74.2 |
2026 | 25 |
2027 | 4.5 |
Thereafter | 3.1 |
Net Carrying Amount | $ 259.2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jan. 31, 2022 | |
Class of Stock [Line Items] | |||
Aggregate purchase price | $ 113.9 | $ 750.2 | |
Remaining authorization available | $ 1,586 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Authorized amount | $ 3,000 | ||
Class A Common Stock | New Accelerated Share Repurchase Agreement | |||
Class of Stock [Line Items] | |||
Repurchases of Class A common stock (in shares) | 1,553 | ||
Aggregate purchase price | $ 113.9 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Derivative assets | $ 168.1 | $ 218.5 |
Prepaid software and maintenance expenses | 44.5 | 29.5 |
Registry deposits | 40.4 | 41 |
Usage-based prepaid expenses | 14.6 | 10.6 |
Other | 23.5 | 13.2 |
Prepaid expenses and other current assets | $ 291.1 | $ 312.8 |
Equity-Based Compensation Pla_3
Equity-Based Compensation Plans - Summary of Stock Option Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares of Class A Common Stock (#) | |
Outstanding at beginning of period (in shares) | shares | 1,426 |
Exercised (in shares) | shares | (132) |
Outstanding at end of period (in shares) | shares | 1,294 |
Vested at end of period (in shares) | shares | 1,248 |
Weighted- Average Exercise Price Per Share ($) | |
Outstanding weighted average exercise price (in dollars per share) | $ / shares | $ 44.38 |
Exercised (in dollars per share) | $ / shares | 24.17 |
Outstanding weighted average exercise price (in dollars per share) | $ / shares | 46.45 |
Vested at end of period (in dollars per share) | $ / shares | $ 45.72 |
Equity-Based Compensation Pla_4
Equity-Based Compensation Plans - Summary of Stock Award Activity (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares of Class A Common Stock (#) | |
Outstanding at beginning of period (in shares) | 7,632,000 |
Vested (in shares) | (1,700,000) |
Forfeited (in shares) | (92,000) |
Outstanding at end of period (in shares) | 9,430,000 |
RSUs | |
Number of Shares of Class A Common Stock (#) | |
Granted (in shares) | 3,235,000 |
Outstanding at end of period (in shares) | 8,617,000 |
Weighted-average grant-date fair value per share (in dollars per share) | $ / shares | $ 78.16 |
TSR-based PSUs | |
Number of Shares of Class A Common Stock (#) | |
Granted (in shares) | 264,000 |
Outstanding at end of period (in shares) | 788,000 |
Weighted-average grant-date fair value per share (in dollars per share) | $ / shares | $ 119.07 |
TSR-Based Performance Stock Units Above Target | |
Number of Shares of Class A Common Stock (#) | |
Granted (in shares) | 91,000 |
Financial-based PSUs not yet granted for accounting purposes | |
Number of Shares of Class A Common Stock (#) | |
Outstanding at end of period (in shares) | 25,000 |
Equity-Based Compensation Pla_5
Equity-Based Compensation Plans - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
RSU's and ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs | $ 541.4 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 2 years 6 months |
Deferred Revenue - Composition
Deferred Revenue - Composition of Deferred Revenue (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Disaggregation of Revenue [Line Items] | ||
Deferred revenue, current | $ 2,043.2 | $ 1,954 |
Deferred revenue, noncurrent | 795.5 | 770.3 |
Applications & commerce | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue, current | 664 | 622.1 |
Deferred revenue, noncurrent | 175.5 | 173.1 |
Core platform | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue, current | 1,379.2 | 1,331.9 |
Deferred revenue, noncurrent | $ 620 | $ 597.2 |
Deferred Revenue - Narrative (D
Deferred Revenue - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized | $ 757.4 |
Deferred Revenue - Expected Rec
Deferred Revenue - Expected Recognition of Deferred Revenue (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 2,838.7 |
Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | 839.5 |
Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | 1,999.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 1,781.7 |
Expected recognition period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 592 |
