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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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46-5769934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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14455 N. Hayden Road
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Scottsdale, Arizona 85260
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(Address of principal executive offices, including zip code)
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(480) 505-8800
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(Registrant’s telephone number, including area code)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer (Do not check if a smaller reporting company)
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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•
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our ability to continue to add new customers and increase sales to our existing customers;
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•
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our ability to develop new solutions and bring them to market in a timely manner;
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•
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our ability to timely and effectively scale and adapt our existing solutions;
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•
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our dependence on establishing and maintaining a strong brand;
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•
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the occurrence of service interruptions and security or privacy breaches;
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•
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system failures or capacity constraints;
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•
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the rate of growth of, and anticipated trends and challenges in, our business and in the market for our products;
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•
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our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including changes in technology and development, marketing and advertising, general and administrative and Customer Care expenses, and our ability to achieve and maintain, future profitability;
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•
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our ability to continue to efficiently acquire customers, maintain our high customer retention rates and maintain the level of our customers’ lifetime spend;
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•
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our ability to provide high quality Customer Care;
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•
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the effects of increased competition in our markets and our ability to compete effectively;
|
•
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our ability to grow internationally;
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•
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the impact of fluctuations in foreign currency exchange rates on our business and our ability to effectively manage the exposure to such fluctuations;
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•
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our ability to effectively manage our growth and associated investments;
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•
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our ability to integrate recent or potential future acquisitions, including our recent acquisition of Host Europe Holdings Limited (HEG) and to deliver a broader range of cloud-based products built on a single global technology platform;
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•
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our ability to maintain our relationships with our partners;
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•
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adverse consequences of our substantial level of indebtedness and our ability to repay our debt;
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•
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our ability to maintain, protect and enhance our intellectual property;
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•
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our ability to maintain or improve our market share;
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•
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sufficiency of cash and cash equivalents to meet our needs for at least the next 12 months;
|
•
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beliefs and objectives for future operations;
|
•
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our ability to stay in compliance with laws and regulations currently applicable to, or which may become applicable to, our business both in the United States (U.S.) and internationally;
|
•
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economic and industry trends or trend analysis;
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•
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our ability to attract and retain qualified employees and key personnel;
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•
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the amount and timing of any payments we make under tax receivable agreements (TRAs) or for tax distributions;
|
•
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the future trading prices of our Class A common stock;
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|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
536.9
|
|
|
$
|
566.1
|
|
Short-term investments
|
16.4
|
|
|
6.6
|
|
||
Accounts and other receivables
|
17.3
|
|
|
8.0
|
|
||
Registry deposits
|
25.6
|
|
|
20.6
|
|
||
Prepaid domain name registry fees
|
357.6
|
|
|
307.0
|
|
||
Prepaid expenses and other current assets
|
49.8
|
|
|
24.5
|
|
||
Total current assets
|
1,003.6
|
|
|
932.8
|
|
||
Property and equipment, net
|
296.3
|
|
|
231.0
|
|
||
Prepaid domain name registry fees, net of current portion
|
185.0
|
|
|
172.1
|
|
||
Goodwill
|
2,882.0
|
|
|
1,718.4
|
|
||
Intangible assets, net
|
1,316.8
|
|
|
716.5
|
|
||
Other assets
|
11.3
|
|
|
16.1
|
|
||
Total assets
|
$
|
5,695.0
|
|
|
$
|
3,786.9
|
|
Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
49.5
|
|
|
$
|
61.7
|
|
Accrued expenses and other current liabilities
|
430.6
|
|
|
143.0
|
|
||
Payable to related parties for tax distributions
|
—
|
|
|
10.0
|
|
||
Deferred revenue
|
1,254.3
|
|
|
1,043.5
|
|
||
Long-term debt
|
16.1
|
|
|
4.0
|
|
||
Total current liabilities
|
1,750.5
|
|
|
1,262.2
|
|
||
Deferred revenue, net of current portion
|
594.8
|
|
|
532.7
|
|
||
Long-term debt, net of current portion
|
2,415.8
|
|
|
1,035.7
|
|
||
Payable to related parties pursuant to tax receivable agreements
|
220.1
|
|
|
202.6
|
|
||
Deferred tax liabilities
|
172.6
|
|
|
—
|
|
||
Other long-term liabilities
|
72.0
|
|
|
39.5
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding
|
—
|
|
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—
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Class A common stock, $0.001 par value - 1,000,000 shares authorized; 126,211 and 88,558 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
0.1
|
|
|
0.1
|
|
||
Class B common stock, $0.001 par value - 500,000 shares authorized; 40,000 and 78,554 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
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—
|
|
|
0.1
|
|
||
Additional paid-in capital
|
451.6
|
|
|
608.3
|
|
||
Accumulated deficit
|
(4.9
|
)
|
|
(48.7
|
)
|
||
Accumulated other comprehensive income (loss)
|
(51.6
|
)
|
|
2.7
|
|
||
Total stockholders' equity attributable to GoDaddy Inc.
