GoDaddy quarterly profit falls short of estimates as costs still weigh

(Reuters) – Web hosting company GoDaddy Inc reported first-quarter profit below Wall Street expectations on Thursday, weighed down by persistent rising costs and slower customer growth, sending its shares 6 percent lower in after-hours trading.

FILE PHOTO: The company logo and ticker for GoDaddy Inc. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 4, 2019. REUTERS/Brendan McDermid

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

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

Shares fell as much as 6.3 percent to $76.

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

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

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

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

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

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

Reporting by Shariq Khan and Arjun Panchadar in Bengaluru; Editing by Maju Samuel, Bernard Orr

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