Expected recognition period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 1,189.7 |
Expected recognition period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 652.4 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 173.9 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 478.5 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 206.9 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 54.9 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 152 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 87.6 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 10.9 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 76.7 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 47.8 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 4.3 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 43.5 |
Expected recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 62.3 |
Expected recognition period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Applications & commerce | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 3.5 |
Expected recognition period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Core platform | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized as revenue | $ 58.8 |
Expected recognition period |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 105 | $ 116.3 |
Tax-related accruals | 57 | 42.8 |
Accrued legal and professional | 33.3 | 34.3 |
Accrued acquisition-related expenses and acquisition consideration payable | 28.8 | 26.2 |
Current portion of operating lease liabilities | 28.7 | 33.3 |
Accrued restructuring costs | 20.7 | 0 |
Accrued marketing and advertising | 18.5 | 13.6 |
Derivative liabilities | 3.8 | 4.9 |
Other | 88.1 | 85.3 |
Accrued expenses and other current liabilities | $ 383.9 | $ 356.7 |
Long-Term Debt - Composition of
Long-Term Debt - Composition of Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 3,895 | $ 3,901.3 |
Less unamortized original issue discount and debt issuance costs | (67.1) | (70.2) |
Less: current portion of long-term debt | (18.3) | (18.2) |
Long-term debt, net of current portion | 3,809.6 | 3,812.9 |
2024 Term Loans | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 729.4 | $ 731.3 |
Effective interest rate percentage | 6.90% | 4.30% |
2027 Term Loans | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,765.6 | $ 1,770 |
Effective interest rate percentage | 8.30% | 4.10% |
2027 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 600 | $ 600 |
Effective interest rate percentage | 5.50% | 5.40% |
2029 Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 800 | $ 800 |
Effective interest rate percentage | 3.70% | 3.60% |
Revolver | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Line of Credit | Revolver | |
Debt Instrument [Line Items] | |
Available borrowing capacity | $ 1,000 |
Long-Term Debt - Estimated Fair
Long-Term Debt - Estimated Fair Values of Long-Term Debt Instruments (Details) - Level 2 $ in Millions | Mar. 31, 2023 USD ($) |
2024 Term Loans | Secured Debt | |
Debt Instrument [Line Items] | |
Estimated fair value of long-term debt | $ 727.6 |
2027 Term Loans | Secured Debt | |
Debt Instrument [Line Items] | |
Estimated fair value of long-term debt | 1,765.6 |
2027 Senior Notes | Senior Notes | |
Debt Instrument [Line Items] | |
Estimated fair value of long-term debt | 586 |
2029 Senior Notes | Senior Notes | |
Debt Instrument [Line Items] | |
Estimated fair value of long-term debt | $ 694.2 |
Long-Term Debt - Aggregate Prin
Long-Term Debt - Aggregate Principal Payments Due on Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Long-Term Debt, Maturity, Remainder of Fiscal Year | $ 18.9 | |
2024 | 25.2 | |
2025 | 25.2 | |
2026 | 25.2 | |
2027 | 1,319 | |
Thereafter | 2,481.5 | |
Aggregate principal payments | $ 3,895 | $ 3,901.3 |
Derivatives and Hedging - Summa
Derivatives and Hedging - Summary of Outstanding Derivative Instruments (Details) € in Millions, $ in Millions | Mar. 31, 2023 USD ($) € / $ | Dec. 31, 2022 USD ($) € / $ | Apr. 30, 2017 USD ($) | Apr. 30, 2017 EUR (€) |
Derivative [Line Items] | ||||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current | ||
Designated as Hedging Instrument | Level 2 | ||||
