filings.toolsItem 6. Selected Financial Data
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Item 6. Selected Financial Data
You should read the following selected consolidated financial data in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes appearing in "Financial Statements and Supplementary Data."
We were incorporated in May 2014 and, pursuant to a series of pre-IPO organizational transactions, became a holding company whose principal asset is a controlling equity interest in Desert Newco. We are the sole managing member of Desert Newco, and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by its other members. Because the pre-IPO organizational transactions were considered transactions between entities under common control, the financial statements for periods prior to our April 2015 IPO have been adjusted to combine the previously separate entities for presentation purposes.
The consolidated statements of operations data for the years ended December 31, 2018, 2017 and 2016 and the consolidated balance sheets data as of December 31, 2018 and 2017 are derived from our audited consolidated financial statements and the related notes appearing in "Financial Statements and Supplementary Data." The consolidated statements of operations data for the years ended December 31, 2015 and 2014, and the consolidated balance sheets data as of December 31, 2016, 2015 and 2014 are derived from our audited consolidated financial statements not included in this Form 10-K. Our historical results are not necessarily indicative of the results to be expected in any future period.
| Year Ended December 31, | |||||||||||||||||||
| 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
| Consolidated Statements of Operations Data: | (in millions, except shares in thousands and per share amounts) | ||||||||||||||||||
| Total revenue | $ | 2,660.1 | $ | 2,231.9 | $ | 1,847.9 | $ | 1,607.3 | $ | 1,387.3 | |||||||||
| Costs and operating expenses(1): | |||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | 893.9 | 775.5 | 657.8 | 565.9 | 518.4 | ||||||||||||||
| Technology and development | 434.0 | 355.8 | 287.8 | 270.2 | 250.8 | ||||||||||||||
| Marketing and advertising | 291.4 | 253.2 | 228.8 | 202.2 | 164.7 | ||||||||||||||
| Customer care | 323.1 | 292.3 | 242.1 | 221.5 | 190.5 | ||||||||||||||
| General and administrative | 334.0 | 282.4 | 221.2 | 219.7 | 172.0 | ||||||||||||||
| Depreciation and amortization | 234.1 | 205.8 | 160.1 | 158.8 | 152.8 | ||||||||||||||
| Total costs and operating expenses | 2,510.5 | 2,165.0 | 1,797.8 | 1,638.3 | 1,449.2 | ||||||||||||||
| Operating income (loss) | 149.6 | 66.9 | 50.1 | (31.0 | ) | (61.9 | ) | ||||||||||||
| Interest expense | (98.4 | ) | (83.0 | ) | (57.2 | ) | (69.2 | ) | (85.0 | ) | |||||||||
| Loss on debt extinguishment | — | (7.3 | ) | — | (21.4 | ) | — | ||||||||||||
| Tax receivable agreements liability adjustment | 14.9 | 123.2 | (12.5 | ) | — | — | |||||||||||||
| Other income (expense), net | 6.9 | 7.0 | (1.9 | ) | 1.0 | 0.8 | |||||||||||||
| Income (loss) from continuing operations before income taxes | 73.0 | 106.8 | (21.5 | ) | (120.6 | ) | (146.1 | ) | |||||||||||
| Benefit (provision) for income taxes | 9.0 | 18.9 | (0.4 | ) | 0.2 | 2.8 | |||||||||||||
| Income (loss) from continuing operations | 82.0 | 125.7 | (21.9 | ) | (120.4 | ) | (143.3 | ) | |||||||||||
| Income from discontinued operations, net of income taxes | — | 14.1 | — | — | — | ||||||||||||||
| Net income (loss) | 82.0 | 139.8 | (21.9 | ) | (120.4 | ) | (143.3 | ) | |||||||||||
| Less: net income (loss) attributable to non-controlling interests | 4.9 | 3.4 | (5.4 | ) | (44.8 | ) | — | ||||||||||||
| Net income (loss) attributable to GoDaddy Inc. | $ | 77.1 | $ | 136.4 | $ | (16.5 | ) | $ | (75.6 | ) | $ | (143.3 | ) | ||||||
| Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—basic(2): | |||||||||||||||||||
| Continuing operations | $ | 0.50 | $ | 1.17 | $ | (0.21 | ) | $ | (0.81 | ) | $ | (1.11 | ) | ||||||
| Discontinued operations | — | 0.08 | — | — | — | ||||||||||||||
| Net income (loss) attributable to GoDaddy Inc. | $ | 0.50 | $ | 1.25 | $ | (0.21 | ) | $ | (0.81 | ) | $ | (1.11 | ) | ||||||
| Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—diluted(2): | |||||||||||||||||||
| Continuing operations | $ | 0.45 | $ | 0.71 | $ | (0.21 | ) | $ | (0.81 | ) | $ | (1.11 | ) | ||||||
| Discontinued operations | — | 0.08 | — | — | — | ||||||||||||||
| Net income (loss) attributable to GoDaddy Inc. | $ | 0.45 | $ | 0.79 | $ | (0.21 | ) | $ | (0.81 | ) | $ | (1.11 | ) | ||||||
| Weighted-average shares of Class A common stock outstanding(2): | |||||||||||||||||||
| Basic | 155,234 | 108,779 | 79,835 | 58,676 | 38,826 | ||||||||||||||
| Diluted | 181,353 | 177,054 | 79,835 | 58,676 | 38,826 | ||||||||||||||
| ___________________________ | |||||||||||||||||||