|
395.2
|
|
|
562.5
|
|
||
Non-controlling interests
|
74.0
|
|
|
151.7
|
|
||
Total stockholders' equity
|
469.2
|
|
|
714.2
|
|
||
Total liabilities and stockholders' equity
|
$
|
5,695.0
|
|
|
$
|
3,786.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Domains
|
$
|
271.5
|
|
|
$
|
236.6
|
|
|
$
|
775.6
|
|
|
$
|
685.3
|
|
Hosting and presence
|
225.9
|
|
|
174.1
|
|
|
619.1
|
|
|
502.0
|
|
||||
Business applications
|
84.8
|
|
|
61.4
|
|
|
235.0
|
|
|
174.7
|
|
||||
Total revenue
|
582.2
|
|
|
472.1
|
|
|
1,629.7
|
|
|
1,362.0
|
|
||||
Costs and operating expenses
(1)
:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue (excluding depreciation and amortization)
|
200.3
|
|
|
169.2
|
|
|
573.5
|
|
|
485.7
|
|
||||
Technology and development
|
91.0
|
|
|
72.3
|
|
|
261.3
|
|
|
214.2
|
|
||||
Marketing and advertising
|
58.8
|
|
|
53.4
|
|
|
188.7
|
|
|
170.9
|
|
||||
Customer care
|
74.6
|
|
|
59.8
|
|
|
217.0
|
|
|
183.6
|
|
||||
General and administrative
|
65.4
|
|
|
52.8
|
|
|
198.2
|
|
|
153.8
|
|
||||
Depreciation and amortization
|
60.0
|
|
|
43.4
|
|
|
147.1
|
|
|
121.6
|
|
||||
Total costs and operating expenses
|
550.1
|
|
|
450.9
|
|
|
1,585.8
|
|
|
1,329.8
|
|
||||
Operating income
|
32.1
|
|
|
21.2
|
|
|
43.9
|
|
|
32.2
|
|
||||
Interest expense
|
(24.4
|
)
|
|
(14.4
|
)
|
|
(59.2
|
)
|
|
(43.0
|
)
|
||||
Tax receivable agreements liability adjustment
|
—
|
|
|
1.3
|
|
|
37.0
|
|
|
(9.4
|
)
|
||||
Loss on debt extinguishment
|
(5.3
|
)
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
||||
Other income (expense), net
|
1.7
|
|
|
(0.7
|
)
|
|
6.1
|
|
|
(0.8
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
4.1
|
|
|
7.4
|
|
|
20.8
|
|
|
(21.0
|
)
|
||||
Benefit (provision) for income taxes
|
3.0
|
|
|
0.9
|
|
|
6.6
|
|
|
(0.1
|
)
|
||||
Income (loss) from continuing operations
|
7.1
|
|
|
8.3
|
|
|
27.4
|
|
|
(21.1
|
)
|
||||
Income from discontinued operations, net of income taxes (includes $36.7 gain on disposal, net of tax)
|
22.9
|
|
|
—
|
|
|
17.6
|
|
|
—
|
|
||||
Net income (loss)
|
30.0
|
|
|
8.3
|
|
|
45.0
|
|
|
(21.1
|
)
|
||||
Less: net income (loss) attributable to non-controlling interests
|
7.6
|
|
|
3.5
|
|
|
1.2
|
|
|
(6.5
|
)
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
22.4
|
|
|
$
|
4.8
|
|
|
$
|
43.8
|
|
|
$
|
(14.6
|
)
|
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.31
|
|
|
$
|
(0.19
|
)
|
Discontinued operations
|
0.15
|
|
|
—
|
|
|
0.12
|
|
|
—
|
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
0.20
|
|
|
$
|
0.06
|
|
|
$
|
0.43
|
|
|
$
|
(0.19
|
)
|
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
$
|
(0.19
|
)
|
Discontinued operations
|
0.13
|
|
|
—
|
|
|
0.10
|
|
|
—
|
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
$
|
0.25
|
|
|
$
|
(0.19
|
)
|
Weighted-average shares of Class A common stock outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
114,836
|
|
|
83,733
|
|
|
102,171
|
|
|
77,170
|
|
||||
Diluted
|
175,219
|
|
|
175,932
|
|
|
177,009
|
|
|
77,170
|
|
||||
___________________________
|
|
|
|
|
|
|
|
||||||||
(1)
Costs and operating expenses include equity-based compensation expense as follows:
|
|
|
|||||||||||||
Technology and development
|
$
|
9.3
|
|
|
$
|
7.0
|
|
|
$
|
26.6
|
|
|
$
|
16.9
|
|
Marketing and advertising
|
2.0
|
|
|
2.3
|
|
|
5.2
|
|
|
5.8
|
|
||||
Customer care
|
1.0
|
|
|
1.6
|
|
|
2.6
|
|
|
3.0
|
|
||||
General and administrative
|
7.5
|
|
|
6.6
|
|
|
20.8
|
|
|
14.6
|
|
|
Class A Common Stock
|
|
Class B Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Non-
Controlling
Interest
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
||||||||||||||||||||
Balance at
December 31, 2016
|
88,558
|
|
|
$
|
0.1
|
|
|
78,554
|
|
|
$
|
0.1
|
|
|
$
|
608.3
|
|
|
$
|
(48.7
|
)
|
|
$
|
2.7
|
|
|
$
|
151.7
|
|
|
$
|
714.2
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43.8
|
|
|
—
|
|
|
1.2
|
|
|
45.0
|
|
|||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55.2
|
|
|||||||
Sales of Class A common stock
|
671
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.4
|
|
|||||||
Stock option exercises
|
4,683
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65.1
|
|
|
—
|
|
|
—
|
|
|
(17.2
|
)
|
|
47.9
|
|
|||||||
Issuance of Class A common stock under employee stock purchase plan
|
325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|||||||
Repurchases of LLC Units
|
—
|
|
|
—
|
|
|
(7,345
|
)
|
|
—
|
|
|
(275.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(275.0
|
)
|
|||||||
Effect of exchanges of LLC Units
|
31,209
|
|
|
—
|
|
|
(31,209
|
)
|
|
(0.1
|
)
|
|
23.9
|
|
|
—
|
|
|
—
|
|
|
(23.9
|
)
|
|
(0.1
|
)
|
|||||||
Liability pursuant to the tax receivable agreements resulting from exchanges of LLC Units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54.5
|
)
|
|||||||
Gain (loss) on swaps and foreign currency hedging, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.0
|
)
|
|
—
|
|
|
(47.0
|
)
|
|||||||
Change in foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45.1
|
)
|
|
—
|
|
|
(45.1
|
)
|
|||||||
Accumulated other comprehensive income (loss) attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37.8
|
|
|
(37.8
|
)
|
|
—
|
|
|||||||
Vesting of restricted stock units
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at
September 30, 2017
|
126,211
|
|
|
$
|
0.1
|
|
|
40,000
|
|
|
$
|
—
|
|
|
$
|
451.6
|
|
|
$
|
(4.9
|
)
|
|
$
|
(51.6
|
)
|
|
$
|
74.0
|
|
|
$
|
469.2
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
$
|
30.0
|
|
|
$
|
8.3
|
|
|
$
|
45.0
|
|
|
$
|
(21.1
|
)
|
Foreign exchange forward contracts gain (loss)
|
(1.7
|
)
|
|
(0.2
|
)
|
|
(6.5
|
)
|
|
(0.4
|
)
|
||||
Unrealized swap gain (loss), net
|
(9.9
|
)
|
|
—
|
|
|
(40.5
|
)
|
|
—
|
|
||||
Change in foreign currency translation adjustment
|
(45.0
|
)
|
|
—
|
|
|
(45.1
|
)
|
|
(0.1
|
)
|
||||
Comprehensive income (loss)
|
(26.6
|
)
|
|
8.1
|
|
|
(47.1
|
)
|
|
(21.6
|
)
|
||||
Less: comprehensive income (loss) attributable to non-controlling interests
|
(20.2
|
)
|
|
—
|
|
|
(36.6
|
)
|
|
—
|
|
||||
Comprehensive income (loss) attributable to GoDaddy Inc.
