Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements
			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			78
Consolidated Balance Sheets			80
Consolidated Statements of Operations			81
Consolidated Statements of Comprehensive Income (Loss)			82
Consolidated Statements of Stockholders' Equity (Deficit)			83
Consolidated Statements of Cash Flows			85
Notes to Consolidated Financial Statements			87

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of GoDaddy Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of GoDaddy Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

						Revenue recognition
Description of the Matter						As more fully described in Note 2 to the consolidated financial statements, the Company derives its revenue primarily from subscription fees for domain registrations, website hosting, website security, and applications and commerce products, which it generally recognizes ratably over the related contractual terms. The majority of the Company's revenue recognition process involves the use of several systems responsible for the processing and recording of transactions originating from the Company's ecommerce websites based on the calculation of revenue in accordance with the Company's accounting policies. The processing and recognition of revenue are highly automated and involve capturing and processing significant volumes of data. Auditing the Company's accounting for revenue from contracts with customers was challenging and complex due to the high volume of transactions and the dependency on the design and operation of multiple systems, some of which are custom-made for the Company's business.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company's accounting for revenue recognition. With the assistance of information technology professionals, we tested controls over the initiation and billing of subscriptions and the Company's cash to billings reconciliation process. We also tested controls related to the interfaces between the provisioning, billing, and accounting systems. Our audit procedures included, among others, testing the completeness and accuracy of the underlying data within the Company's billing systems, performing data analytics to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts, testing samples of sales transactions to third-party documentation, and reviewing the Company's cash to billings reconciliations. We also evaluated the Company's disclosures included in Note 2 to the consolidated financial statements.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2004.

Phoenix, Arizona

February 16, 2023

GoDaddy Inc.

Consolidated Balance Sheets

(In millions, except shares in thousands and per share amounts)

			December 31,
			2022						2021
Assets
Current assets:
Cash and cash equivalents			$	774.0					$	1,255.7
Accounts and other receivables			60.1						63.6
Registry deposits			41.0						40.9
Prepaid domain name registry fees			435.7						419.7
Prepaid expenses and other current assets			271.8						109.9
Total current assets			1,582.6						1,889.8
Property and equipment, net			225.6						220.0
Operating lease assets			84.1						109.2
Prepaid domain name registry fees, net of current portion			197.1						181.4
Goodwill			3,536.9						3,540.8
Intangible assets, net			1,252.2						1,384.7
Other assets			95.0						91.2
Total assets			$	6,973.5					$	7,417.1
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable			$	130.9					$	85.2
Accrued expenses and other current liabilities			356.7						437.3
Deferred revenue			1,954.0						1,890.1
Long-term debt			18.2						24.1
Total current liabilities			2,459.8						2,436.7
Deferred revenue, net of current portion			770.3						743.3
Long-term debt, net of current portion			3,812.9						3,858.2
Operating lease liabilities, net of current portion			116.5						142.7
Other long-term liabilities			87.1						77.7
Deferred tax liabilities			56.2						75.3
Commitments and contingencies
Stockholders' equity (deficit):
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; 153,830 and 166,901 shares issued and outstanding as of December 31, 2022 and 2021, respectively			0.2						0.2
Class B common stock, $0.001 par value - 500,000 shares authorized; 312 and 320 shares issued and outstanding as of December 31, 2022 and 2021, respectively			—						—
Additional paid-in capital			1,912.6						1,594.7
Accumulated deficit			(2,422.6)						(1,474.6)
Accumulated other comprehensive income (loss)			178.0						(38.6)
Total stockholders' equity (deficit) attributable to GoDaddy Inc.			(331.8)						81.7
Non-controlling interests			2.5						1.5
Total stockholders' equity (deficit)			(329.3)						83.2
Total liabilities and stockholders' equity (deficit)			$	6,973.5					$	7,417.1

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Operations

(In millions, except shares in thousands and per share amounts)

			Year Ended December 31,
			2022						2021						2020
Revenue:
Applications & commerce			$	1,279.7					$	1,128.3					$	926.1
Core platform			2,811.6						2,687.4						2,390.6
Total revenue			4,091.3						3,815.7						3,316.7
Costs and operating expenses(1):
Cost of revenue (excluding depreciation and amortization)			1,484.5						1,372.2						1,158.6
Technology and development			794.0						706.3						560.4
Marketing and advertising			412.3						503.9						438.5
Customer care			305.9						306.1						316.9
General and administrative			385.5						345.8						323.8
Restructuring and other			15.7						(0.3)						43.6
Depreciation and amortization			194.6						199.6						202.7
Total costs and operating expenses			3,592.5						3,433.6						3,044.5
Operating income			498.8						382.1						272.2
Interest expense			(146.3)						(126.0)						(91.3)
Loss on debt extinguishment			(3.6)						—						—
Tax receivable agreements liability adjustment			—						—						(674.7)
Other income (expense), net			7.6						(2.5)						(1.6)
Income (loss) before income taxes			356.5						253.6						(495.4)
Benefit (provision) for income taxes			(3.6)						(10.8)						1.3
Net income (loss)			352.9						242.8						(494.1)
Less: net income attributable to non-controlling interests			0.7						0.5						1.0
Net income (loss) attributable to GoDaddy Inc.			$	352.2					$	242.3					$	(495.1)
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock:
Basic			$	2.22					$	1.44					$	(2.94)
Diluted			$	2.19					$	1.42					$	(2.94)
Weighted-average shares of Class A common stock outstanding:
Basic			158,788						167,906						168,636
Diluted			161,457						171,105						168,636
___________________________
(1) Costs and operating expenses include equity-based compensation expense as follows:
Cost of revenue			$	1.5					$	0.9					$	0.7
Technology and development			140.3						110.0						90.2
Marketing and advertising			29.1						24.8						21.7
Customer care			20.0						14.1						12.0
General and administrative			73.5						58.1						66.9
Total equity-based compensation expense			$	264.4					$	207.9					$	191.5

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

			Year Ended December 31,
			2022						2021						2020
Net income (loss)			$	352.9					$	242.8					$	(494.1)
Foreign exchange forward contracts gain (loss), net			24.3						16.3						(17.6)
Unrealized swap gain (loss), net(1)			214.9						30.7						9.1
Change in foreign currency translation adjustment			(22.1)						45.9						(44.2)
Comprehensive income (loss)			570.0						335.7						(546.8)
Less: comprehensive income attributable to non-controlling interests			1.1						—						1.1
Comprehensive income (loss) attributable to GoDaddy Inc.			$	568.9					$	335.7					$	(547.9)
(1) Amounts are net of the income tax effects reflected below:
Unrealized swap gain (loss), net			$	(2.6)					$	2.2					$	2.2

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Stockholders' Equity (Deficit)

(In millions, except shares in thousands)

									Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Income (Loss)						Non- Controlling Interests						Total
						Shares						Amount						Shares						Amount
Balance at December 31, 2019									172,867						$	0.2					1,490						$	—					$	1,003.5					$	(153.5)					$	(78.2)					$	10.1					$	782.1
Net income (loss)									—						—						—						—						—						(495.1)						—						1.0						(494.1)
Equity-based compensation, including amounts capitalized									—						—						—						—						193.9						—						—						—						193.9
Repurchases of Class A common stock									(9,986)						—						—						—						—						(541.7)						—						—						(541.7)
Stock option exercises									2,613						—						—						—						79.6						—						—						(1.9)						77.7
Issuances of Class A common stock under employee stock purchase plan									493						—						—						—						29.6						—						—						—						29.6
Distributions to holders of LLC Units									—						—						—						—						—						—						—						(6.0)						(6.0)
Impact of derivatives, net									—						—						—						—						—						—						(8.5)						—						(8.5)
Change in foreign currency translation adjustment									—						—						—						—						—						—						(44.2)						—						(44.2)
Vesting of restricted stock units and other									3,170						—						(802)						—						2.2						(0.6)						(0.1)						(2.1)						(0.6)
Balance at December 31, 2020									169,157						0.2						688						—						1,308.8						(1,190.9)						(131.0)						1.1						(11.8)
Net income									—						—						—						—						—						242.3						—						0.5						242.8
Equity-based compensation, including amounts capitalized									—						—						—						—						211.9						—						—						—						211.9
Repurchases of Class A common stock									(6,925)						—						—						—						—						(526.0)						—						—						(526.0)
Stock option exercises									1,167						—						—						—						43.4						—						—						(0.7)						42.7
Issuances of Class A common stock under employee stock purchase plan									489						—						—						—						30.7						—						—						—						30.7
Impact of derivatives, net									—						—						—						—						—						—						47.0						—						47.0
Change in foreign currency translation adjustment									—						—						—						—						—						—						45.9						—						45.9
Vesting of restricted stock units and other									3,013						—						(368)						—						(0.1)						—						(0.5)						0.6						—
Balance at December 31, 2021									166,901						0.2						320						—						1,594.7						(1,474.6)						(38.6)						1.5						83.2

GoDaddy Inc.

Consolidated Statements of Stockholders' Equity (Deficit) (continued)

(In millions, except shares in thousands)

									Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Income (Loss)						Non- Controlling Interests						Total
						Shares						Amount						Shares						Amount
Net income									—						—						—						—						—						352.2						—						0.7						352.9
Equity-based compensation, including amounts capitalized									—						—						—						—						267.8						—						—						—						267.8
Repurchases of Class A common stock									(16,844)						—						—						—												(1,300.3)						—						—						(1,300.3)
Stock option exercises									536						—						—						—						20.0						—						—						(0.1)						19.9
Issuances of Class A common stock under employee stock purchase plan									495						—						—						—						30.1						—						—						—						30.1
Impact of derivatives, net									—						—						—						—						—						—						239.2						—						239.2
Change in foreign currency translation adjustment									—						—						—						—						—						—						(22.1)						—						(22.1)
Vesting of restricted stock units and other									2,742												(8)						—						—						0.1						(0.5)						0.4						—
Balance at December 31, 2022									153,830						$	0.2					312						$	—					$	1,912.6					$	(2,422.6)					$	178.0					$	2.5					$	(329.3)

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Cash Flows

(In millions)

			Year Ended December 31,
			2022						2021						2020
Operating activities
Net income (loss)			$	352.9					$	242.8					$	(494.1)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			194.6						199.6						202.7
Equity-based compensation			264.4						207.9						191.5
Gain on derivative instruments			27.6						6.3						7.0
Non-cash restructuring and other charges			10.4						15.1						29.0
Tax receivable agreements liability adjustment			—						—						674.7
Other			48.4						14.6						25.7
Changes in operating assets and liabilities, net of amounts acquired:
Prepaid domain name registry fees			(34.7)						(37.8)						(17.5)
Accounts payable			35.1						34.2						(20.5)
Accrued expenses and other current liabilities			11.3						40.9						22.3
Deferred revenue			101.6						190.7						215.6
Other operating assets and liabilities			(31.9)						(85.0)						(71.8)
Net cash provided by operating activities			979.7						829.3						764.6
Investing activities
Maturities of short-term investments			—						—						23.7
Business acquisitions, net of cash acquired			(72.5)						(367.7)						(424.7)
Purchases of intangible assets			(0.4)						(202.1)						(15.0)
Purchases of property and equipment			(59.7)						(51.1)						(66.5)
Purchases of equity investments			—						(40.0)						—
Other investing activities, net			0.6						25.3						0.2
Net cash used in investing activities			(132.0)						(635.6)						(482.3)
Financing activities
Proceeds received from:
Issuance of term loans			1,725.3						—						746.3
Issuance of Senior Notes			—						800.0						—
Stock option exercises			19.9						42.7						77.7
Issuance of Class A common stock under employee stock purchase plan			30.1						30.7						29.6
Payments made for:
Settlement of tax receivable agreements			—						(0.2)						(849.8)
Repurchases of Class A common stock			(1,294.6)						(526.0)						(541.7)
Repayment of term loans			(1,789.9)						(32.4)						(28.7)
Financing-related costs			(4.2)						(9.6)						(6.4)
Contingent consideration for business acquisitions			(9.3)						(4.7)						(0.5)
Other financing obligations			(4.0)						(2.4)						(8.2)
Net cash provided by (used in) financing activities			(1,326.7)						298.1						(581.7)
Effect of exchange rate changes on cash and cash equivalents			(2.7)						(1.3)						1.8
Net increase (decrease) in cash and cash equivalents			(481.7)						490.5						(297.6)
Cash and cash equivalents, beginning of period			1,255.7						765.2						1,062.8
Cash and cash equivalents, end of period			$	774.0					$	1,255.7					$	765.2

Table of Contents

GoDaddy Inc.

Consolidated Statements of Cash Flows (continued)

(In millions)

			Year Ended December 31,
			2022						2021						2020
Cash paid during the period for:
Interest on long-term debt, including impact of interest rate swaps			$	127.3					$	104.2					$	80.5
Income taxes, net of refunds received			$	11.2					$	19.1					$	16.2
Amounts included in the measurement of operating lease liabilities			$	50.0					$	54.4					$	53.0
Supplemental disclosure of non-cash transactions
Operating lease assets obtained in exchange for operating lease obligations			$	14.9					$	14.8					$	21.0
Acquisition date fair value of contingent consideration			$	—					$	18.5					$	—
Accrued purchases of property and equipment at period end			$	12.4					$	1.2					$	3.0
Share repurchases not yet settled			$	5.8					$	—					$	—

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Notes to Consolidated Financial Statements

(In millions, except shares in thousands and per share amounts)

Note 1			Organization and Background			88
Note 2			Summary of Significant Accounting Policies			89
Note 3			Business Acquisitions			98
Note 4			Goodwill and Intangible Assets			100
Note 5			Stockholders' Equity			101
Note 6			Prepaid Expenses and Other Current Assets			102
Note 7			Equity-Based Compensation Plans			102
Note 8			Deferred Revenue			105
Note 9			Accrued Expenses and Other Current Liabilities			105
Note 10			Long-Term Debt			106
Note 11			Derivatives and Hedging			108
Note 12			Leases			111
Note 13			Commitments and Contingencies			112
Note 14			Restructuring and Other			114
Note 15			Defined Contribution Plan			114
Note 16			Income Taxes			114
Note 17			Income (Loss) Per Share			117
Note 18			Segment Information			118
Note 19			Accumulated Other Comprehensive Loss			120
Note 20			Subsequent Events			120

1. Organization and Background

Description of Business

We deliver simple, easy-to-use cloud-based products, outcome-driven, personalized guidance and ease and access to payment systems. Our products enable our customers to establish a digital presence, connect with their customers and manage their presence.

