10-Q 1 gddy-20240331.htm 10-Q gddy-20240331
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Costs and operating expenses include equity-based compensation expense as follows:
Cost of revenue$— $0.4 
Technology and development37.5 39.0 
Marketing and advertising7.3 6.6 
Customer care5.8 5.4 
General and administrative20.4 20.2 
Restructuring and other0.8 2.3 
Total equity-based compensation expense$71.8 $73.9 
Components of OCI are net of the tax effects reflected below:

Three Months Ended
March 31,
20242023
Unrealized swap gain (loss), net$8.5 $— 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-36904
GoDaddy Inc.
(Exact name of registrant as specified in its charter)
Delaware46-5769934
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
100 S. Mill Ave
Tempe, Arizona 85281
(Address of principal executive offices) (zip code)
(480) 505-8800
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareGDDYNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes        No    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                    Yes        No    
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                         
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes        No    
As of April 26, 2024, there were 140,940,862 shares of GoDaddy Inc.'s Class A common stock, $0.001 par value per share.




GoDaddy Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2024

TABLE OF CONTENTS

i


NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this Quarterly Report), including the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors," contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), involving substantial risks and uncertainties. The words "believe," "may," "will," "potentially," "plan," "could," "should," "predict," "ongoing," "estimate," "continue," "anticipate," "intend," "project," "expect," "seek," or the negative of these words, or terms or similar expressions conveying uncertainty of future events or outcomes, or that concern our expectations, strategy, plans or intentions, are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or expected. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements discussed under the heading "Risk Factors" and in our publicly available filings and press releases. These statements include, among other things, those regarding:
our ability to continue to add new customers and increase sales to our existing customers;
our ability to develop new solutions and bring them to market in a timely manner;
our ability to timely and effectively scale and adapt our existing solutions;
our ability to deploy new and evolving technologies, such as artificial intelligence, machine learning, data analytics and similar tools (collectively, AI), in our offerings;
our dependence on establishing and maintaining a strong brand;
the occurrence of service interruptions and security or privacy breaches and related remediation efforts and fines;
system failures or capacity constraints;
the rate of growth of, and anticipated trends and challenges in, our business and in the market for our products;
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 maintain future profitability;
our ability to continue to efficiently acquire customers, maintain our high customer retention rates and grow the level of our customers' lifetime spend;
our ability to provide high quality customer care;
the effects of increased competition in our markets and our ability to compete effectively;
our ability to grow internationally;
the impact of fluctuations in foreign currency exchange rates on our business and our ability to effectively manage the exposure to such fluctuations;
our ability to effectively manage our growth and associated investments, including the migration of applications and services to the public cloud;
our ability to integrate acquisitions, our entry into new lines of business and our ability to achieve expected results from our integrations and new lines of business;
our ability to complete desired or proposed divestitures;
our ability to maintain our relationships with our partners;
adverse consequences of our level of indebtedness and our ability to repay our debt;
our ability to maintain, protect and enhance our intellectual property;
our ability to maintain or improve our market share;
sufficiency of cash and cash equivalents to meet our needs for at least the next 12 months;
beliefs and objectives for future operations;
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;
ii


NOTE ABOUT FORWARD-LOOKING STATEMENTS (continued)

economic and industry trends or trend analysis;
our ability to attract and retain qualified employees and key personnel;
anticipated income tax rates, tax estimates and tax standards;
our future taxable income and ability to realize our deferred tax assets;
interest rate changes;
the future trading prices of our Class A common stock;
our expectations regarding the outcome of any regulatory investigation or litigation;
the amount and timing of future repurchases of our Class A common stock under any share repurchase program;
the potential impact of shareholder activism on our business and operations;
our expectations regarding the effectiveness of our restructuring efforts;
our ability to remediate the identified material weakness in our internal control over financial reporting and to maintain effective internal control over financial reporting;
as well as other statements regarding our future operations, financial condition, growth prospects and business strategies.
We operate in very competitive and rapidly-changing environments, and new risks emerge from time-to-time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Quarterly Report may not occur, and actual results could differ materially and adversely from those implied in our forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this Quarterly Report to conform such statements to actual results or to changes in our expectations, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless expressly indicated or the context suggests otherwise, references to "GoDaddy," "company," "we," "us" and "our" refer to GoDaddy Inc. and its consolidated subsidiaries, including Desert Newco, LLC and its subsidiaries (Desert Newco).
iii

Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
GoDaddy Inc.
Consolidated Balance Sheets (unaudited)
(In millions, except shares in thousands and per share amounts)
March 31,December 31,
 20242023
Assets
Current assets:
Cash and cash equivalents$664.0 $458.8 
Short-term investments 40.0 
Accounts and other receivables93.9 76.6 
Registry deposits35.8 37.3 
Prepaid domain name registry fees480.3 466.0 
Prepaid expenses and other current assets221.8 177.2 
Total current assets1,495.8 1,255.9 
Property and equipment, net171.3 185.3 
Operating lease assets49.3 60.8 
Prepaid domain name registry fees, net of current portion216.4 209.0 
Goodwill3,548.7 3,569.3 
Intangible assets, net1,123.7 1,158.6 
Deferred tax assets1,271.5 1,020.4 
Other assets102.1 105.6 
Total assets$7,978.8 $7,564.9 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$120.8 $148.1 
Accrued expenses and other current liabilities409.5 442.2 
Deferred revenue2,174.4 2,074.9 
Long-term debt17.6 17.9 
Total current liabilities2,722.3 2,683.1 
Deferred revenue, net of current portion842.9 802.4 
Long-term debt, net of current portion3,794.8 3,798.5 
Operating lease liabilities, net of current portion83.9 90.2 
Other long-term liabilities91.2 90.7 
Deferred tax liabilities28.9 37.8 
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding
  
Class A common stock, $0.001 par value - 1,000,000 shares authorized; 142,429 and 142,051 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
0.1 0.1 
Class B common stock, $0.001 par value - 500,000 shares authorized; (1) and 259 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
  
Additional paid-in capital2,345.9 2,271.6 
Accumulated deficit(2,066.2)(2,320.7)
Accumulated other comprehensive income135.0 111.2 
Total stockholders' equity414.8 62.2 
Total liabilities and stockholders' equity$7,978.8 $7,564.9 
_________________________________
(1)Substantially all Class B shares were no longer outstanding as of March 31, 2024. See Note 1 for further discussion.
See accompanying notes to consolidated financial statements.
1

GoDaddy Inc.
Consolidated Statements of Operations (unaudited)
(In millions, except shares in thousands and per share amounts)

Three Months Ended
March 31,
20242023
Revenue:
Applications and commerce$383.1 $338.0 
Core platform725.4 698.0 
Total revenue1,108.5 1,036.0 
Costs and operating expenses(1):
Cost of revenue (excluding depreciation and amortization)414.5 386.1 
Technology and development202.9 215.0 
Marketing and advertising87.5 92.4 
Customer care76.4 76.8 
General and administrative91.7 94.1 
Restructuring and other22.4 52.3 
Depreciation and amortization37.2 48.5 
Total costs and operating expenses932.6 965.2 
Operating income175.9 70.8 
Interest expense(41.3)(45.8)
Loss on debt extinguishment(1.0) 
Other income (expense), net9.6 22.6 
Income before income taxes143.2 47.6 
Benefit (provision) for income taxes258.3 (0.2)
Net income 401.5 47.4 
Less: net income attributable to non-controlling interests 0.1 
Net income attributable to GoDaddy Inc. $401.5 $47.3 
Net income attributable to GoDaddy Inc. per share of Class A common stock:
Basic$2.82 $0.31 
Diluted$2.76 $0.30 
Weighted-average shares of Class A common stock outstanding:
Basic142,528 154,124 
Diluted145,676 156,644 
___________________________
(1) Costs and operating expenses include equity-based compensation expense as follows:
Cost of revenue$ $0.4 
Technology and development37.5 39.0 
Marketing and advertising7.3 6.6 
Customer care5.8 5.4 
General and administrative20.4 20.2 
Restructuring and other0.8 2.3 
Total equity-based compensation expense$71.8 $73.9 
See accompanying notes to consolidated financial statements.
2

GoDaddy Inc.
Consolidated Statements of Comprehensive Income (unaudited)
(In millions)

Three Months Ended
March 31,
20242023
Net income$401.5 $47.4 
Foreign exchange forward contracts gain (loss), net9.3 (6.9)
Unrealized swap gain (loss), net(1)
10.5 (32.6)
Change in foreign currency translation adjustment3.8 2.1 
Comprehensive income425.1 10.0 
Less: comprehensive income attributable to non-controlling interests 0.2 
Comprehensive income attributable to GoDaddy Inc.$425.1 $9.8 
___________________________
(1) Amounts are net of the tax effects reflected below:
Unrealized swap gain (loss), net$8.5 $ 
See accompanying notes to consolidated financial statements.
3

GoDaddy Inc.
Consolidated Statements of Stockholders' Equity (Deficit) (unaudited)
(In millions, except shares in thousands)

Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive IncomeTotal
SharesAmount
Shares(1)
Amount
Balance at December 31, 2023142,051 $0.1 259 $ $2,271.6 $(2,320.7)$111.2 $62.2 
Net income — — — — — 401.5 — 401.5 
Equity-based compensation, including amounts capitalized— — — — 72.3 — — 72.3 
Stock option exercises80 — — — 2.1 — — 2.1 
Repurchases of Class A common stock(2)
(1,245)— — — — (147.1)— (147.1)
Impact of derivatives, net— — — — — — 19.8 19.8 
Change in foreign currency translation adjustment— — — — — — 3.8 3.8 
Vesting of restricted stock units and other1,543 — (259)— (0.1)0.1 0.2 0.2 
Balance at March 31, 2024142,429 $0.1  $ $2,345.9 $(2,066.2)$135.0 $414.8 
_________________________________
(1)Substantially all Class B shares were no longer outstanding as of March 31, 2024. See Note 1 for further discussion.
(2)Includes a 1% excise tax on shares repurchased, net of the fair market value of new share issuances, of $0.5 million.

4

GoDaddy Inc.
Consolidated Statements of Stockholders' Equity (Deficit) (unaudited) (continued)
(In millions, except shares in thousands)
Class A Common StockClass B Common StockAdditional
Paid-in
Capital
Accumulated DeficitAccumulated Other Comprehensive Income (Loss)Non-
Controlling
Interests
Total
SharesAmountSharesAmount
Balance at December 31, 2022153,830 $0.2 312 $ $1,912.6 $(2,422.6)$178.0 $2.5 $(329.3)
Net income — — — — — 47.3 — 0.1 47.4 
Equity-based compensation, including amounts capitalized— — — — 74.5 — — — 74.5 
Stock option exercises132 — — — 3.2 — — — 3.2 
Repurchases of Class A common stock(1,553)— — — — (113.9)— — (113.9)
Impact of derivatives, net— — — — — — (39.5)— (39.5)
Change in foreign currency translation adjustment— — — — — — 2.1 — 2.1 
Vesting of restricted stock units and other1,705 — (5)— 0.2 (0.1)0.1 (0.2) 
Balance at March 31, 2023154,114 $0.2 307 $ $1,990.5 $(2,489.3)$140.7 $2.4 $(355.5)
See accompanying notes to consolidated financial statements.
5

GoDaddy Inc.
Consolidated Statements of Cash Flows (unaudited)
(In millions)
 
Three Months Ended
March 31,
 20242023
Operating activities
Net income$401.5 $47.4 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization37.2 48.5 
Equity-based compensation expense71.8 73.9 
Non-cash restructuring and other charges1.9 21.0 
Deferred taxes(259.5)(10.0)
Other5.6 8.9 
Changes in operating assets and liabilities, net of amounts acquired:
Prepaid domain name registry fees(22.1)(29.5)
Deferred revenue146.1 114.8 
Other operating assets and liabilities(85.3)(4.7)
Net cash provided by operating activities297.2 270.3 
Investing activities
Maturities of short-term investments40.0  
Net proceeds received from disposition of a business8.1  
Purchases of property and equipment(4.4)(22.8)
Net cash provided by (used in) investing activities43.7 (22.8)
Financing activities
Proceeds from stock option exercises2.1 3.2 
Payments made for:
Repurchases of Class A common stock(128.3)(119.7)
Repayment of long-term debt(6.3)(6.3)
Other financing obligations(2.5)(1.4)
Net cash used in financing activities(135.0)(124.2)
Cash and cash equivalents classified within assets held for sale (5.2)
Effect of exchange rate changes on cash and cash equivalents(0.7)0.3 
Net increase in cash and cash equivalents205.2 118.4 
Cash and cash equivalents, beginning of period458.8 774.0 
Cash and cash equivalents, end of period$664.0 $892.4 
Cash paid during the period for:
Interest on long-term debt, including impact of interest rate swaps$31.2 $44.7 
Income taxes, net of refunds received$5.2 $2.2 
Amounts included in the measurement of operating lease liabilities$10.6 $12.1 
Supplemental disclosure of non-cash transactions
Operating lease assets obtained in exchange for operating lease liabilities$0.3 $1.4 
Accrued purchases of property and equipment at period end$0.5 $2.0 
Share repurchases not yet settled$19.3 $ 
See accompanying notes to consolidated financial statements.
6

GoDaddy Inc.
Notes to Consolidated Financial Statements (unaudited)
(In millions, except shares in thousands and per share amounts)

