GoDaddy beats the Street in fourth quarter of 2018
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GoDaddy beats the Street in fourth quarter of 2018

Web hosting company GoDaddy reported fourth quarter earnings for 2018 last week, beating the Street’s expectations and sending its share price higher. Despite this, the company logged an eye-catching reduction when it came to earnings (year on year the figure was down by 54%). But the reason investors aren’t concerned is simple: it’s a tax effect, rather than an issue with the underlying business. And, of course, despite coming in low against the previous year, GoDaddy’s earnings for the quarter were still double the Street’s estimates.

GoDaddy’s share price has appreciated by 19% so far this year

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Source: Yahoo Finance

For the three months just gone, GoDaddy said that non-GAAP adjusted earnings came in at 28 cents per share. That’s much lower than the 54 cents per share it reported in the fourth quarter of the previous year, due to “lower tax receivable agreements liability adjustment.” But, it’s still double the 14 cents per share analysts were expecting. GoDaddy said revenues came in at $695.8 million for the quarter – beating both the year-ago figure of $602.2 million, and analysts’ expectations of $693.2 million.

For the full year, GoDaddy said earnings came in at 45 cents per share, and revenue came in at $2.66 billion. Once more, tax-effects saw income diminish against the 2017, but the company’s revenue rose by half a billion (or 19%) against the previous year. At the end of the year, GoDaddy has a record number of customers: 18.5 million.

Stating that the company “finished 2018 on a strong note,” CEO Scott Wagner noted that GoDaddy had “an abundance of opportunities” and “continued to evolve our management structure.” Looking to the future, he added: “Stepping back, we've entered 2019 with wind at our back delivering on our financial objectives and laying the right foundation for multi-year growth.”

Dominion holds GoDaddy in its Global Trends Ecommerce Fund.

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