Thursday , March 30 2023

Takeaways from GoDaddy’s Investor Day

Fewer business segments and high-level aftermarket data.

GoDaddy held an investor day last Friday following its earnings announcement on Thursday. The full presentation is here (pdf). Here are some notable things for domain industry observers.

GoDaddy will now report just two business segments

GoDaddy previously had three business segments for reporting: Hosting & Presence, Business Applications, and Domains. Going forward, it will have two segments called Applications & Commerce and Core Platform. Here’s a breakdown of the old and new segments:

Graphic showing GoDaddy switching to two business segments, Applications & Commerce and Core Platform

Fewer segments, less granular reporting. Image from 2022 Investor Day presentation.

I think it’s a warning sign when a company changes its reporting like this. It makes me think one part of the business is facing headwinds and this will be obfuscated by tucking it into another. I also don’t like how the domains business will now be lumped in with part of the hosting business, while another part of hosting (Managed WordPress) will be part of the other segment. Technically, WordPress is an application, but I think most people who choose it are just looking for a hosting provider. People have a choice to use the free WordPress CMS on a regular hosting plan or a so-called Managed WordPress plan.

The domain aftermarket is sizzling

GoDaddy reported some high-level numbers about the domain aftermarket.

First, it says everyday entrepreneurs purchase 80% of aftermarket “retail inventory.” This inventory excludes domain auctions, where domain investors scoop up most of the inventory. The company also says that the 24-month lifetime value of a new aftermarket customer is 15 times more than a new domain customer. This makes sense because the cost of entry into this cohort is more.

The company also shared that aftermarket growth in terms of units sold has grown by a 29% CAGR since 2019. It also breaks this out by size of transaction. GoDaddy’s presentation has very few y-axes, so it’s hard to get granularity here. But the average selling price is going up and GoDaddy is selling more domains:

GoDaddy is selling more aftermarket domains and at higher prices. Image from 2022 Investor Day presentation.

Post link: Takeaways from GoDaddy’s Investor Day

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About Andrew Allemann

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