1.    Organization and Background
Organization
We are the sole managing member of Desert Newco, LLC (Desert Newco), and as a result, we consolidate its financial results into the results and financial position of the Company. As of March 31, 2024, we owned 100% of Desert Newco.
On December 11, 2023, we completed a series of transactions (the DNC Restructure) designed to simplify our capital structure, commonly referred to as an "Up-C" structure, and provide us with additional strategic flexibility which resulted in Desert Newco becoming a wholly-owned subsidiary of GoDaddy Inc. Pursuant to the DNC Restructure, 271 Limited Liability Company Units (LLC Units) of Desert Newco not held by us or our subsidiaries were cancelled and converted into 271 newly issued shares of our Class A common stock. Each LLC Unit formerly held by such other unitholders was paired with one share of our Class B common stock, which shares of Class B common stock remained outstanding immediately following the DNC Restructure. To the extent the shares of Class B common stock remain outstanding, the holders are entitled to one vote for each share held of record on all matters submitted to a vote of our stockholders, but such shares have no economic rights and are non-transferrable. As of March 31, 2024, substantially all Class B shares outstanding immediately following the DNC Restructure were surrendered and no longer outstanding. Subsequent to the DNC Restructure, on January 1, 2024, Desert Newco was converted from a partnership to a disregarded entity and as a result we are now treated as a consolidated C corporation group for U.S. income tax purposes.

Basis of Presentation
Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated.
Our interim financial statements are unaudited and, in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2024.
7

These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the 2023 Form 10-K).
Prior Period Presentation
Certain immaterial prior period amounts have been reclassified to conform to the current period presentation.
Use of Estimates
GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ.
Segments
We report our operating results through two reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 16.
2.    Summary of Significant Accounting Policies
Property and Equipment
Property and equipment, net by geography was as follows:
 March 31, 2024December 31, 2023
U.S.$139.0 $146.9 
France17.3 19.8 
All other international15.0 18.6 
$171.3 $185.3 
No other international country represented more than 10% of property and equipment, net in any period presented.
Equity Investments
We hold investments in privately held equity securities, which are recorded in other assets with a carrying value of $53.1 million as of March 31, 2024 and December 31, 2023.
Revenue Recognition
Disaggregated Revenue
Revenue by major product type was as follows:
 Three Months Ended March 31,
 20242023
A&C$383.1 $338.0 
Core: domains532.0 492.1 
Core: other193.4 205.9 
$1,108.5 $1,036.0 
No single customer represented over 10% of our total revenue for any period presented.
8

Revenue by geography is based on the customer's billing address and was as follows:
 Three Months Ended March 31,
 20242023
U.S.$755.6 $695.4 
International352.9 340.6 
$1,108.5 $1,036.0 
No international country represented more than 10% of total revenue in any period presented.
See Note 7 for information regarding our deferred revenue.
Assets Recognized from Contract Costs
Fees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the asset relates. Amortization expense of such asset was $193.8 million and $185.1 million for the three months ended March 31, 2024 and 2023, respectively.
Restructuring and Other
Restructuring and other primarily represents: (i) charges related to restructuring activities undertaken to reduce future operating expenses and improve cash flows through a combination of reductions in force and the sale of certain assets and liabilities of our hosting business within our Core segment; and (ii) charges incurred in the first quarter of 2024 related to the abandonment of right-of-use assets associated with certain operating leases. See Note 13 for further discussion.
Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows:
Level 1— Observable inputs such as quoted prices for identical assets or liabilities in active markets;
Level 2— Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and
Level 3— Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions.
We hold certain assets required to be measured at fair value on a recurring basis. These include time deposits, which we classify within Level 1 because we use quoted market prices to determine their fair value. Level 2 assets and liabilities include commercial paper and derivative financial instruments associated with hedging activity, as further discussed in Note 10. Derivative financial instruments are measured at fair value on the contract date and are subsequently remeasured each reporting period using inputs such as spot rates, discount rates and forward rates. There are not active markets for the hedge contracts themselves; however, the inputs used to calculate the fair value of the instruments are tied to active markets.
9

The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis:
March 31, 2024
Level 1Level 2Level 3Total
Assets:
 Cash and cash equivalents:
Commercial paper$ $49.8 $ $49.8 
Time deposits58.8   58.8 
 Derivative assets 150.4  150.4 
Total assets$58.8 $200.2 $ $259.0 
Liabilities:
 Derivative liabilities$ $18.2 $ $18.2 
December 31, 2023
Level 1Level 2Level 3Total
Assets:
 Cash and cash equivalents:
Commercial paper$ $39.6 $ $39.6 
Time deposits40.0   40.0 
 Short-term investments:
Time deposits40.0 40.0 
 Derivative assets 128.6  128.6 
Total assets$80.0 $168.2 $ $248.2 
Liabilities:
 Derivative liabilities $ $46.4 $ $46.4 
We have no other material assets or liabilities measured at fair value on a recurring basis.
Recent Accounting Pronouncements
In November 2023, the Financial Standards Accounting Board (FASB) issued guidance to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective for our 2024 fiscal year and interim periods in fiscal year 2025, with early adoption permitted. We are currently evaluating the impact that the adoption of this standard will have on our consolidated financial statements.
In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this guidance require additional disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table. The new guidance will be effective for the 2025 fiscal year, with early adoption permitted. We are currently evaluating the impact of this standard on our disclosures within our consolidated financial statements.
3.    Goodwill and Intangible Assets
The following table summarizes changes in our goodwill balance by segment:
A&CCoreTotal
Balance at December 31, 2023$1,513.6 $2,055.7 $3,569.3 
Impact of foreign currency translation(7.9)(11.0)(18.9)
Less: goodwill related to disposition of a business (1.7)(1.7)
Balance at March 31, 2024$1,505.7 $2,043.0 $3,548.7 
10