|
$
|
(6.4
|
)
|
|
$
|
8.1
|
|
|
$
|
(10.5
|
)
|
|
$
|
(21.6
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
45.0
|
|
|
$
|
(21.1
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
147.1
|
|
|
121.6
|
|
||
Equity-based compensation
|
55.2
|
|
|
40.3
|
|
||
Loss on debt extinguishment
|
7.0
|
|
|
—
|
|
||
Tax receivable agreements liability adjustment
|
(37.0
|
)
|
|
9.4
|
|
||
Deferred taxes
|
(15.9
|
)
|
|
(2.4
|
)
|
||
Gain on sale of PlusServer
|
(36.7
|
)
|
|
—
|
|
||
Other
|
10.6
|
|
|
13.5
|
|
||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
||||
Registry deposits
|
(4.1
|
)
|
|
(2.9
|
)
|
||
Prepaid domain name registry fees
|
(24.3
|
)
|
|
(26.6
|
)
|
||
Deferred revenue
|
208.4
|
|
|
156.6
|
|
||
Other operating assets and liabilities
|
16.0
|
|
|
9.0
|
|
||
Net cash provided by operating activities
|
371.3
|
|
|
297.4
|
|
||
Investing activities
|
|
|
|
||||
Purchases of short-term investments
|
(16.3
|
)
|
|
(10.5
|
)
|
||
Maturities of short-term investments
|
6.6
|
|
|
5.4
|
|
||
Business acquisitions, net of cash acquired
|
(1,875.7
|
)
|
|
(57.9
|
)
|
||
Proceeds received from sale of PlusServer
|
447.7
|
|
|
—
|
|
||
Purchases of property and equipment, excluding improvements
|
(50.2
|
)
|
|
(37.8
|
)
|
||
Purchases of leasehold and building improvements
|
(10.0
|
)
|
|
(5.0
|
)
|
||
Net cash used in investing activities
|
(1,497.9
|
)
|
|
(105.8
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds received from:
|
|
|
|
||||
Acquisition Term Loan
|
1,421.4
|
|
|
—
|
|
||
Bridge Loan
|
531.7
|
|
|
—
|
|
||
Stock option exercises
|
47.9
|
|
|
45.9
|
|
||
Sale of Class A common stock, net of expenses
|
22.1
|
|
|
—
|
|
||
Issuance of Class A common stock under employee stock purchase plan
|
9.2
|
|
|
—
|
|
||
Payments made for:
|
|
|
|
||||
Repurchases of LLC Units
|
(275.0
|
)
|
|
—
|
|
||
Financing-related costs
|
(38.9
|
)
|
|
—
|
|
||
Distributions to holders of LLC Units
|
(10.0
|
)
|
|
(10.8
|
)
|
||
Repayment of Bridge Loan
|
(596.6
|
)
|
|
—
|
|
||
Repayment of term loan
|
(9.0
|
)
|
|
(8.2
|
)
|
||
Capital leases and other financing obligations
|
(8.8
|
)
|
|
(10.3
|
)
|
||
Net cash provided by financing activities
|
1,094.0
|
|
|
16.6
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3.4
|
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(29.2
|
)
|
|
208.2
|
|
||
Cash and cash equivalents, beginning of period
|
566.1
|
|
|
348.0
|
|
||
Cash and cash equivalents, end of period
|
$
|
536.9
|
|
|
$
|
556.2
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest on long-term debt, net of swap benefit
|
$
|
59.3
|
|
|
$
|
35.0
|
|
Income taxes, net of refunds received
|
$
|
12.6
|
|
|
$
|
2.7
|
|
Supplemental information for non-cash investing and financing activities:
|
|
|
|
||||
Fair value of contingent consideration in connection with business acquisitions
|
$
|
11.6
|
|
|
$
|
1.0
|
|
Accrued capital expenditures at period end
|
$
|
7.1
|
|
|
$
|
13.5
|
|
Property and equipment acquired under capital leases
|
$
|
6.3
|
|
|
$
|
7.0
|
|
•
|
the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements;
|
•
|
the fair value of assets acquired and liabilities assumed in business acquisitions;
|
•
|
the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;
|
•
|
the estimated reserve for refunds;
|
•
|
the estimated useful lives of intangible and depreciable assets;
|
•
|
the grant date fair value of equity-based awards;
|
•
|
the recognition, measurement and valuation of current and deferred income taxes;
|
•
|
the recognition and measurement of amounts payable under TRAs or as tax distributions to Desert Newco's owners; and
|
•
|
the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities.
|
|
September 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Reverse repurchase agreements
(1)
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
Commercial paper
|
—
|
|
|
49.9
|
|
|
—
|
|
|
49.9
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit and time deposits
|
6.4
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
||||
Commercial paper
|
—
|
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
||||
Derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets measured and recorded at fair value
|
$
|
6.4
|
|
|
$
|
159.9
|
|
|
$
|
—
|
|
|
$
|
166.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20.6
|
|
|
$
|
20.6
|
|
Derivative liabilities
|
—
|
|
|
184.9
|
|
|
—
|
|
|
184.9
|
|
||||
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
184.9
|
|
|
$
|
20.6
|
|
|
$
|
205.5
|
|
|
|
(1)
|
Reverse repurchase agreements include a
$50.0 million
repurchase agreement with Morgan Stanley, callable with
31
days notice, and a
$50.0 million
one-week repurchase agreement with Wells Fargo.
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Reverse repurchase agreements
(1)
|
$
|
—
|
|
|
$
|
130.0
|
|
|
$
|
—
|
|
|
$
|
130.0
|
|
Commercial paper
|
—
|
|
|
55.9
|
|
|
—
|
|
|
55.9
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit and time deposits
|
6.6
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
||||
Derivative assets
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
||||
Total assets measured and recorded at fair value
|
$
|
6.6
|
|
|
$
|
186.6
|
|
|
$
|
—
|
|
|
$
|
193.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
|
(1)
|
Reverse repurchase agreements include an
$80.0 million
repurchase agreement with Morgan Stanley, callable with
31
days notice, and a
$50.0 million
one-week repurchase agreement with Wells Fargo.
|
Total purchase consideration
(1)
|
|
$
|
1,849.5
|
|
|
|
|
||
Fair value of assets acquired:
|
|
|
||
Cash and cash equivalents
|
|
27.2
|
|
|
Other current assets
|
|
66.3
|
|
|
Assets held for sale
(2)
|
|
497.5
|
|
|
Property and equipment, net
|
|
61.9
|
|
|
Intangible assets, net
|
|
595.7
|
|
|
Other assets
|
|
9.3
|
|
|
Amount attributable to assets acquired
|
|
1,257.9
|
|
|
Fair value of liabilities assumed:
|
|
|
||
Accounts payable and accrued expenses
|
|
61.9
|
|
|
Current portion of deferred revenue
|
|
45.5
|
|
|
Liabilities directly associated with the assets held for sale
(2)
|
|
93.0
|
|
|
Other long-term liabilities
|
|
14.0
|
|
|
Deferred tax liabilities
|
|
186.6
|
|
|
Amount attributable to liabilities assumed
|
|
401.0
|
|
|
Goodwill
|
|
$
|
992.6
|
|
|
|
(1)
|
The purchase consideration was translated using the Euro to U.S. dollar exchange rate in effect on the closing date,
April 3, 2017
, of approximately
1.066
.