Organization

We are the sole managing member of Desert Newco, LLC and its subsidiaries (Desert Newco), and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by other members. The calculation of non-controlling interests excludes any net income attributable directly to GoDaddy Inc. We owned approximately 99.8% of Desert Newco's limited liability company units (LLC Units) as of December 31, 2022.

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.

Prior Period Reclassifications

In the first quarter of 2022, we revised the presentation of revenue in our statements of operations, as described in Note 2. Reclassifications of certain other immaterial prior period amounts have been made 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. Our more significant estimates include:

• the relative stand-alone selling price (SSP) of the indicated performance obligations included in revenue arrangements with multiple performance obligations;

• the estimated reserve for refunds;

• the fair value of assets acquired and liabilities assumed in business acquisitions;

• the assessment of recoverability of our goodwill, intangible assets and long-lived assets;

• the estimated useful lives of intangible and depreciable assets;

• the fair value of financial instruments;

• the recognition, measurement and valuation of current and deferred income taxes; and

• the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities.

We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ.

Segments

Beginning in the first quarter of 2022, we revised the presentation of segment information to reflect changes in the way we manage and evaluate our business. As such, we report our operating results through two reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 18. Accordingly, we have revised our segment information for the comparable prior year period.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, other highly liquid investments with a remaining maturity of 90 days or less at the date of acquisition and receivables related to third-party payment processor transactions normally received within 72 hours. Amounts receivable for payment processor transactions totaled $30.4 million and $24.2 million at December 31, 2022 and 2021, respectively.

Registry Deposits

Registry deposits represent amounts on deposit with, or receivable from, various domain name registries to be used by us to make payments for future domain registrations or renewals.

Prepaid Domain Name Registry Fees

Prepaid domain name registry fees represent amounts charged by a registry at the time a domain is registered or renewed. These amounts are amortized to cost of revenue over the same period revenue is recognized for the related domain registration contracts.

Property and Equipment

Property and equipment is stated at cost. Depreciation is recorded over the estimated useful lives of the applicable assets using the straight-line method beginning on the date an asset is placed in service. We regularly evaluate the estimated useful lives to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation.

Property and equipment consisted of the following:

						Estimated Useful Lives						December 31,
						2022						2021
Computer equipment						3 years						$	486.1					$	488.5
Software						3-5 years						87.6						77.6
Land						Indefinite						5.9						5.9
Buildings, including improvements						5-40 years						126.3						125.4
Leasehold improvements						Lesser of useful life or remaining lease term						78.8						87.0
Other						1-20 years						18.0						21.9
Total property and equipment												802.7						806.3
Less: accumulated depreciation and amortization												(577.1)						(586.3)
Property and equipment, net												$	225.6					$	220.0

Depreciation and amortization expense related to property and equipment was $61.2 million, $68.4 million and $73.4 million during 2022, 2021 and 2020, respectively.

Property and equipment, net by geography was as follows:

			December 31,
			2022						2021
U.S.			167.5						162.6
France			28.8						23.8
All other international			29.3						33.6
			$	225.6					$	220.0

No other individual international country represented more than 10% of property and equipment, net in any period presented.

Capitalized Software Costs

We capitalize and amortize certain implementation costs related to cloud computing arrangements as well as costs incurred to develop software for internal-use during the application development phase. Costs related to the design or maintenance of internal-use software are included in technology and development expenses as incurred. We capitalized $17.7 million and $23.9 million of such costs during 2022 and 2021, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business acquisitions. Indefinite-lived intangible assets consist of the GoDaddy trade names and branding, our domain portfolio and certain contractual-based assets. Goodwill and indefinite-lived intangible assets are not amortized to earnings, but are assessed for impairment at least annually. As individual domains are sold, our indefinite-lived domain portfolio intangible asset is reduced by the allocated carrying cost of each domain, which is included in cost of revenue.

Goodwill is assessed for impairment annually during the fourth quarter of each year. We also perform an assessment at other times if events or changes in circumstances indicate the carrying value may not be recoverable. If, based on qualitative analysis, we determine it is more-likely-than-not the fair value of either of our reporting units is less than its carrying amount, a quantitative impairment test is performed. Our qualitative analysis did not indicate impairment of our goodwill during any of the periods presented.

Our indefinite-lived trade names and branding, domain portfolio and contractual-based assets are reviewed for impairment annually during the fourth quarter of each year. We also perform assessments at other times if events or changes in circumstances indicate the carrying amounts of these assets may not be fully recoverable. Any identified impairment losses are treated as permanent reductions in the carrying amounts of the assets. Our qualitative analysis did not indicate impairment of our indefinite-lived assets during any of the periods presented.

Long-Lived and Finite-Lived Intangible Assets

Finite-lived intangible assets are amortized over the following estimated useful lives:

Customer relationships			2-9 years
Developed technology			2-7 years
Trade names and other			1-10 years

Our finite-lived intangible assets are primarily amortized on a straight-line basis. We annually evaluate the estimated remaining useful lives of our intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Long-lived and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. Our analysis did not indicate impairment during any of the periods presented.

Debt Issuance Costs

We capitalize issuance costs, underwriting fees and related expenses incurred in connection with the issuance of debt instruments and amortize such costs using the interest method over the terms of the respective instruments. Debt issuance costs, other than those associated with our revolving credit loan, are reflected as a direct reduction of the carrying amount of the related debt liability. Debt issuance costs related to our revolving credit loan are reflected as an asset.

Derivative Financial Instruments

We are exposed to changes in foreign currency exchange rates, primarily relating to intercompany debt, the net assets of our foreign operations and sales transactions denominated in currencies other than the U.S. dollar, as well as to changes in interest rates as a result of our variable-rate debt. Consequently, we use derivative financial instruments to manage and mitigate such risks. We do not enter into derivative transactions for speculative or trading purposes.

We utilize a variety of derivative instruments and expect that each derivative instrument qualifying for hedge accounting will be highly effective at reducing the risk associated with the exposure being hedged. For each derivative instrument designated as a hedge, we formally document, at inception, the related risk management strategy and objective, including identification of the hedging instrument, the hedged item and the risk of exposure. In addition, we formally assess, both at the inception and at least quarterly thereafter, whether the financial instruments used in the hedging transactions are effective at offsetting changes in either the fair values or cash flows of the relating underlying exposures.

Our derivative instruments are recorded at fair value on a gross basis. For cash flow reporting purposes, proceeds received or amounts paid upon the settlement of a derivative instrument are classified in the same manner as the related item being hedged.

Cash Flow Hedges

We utilize a variety of 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 reflect unrealized gains or losses on our cash flow hedges as components of accumulated other comprehensive income (loss) (AOCI). Gains and losses on these instruments are recorded as a component of AOCI until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from AOCI to earnings within the same line items as the underlying transactions. At inception, and each reporting period, we evaluate the effectiveness of each of our hedges, and all hedges were determined to be effective.