| (1) Costs and operating expenses include equity-based compensation expense as follows: | |||||||||||||||||||
| Technology and development | $ | 57.8 | $ | 37.1 | $ | 23.2 | $ | 18.2 | $ | 10.4 | |||||||||
| Marketing and advertising | 10.3 | 7.3 | 8.1 | 6.1 | 6.1 | ||||||||||||||
| Customer care | 6.2 | 3.6 | 3.9 | 2.9 | 0.8 | ||||||||||||||
| General and administrative | 51.2 | 28.4 | 21.6 | 13.2 | 12.8 | ||||||||||||||
| Total equity-based compensation expense | $ | 125.5 | $ | 76.4 | $ | 56.8 | $ | 40.4 | $ | 30.1 |
| (2) | Amounts for periods prior to our IPO have been retrospectively adjusted to give effect to the pre-IPO organizational transactions. The prior period amounts do not consider the 26,000 shares of Class A common stock sold in our IPO. |
| December 31, | |||||||||||||||||||
| 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
| Consolidated Balance Sheets Data: | (in millions) | ||||||||||||||||||
| Cash and cash equivalents | $ | 932.4 | $ | 582.7 | $ | 566.1 | $ | 348.0 | $ | 139.0 | |||||||||
| Prepaid domain name registry fees | 546.8 | 532.3 | 479.1 | 456.3 | 425.6 | ||||||||||||||
| Property and equipment, net | 299.0 | 297.9 | 231.0 | 225.0 | 220.9 | ||||||||||||||
| Total assets | 6,083.4 | 5,738.3 | 3,786.9 | 3,498.8 | 3,260.7 | ||||||||||||||
| Deferred revenue | 2,017.5 | 1,861.6 | 1,576.2 | 1,416.2 | 1,250.6 | ||||||||||||||
| Total debt(1) | 2,457.3 | 2,482.3 | 1,072.5 | 1,083.5 | 1,469.5 | ||||||||||||||
| Total liabilities | 5,258.9 | 5,191.8 | 3,072.7 | 2,817.8 | 2,850.3 |
| (1) | Total debt includes long-term debt, unamortized original issue discount and unamortized debt issuance costs. |
Key Metrics
In addition to our results determined in accordance with GAAP, we believe the following operating metrics are useful as supplements in evaluating our ongoing operational performance and help provide an enhanced understanding of our business:
| Year Ended December 31, | |||||||||||||||||||
| 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
| (unaudited) | |||||||||||||||||||
| Total bookings (in millions) | $ | 3,011.5 | $ | 2,618.2 | $ | 2,155.5 | $ | 1,914.2 | $ | 1,675.2 | |||||||||
| Total customers at period end (in thousands) | 18,518 | 17,339 | 14,740 | 13,774 | 12,709 | ||||||||||||||
| Average revenue per user | $ | 148 | $ | 139 | $ | 130 | $ | 121 | $ | 114 |
Total bookings. Total bookings represents cash receipts from the sale of products to customers in a given period adjusted for products where we recognize revenue on a net basis and without giving effect to certain adjustments, primarily net refunds granted in the period. Total bookings provides valuable insight into the sales of our products and the performance of our business since we typically collect payment at the time of sale and recognize revenue ratably over the term of our customer contracts. We report total bookings without giving effect to refunds granted in the period because refunds often occur in periods different from the period of sale for reasons unrelated to the marketing efforts leading to the initial sale. Accordingly, by excluding net refunds, we believe total bookings reflects the effectiveness of our sales efforts in a given period.
Total customers. We define a customer as an individual or entity, as of the end of a period, having an account with one or more paid product subscriptions. A single user may be counted as a customer more than once if the user maintains paid subscriptions in multiple accounts. Total customers is an indicator of the scale of our business and is a critical factor in our ability to increase our revenue base.
Average revenue per user (ARPU). We calculate ARPU as total revenue during the preceding 12 month period divided by the average of the number of total customers at the beginning and end of the period. ARPU provides insight into our ability to sell additional products to customers, though the impact to date has been muted due to our continued growth in total customers and the acquisition of HEG.
Reconciliation of Bookings
The following table reconciles total bookings to total revenue, its most directly comparable GAAP financial measure:
| Year Ended December 31, | |||||||||||||||||||
| 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
| Total Bookings: | (unaudited; in millions) | ||||||||||||||||||
| Total revenue | $ | 2,660.1 | $ | 2,231.9 | $ | 1,847.9 | $ | 1,607.3 | $ | 1,387.3 | |||||||||
| Change in deferred revenue(1) | 163.2 | 214.4 | 163.5 | 165.9 | 166.4 | ||||||||||||||
| Net refunds | 192.6 | 170.0 | 141.9 | 137.8 | 116.2 | ||||||||||||||
| Other | (4.4 | ) | 1.9 | 2.2 | 3.2 | 5.3 | |||||||||||||
| Total bookings | $ | 3,011.5 | $ | 2,618.2 | $ | 2,155.5 | $ | 1,914.2 | $ | 1,675.2 |
| (1) | Change in deferred revenue also includes the impact of realized gains or losses from the hedging of bookings in foreign currencies. |
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