|
(2)
|
Assets held for sale and liabilities directly associated with the assets held for sale, represented those of HEG's PlusServer managed hosting business, which met the criteria for held for sale designation at the acquisition date and was sold in
August 2017
. See Note
4
for further discussion.
|
Finite-lived Intangible Assets
|
|
Preliminary Estimated
Useful Life
|
|
HEG Continuing Operations
|
||
Trade names
|
|
10 years
|
|
$
|
75.2
|
|
Developed technology
|
|
6 years
|
|
62.4
|
|
|
Customer relationships
|
|
9 years
|
|
458.1
|
|
|
|
|
|
|
$
|
595.7
|
|
|
Total Revenue
|
|
Net Loss from Continuing Operations
|
||||
For the three months ended:
|
|
|
|
||||
June 30, 2017 (as revised)
(1)
|
$
|
45.9
|
|
|
$
|
(9.4
|
)
|
September 30, 2017
|
52.8
|
|
|
(6.1
|
)
|
||
Total HEG contribution
|
$
|
98.7
|
|
|
$
|
(15.5
|
)
|
|
|
(1)
|
HEG's net loss from continuing operations for the three months ended June 30, 2017 was revised to exclude intercompany expenses, which eliminated in consolidation.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Pro forma Consolidated Results of Operations
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
589.5
|
|
|
$
|
526.1
|
|
|
$
|
1,707.9
|
|
|
$
|
1,515.7
|
|
Net income (loss) attributable to GoDaddy Inc.
|
25.9
|
|
|
(1.8
|
)
|
|
47.5
|
|
|
(29.0
|
)
|
||||
Net income (loss) from continuing operations attributable to GoDaddy Inc.
|
2.9
|
|
|
(3.0
|
)
|
|
28.8
|
|
|
(38.4
|
)
|
||||
Net income (loss) from continuing operations attributable to GoDaddy Inc. per share of Class A common stock - basic
|
0.08
|
|
|
(0.03
|
)
|
|
0.35
|
|
|
(0.50
|
)
|
||||
Net income (loss) from continuing operations attributable to GoDaddy Inc. per share of Class A common stock - diluted
|
0.07
|
|
|
(0.03
|
)
|
|
0.18
|
|
|
(0.50
|
)
|
Balance at December 31, 2016
|
$
|
1,718.4
|
|
Goodwill related to acquisitions
|
1,056.7
|
|
|
Impact of foreign currency translation
|
106.9
|
|
|
Balance at September 30, 2017
|
$
|
2,882.0
|
|
|
September 30, 2017
|
||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Domains Sold
|
|
Net Carrying
Amount
|
||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trade names and branding
|
$
|
445.0
|
|
|
n/a
|
|
|
n/a
|
|
|
$
|
445.0
|
|
||
Domain portfolio
|
120.5
|
|
|
n/a
|
|
|
$
|
(18.2
|
)
|
|
102.3
|
|
|||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Customer-related
|
872.6
|
|
|
$
|
(295.8
|
)
|
|
n/a
|
|
|
576.8
|
|
|||
Developed technology
|
184.8
|
|
|
(74.7
|
)
|
|
n/a
|
|
|
110.1
|
|
||||
Trade names
|
95.3
|
|
|
(12.7
|
)
|
|
n/a
|
|
|
82.6
|
|
||||
|
$
|
1,718.2
|
|
|
$
|
(383.2
|
)
|
|
$
|
(18.2
|
)
|
|
$
|
1,316.8
|
|
|
December 31, 2016
|
||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Domains Sold
|
|
Net Carrying
Amount
|
||||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trade names and branding
|
$
|
445.0
|
|
|
n/a
|
|
|
n/a
|
|
|
$
|
445.0
|
|
||
Domain portfolio
|
120.5
|
|
|
n/a
|
|
|
$
|
(14.4
|
)
|
|
106.1
|
|
|||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Customer-related
|
367.4
|
|
|
$
|
(245.4
|
)
|
|
n/a
|
|
|
122.0
|
|
|||
Developed technology
|
226.0
|
|
|
(187.0
|
)
|
|
n/a
|
|
|
39.0
|
|
||||
Trade names
|
11.9
|
|
|
(7.5
|
)
|
|
n/a
|
|
|
4.4
|
|
||||
|
$
|
1,170.8
|
|
|
$
|
(439.9
|
)
|
|
$
|
(14.4
|
)
|
|
$
|
716.5
|
|
|
Number of
Shares of Class A Common Stock (#)
|
|
Weighted-
Average
Grant-
Date Fair
Value ($)
|
|
Weighted-
Average
Exercise
Price ($)
|
|||
Outstanding at December 31, 2016
|
18,628
|
|
|
|
|
14.06
|
|
|
Granted
|
2,011
|
|
|
14.94
|
|
|
37.70
|
|
Exercised
|
(4,683
|
)
|
|
|
|
10.20
|
|
|
Forfeited
|
(1,010
|
)
|
|
|
|
23.42
|
|
|
Outstanding at September 30, 2017
|
14,946
|
|
|
|
|
17.83
|
|
|
Vested and exercisable at September 30, 2017
|
7,687
|
|
|
|
|
11.76
|
|
|
Number of
Shares of Class A Common Stock (#)
|
|
Weighted-
Average
Grant-
Date Fair
Value ($)
|
||
Outstanding at December 31, 2016
|
2,757
|
|
|
|
|
Granted
|
2,719
|
|
|
38.17
|
|
Vested
|
(765
|
)
|
|
|
|
Forfeited
|
(353
|
)
|
|
|
|
Outstanding at September 30, 2017
|
4,358
|
|
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Current:
|
|
|
|
||||
Domains
|
$
|
634.6
|
|
|
$
|
531.2
|
|
Hosting and presence
|
441.7
|
|
|
370.8
|
|
||
Business applications
|
178.0
|
|
|
141.5
|
|
||
|
$
|
1,254.3
|
|
|
$
|
1,043.5
|
|
Noncurrent:
|
|
|
|
||||
Domains
|
$
|
341.4
|
|
|
$
|
311.1
|
|
Hosting and presence
|
182.0
|
|
|
163.4
|
|
||
Business applications
|
71.4
|
|
|
58.2
|
|
||
|
$
|
594.8
|
|
|
$
|
532.7
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Derivative liabilities
|
$
|
184.9
|
|
|
$
|
—
|
|
Accrued payroll and employee benefits
|
82.2
|
|
|
74.0
|
|
||
Tax-related accruals
|
66.3
|
|
|
15.8
|
|
||
Accrued acquisition-related expenses and acquisition consideration payable
|
32.5
|
|
|
13.4
|
|
||
Accrued marketing and advertising expenses
|
20.8
|
|
|
9.8
|
|
||
Current portion of capital lease obligation
|
5.3
|
|
|
6.9
|
|
||
Accrued other
|
38.6
|
|
|
23.1
|
|
||
|
$
|
430.6
|
|
|
$
|
143.0
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Term loans (effective interest rate of 4.1% at September 30, 2017
and 4.9% at December 31, 2016)
|
$
|
2,488.6
|
|
|
$
|
1,072.5
|
|
Revolving Credit Loan
|
—
|
|
|
—
|
|
||
Total
|
2,488.6
|
|
|
1,072.5
|
|
||
Less: unamortized original issue discount on long-term debt
(1)
|
(34.0
|
)
|
|
(30.5
|
)
|
||
Less: unamortized debt issuance costs
(1)
|
(22.7
|
)
|
|
(2.3
|
)
|
||
Less: current portion of long-term debt
|
(16.1
|
)
|
|
(4.0
|
)
|
||
|
$
|
2,415.8
|
|
|
$
|
1,035.7
|
|
|
|
(1)
|
Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the effective interest method.