Net Investment Hedges

We use cross-currency swaps to reduce the risk associated with exchange rate fluctuations on our net investments in certain foreign operations. Changes in the fair value of these derivative instruments are recorded in equity as a component of AOCI in the same manner as foreign currency translation adjustments (CTA). We elected to use the spot method to assess effectiveness of these derivatives. Under this method, changes in fair value of the hedging instruments attributed to changes in spot rates are initially recorded in the CTA component of AOCI and will remain there until the hedged net investments are sold or substantially liquidated. Changes in fair value of the hedging instruments other than those due to changes in the spot rate are initially recorded in the CTA component of AOCI and are amortized to interest expense using a systematic and rational method over the instruments' term.

See Note 11 for further discussion of our derivative instruments.

Leases

We lease office and data center space in various locations. We determine whether a contract contains a lease at contract inception. We have lease agreements with lease and non-lease components and have elected to account for such components as a single lease component. This election is made by class of underlying asset and was elected for our leases of office space, data center space and server equipment.

We initially recognize and measure contracts containing a lease and determine lease classification at commencement. Right-of-use (ROU) assets and operating lease liabilities are measured based on the estimated present value of lease payments

over the lease term. In determining the present value of lease payments, we use our estimated incremental borrowing rate when the rate implicit in the lease cannot be readily determined. The estimated incremental borrowing rate is based upon information available at lease commencement including publicly available data for debt instruments. The lease term includes periods covered by options to extend when it is reasonably certain we will exercise such options as well as periods subsequent to an option to terminate the lease if it is reasonably certain we will not exercise the termination option.

Operating lease costs are recognized on a straight-line basis over the lease term while finance leases result in a front-loaded expense pattern. Variable lease costs are recognized as incurred. On our balance sheets, assets and liabilities associated with operating leases are included within operating lease assets, accrued expenses and other current liabilities and operating lease liabilities. Assets and liabilities associated with finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities.

Equity Investments

We hold investments in privately held equity securities, which are recorded in other assets and totaled $40.5 million and $40.0 million at December 31, 2022 and 2021, respectively. These securities are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment. Investment gains and losses are recorded in other income (expense), net.

Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available observable market data. A security's carrying value is not adjusted if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. In determining the estimated fair value of our investments, we utilize the most recent data available to us. We assess our investments for impairment at least quarterly using both qualitative and quantitative factors. If an investment is considered impaired, we recognize an impairment loss and establish a new carrying value for the investment. Our analysis did not indicate impairment of our investments as of December 31, 2022.

Foreign Currency

Our functional and reporting currency is the U.S. dollar. Assets denominated in foreign currencies are remeasured into United States (U.S.) dollars at period-end exchange rates. Foreign currency-based revenue and expense transactions are measured at transaction date exchange rates. Foreign currency remeasurement gains and losses are recorded in other income (expense), net and were $(15.7) million, $(10.5) million and $(12.3) million during 2022, 2021 and 2020, respectively.

For certain of our foreign subsidiaries whose functional currency is other than the U.S. dollar, we translate revenue and expense transactions at average exchange rates. We translate assets and liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of AOCI.

Revenue Recognition

Revenue is recognized when control of the promised product or service (product) is transferred to our customers, in an amount reflecting the consideration we expect to be entitled to in exchange for such product.

We typically receive payment at the time of sale, the purpose of which is to provide our customers with a simplified and predictable way of purchasing our products. We have determined that our contracts do not include a significant financing component. Payments received in advance of our performance are initially recorded as deferred revenue and then recognized as revenue on a straight-line basis over the term of the contract. Revenue is recognized net of allowances for returns and applicable transaction-based taxes collected from customers.

Our products are generally sold with a right of return within our policy, which is accounted for as variable consideration when estimating the amount of revenue to recognize. Refunds are estimated at contract inception using the expected value method based on historical refund experience and updated each reporting period as additional information becomes available and only to the extent it is probable a significant reversal of any incremental revenue will not occur. Refunds result in a reduced amount of revenue recognized over the contract term of the applicable product.

In the first quarter of 2022, we revised the presentation of revenue in our statements of operations in order to provide better visibility into our business and products as well as a more consistent way to track our progress against our strategic

objectives. This change also aligns our revenue presentation with the products in each of our two reportable segments, which are discussed in Note 18. Following this change, our revenue is categorized as follows:

Applications and Commerce. A&C revenue primarily consists of revenue from sales of products containing proprietary software such as Websites + Marketing and Managed WordPress and commerce products such as payment processing fees and point-of-sale (POS) hardware as well as sales of third-party email and productivity solutions such as Microsoft Office 365. A&C revenue also includes revenue from sales of products, such as website security products, when they are included in bundled offerings of our proprietary software products. Consideration is generally recorded as deferred revenue when received, which is typically at the time of sale, and revenue from most A&C products is recognized ratably over the period in which the performance obligations are satisfied, which is typically over the contract term. Payment processing fee revenue is recognized at the time of the transaction and revenue from the sale of POS hardware is recognized at the time when ownership is transferred to the customer.

Core Platform. Core revenue primarily consists of revenue from sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products. Core revenue also includes revenue from sales of products not containing a software component such as professional web services as well as fee surcharges paid to ICANN. Consideration is generally recorded as deferred revenue when received, which is typically at the time of sale, and revenue from most Core products is recognized ratably over the period in which the performance obligations are satisfied, which is typically over the contract term. Aftermarket domain revenue is recognized at the time when ownership of the domain is transferred to the buyer.

The prior period statement of operations was revised to retrospectively present revenue in the new groupings as shown in the table below. There was no impact on total revenue, operating income, net income, deferred revenue or our statement of cash flows as a result of these revisions.

									Year Ended December 31,
									2021						2020
As Previously Reported
Revenue:
Domains									$	1,809.9					$	1,515.1
Hosting and presence									1,283.4						1,200.6
Business applications									722.4						601.0
Total revenue									$	3,815.7					$	3,316.7
As Revised
Revenue:
Applications and commerce									$	1,128.3					$	926.1
Core platform									2,687.4						2,390.6
Total revenue									$	3,815.7					$	3,316.7

Disaggregated Revenue

Revenue by major product type was as follows:

						Year Ended December 31,
						2022						2021						2020
Applications and commerce						$	1,279.7					$	1,128.3					$	926.1
Core platform: domains						1,959.2						1,815.9						1,521.4
Core platform: other						852.4						871.5						869.2
						$	4,091.3					$	3,815.7					$	3,316.7

No single customer represented over 10% of our total revenue for any period presented.

Revenue by geography is based on the customer's billing address and was as follows:

			Year Ended December 31,
			2022						2021						2020
U.S.			$	2,757.3					$	2,544.9					2,211.3
International			1,334.0						1,270.8						1,105.4
			$	4,091.3					$	3,815.7					$	3,316.7

No individual international country represented more than 10% of total revenue in any period presented.

See Note 8 for additional information regarding our deferred revenue.