Intangible assets, net are summarized as follows:
March 31, 2024
Gross 
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Indefinite-lived intangible assets:
Trade names and branding$445.0 n/a$445.0 
Domain portfolio232.6 n/a232.6 
Contractual-based assets292.7 n/a292.7 
Finite-lived intangible assets:
Customer-related399.6 $(315.1)84.5 
Developed technology237.3 (202.1)35.2 
Trade names and other95.2 (61.5)33.7 
$1,702.4 $(578.7)$1,123.7 

 December 31, 2023
Gross 
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Indefinite-lived intangible assets:
Trade names and branding$445.0 n/a$445.0 
Domain portfolio233.6 n/a233.6 
Contractual-based assets292.7 n/a292.7 
Finite-lived intangible assets:
Customer-related459.3 $(352.2)107.1 
Developed technology246.8 (205.6)41.2 
Trade names and other104.8 (65.8)39.0 
$1,782.2 $(623.6)$1,158.6 
Amortization expense was $20.5 million and $32.7 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the weighted-average remaining amortization period for amortizable intangible assets was 25 months for customer-related, 21 months for developed technology and 43 months for trade names and other, and was 28 months in total.
Based on the balance of finite-lived intangible assets as of March 31, 2024, expected future amortization expense is as follows:
Year Ending December 31:
2024 (remainder of)$55.7 
202567.8 
202622.5 
20274.2 
20281.9 
Thereafter1.3 
$153.4 
11

4.    Stockholders' Equity
Share Repurchase Program
Our board of directors has authorized a share repurchase program of up to $4,000.0 million. During the three months ended March 31, 2024, we repurchased a total of 1,245 shares of our Class A common stock in the open market, which were retired upon repurchase, for an aggregate purchase price of $147.7 million. As of March 31, 2024, we had $1,287.8 million of remaining authorization available for repurchases.
5.    Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
March 31, 2024December 31, 2023
Derivative assets$148.5 $127.2 
Prepaid software and maintenance expenses40.2 23.0 
Other33.1 27.0 
$221.8 $177.2 
6.    Equity-Based Compensation Plans
We have granted stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date as well as granted both stock options and restricted stock awards (RSUs) vesting solely upon the continued service of the recipient. Performance-based awards (PSUs) vest based on our relative total stockholder return (TSR) as compared to an index of public internet companies.
The following table summarizes stock option activity:
Number of
Shares of Class A Common Stock (#)
Weighted-
Average
Exercise
Price Per Share ($)
Outstanding at December 31, 2023
845 49.60 
Exercised(80)26.52 
Forfeited 18.00 
Outstanding at March 31, 2024
765 52.03 
Vested at March 31, 2024
764 52.01 
12