Derivative [Line Items] | ||||
Notional amount | $ 3,603.9 | $ 3,599.5 | ||
Fair value of derivative assets | 168.1 | 218.5 | ||
Fair value of derivative liabilities | 3.8 | 4.9 | ||
Cash Flow Hedging | Foreign exchange forward contracts | Designated as Hedging Instrument | Level 2 | ||||
Derivative [Line Items] | ||||
Notional amount | 361.5 | 364.7 | ||
Fair value of derivative assets | 4.9 | 9.4 | ||
Fair value of derivative liabilities | $ 3.8 | $ 2 | ||
Cash Flow Hedging | Cross-currency swap | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Notional amount | $ 1,262.5 | € 1,184.2 | ||
Euro to U.S. dollar exchange rate for translation | € / $ | 1.08 | 1.07 | ||
Cash Flow Hedging | Cross-currency swap | Designated as Hedging Instrument | Level 2 | ||||
Derivative [Line Items] | ||||
Notional amount | $ 555.3 | $ 549.7 | ||
Fair value of derivative assets | 10.8 | 15.8 | ||
Fair value of derivative liabilities | 0 | 2.2 | ||
Cash Flow Hedging | Interest rate swaps | Designated as Hedging Instrument | Level 2 | ||||
Derivative [Line Items] | ||||
Notional amount | 1,975.3 | 1,980.5 | ||
Fair value of derivative assets | 138.5 | 173 | ||
Fair value of derivative liabilities | 0 | 0 | ||
Net Investment Hedging | Cross-currency swap | Designated as Hedging Instrument | Level 2 | ||||
Derivative [Line Items] | ||||
Notional amount | 711.8 | 704.6 | ||
Fair value of derivative assets | 13.9 | 20.3 | ||
Fair value of derivative liabilities | $ 0 | $ 0.7 |
Derivatives and Hedging - Sum_2
Derivatives and Hedging - Summary of the Gains (Losses) Recognized within Earnings Related to Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative [Line Items] | ||
Revenue | $ 1,036 | $ 1,002.7 |
Interest Expense | 45.8 | 33.6 |
Other Income (Expense), Net | 22.6 | (1.1) |
Reclassification out of Accumulated Other Comprehensive Income | Total hedges | ||
Derivative [Line Items] | ||
Revenue | 4.8 | (1.6) |
Interest Expense | 19.7 | (3.9) |
Other Income (Expense), Net | (7.1) | 22.5 |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Total hedges | (45.9) | 64.2 |
Foreign exchange forward contracts | Cash Flow Hedging | Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | ||
Derivative [Line Items] | ||
Revenue | 4.8 | (1.6) |
Interest Expense | 0 | 0 |
Other Income (Expense), Net | 0 | 0 |
Foreign exchange forward contracts | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Unrealized Gains (Losses) Recognized in Other Comprehensive Income | (6.9) | 3.2 |
Cross-currency swap | Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | Euro-Denominated Intercompany Loan | ||
Derivative [Line Items] | ||
Other Income (Expense), Net | 7 | (22.7) |
Cross-currency swap | Cash Flow Hedging | Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | ||
Derivative [Line Items] | ||
Revenue | 0 | 0 |
Interest Expense | 2.4 | 6.1 |
Other Income (Expense), Net | (7.1) | 22.5 |
Cross-currency swap | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Unrealized Gains (Losses) Recognized in Other Comprehensive Income | 2 | 36.3 |
Cross-currency swap | Net Investment Hedging | Reclassification out of Accumulated Other Comprehensive Income | Net investment hedges | ||
Derivative [Line Items] | ||
Revenue | 0 | 0 |
Interest Expense | 3.2 | 0.8 |
Other Income (Expense), Net | 0 | 0 |
Cross-currency swap | Net Investment Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Unrealized Gains (Losses) Recognized in Other Comprehensive Income | (6.4) | (26.4) |
Interest rate swaps | Cash Flow Hedging | Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | ||
Derivative [Line Items] | ||
Revenue | 0 | 0 |
Interest Expense | 14.1 | (10.8) |
Other Income (Expense), Net | 0 | 0 |
Interest rate swaps | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Unrealized Gains (Losses) Recognized in Other Comprehensive Income | $ (34.6) | $ 51.1 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2020 USD ($) | Apr. 30, 2017 USD ($) | Mar. 31, 2023 USD ($) | Apr. 30, 2017 EUR (€) | |
Derivative [Line Items] | ||||
Net deferred losses from cash flow hedges | $ 72.6 | |||
Euro-Denominated Intercompany Loan | ||||
Derivative [Line Items] | ||||
Base rate | 3% | 3% | ||