Performance Obligations

Our contracts with customers may include multiple performance obligations, including a combination of some or all of the following products: domain registrations, website hosting products, website building products, website security products and other cloud-based products. Judgment may be required in determining whether products contain multiple distinct performance obligations that should each be accounted for separately or as one combined performance obligation. Revenue is recognized ratably over the period in which the performance obligations are satisfied, which is generally over the contract term.

For each domain registration or renewal we provide, we have one performance obligation to our customers consisting of two promises: (1) to ensure the exclusive use of the domain during the applicable registration term and (2) to ensure the domain is accessible and appropriately directed to its underlying content. After the contract term expires, unless renewed, the customer can no longer access or use the domain. We have determined these promises are not distinct within the context of our contracts as they are highly interdependent and interrelated and are inputs to a combined benefit. Accordingly, we concluded that each domain registration or renewal represents one product offering and is a single performance obligation.

We may also offer specific arrangements, such as our Websites + Marketing solution, in which we include promises to transfer multiple performance obligations in a single product offering. For such arrangements, we allocate the transaction price to each of the underlying distinct performance obligations based on its relative SSP, as described below.

We have determined that generally each of our other products constitutes an individual product offering to our customers, and therefore have concluded that each is a single performance obligation.

For arrangements with multiple performance obligations, we allocate revenue to each distinct performance obligation based on its relative SSP. We use judgment to determine SSP based on prices charged to customers for individual products, taking into consideration factors including historical and expected discounting practices, the size, volume and term length of transactions, customer demographics, the geographic areas in which our products are sold and our overall go-to-market strategy.

Principal versus Agent Considerations

We sell our products directly to customers and also through a network of resellers. In certain cases, such as for aftermarket domain sales, we act as a reseller of products provided by others. The determination of gross or net revenue recognition is reviewed on a product-by-product basis and is dependent on our determination as to whether we act as principal or agent in the transaction. Revenue associated with sales through our network of resellers, for certain aftermarket domain sales and for third-party offerings, is generally recorded on a gross basis as we have determined that we control the product before transferring it to our end customers. Commissions paid to resellers are capitalized and amortized to cost of revenue consistent with the pattern of transfer of the products purchased.

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 $717.1 million, $675.1 million and $644.6 million during 2022, 2021 and 2020, respectively.

No other material contract costs were capitalized during any of the periods presented.

Operating Expenses

Cost of Revenue (excluding depreciation and amortization)

Costs of revenue are the direct costs we incur in connection with selling an incremental product to our customers. Substantially all cost of revenue relates to domain registration fees paid to the various domain registries, payment processing fees, third-party commissions and licensing fees for third-party productivity applications.

Technology and Development

Technology and development expenses represent the costs associated with the creation, development and distribution of our products and websites. These expenses primarily consist of personnel costs associated with the design, development, deployment, testing, operation and enhancement of our products, as well as costs associated with the data centers and systems infrastructure supporting those products, excluding depreciation expense.

Marketing and Advertising

Marketing and advertising expenses represent the costs associated with attracting and acquiring customers, primarily consisting of fees paid to third parties for marketing and advertising campaigns across a variety of channels. These expenses also include personnel costs and affiliate program commissions.

Advertising costs are expensed either as incurred, at the time a commercial initially airs or when a promotion first appears in the media. Advertising expenses were $284.9 million, $378.3 million and $329.6 million during 2022, 2021 and 2020, respectively.

Customer Care

Customer care expenses represent the costs to guide and service our customers, primarily consisting of personnel costs.

General and Administrative

General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent and facilities expenses for all locations, acquisition-related expenses and other general costs.

Restructuring and Other

Restructuring and other consists primarily of severance and other exit costs as well as charges recorded in connection with the impairment and gains and losses on disposition of certain assets.

Equity-Based Compensation

We have granted stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date. We have granted both stock options and restricted stock units (RSUs) vesting solely upon the continued service of the recipient as well as performance-based awards (PSUs) with vesting based on either (i) our achievement of specified financial targets or (ii) our relative total stockholder return (TSR) as compared to a selected index of public Internet companies. We recognize the accounting grant date fair value of equity-based awards as compensation expense over the required service period of each award, taking into account the probability of our achievement of associated performance targets.

On the settlement date of each three-year performance period associated with our TSR-based PSU grants, and only if a participant remains a Service Provider (as defined in the 2015 Equity Incentive Plan) on such date, a participant will receive shares of our Class A common stock ranging from 0% to 200% of the originally granted PSUs based on our relative TSR as compared to the companies within the selected index. Vesting of the PSUs is subject to the TSR market condition as well as approval of the performance by our board of directors following the end of each performance period.

Equity-based awards are accounted for using the fair value method. RSUs and financial-based PSUs are measured based on the fair market value of the underlying common stock on their respective accounting grant dates. Grant date fair values for stock options, which we last granted in 2020, are determined using the Black-Scholes option pricing model and a single option award approach. The accounting grant date for financial-based PSUs is the date on which the applicable performance criteria are approved by our board of directors. The fair value of shares issued under our employee stock purchase plan is estimated on the first day of each offering period using the Black-Scholes option pricing model.

We utilize an estimated forfeiture rate in our equity-based compensation expense calculations, which is based on an analysis of historical data. The cumulative effect of any changes to the forfeiture rate is recognized in the period in which the estimate is changed.

We estimate the grant-date fair value of the TSR-based PSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield. Expected volatilities for GoDaddy and the companies within the index are derived using historical volatilities over a period equal to the length of the performance period. We base the risk-free rate of return on the yield of a zero-coupon U.S. Treasury bond with a maturity equal to the performance period, and assume a 0% dividend rate. Equity-based compensation expense for these PSUs is recognized over the requisite service period, regardless of whether the TSR market condition is satisfied.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (DTAs) and liabilities (DTLs) for the expected future tax consequences of events included in the financial statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in the period in which the enactment date occurs.

We recognize DTAs to the extent we believe these assets are more-likely-than-not to be realized. In evaluating our ability to realize our DTAs, in full or in part, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, prudent and feasible tax planning strategies and recent results of operations.

We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Interest and penalties related to income taxes are included in benefit (provision) for income taxes.

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 and money market funds, which we classify within Level 1 because we use quoted market prices to determine their fair value. Level 2 assets and liabilities include derivative financial instruments associated with hedging activity, as further discussed in Note 11. 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.

The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis:

			December 31, 2022
			Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Commercial paper			$	—					$	120.0					$	—					$	120.0
Time deposits			347.3						—						—						347.3
Derivative assets			—						218.5						—						218.5
Total assets			$	347.3					$	338.5					$	—					$	685.8
Liabilities:
Derivative liabilities			$	—					$	4.9					$	—					$	4.9
Total liabilities			$	—					$	4.9					$	—					$	4.9

			December 31, 2021
Assets:			Level 1						Level 2						Level 3						Total
Cash and cash equivalents:
Time deposits and money market funds			$	178.1					$	—					$	—					$	178.1
Derivative assets			—						30.3						—						30.3
Total assets			$	178.1					$	30.3					$	—					$	208.4
Liabilities:
Derivative liabilities			$	—					$	89.5					$	—					$	89.5
Total liabilities			$	—					$	89.5					$	—					$	89.5

We have no other material assets or liabilities measured at fair value on a recurring basis.