The following table summarizes stock award activity:
Number of
Shares of Class A Common Stock (#)
Outstanding at December 31, 20236,257 
Granted: RSUs2,472 
Granted: TSR-based PSUs212 
TSR-based PSU achievement above target230 
Vested(1,542)
Forfeited(221)
Outstanding at March 31, 2024(1)
7,408 
_________________________________
(1)The balance of outstanding awards is comprised of the following:
Number of
Shares of Class A Common Stock (#)
Weighted-Average Grant-Date Fair Value Per Share ($)
RSUs6,757 91.62
TSR-based PSUs651 142.30
Outstanding at March 31, 20247,408 
As of March 31, 2024, total unrecognized compensation expense related to non-vested equity grants was $552.9 million with an expected remaining weighted-average recognition period of 2.3 years.
7.    Deferred Revenue
Deferred revenue consisted of the following:
March 31, 2024December 31, 2023
Current:
A&C$742.2 $683.8 
Core1,432.2 1,391.1 
$2,174.4 $2,074.9 
Noncurrent:
A&C$186.7 $173.5 
Core656.2 628.9 
$842.9 $802.4 
The increase in deferred revenue is primarily driven by payments received in advance of satisfying our performance obligations, offset by $810.3 million of revenue recognized during the three months ended March 31, 2024, which was included in deferred revenue as of December 31, 2023. Deferred revenue as of March 31, 2024 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are expected to be satisfied, as follows:
Remainder of 2024
2025202620272028ThereafterTotal
A&C$663.4 $186.5 $59.8 $11.7 $4.5 $3.0 $928.9 
Core1,238.7 492.2 172.5 80.2 43.6 61.2 2,088.4 
$1,902.1 $678.7 $232.3 $91.9 $48.1 $64.2 $3,017.3 
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8.     Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
March 31, 2024December 31, 2023
Accrued payroll and employee benefits$104.6 $143.6 
Tax-related accruals68.9 56.2 
Accrued legal and professional37.8 34.2 
Current portion of operating lease liabilities26.6 29.1 
Share repurchases not yet settled19.3  
Derivative liabilities18.1 46.4 
Accrued marketing and advertising16.1 12.3 
Accrued interest14.9 13.6 
Accrued restructuring costs10.0 7.4 
Accrued acquisition-related expenses1.6 20.6 
Other91.6 78.8 
$409.5 $442.2 
9.    Long-Term Debt
Long-term debt consisted of the following:
 Maturity DateMarch 31, 2024December 31, 2023
2027 Term Loans (effective interest rate of 7.7% at March 31, 2024 and 7.4% at December 31, 2023)
August 10, 2027$721.9 $723.8 
2029 Term Loans (effective interest rate of 7.9% at March 31, 2024 and 8.4% at December 31, 2023)
November 10, 20291,748.0 1,752.3 
2027 Senior Notes (effective interest rate of 5.5% at March 31, 2024 and 5.4% at December 31, 2023)
December 1, 2027600.0 600.0 
2029 Senior Notes (effective interest rate of 3.7% at March 31, 2024 and 3.6% at December 31, 2023)
March 1, 2029800.0 800.0 
Revolver
November 10, 2027  
Total3,869.9 3,876.1 
Less: unamortized original issue discount and debt issuance costs(1)
(57.5)(59.7)
Less: current portion of long-term debt(17.6)(17.9)
$3,794.8 $3,798.5 
_________________________________
(1)Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method.
Credit Facility
As described in our 2023 Form 10-K, our secured credit agreement (the Credit Facility) includes two tranches of term loans (the 2027 Term Loans and the 2029 Term Loans) and a revolving credit facility (the Revolver). A portion of the term loans is hedged by interest rate swap arrangements, as discussed in Note 10.
In January 2024, we entered into an amendment to the Credit Facility to provide for a new tranche of term loans maturing in 2029, the proceeds of which were used to refinance our existing 2029 Term Loans. Pursuant to this amendment, these loans were issued at par and bear interest at a rate equal to, at our option, either (a) Secured Overnight Financing Rate (SOFR) for the applicable interest period plus a margin of 2.0% per annum or (b) a margin of 1.0% per annum plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) SOFR for an interest period of one month plus 1.0%.
14

As of March 31, 2024, we had $998.8 million available for borrowing under the Revolver as $1.2 million has been used to secure the issuance of standby letters of credit. We were not in violation of any covenants of the Credit Facility as of March 31, 2024.
Senior Notes
As described in our 2023 Form 10-K, we have completed two offerings of senior notes (the 2027 Senior Notes and the 2029 Senior Notes).
As of March 31, 2024, we were not in violation of any covenants of the Senior Notes.
Fair Value
The estimated fair values of our long-term debt instruments are based on observable market prices for these instruments, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of March 31, 2024:
2027 Term Loans$722.8 
2029 Term Loans$1,748.0 
2027 Senior Notes$587.2 
2029 Senior Notes$721.6 
Future Debt Maturities
Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of March 31, 2024 were as follows:
Year Ending December 31:
2024 (remainder of)$18.8 
202525.0 
202625.0 
20271,318.8 
202817.5 
Thereafter2,464.8 
$3,869.9 
10.    Derivatives and Hedging
We utilize the following derivative instruments designated as cash flow hedges:
foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currencies;
cross-currency swaps used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and
pay-fixed rate, receive-floating rate interest rate swaps to effectively convert portions of our variable-rate debt to fixed.
We also utilize cross-currency swaps designated as net investment hedges to mitigate the risk associated with exchange rate fluctuations on our net investment in certain foreign operations.
15