|
|
Notional Amount
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
|
|
|
|
|
Balance Sheet Location
(2)
|
Fair Value
|
|
Balance Sheet Location
(2)
|
Fair Value
|
|
Balance Sheet Location
(2)
|
Fair Value
|
|
Balance Sheet Location
(2)
|
Fair Value
|
||||||||||||
Derivative Instrument:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forward contracts
|
$
|
28.6
|
|
|
$
|
—
|
|
|
PP
|
$
|
—
|
|
|
PP
|
$
|
0.7
|
|
|
ACC
|
$
|
3.2
|
|
|
ACC
|
$
|
0.1
|
|
Cross-currency swap
|
1,460.0
|
|
(1)
|
—
|
|
|
PP
|
—
|
|
|
PP
|
—
|
|
|
ACC
|
147.5
|
|
|
ACC
|
—
|
|
||||||
Interest rate swap
|
1,318.8
|
|
|
—
|
|
|
PP
|
—
|
|
|
PP
|
—
|
|
|
ACC
|
34.2
|
|
|
ACC
|
—
|
|
||||||
Total hedges
|
$
|
2,807.4
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
0.7
|
|
|
|
$
|
184.9
|
|
|
|
$
|
0.1
|
|
|
|
(1)
|
The notional value for the cross-currency swap reflects
€1,237.1 million
translated to U.S. dollar at the foreign currency rate in effect at
September 30, 2017
of approximately
1.18
.
|
(2)
|
PP = Prepaid expenses and other current assets; ACC = Accrued expenses and other current liabilities.
|
|
Unrealized Gains (Losses) Recognized in Other Comprehensive Income
|
||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||
Derivative Instrument:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
(1)
|
$
|
(1.7
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
(0.4
|
)
|
Cross-currency swap
|
(12.6
|
)
|
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
||||
Interest rate swap
|
2.7
|
|
|
—
|
|
|
(34.2
|
)
|
|
—
|
|
||||
Total hedges
|
$
|
(11.6
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(47.0
|
)
|
|
$
|
(0.4
|
)
|
|
|
(1)
|
Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||||
|
Revenue
|
|
Interest Expense
|
|
Other Income (Expense), Net
|
|
Revenue
|
|
Interest Expense
|
|
Other Income (Expense), Net
|
||||||||||||
Foreign Exchange Forward Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cross Currency Swap:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
—
|
|
|
7.0
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest Rate Swap:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
—
|
|
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total hedges
|
$
|
0.1
|
|
|
$
|
2.9
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
|
Revenue
|
|
Interest Expense
|
|
Other Income (Expense), Net
|
|
Revenue
|
|
Interest Expense
|
|
Other Income (Expense), Net
|
||||||||||||
Foreign Exchange Forward Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cross Currency Swap:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
—
|
|
|
14.5
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest Rate Swap:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reclassified from AOCI into income
|
—
|
|
|
(8.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total hedges
|
$
|
1.3
|
|
|
$
|
5.7
|
|
|
$
|
(0.6
|
)
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
7.1
|
|
|
$
|
8.3
|
|
|
$
|
27.4
|
|
|
$
|
(21.1
|
)
|
Income from discontinued operations, net of income taxes
|
22.9
|
|
|
—
|
|
|
17.6
|
|
|
—
|
|
||||
Net income (loss)
|
30.0
|
|
|
8.3
|
|
|
45.0
|
|
|
(21.1
|
)
|
||||
Less: net income (loss) attributable to non-controlling interests
|
7.6
|
|
|
3.5
|
|
|
1.2
|
|
|
(6.5
|
)
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
22.4
|
|
|
$
|
4.8
|
|
|
$
|
43.8
|
|
|
$
|
(14.6
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of Class A common stock outstanding—basic
|
114,836
|
|
|
83,733
|
|
|
102,171
|
|
|
77,170
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Class B common stock
|
50,601
|
|
|
79,189
|
|
|
64,510
|
|
|
—
|
|
||||
Options and vesting LLC Units
|
8,324
|
|
|
12,594
|
|
|
9,046
|
|
|
—
|
|
||||
RSUs and ESPP shares
|
1,458
|
|
|
416
|
|
|
1,282
|
|
|
—
|
|
||||
Weighted-average shares of Class A Common stock outstanding—diluted
|
175,219
|
|
|
175,932
|
|
|
177,009
|
|
|
77,170
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
$
|
0.31
|
|
|
$
|
(0.19
|
)
|
Discontinued operations
|
0.15
|
|
|
—
|
|
|
0.12
|
|
|
—
|
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
0.20
|
|
|
$
|
0.06
|
|
|
$
|
0.43
|
|
|
$
|
(0.19
|
)
|
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—diluted:
(1)
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
$
|
(0.19
|
)
|
Discontinued operations
|
0.13
|
|
|
—
|
|
|
0.10
|
|
|
—
|
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
0.17
|
|
|
$
|
0.05
|
|
|
$
|
0.25
|
|
|
$
|
(0.19
|
)
|
|
|
(1)
|
The dilutive income per share calculations exclude the net income (loss) attributable to non-controlling interests.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Class B common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
83,236
|
|
Options and vesting LLC Units
|
—
|
|
|
—
|
|
|
—
|
|
|
14,443
|
|
RSUs and ESPP shares
|
—
|
|
|
—
|
|
|
—
|
|
|
237
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,916
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S.