Acquisitions

We determine whether substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is accounted for as an asset acquisition. If the threshold is not met, further assessment is undertaken to ascertain whether the acquisition meets the definition of a business.

We include the results of operations of acquired businesses as of the respective acquisition dates. Purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in general and administrative expenses. Acquisition-related costs are charged to general and administrative expense as incurred.

Tax Receivable Agreements

Concurrent with the completion of our initial public offering (IPO), we became a party to five tax receivable agreements (TRAs) with our pre-IPO owners under which we were contractually committed to pay such owners 85% of the amount of calculated tax savings that we would be deemed to realize as a result of certain transactions. In July 2020, we entered into a series of agreements pursuant to which we settled all liabilities under the TRAs in exchange for aggregate payments totaling $850.0 million. We recorded a charge of $674.7 million to our statement of operations during 2020 to adjust our liability under the TRAs at that time to the aggregate settlement amount. No amounts remain payable under the TRAs as of December 31, 2022.

Concentrations of Risks

Our financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Although we deposit cash with multiple banks, these deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may generally be redeemed upon demand and bear minimal risk.

No single customer represented over 10% of our total revenue for any period presented.

In order to reduce the risk of downtime of the products we provide, we have established data centers in various geographic regions. We have internal procedures to restore products in the event of a service disruption or disaster at any of our data center facilities. We serve our customers and users from data center facilities operated either by us or third parties, which are most significantly located in Arizona, Virginia, France, the Netherlands and Singapore. Even with these procedures for disaster recovery in place, the availability of our products could be significantly interrupted during the implementation of restoration procedures.

Recent Accounting Pronouncements

In October 2021, the FASB issued final guidance changing the measurement of acquired liabilities from contracts with customers in a business combination. The new guidance requires the recognition of contract liabilities at amounts generally consistent with those recorded by the acquiree immediately before the acquisition date. Under existing guidance, contract liabilities are measured at fair value, which generally results in a reduction to acquired contract liabilities and therefore lower revenue recognized during the post-acquisition period. We early adopted the new guidance on January 1, 2022.

3. Business Acquisitions

2022 Acquisition

In July 2022, we completed the acquisition of Dan.com for net cash consideration of $69.6 million. The acquisition was not material to our results of operations.

The aggregate purchase price was preliminarily allocated based upon our assessment of acquisition-date fair values with $56.3 million allocated to goodwill, none of which is tax deductible, $17.6 million to identified finite-lived intangible assets and $4.3 million of net liabilities assumed. The identified finite-lived intangible assets, which primarily consist of developed technology and customer relationships, were valued using an income-based approach and have a total weighted-average amortization period of 3.3 years.

The recognition of goodwill was made based on the strategic benefits we expect to realize from the acquisition. During the measurement period, which will not exceed one year from each closing, we will continue to obtain information to assist us in finalizing the acquisition-date fair values. Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill.

2021 Acquisitions

In February 2021, we completed the acquisition of Poynt Co. (now known as GoDaddy Payments) for $297.1 million in cash consideration to expand our commerce capabilities. GoDaddy Payments offers a suite of products allowing small businesses to sell and accept payments anywhere, including point-of-sale systems, payments, invoicing and transaction management. At closing, we also paid an additional $29.4 million in cash that was recorded as compensation expense during the three months ended March 31, 2021. The acquisition agreements also call for $45.0 million in additional compensatory cash payments subject to certain performance and employment conditions over the three-year period following the closing date. We paid $14.3 million of these compensatory payments in 2022.

During 2021, we completed two other acquisitions for aggregate purchase consideration of $65.7 million in cash paid at closing and additional contingent earn-out payments of up to $18.5 million subject to the achievement of certain operational and financial milestones over the two year periods following the respective closing dates. We paid $9.3 million of these milestones in 2022.

The aggregate purchase price of these three acquisitions was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of each acquisition date, with the excess recorded to goodwill. The recognition of goodwill, none of which is deductible for income tax purposes, was made based on strategic benefits we expect to realize from the acquisitions. During the measurement periods, which will not exceed one year from each closing, we will continue to obtain information, primarily related to income taxes, to assist us in finalizing the acquisition date fair values. Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill.

The following table summarizes the estimated acquisition date fair values of the aggregate assets acquired and liabilities assumed:

Total purchase consideration						$	381.3
Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents						4.2
Indefinite-lived intangibles assets						1.3
Finite-lived intangible assets						66.0
Other assets and liabilities, net						(0.5)
Total assets acquired, net of liabilities assumed						71.0
Goodwill						$	310.3

The identified finite-lived intangible assets, which were valued using either an income or cost-based approach, primarily consist of developed technology and customer relationships, and have a total weighted-average amortization period of 4.1 years.

2020 Acquisitions

In August 2020, we completed the acquisition of the registry operations of Neustar Inc. for total purchase consideration consisting of $217.2 million in cash, of which $1.3 million was paid in 2021, and the settlement of $19.4 million in pre-existing contractual relationships related to prepaid domain name registry fees. This acquisition was completed to expand our domains offerings and capabilities on an established registry technology platform.

During 2020, we completed three other acquisitions for aggregate purchase consideration of $219.2 million in cash, of which $10.2 million is payable in future periods upon expiration of the respective contractual holdback periods. We paid $3.0 million and $7.2 million of these holdbacks in 2022 and 2021, respectively.

The aggregate purchase price of these four acquisitions was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of each acquisition date, with the excess recorded to goodwill. The recognition of goodwill, of which approximately $92.0 million is deductible for income tax purposes, was made based on strategic benefits we expect to realize from the acquisitions.

The following table summarizes the final estimated acquisition date fair values of the aggregate assets acquired and liabilities assumed:

Total purchase consideration						$	455.8
Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents						4.5
Domain portfolio indefinite-lived intangible assets						88.5
Contractual-based indefinite-lived intangible assets						67.0
Finite-lived intangible assets						96.2
Deferred revenue						(17.1)
Other assets and liabilities, net						(20.6)
Total assets acquired, net of liabilities assumed						218.5
Goodwill						$	237.3

The identified intangible assets, which were valued using income-based approaches, primarily consist of an indefinite-lived domain portfolio, contractual-based assets, developed technology and customer relationships. The acquired finite-lived intangible assets have a total weighted-average amortization period of 5.5 years.

Pro forma financial information is not presented because the acquisitions occurring in each of the years ended December 31, 2022, 2021 and 2020 were not material to our financial statements, either individually or in the aggregate.

Other Acquisition-Related Payments

During 2022, 2021 and 2020, we made $12.3 million, $17.4 million and $6.8 million of aggregate holdback and contingent consideration payments related to business acquisitions, respectively.

4. Goodwill and Intangible Assets

As described in Note 18, beginning in the first quarter of 2022, we revised the presentation of segment information to reflect changes in the way we manage and evaluate our business. As such, we now have two operating segments, which are also our reporting units. We evaluated the goodwill of each reporting unit for impairment immediately before and after this change; no impairment was identified.