The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments:
Notional Amount
Fair Value of Derivative Assets(2)
Fair Value of Derivative Liabilities(2)
 March 31, 2024December 31, 2023March 31, 2024December 31, 2023March 31, 2024December 31, 2023
Cash flow hedges:
Foreign exchange forward contracts(1)
$663.7 $592.1 $1.9 $1.4 $3.6 $14.7 
Cross-currency swaps(2)
546.9 560.8   6.4 13.9 
Interest rate swaps1,954.5 1,959.7 148.5 127.2   
Net investment hedges:
Cross-currency swaps(3)
701.1 718.8   8.2 17.8 
Total hedges$3,866.2 $3,831.4 $150.4 $128.6 $18.2 $46.4 
_________________________________
(1)The notional amount includes $0.7 million of foreign exchange forward contracts not designated as cash flow hedges, the aggregate fair value of which was $0.9 million at March 31, 2024.
(2)The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.08 and 1.10 as of March 31, 2024 and December 31, 2023, respectively.
(3)In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets and all derivative liabilities are recorded within accrued expenses and other current liabilities.
The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI):
Unrealized Gains (Losses) Recognized in Other Comprehensive Income
 Three Months Ended
March 31, 2024March 31, 2023
Cash flow hedges:
Foreign exchange forward contracts(1)
$9.3 $(6.9)
Cross-currency swaps(2.1)2.0 
Interest rate swaps21.1 (34.6)
Net investment hedges:
Cross-currency swaps13.2 (6.4)
Total hedges$41.5 $(45.9)
_________________________________
(1)Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.
16