|
$
|
384.1
|
|
|
$
|
340.9
|
|
|
$
|
1,109.6
|
|
|
$
|
996.2
|
|
International
|
198.1
|
|
|
131.2
|
|
|
520.1
|
|
|
365.8
|
|
||||
|
$
|
582.2
|
|
|
$
|
472.1
|
|
|
$
|
1,629.7
|
|
|
$
|
1,362.0
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
U.S.
|
$
|
221.1
|
|
|
$
|
216.7
|
|
Germany
|
43.9
|
|
|
—
|
|
||
All other international
|
31.3
|
|
|
14.3
|
|
||
|
$
|
296.3
|
|
|
$
|
231.0
|
|
|
Foreign Currency Translation Gains (Losses)
|
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
(1)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
Balance as of December 31, 2016
|
$
|
(0.3
|
)
|
|
$
|
3.0
|
|
|
$
|
2.7
|
|
Other comprehensive income (loss) before reclassifications
|
1.8
|
|
|
(40.6
|
)
|
|
(38.8
|
)
|
|||
Amounts reclassified from AOCI
|
(46.9
|
)
|
|
(6.4
|
)
|
|
(53.3
|
)
|
|||
Other comprehensive income (loss)
|
(45.1
|
)
|
|
(47.0
|
)
|
|
(92.1
|
)
|
|||
|
$
|
(45.4
|
)
|
|
$
|
(44.0
|
)
|
|
$
|
(89.4
|
)
|
Less: AOCI attributable to non-controlling interests
|
|
|
|
|
(37.8
|
)
|
|||||
Balance as of September 30, 2017
|
|
|
|
|
$
|
(51.6
|
)
|
||||
|
|
|
|
|
|
||||||
Balance as of December 31, 2015
|
$
|
(0.2
|
)
|
|
$
|
3.4
|
|
|
$
|
3.2
|
|
Other comprehensive income (loss) before reclassifications
|
(0.1
|
)
|
|
0.6
|
|
|
0.5
|
|
|||
Amounts reclassified from AOCI
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|||
Other comprehensive income (loss)
|
(0.1
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
|||
|
$
|
(0.3
|
)
|
|
$
|
3.0
|
|
|
$
|
2.7
|
|
Less: AOCI attributable to non-controlling interests
|
|
|
|
|
—
|
|
|||||
Balance as of September 30, 2016
|
|
|
|
|
$
|
2.7
|
|
|
|
(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.
|
•
|
Total revenue of
$582.2 million
, an increase of
23.3%
, or approximately
23.6%
on a constant currency basis
(1)
.
|
•
|
International revenue of
$198.1 million
, an increase of
51.0%
, or approximately
51.8%
on a constant currency basis
(1)
.
|
•
|
Total bookings
(2)
of
$668.0 million
, an increase of
25.0%
, or approximately
24.7%
on a constant currency basis
(1)
.
|
•
|
Net income was
$30.0 million
.
|
•
|
Total customers increased
17.7%
to
17.1 million
.
|
•
|
Average revenue per user increased
5.1%
to
$134
.
|
•
|
Cash and cash equivalents were
$536.9 million
.
|
•
|
Net cash provided by operating activities was
$131.4 million
.
|
•
|
Net proceeds received from the sale of PlusServer were
$447.7 million
and, in combination with cash and cash equivalents of
$148.9 million
, were used to prepay the Bridge Loan.
|
•
|
Capital expenditures were
$23.7 million
.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total bookings
|
$
|
668.0
|
|
|
$
|
534.3
|
|
|
$
|
1,960.3
|
|
|
$
|
1,630.7
|
|
Total customers at period end (in thousands)
|
17,123
|
|
|
14,547
|
|
|
17,123
|
|
|
14,547
|
|
||||
Average revenue per user
|
$
|
134
|
|
|
$
|
127
|
|
|
$
|
134
|
|
|
$
|
127
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total Bookings:
|
|
||||||||||||||
Total revenue
|
$
|
582.2
|
|
|
$
|
472.1
|
|
|
$
|
1,629.7
|
|
|
$
|
1,362.0
|
|
Change in deferred revenue
(1)
|
44.5
|
|
|
27.3
|
|
|
204.3
|
|
|
158.3
|
|
||||
Net refunds
|
43.4
|
|
|
35.4
|
|
|
125.1
|
|
|
108.8
|
|
||||
Other
|
(2.1
|
)
|
|
(0.5
|
)
|
|
1.2
|
|
|
1.6
|
|
||||
Total bookings
|
$
|
668.0
|
|
|
$
|
534.3
|
|
|
$
|
1,960.3
|
|
|
$
|
1,630.7
|
|
|
|
(1)
|
Change in deferred revenue also includes the impact of realized gains or losses from the hedging of bookings in foreign currencies.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
$
|
|
% of Total Revenue
|
|
$
|
|
% of Total Revenue
|
|
$
|
|
% of Total Revenue
|
|
$
|
|
% of Total Revenue
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue:
|
|
|
|
||||||||||||||||||||||||
Domains
|
$
|
271.5
|
|
|
46.6
|
%
|
|
$
|
236.6
|
|
|
50.1
|
%
|
|
$
|
775.6
|
|
|
47.6
|
%
|
|
$
|
685.3
|
|
|
50.3
|
%
|
Hosting and presence
|
225.9
|
|
|
38.8
|
%
|
|
174.1
|
|
|
36.9
|
%
|
|
619.1
|
|
|
38.0
|
%
|
|
502.0
|
|
|
36.9
|
%
|
||||
Business applications
|
84.8
|
|
|
14.6
|
%
|
|
61.4
|
|
|
13.0
|
%
|
|
235.0
|
|
|
14.4
|
%
|
|
174.7
|
|
|
12.8
|
%
|
||||
Total revenue
|
582.2
|
|
|
100.0
|
%
|
|
472.1
|
|
|
100.0
|
%
|
|
1,629.7
|
|
|
100.0
|
%
|
|
1,362.0
|
|
|
100.0
|
%
|
||||
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue (excluding depreciation and amortization)
|
200.3
|
|
|
34.4
|
%
|
|
169.2
|
|
|
35.8
|
%
|
|
573.5
|
|
|
35.2
|
%
|
|
485.7
|
|
|
35.7
|
%
|
||||
Technology and development
|
91.0
|
|
|
15.6
|
%
|
|
72.3
|
|
|
15.3
|
%
|
|
261.3
|
|
|
16.0
|
%
|
|
214.2
|
|
|
15.7
|
%
|
||||
Marketing and advertising
|
58.8
|
|
|
10.1
|
%
|
|
53.4
|
|
|
11.3
|
%
|
|
188.7
|
|
|
11.6
|
%
|
|
170.9
|
|
|
12.5
|
%
|
||||
Customer care
|
74.6
|
|
|
12.8
|
%
|
|
59.8
|
|
|
12.7
|
%
|
|
217.0
|
|
|
13.3
|
%
|
|
183.6
|
|
|
13.5
|
%
|
||||
General and administrative
|
65.4
|
|
|
11.2
|
%
|
|
52.8
|
|
|
11.2
|
%
|
|
198.2
|
|
|
12.2
|