The following table summarizes changes in our goodwill balance by segment:

			A&C						Core						Total
Balance at December 31, 2020			1,408.3						1,866.8						3,275.1
Goodwill related to acquisitions			134.0						177.6						311.6
Impact of foreign currency translation			(19.1)						(25.4)						(44.5)
Other			(0.7)						(0.7)						(1.4)
Balance at December 31, 2021			1,522.5						2,018.3						3,540.8
Goodwill related to acquisitions			—						56.3						56.3
Impact of foreign currency translation			(31.7)						(43.0)						(74.7)
Purchase accounting adjustments related to prior period acquisitions			6.2						8.3						14.5
Balance at December 31, 2022			$	1,497.0					$	2,039.9					$	3,536.9

Intangible assets, net are summarized as follows:

			December 31, 2022
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding			$	445.0					n/a						$	445.0
Domain portfolio			243.2						n/a						243.2
Contractual-based assets			256.8						n/a						256.8
Finite-lived intangible assets:
Customer-related			487.7						$	(309.0)					178.7
Developed technology			243.9						(171.1)						72.8
Trade names and other			109.8						(54.1)						55.7
			$	1,786.4					$	(534.2)					$	1,252.2

			December 31, 2021
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding			$	445.0					n/a						$	445.0
Domain portfolio			246.8						n/a						246.8
Contractual-based assets			253.8						n/a						253.8
Finite-lived intangible assets:
Customer-related			535.1						$	(279.3)					255.8
Developed technology			243.5						(133.1)						110.4
Trade names and other			118.4						(45.5)						72.9
			$	1,842.6					$	(457.9)					$	1,384.7

During 2021, we purchased intangible assets for a total of $200.1 million in cash. One of these purchases also includes a variable earn-out payment of up to $12.0 million based on the achievement of specified future performance conditions. The variable earn-out will be recognized only if the future performance conditions are achieved. These purchases primarily consisted of a number of top-level domains (TLDs), of which $186.8 million were recorded as indefinite-lived contractual-based intangible assets.

Amortization expense was $128.9 million, $127.9 million and $127.1 million during 2022, 2021 and 2020, respectively. As of December 31, 2022, the weighted-average remaining amortization period for amortizable intangible assets was 38 months for customer-related intangible assets, 31 months for developed technology and 54 months for trade names and other, and was 39 months in total.

Based on the balance of finite-lived intangible assets at December 31, 2022, expected future amortization expense is as follows:

Year Ending December 31:
2023			$	107.9
2024			86.3
2025			78.7
2026			26.6
2027			4.6
Thereafter			3.1
			$	307.2

5. Stockholders' Equity

Certificate of Incorporation

Our amended and restated certificate of incorporation authorized the issuance of up to 1,000,000 shares of Class A common stock, up to 500,000 shares of Class B common stock and up to 50,000 shares of undesignated preferred stock, each having a par value of $0.001 per share. Shares of Class A common stock have both economic and voting rights. Shares of Class B common stock have no economic rights, but do have voting rights. Holders of Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of an owner, exchange LLC Units for shares of Class A common stock.

Share Repurchases

In August 2021, we entered into an accelerated share repurchase agreement (ASR) to repurchase shares of our Class A common stock in exchange for an up-front payment of $250.0 million. The total number of shares ultimately delivered under the ASR, and therefore the average repurchase price paid per share, was determined based on the volume weighted-average

price of our stock during the purchase period. The shares received were retired at the time of delivery and the up-front payment was accounted for as a charge to accumulated deficit. The ASR was a forward contracts indexed to our Class A common stock and met all of the applicable criteria for equity classification; therefore, it was not accounted for as a derivative instrument. The ASR was completed during 2021 and we repurchased a total of 3,425 shares of our Class A common stock at an average price of $72.99 per share under this arrangement. Expenses incurred in connection with the ASR were recorded as a charge to accumulated deficit.

In January 2022, our board of directors approved the repurchase of up to an additional $2,251.0 million of our Class A common stock. Such approval was in addition to the amount remaining available for repurchases under prior board approvals, such that we have authority to repurchase up to $3,000.0 million of our Class A common stock. Shares may be repurchased in open market purchases, block transactions and privately negotiated transactions, in accordance with applicable federal securities laws. This authorization has no time limits, does not obligate us to make any repurchases and may be modified, suspended or terminated by us at any time without prior notice.

In February 2022, we entered into ASRs to repurchase shares of our Class A common stock in exchange for an up-front aggregate payment of $750.0 million. The ASRs were completed in May 2022 and we repurchased a total of 9,202 shares of our Class A common stock at an average price of $81.50 per share under these arrangements. Expenses incurred in connection with the ASRs were recorded as a charge to accumulated deficit.

In addition to the ASRs discussed above, we also made the following open market repurchases of our Class A common stock:

Year Ended December 31,						Number of Shares Repurchased						Aggregate Purchase Price**(1)**
2022						7,642						$	550.1
2021						3,500						$	275.9
2020						9,986						$	541.7

_________________________________

(1) The aggregate purchase price includes commissions paid in connection with the repurchases.

As of December 31, 2022, we had $1,699.9 million of remaining authorization available for repurchases.

6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

			December 31,
			2022						2021
Derivative assets			$	209.6					$	24.7
Prepaid software and maintenance expenses			29.5						25.7
Usage-based prepaid expenses(1)			10.6						29.1
Other			22.1						30.4
			$	271.8					$	109.9

_________________________________

(1) Usage-based prepaid expenses include various cost of sales, marketing, rent and other prepaid commitments that are amortized as the funds are used.

7. Equity-Based Compensation Plans

Equity Plans

On March 31, 2015, we adopted the 2015 Equity Incentive Plan (the 2015 Plan). On January 1, 2022, an additional 6,689 shares of our Class A common stock were reserved for issuance under the automatic increase provisions of the 2015 Plan, and as of December 31, 2022, 34,242 shares were available for issuance as future awards under the plan.

On March 31, 2015, we adopted the 2015 Employee Stock Purchase Plan (the ESPP). On January 1, 2022, an additional 1,000 shares of our Class A common stock were reserved for issuance under the automatic increase provisions of the ESPP, and as of December 31, 2022, 5,097 shares were available for issuance under the plan.