Cash Flow Hedging | Designated as Hedging Instrument | Foreign exchange forward contracts | ||||
Derivative [Line Items] | ||||
Derivative remaining maturity | 18 months | |||
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swap | ||||
Derivative [Line Items] | ||||
Derivative contract term | 5 years | |||
Notional amount | $ 1,262.5 | € 1,184.2 | ||
Fixed rate | 4.81% | 4.81% | ||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap Agreement - August 2020 | ||||
Derivative [Line Items] | ||||
Derivative contract term | 7 years | |||
Notional amount | $ 750 | |||
Fixed rate | 0.705% | 4.81% | 4.81% | |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap Agreement - April 2017 | ||||
Derivative [Line Items] | ||||
Derivative contract term | 5 years | |||
Notional amount | $ 1,262.5 | |||
Fixed rate | 5.44% | 5.44% |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2023 |
Leases [Abstract] | |
Operating lease, remaining weighted average lease term | 6 years 10 months 24 days |
Operating lease, weighted average discount rate | 5.30% |
Leases - Components of Lease Ex
Leases - Components of Lease Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 9.8 | $ 12.8 |
Variable lease costs | 3.8 | 2.7 |
Sublease income | (2.3) | (1.8) |
Total net lease cost | $ 11.3 | $ 13.7 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Loss Contingencies [Line Items] | ||
Estimated loss provision for settlement | $ 8.1 | |
Indirect Taxation | ||
Loss Contingencies [Line Items] | ||
Accrual for estimated indirect tax liabilities | $ 18.9 | $ 18.9 |
Restructuring and Other Charg_3
Restructuring and Other Charges and Assets and Liabilities Held for Sale - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2023 employee | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | $ 39 | $ 0.7 | ||
Restructuring Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cash payments related to restructuring | 6.4 | |||
Restructuring Plan | Disposal Group, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reduction in current workforce, percentage | 8% | |||
Restructuring and other | 50.4 | |||
Cash payments related to restructuring | 6.4 | |||
Restructuring Plan | Forecast | Disposal Group, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Maximum expected charges | $ 5.5 | |||
Restructuring Plan | Workforce reduction | Disposal Group, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reduction in current workforce | employee | 550 | |||
Restructuring Plan | Severance, Employee Benefits And Equity Based Compensation | Disposal Group, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | 29.4 | |||
Restructuring Plan | Disposition Of Assets | Disposal Group, Held-for-sale | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other | $ 21 |
Restructuring and Other Charg_4
Restructuring and Other Charges and Assets and Liabilities Held for Sale - Summary of the Activity in the Restructuring Related Accruals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Additional paid-in capital | $ 1,990.5 | $ 1,912.6 |
Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring costs | 20.7 | $ 0 |
Restructuring and Related Cost, Incurred Cost | 27.1 | |
Cash payments related to restructuring | (6.4) | |
Additional paid-in capital | $ 2.3 |
Restructuring and Other Charg_5
Restructuring and Other Charges and Assets and Liabilities Held for Sale - Summary of Reconciliation of Carrying Amounts (Details) - Disposal Group, Held-for-sale $ in Millions | Mar. 31, 2023 USD ($) |
Assets: | |
Cash | $ 5.2 |
Goodwill | 2.6 |
Intangible assets | 18.2 |
Property and equipment | 7.9 |
Other assets | 8.8 |
Total assets | 42.7 |
Valuation allowance | (21) |
Total assets held for sale | 21.7 |
Liabilities: | |
Accrued expenses | 5.4 |
Deferred tax liabilities | 4.8 |
Other liabilities | 3.7 |
Total liabilities held for sale | 13.9 |
Net assets held for sale | $ 7.8 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits | $ 144.2 |
Unrecognized tax benefits that if fully recognized would decrease the effective tax rate | $ 42.5 |
Income Per Share - Reconciliati
Income Per Share - Reconciliation of the Numerator and Denominator Used in the Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income | $ 47.4 | $ 68.6 |