%
|
|
153.8
|
|
|
11.3
|
%
|
||||
Depreciation and amortization
|
60.0
|
|
|
10.3
|
%
|
|
43.4
|
|
|
9.2
|
%
|
|
147.1
|
|
|
9.0
|
%
|
|
121.6
|
|
|
8.9
|
%
|
||||
Total costs and operating expenses
|
550.1
|
|
|
94.4
|
%
|
|
450.9
|
|
|
95.5
|
%
|
|
1,585.8
|
|
|
97.3
|
%
|
|
1,329.8
|
|
|
97.6
|
%
|
||||
Operating income
|
32.1
|
|
|
5.6
|
%
|
|
21.2
|
|
|
4.5
|
%
|
|
43.9
|
|
|
2.7
|
%
|
|
32.2
|
|
|
2.4
|
%
|
||||
Interest expense
|
(24.4
|
)
|
|
(4.2
|
)%
|
|
(14.4
|
)
|
|
(3.1
|
)%
|
|
(59.2
|
)
|
|
(3.6
|
)%
|
|
(43.0
|
)
|
|
(3.2
|
)%
|
||||
Tax receivable agreements liability adjustment
|
—
|
|
|
—
|
%
|
|
1.3
|
|
|
0.3
|
%
|
|
37.0
|
|
|
2.2
|
%
|
|
(9.4
|
)
|
|
(0.7
|
)%
|
||||
Loss on debt extinguishment
|
(5.3
|
)
|
|
(0.9
|
)%
|
|
—
|
|
|
—
|
%
|
|
(7.0
|
)
|
|
(0.4
|
)%
|
|
—
|
|
|
—
|
%
|
||||
Other income (expense), net
|
1.7
|
|
|
0.3
|
%
|
|
(0.7
|
)
|
|
(0.1
|
)%
|
|
6.1
|
|
|
0.4
|
%
|
|
(0.8
|
)
|
|
—
|
%
|
||||
Income (loss) from continuing operations before income taxes
|
4.1
|
|
|
0.8
|
%
|
|
7.4
|
|
|
1.6
|
%
|
|
20.8
|
|
|
1.3
|
%
|
|
(21.0
|
)
|
|
(1.5
|
)%
|
||||
Benefit (provision) for income taxes
|
3.0
|
|
|
0.5
|
%
|
|
0.9
|
|
|
0.2
|
%
|
|
6.6
|
|
|
0.4
|
%
|
|
(0.1
|
)
|
|
—
|
%
|
||||
Income (loss) from continuing operations
|
7.1
|
|
|
1.3
|
%
|
|
8.3
|
|
|
1.8
|
%
|
|
27.4
|
|
|
1.7
|
%
|
|
(21.1
|
)
|
|
(1.5
|
)%
|
||||
Income from discontinued operations, net of income taxes
|
22.9
|
|
|
3.9
|
%
|
|
—
|
|
|
—
|
%
|
|
17.6
|
|
|
1.1
|
%
|
|
—
|
|
|
—
|
%
|
||||
Net income (loss)
|
30.0
|
|
|
5.2
|
%
|
|
8.3
|
|
|
1.8
|
%
|
|
45.0
|
|
|
2.8
|
%
|
|
(21.1
|
)
|
|
(1.5
|
)%
|
||||
Less: net income (loss) attributable to non-controlling interests
|
7.6
|
|
|
1.3
|
%
|
|
3.5
|
|
|
0.8
|
%
|
|
1.2
|
|
|
0.1
|
%
|
|
(6.5
|
)
|
|
(0.4
|
)%
|
||||
Net income (loss) attributable to GoDaddy Inc.
|
$
|
22.4
|
|
|
3.9
|
%
|
|
$
|
4.8
|
|
|
1.0
|
%
|
|
$
|
43.8
|
|
|
2.7
|
%
|
|
$
|
(14.6
|
)
|
|
(1.1
|
)%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Domains
|
$
|
271.5
|
|
|
$
|
236.6
|
|
|
$
|
34.9
|
|
|
14.8
|
%
|
|
$
|
775.6
|
|
|
$
|
685.3
|
|
|
$
|
90.3
|
|
|
13.2
|
%
|
Hosting and presence
|
225.9
|
|
|
174.1
|
|
|
51.8
|
|
|
29.8
|
%
|
|
619.1
|
|
|
502.0
|
|
|
117.1
|
|
|
23.3
|
%
|
||||||
Business applications
|
84.8
|
|
|
61.4
|
|
|
23.4
|
|
|
38.1
|
%
|
|
235.0
|
|
|
174.7
|
|
|
60.3
|
|
|
34.5
|
%
|
||||||
Total revenue
|
$
|
582.2
|
|
|
$
|
472.1
|
|
|
$
|
110.1
|
|
|
23.3
|
%
|
|
$
|
1,629.7
|
|
|
$
|
1,362.0
|
|
|
$
|
267.7
|
|
|
19.7
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of revenue (excluding depreciation and amortization)
|
$
|
200.3
|
|
|
$
|
169.2
|
|
|
$
|
31.1
|
|
|
18.4
|
%
|
|
$
|
573.5
|
|
|
$
|
485.7
|
|
|
$
|
87.8
|
|
|
18.1
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Technology and development
|
$
|
91.0
|
|
|
$
|
72.3
|
|
|
$
|
18.7
|
|
|
25.9
|
%
|
|
$
|
261.3
|
|
|
$
|
214.2
|
|
|
$
|
47.1
|
|
|
22.0
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Marketing and advertising
|
$
|
58.8
|
|
|
$
|
53.4
|
|
|
$
|
5.4
|
|
|
10.1
|
%
|
|
$
|
188.7
|
|
|
$
|
170.9
|
|
|
$
|
17.8
|
|
|
10.4
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Customer care
|
$
|
74.6
|
|
|
$
|
59.8
|
|
|
$
|
14.8
|
|
|
24.7
|
%
|
|
$
|
217.0
|
|
|
$
|
183.6
|
|
|
$
|
33.4
|
|
|
18.2
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
65.4
|
|
|
$
|
52.8
|
|
|
$
|
12.6
|
|
|
23.9
|
%
|
|
$
|
198.2
|
|
|
$
|
153.8
|
|
|
$
|
44.4
|
|
|
28.9
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Depreciation and amortization
|
$
|
60.0
|
|
|
$
|
43.4
|
|
|
$
|
16.6
|
|
|
38.2
|
%
|
|
$
|
147.1
|
|
|
$
|
121.6
|
|
|
$
|
25.5
|
|
|
21.0
|
%
|
|
Three Months Ended September 30,
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Change
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|
2017
|
|
2016
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
$
|
24.4
|
|
|
$
|
14.4
|
|
|
$
|
10.0
|
|
|
69.4
|
%
|
|
$
|
59.2
|
|
|
$
|
43.0
|
|
|
$
|
16.2
|
|
|
37.7
|
%
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
371.3
|
|
|
$
|
297.4
|
|
Net cash used in investing activities
|
(1,497.9
|
)
|
|
(105.8
|
)
|
||
Net cash provided by financing activities
|
1,094.0
|
|
|
16.6
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
3.4
|
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(29.2
|
)
|
|
$
|
208.2
|
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Domains
|
$
|
233.5
|
|
|
$
|
458.1
|
|
|
$
|
137.4
|
|
|
$
|
61.7
|
|
|
$
|
36.8
|
|
|
$
|
48.5
|
|
|
$
|
976.0
|
|
Hosting and presence
|
175.0
|
|
|
297.3
|
|
|
100.7
|
|
|
32.5
|
|
|
9.8
|
|
|
8.4
|
|
|
623.7
|
|
|||||||
Business applications
|
68.7
|
|
|
121.4
|
|
|
38.8
|
|
|
12.9
|
|
|
4.4
|
|
|
3.2
|
|
|
249.4
|
|
|||||||
|
$
|
477.2
|
|
|
$
|
876.8
|
|
|
$
|
276.9
|
|
|
$
|
107.1
|
|
|
$
|
51.0
|
|
|
$
|
60.1
|
|
|
$
|
1,849.1
|
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
2.1^
|
|
|
8-K
|
001-36904