The following tables summarize the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
RevenueInterest ExpenseOther Income (Expense), NetRevenueInterest ExpenseOther Income (Expense), Net
Cash flow hedges:
Foreign exchange forward contracts:
Reclassified from AOCI into income$1.6 $ $ $4.8 $ $ 
Cross-currency swaps:
Reclassified from AOCI into income(1)
 2.4 12.4  2.4 (7.1)
Interest rate swaps:
Reclassified from AOCI into income 18.0   14.1  
Net investment hedges:
Cross-currency swaps:
Reclassified from AOCI into income 3.1   3.2  
Total hedges$1.6 $23.5 $12.4 $4.8 $19.7 $(7.1)
_________________________________
(1)The amounts reflected in other income (expense), net include $(12.4) million and $7.0 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by cross-currency swaps during the three months ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, we estimate that $97.2 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing.
Risk Management Strategies
Foreign Exchange Forward Contracts
From time-to-time, we may enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in foreign currencies. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. At March 31, 2024, all such contracts had maturities of 24 months or less.
Cross-Currency Swaps
In April 2017, in order to manage variability due to movements in foreign currency rates related to a Euro-denominated intercompany loan, we entered into five-year cross-currency swaps. In March 2022, we entered into a transaction to extend the maturity of these swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new swaps (the 2022 Cross-Currency Swaps) were designated as either cash flow hedging relationships or net investment hedging relationships. The 2022 Cross-Currency Swaps had an aggregate amortizing notional amount of €1,184.2 million at inception (approximately $1,262.5 million). The swaps designated as cash flow hedging relationships convert the 3.00% fixed rate Euro-denominated interest and principal receipts on the intercompany loan into U.S. dollar interest and principal receipts at a fixed rate of 4.81%. The swaps designated as net investment hedging relationships hedge the foreign currency exposure of our net investment in certain Euro denominated functional currency subsidiaries. Pursuant to the contracts, the Euro notional value will be exchanged for the U.S. dollar notional value at maturity.
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Interest Rate Swaps
In April 2017, we entered into a five-year pay-fixed rate, receive-floating rate interest rate swap arrangement to effectively convert a portion of the variable-rate borrowings under the previously issued term loans maturing in 2024, which were refinanced with the 2029 Term Loans, to a fixed rate of 5.44%. In March 2022, we entered into a transaction to extend the maturity of the swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new interest rate swaps (the 2022 Interest Rate Swaps) were designated. The 2022 Interest Rate Swaps, which had an amortizing notional amount of $1,262.5 million at inception, serve to convert a portion of the variable-rate borrowings under the 2029 Term Loans to a fixed rate of 4.81%. In November 2022, in conjunction with the concurrent Credit Facility refinancing discussed in our 2023 Form 10-K, we terminated these swaps and entered into new SOFR-based interest rate swaps. This modification impacted no critical terms other than the reference rate change from LIBOR to SOFR and thus had no impact on our hedging relationships or financial statements.
In August 2020, in conjunction with the issuance of the 2027 Term Loans, we entered into seven-year pay-fixed rate, receive-floating rate interest rate swaps to effectively convert the variable one-month LIBOR interest rate on the 2027 Term Loans borrowings to a fixed rate of 0.705%. These interest rate swaps, which mature on August 10, 2027, had an aggregate notional amount of $750.0 million at inception. In May 2023, in conjunction with the concurrent Credit Facility amendment, we terminated these swaps and entered into new SOFR-based interest rate swaps. This modification impacted no critical terms other than the reference rate change from LIBOR to SOFR and thus had no impact on our hedging relationships or financial statements.
The objective of these arrangements, which are designated as cash flow hedges and recognized as assets or liabilities at fair value, is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. The unrealized gains and losses on the swaps are included in AOCI and will be recognized in earnings within or against interest expense when the hedged interest payments are accrued each month.
11.     Leases
Our operating leases primarily consist of office and data center space expiring at various dates through October 2034. Certain leases include options to renew or terminate at our discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2024, operating leases have a remaining weighted average lease term of 6.5 years and our operating lease liabilities were measured using a weighted average discount rate of 5.5%.
The components of operating lease expense were as follows:
Three Months Ended
 March 31, 2024March 31, 2023
Operating lease costs$7.5 $9.8 
Variable lease costs3.7 3.8 
Sublease income(2.9)(2.3)
Total net lease cost$8.3 $11.3 
During the three months ended March 31, 2024, we recognized $5.8 million of expense related to the abandonment of certain operating leases, which is included within restructuring and other.
As of March 31, 2024, we have $14.9 million in commitments for operating leases that have not yet commenced, and therefore are not included in our right-of-use assets or operating lease liabilities. These leases will commence during Q2 2024 with a weighted average lease term of 6.7 years.
12.    Commitments and Contingencies
Litigation
From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigations, other proceedings and consent decrees in the ordinary course of business, including intellectual property claims, putative and certified class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims and
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other asserted and unasserted claims. We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable.
There have been no material changes outside of the ordinary course of business to our known contractual obligations, which were included in Note 13 of Item 8 of our 2023 Form 10-K.
Indirect Taxes
We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject communications and commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the U.S. and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the businesses of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generate based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals.
Our accrual for estimated indirect tax liabilities was $25.5 million and $23.6 million as of March 31, 2024 and December 31, 2023, respectively, reflecting our best estimate of the probable liability based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations. Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits, litigation or settlements could be materially different than the amounts established for indirect tax contingencies.
13. Restructuring and Other Charges
During the three months ended March 31, 2024, we implemented restructuring activities to further reduce operating expenses and improve cash flows through a reduction in force, which impacted approximately 180 employees. In conjunction with these restructuring activities, we recognized $11.1 million of pre-tax restructuring charges in our statement of operations related to severance, employee benefits and equity-based compensation. Of the $11.1 million of pre-tax restructuring charges recognized during the three months ended March 31, 2024, $4.5 million and $6.1 million were recognized within our A&C and Core segments, respectively, and $0.5 million was recognized as corporate overhead.
Cash payments of $1.3 million related to the restructuring activities described above were made during the three months ended March 31, 2024. We expect to make substantially all remaining restructuring payments by the end of the third quarter of 2024.
The following table shows the total amount incurred and the accrued restructuring costs, which are recorded in accrued expenses and other current liabilities in our balance sheet, for severance and employee benefits:
 Accrued Restructuring Costs
Accrued restructuring costs as of December 31, 2023$7.4 
Restructuring costs incurred during the three months ended March 31, 2024(1)
10.6 
Amount paid during the three months ended March 31, 2024
(8.0)
Accrued restructuring costs as of March 31, 2024
$10.0 
Accrued restructuring costs as of December 31, 2022$ 
Restructuring costs incurred during the three months ended March 31, 2023(1)
27.1 
Amount paid during the three months ended March 31, 2023
(6.4)
Accrued restructuring costs as of March 31, 2023
$20.7 
________________________________
(1)The three months ended March 31, 2024 and March 31, 2023 excludes $0.8 million and $2.3 million, respectively, of equity-based compensation expense associated with our restructuring plans which was recorded within additional paid-in capital.
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During the three months ended March 31, 2024, we also recognized $5.8 million of expense related to the abandonment of certain operating leases as discussed in Note 11. During the three months ended March 31, 2023, we recognized a $21.0 million charge in connection with the planned disposition of certain assets and liabilities of our hosting business within our Core segment which occurred on June 30, 2023.
14.    Income Taxes
We completed the DNC Restructure to simplify our capital structure, and on January 1, 2024, Desert Newco was converted from a partnership to a disregarded entity for U.S. income tax purposes. As a result, we now account for our deferred taxes related to Desert Newco based on the inside basis differences of our assets and liabilities where prior to the DNC Restructure we accounted for our deferred tax assets and liabilities related to Desert Newco based on the outside basis difference of our investment in Desert Newco. In connection with this change, we adjusted certain temporary differences on existing assets and liabilities which resulted in a one-time non-cash income tax benefit in the first quarter of 2024 of $267.4 million.
The components of our deferred taxes before and after the DNC restructuring are as follows:
January 1, 2024December 31, 2023
(Post-DNC Restructure)(Pre-DNC Restructure)
Deferred tax assets (DTAs) related to:
Deferred revenue$636.3 $ 
Goodwill385.2  
Net operating losses (NOLs)198.9 473.1 
Intangible assets168.0 (40.0)
Tax credits167.6 167.6 
Deferred interest44.0 44.0 
Operating lease liabilities31.8 15.3 
Accrued expenses24.2