Less: net income attributable to non-controlling interests | 0.1 | 0.2 |
Net income attributable to GoDaddy Inc. | $ 47.3 | $ 68.4 |
Class A Common Stock | ||
Denominator: | ||
Weighted-average shares of Class A common stock outstanding—basic (in shares) | 154,124 | 164,323 |
Weighted-average shares of Class A Common stock outstanding—diluted (in shares) | 156,644 | 166,811 |
Net income attributable to GoDaddy Inc. per share of Class A common stock—basic (in USD per share) | $ 0.31 | $ 0.42 |
Net income attributable to GoDaddy Inc. per share of Class A common stock—diluted (in USD per share) | $ 0.30 | $ 0.41 |
Class B Common Stock | ||
Denominator: | ||
Effect of dilutive securities (in shares) | 309 | 313 |
Stock options | ||
Denominator: | ||
Effect of dilutive securities (in shares) | 535 | 822 |
RSUs, PSUs and ESPP shares | ||
Denominator: | ||
Effect of dilutive securities (in shares) | 1,676 | 1,353 |
Income Per Share - Summary of W
Income Per Share - Summary of Weighted Average Potentially Dilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 574 | 5,016 |
Accelerated Share Repurchase Agreement Shares (ASR) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | 2,814 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 20 | 280 |
RSUs, PSUs and ESPP shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 554 | 1,922 |
Income Per Share - Narrative (D
Income Per Share - Narrative (Details) | Mar. 31, 2023 shares |
Class B Common Stock | |
Class of Stock [Line Items] | |
Conversion feature of Class B common stock, number of Class A common shares (in shares) | 1 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Number of reportable segments | segment | 2 | |
Revenue | $ 1,036 | $ 1,002.7 |
Unallocated Corporate Overhead | (71.7) | (72.3) |
Depreciation and amortization | (48.5) | (48.2) |
Equity-based compensation expense(1) | (71.6) | (61.2) |
Interest expense | (38) | (33.2) |
Acquisition-related expenses | (5) | (7.7) |
Restructuring and other | (39) | (0.7) |
Income before income taxes | 47.6 | 74.9 |
Provision for income taxes | (0.2) | (6.3) |
Net income | 47.4 | 68.6 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment NEBITDA | 321.4 | 298.2 |
Applications & commerce | ||
Segment Reporting Information [Line Items] | ||
Revenue | 338 | 303.1 |
Applications & commerce | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment NEBITDA | 132.4 | 119.8 |
Core platform | ||
Segment Reporting Information [Line Items] | ||
Revenue | 698 | 699.6 |
Core platform | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Segment NEBITDA | $ 189 | $ 178.4 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - AOCI Activity in Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ (329.3) | $ 83.2 |
Other comprehensive income (loss) before reclassifications | (54.8) | 41.8 |
Amounts reclassified from AOCI | 17.4 | 17 |
Other comprehensive income (loss) | (37.4) | 58.8 |
Ending balance | (355.5) | (468.7) |
Net investment hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (75) | (52.9) |
Other comprehensive income (loss) before reclassifications | 2.1 | (35.1) |
Amounts reclassified from AOCI | 0 | 0.8 |
Other comprehensive income (loss) | 2.1 | (34.3) |
Ending balance | (72.9) | (87.2) |
Net Unrealized Gains (Losses) on Cash Flow Hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 253.4 | 14.2 |
Other comprehensive income (loss) before reclassifications | (56.9) | 76.9 |
Amounts reclassified from AOCI | 17.4 | 16.2 |
Other comprehensive income (loss) | (39.5) | 93.1 |
Ending balance | 213.9 | 107.3 |
AOCI Including Portion Attributable to Noncontrolling Interest | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 178.4 | (38.7) |
Ending balance | 141 | 20.1 |
AOCI Attributable to Noncontrolling Interest | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Ending balance | 0.3 | 0 |
AOCI Attributable to Parent | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 178 | (38.6) |
Ending balance | $ 140.7 | $ 20.1 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amounts reclassified from AOCI | $ (17.4) | $ (17) |
Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amounts reclassified from AOCI | $ 0 | $ (0.8) |