|
2.1
|
7/18/2017
|
|
10.1+*
|
|
|
|
|
|
|
|
10.2+*
|
|
|
|
|
|
|
|
31.1
*
|
|
|
|
|
|
|
|
31.2
*
|
|
|
|
|
|
|
|
32.1
**
|
|
|
|
|
|
|
+
|
|
Indicates management contract or compensatory plan or arrangement.
|
*
|
|
Filed herewith.
|
**
|
|
The certifications attached as Exhibit 32.1 accompanying this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of GoDaddy Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
^
|
|
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. GoDaddy Inc. agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request.
|
|
|
GODADDY INC.
|
|
|
|
Date:
|
November 8, 2017
|
/s/ Ray E. Winborne
|
|
|
Ray E. Winborne
|
|
|
Chief Financial Officer
|
GoDaddy.com, LLC
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
Executive
|
|
/s/ Blake Irving
|
Blake Irving
|
August 21, 2017
|
Desert Newco, LLC
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
GoDaddy Inc.
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
Term
|
Summary
|
Cross-Reference
|
Position:
|
Chief Executive Officer
|
Section 1
|
Reports to:
|
Board of Directors
|
Section 1
|
Employment Term:
|
Through December 31, 2020 unless extended
|
Section 2
|
Annual Salary:
|
$750,000
|
Section 3(a)
|
Annual Target Bonus:
|
100%
of annual salary
|
Section 3(b)
|
Non-Change in Control Severance:
|
•
Any earned but unpaid salary or bonus
•
100% of annual salary
•
Prorated Annual Target Bonus for year of termination
•
Payment equal to the cost of health insurance coverage for 18 months
•
Acceleration of time-based equity awards that would have vested in next 12 months
•
Pro-rata vesting of performance-based equity awards that would have vested for the performance period in which termination occurs, based on actual performance
|
Section 5(b)(iii)
|
Change in Control Severance:
|
•
Any earned but unpaid salary or bonus
•
150% of annual salary
•
150% of Annual Target Bonus for the year of termination
•
Payment equal to the cost of health insurance coverage for 18 months
•
Acceleration of all time-based and performance-based equity awards (at target)
|
Section 5(b)(iv)
|
•
|
$8 million in time-based options (the “
Option
”), with a per share exercise price equal to the closing price of a share of GoDaddy’s Class A common stock on the grant date. The vesting for the Option shall commence on the Effective Date and vest as follows, provided Executive continues to be a Service Provider under the 2015 Incentive Plan through each such date: 1/3 of the shares subject to the Option shall vest on the first anniversary of the Effective Date and 1/12
th
of the shares subject to the Option shall vest ever three months thereafter;
|
•
|
$8 million in time-based restricted stock units (“
RSUs
”). The vesting for the RSUs shall commence on the Effective Date and vest as follows, provided Executive continues to be a Service Provider under the 2015 Incentive Plan through each such date: 1/3 of the RSUs shall vest on the first anniversary of the Effective Date and 1/12
th
of the RSUs shall vest each every three months thereafter;
|
•
|
$8 million in performance-based RSUs (“
PSUs
”). The vesting of performance-based RSUs shall be based on GoDaddy’s achievement of its performance goals for fiscal years 2018, 2019, and 2020 achievement of which shall be determined solely by the Committee and vest as follows, provided Executive continues to be a Service Provider under the 2015 Incentive Plan through each such date: 25% of the performance-based RSUs shall vest annually on the date the Committee determines whether and to what extent performance targets have been met.
|
•
|
To determine the number of shares subject to each Equity Award, the specified value will be divided by the closing price of a share of GoDaddy Class A Common Stock on the date of grant, with the result rounded down to the nearest whole share.
|
4.
|
Employee Benefits.
|
GoDaddy.com, LLC
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
Scott Wagner
|
|
/s/ Scott Wagner
|
August 20, 2017
|
GoDaddy Inc.
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
Desert Newco, LLC (Soley for purposes of Section 9(b) hereof)
|
|
/s/ Nima Jacobs Kelly
|
By: Nima Kelly
|
August 21, 2017
|
|
Vested Options
|
Unvested Options, RSUs & PSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
The Company’s payment of wages
[
and accrued vacation pay
]
described in Paragraph 1(a)
[
and (b)] will be made on the Separation Date.
|
b.
|
The Separation Consideration is in addition to any wages earned prior to the Separation Date.
|
By:
|
/s/ Blake J. Irving
|
|
Blake J. Irving
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
By:
|
/s/ Ray E. Winborne
|
|
Ray E. Winborne
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
By:
|
/s/ Blake J. Irving
|
|
Blake J. Irving
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
By:
|
/s/ Ray E. Winborne
|
|
Ray E. Winborne
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|