GoDaddy 2015 Annual Report – Things to Watch
GoDaddy published its 2015 annual report today, and it can be viewed on Morningstar’s website. As Andrew Allemann noted this morning, the company essentially confirmed the purchase price of Mike Berkens’ domain portfolio. Aside from this, I think there are a several interesting aspects of GoDaddy’s annual report, and there are a few things to watch over the next few years.
I took a relatively quick look through the company’s annual report, and I highlighted some interesting aspects of it. I paid particularly close attention to the company’s mentions of its aftermarket and customer growth.
I listed some of the things I found particularly interesting as well as some of the things I will be observing as the company reports in the future. I invite you to share some of your thoughts and observations:
“As of December 31, 2015, we had 13.8 million customers and added 1.1 million customers in 2015.”
For better or worse, many people became familiar with GoDaddy through its Super Bowl advertising campaigns. During the Super Bowl played last month, GoDaddy did not have a Super Bowl commercial for the first time in many years. The company is also no longer sponsoring a NASCAR driving. I would imagine the company saw a large uptick in new customers who registered at least one domain name following each Super Bowl commercial and NASCAR race. It will be interesting to see if not advertising and sponsoring a car has any impact, although this number could be offset by the company’s other advertising spend, which has likely increased.
“In 2015, we derived 26% of our total bookings from international sales compared to 25% in 2014 and 24% in 2013.”
GoDaddy has made a big push to grow its business outside of the US. The company has made the market in India a major priority, and it is now ramping up its operations elsewhere in Asia. GoDaddy CEO Blake Irving has been spending time in Asia this past week, and the Asian market could be a huge opportunity for the company. An increase in this percentage next year will show how well their efforts are paying off.
“As of December 31, 2015, we had more than 700,000 customers who each spent more than $500 a year.”
GoDaddy now owns a very large portfolio of domain names. I would imagine the vast majority of those domain names will be priced well above $500/each to acquire. Should the company sell significant numbers of its portfolio, the 700,000 number should grow.
“In 2015, we acquired approximately 278,000 premium domain names to increase the inventory available to our customers.”
I will be interested to see if the company continues to be acquisitive. If so, that would indicate to me that the company is bullish on the domain name aftermarket. That would be a positive market indicator to me.
“We generated 52% of our 2015 total bookings from the sale of domain products, primarily from domain name registrations and renewals, domain add-ons such as privacy and aftermarket sales.”
With the average price of domain names in its owned and operated portfolio being significantly more expensive than domain registrations and renewals, I would imagine this percentage should increase. I would imagine that 6 and 7 figure domain name sales should impact this number quite a bit.
“Domains revenue increased $77.5 million, or 10.2%, from $763.3 million in 2014 to $840.8 million in 2015. The increase was primarily attributable to a$54.6 million increase in revenue from domain registrations and renewals and a $19.6 million increase in revenue from aftermarket domain sales.”
The company noted a “$19.6 million increase in revenue from aftermarket domain sales” last year. I am curious about what the aftermarket sales number was before. I presume that includes auction revenue and commission from private sales consummated on its platform and through its partners (in addition to its owned and operated portfolio sales). This number should grow considerably over the next few years.
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