Equity Plan Activity

The following table summarizes stock option activity:

						Number of Shares of Class A Common Stock (#)						Weighted- Average Grant- Date Fair Value ($)						Weighted- Average Exercise Price ($)						Weighted- Average Remaining Contractual Life (in years)						Aggregate Intrinsic Value ($)
Outstanding at December 31, 2019						6,304												38.08
Granted						154						22.33						68.05
Exercised						(2,613)												29.71												121.0
Forfeited						(417)												62.82
Outstanding at December 31, 2020						3,428												42.79
Exercised						(1,168)												36.72												51.0
Forfeited						(261)												68.77
Outstanding at December 31, 2021						1,999												42.94
Exercised						(536)												37.04												22.9
Forfeited						(37)												72.94
Outstanding at December 31, 2022						1,426												44.38						4.4						43.5
Vested at December 31, 2022						1,347												43.05						4.2						42.9

The following table summarizes stock award activity:

						Number of Shares of Class A Common Stock (#)
Outstanding at December 31, 2019(1)						5,240
Granted: RSUs						3,743
Granted: Financial-based PSUs						414
Vested						(2,368)
Forfeited						(896)
Outstanding at December 31, 2020(1)						6,133
Granted: RSUs						4,332
Granted: TSR-based PSUs						426
Vested						(2,645)
Forfeited						(1,480)
Outstanding at December 31, 2021(1)						6,766
Granted: RSUs						4,369
Granted: TSR-based PSUs						246
Vested						(2,734)
Forfeited						(1,015)
Outstanding at December 31, 2022(1)						7,632

_________________________________

(1)Includes financial-based PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes. The balance of outstanding awards is comprised of the following:

			Number of Shares of Class A Common Stock (#)						Weighted Average Fair Value Per Share ($)
RSUs			5,356						70.54
TSR-based PSUs			349						106.14
Financial-based PSUs granted for accounting purposes			223						66.97
Financial-based PSUs not yet granted for accounting purposes			205						n/a
Outstanding at December 31, 2020			6,133
RSUs			6,058						77.37
TSR-based PSUs			558						107.05
Financial-based PSUs granted for accounting purposes			75						78.62
Financial-based PSUs not yet granted for accounting purposes			75						n/a
Outstanding at December 31, 2021			6,766
RSUs			6,890						80.32
TSR-based PSUs			676						121.00
Financial-based PSUs granted for accounting purposes			41						82.52
Financial-based PSUs not yet granted for accounting purposes			25						n/a
Outstanding at December 31, 2022			7,632

As of December 31, 2022, total unrecognized compensation expense related to non-vested equity grants was $406.9 million with an expected remaining weighted-average recognition period of approximately 2.4 years. Such amounts exclude PSUs not yet considered granted for accounting purposes.

8. Deferred Revenue

Deferred revenue consisted of the following:

			December 31,
			2022						2021
Current:
A&C			$	622.1					$	568.0
Core			1,331.9						1,322.1
			$	1,954.0					$	1,890.1
Noncurrent:
A&C			$	173.1					$	187.3
Core			597.2						556.0
			$	770.3					$	743.3

The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, offset by $2,035.8 million of revenue recognized during 2022 that was included in the deferred revenue balance as of December 31, 2021. The deferred revenue balance as of December 31, 2022 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are satisfied, and is expected to be recognized as revenue as follows:

			2023						2024						2025						2026						2027						Thereafter						Total
A&C			$	622.1					$	120.9					$	38.4					$	7.7					$	3.1					$	3.0					$	795.2
Core			1,331.9						333.7						114.8						63.5						35.0						50.2						1,929.1
			$	1,954.0					$	454.6					$	153.2					$	71.2					$	38.1					$	53.2					$	2,724.3

9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

			December 31,
			2022						2021
Accrued payroll and employee benefits			$	116.3					$	124.2
Tax-related accruals			42.8						35.6
Accrued legal and professional			34.3						23.2
Current portion of operating lease liabilities			33.3						36.9
Accrued acquisition-related expenses and acquisition consideration payable			26.2						24.5
Accrued marketing and advertising			13.6						22.9
Derivative liabilities			4.9						89.5
Other			85.3						80.5
			$	356.7					$	437.3

10. Long-Term Debt

Long-term debt consisted of the following:

									December 31,
			Maturity Date						2022						2021
2027 Term Loans (effective interest rate of 4.3% at December 31, 2022 and 2.4% at December 31, 2021)			August 10, 2027						$	731.3					$	738.8
2029 Term Loans (effective interest rate of 4.1% at December 31, 2022 and 2.3% at December 31, 2021)			November 10, 2029						1,770.0						1,782.4
2027 Senior Notes (effective interest rate of 5.4% at December 31, 2022 and December 31, 2021)			December 1, 2027						600.0						600.0
2029 Senior Notes (effective interest rate of 3.6% at December 31, 2022 and December 31, 2021)			March 1, 2029						800.0						800.0
Revolver			November 10, 2027						—						—
Total									3,901.3						3,921.2
Less: unamortized original issue discount and debt issuance costs(1)									(70.2)						(38.9)
Less: current portion of long-term debt									(18.2)						(24.1)
									$	3,812.9					$	3,858.2

_________________________________

(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

Our secured credit agreement (the Credit Facility) includes two tranches of term loan (the 2027 Term Loans and the 2029 Term Loans, the latter of which refinanced and replaced our previously issued term loans maturing in 2024, as described below) and a revolving credit facility (the Revolver). A portion of the term loans is hedged by interest rate swap agreements, as discussed in Note 11.

The 2027 Term Loans were originally issued in 2020 in an aggregate principal amount of $750.0 million at a 0.5% discount on the face of the note at original issue. The net proceeds of these loans were used to partially fund the payments associated with the settlement of our obligations under certain tax receivable agreements in 2020. In March 2021, we refinanced the 2027 Term Loans to lower the interest rate margins by 0.5% with no changes made to the maturity date or any other terms. Following this refinancing, the 2027 Term Loans bear interest at a rate equal to, at our option, either (a) LIBOR plus 2.0% per annum or (b) 1.0% per annum plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) one-month LIBOR plus 1.0%.

In November 2022, we amended our Credit Facility to provide for a new $1,770.0 million tranche of term loans maturing in 2029 (the 2029 Term Loans), the proceeds of which were used to refinance all of the outstanding previously issued term loans maturing in 2024. The 2029 Term Loans were issued at a 2.0% discount on the face of the note at original issue and bear interest at a rate equal to at our option, either (a) Secured Overnight Financing Rate (SOFR) for an interest period of one month plus an initial margin of 3.25% per annum or (b) an initial margin of 2.25% 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%.

In evaluating the above refinancings, we compared the net present value cash flows of the previous instruments and the refinanced instruments to determine whether the terms of the new debt and original instruments were "substantially different" on a creditor-by-creditor basis. In each case, certain of the creditors in the loan syndication did not reinvest in the refinanced debt, and we accounted for their proportionate share of the unamortized original issue discount and deferred financing costs as an aggregate loss on debt extinguishment. As the cash flows for the continuing creditors varied by less than 10% between the old and new instruments, we concluded that the refinancing represented a debt modification. Neither fees incurred nor loss on debt extinguishment recognized in connection with the refinancing of the 2027 Term Loans was material. With respect to the refinancing of the 2029 Term Loans, aggregate fees paid to lenders of $9.3 million were recorded as additional discount, and we recognized a loss on debt extinguishment of $3.3 million.

In November 2022, we also increased the borrowing capacity under our Revolver from $600.0 million to $1,000.0 million under a new revolving credit facility maturing in November 2027. In connection with this transaction, we capitalized aggregate fees of $4.1 million as debt issuance costs as well as recognized a loss on debt extinguishment of $0.3 million. The Revolver bears interest at a rate equal to, at our option, either (a) SOFR plus a margin ranging from 1.25% to 1.75% per annum or (b) the higher 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% plus a margin ranging from 0.25% to 0.75% per annum, with the margins determined based on our first lien secured leverage ratio. The Revolver also contains a financial covenant requiring us to maintain a leverage ratio of 5.75:1.00 when our usage exceeds 40.0% of the maximum capacity. This ratio is calculated as the ratio of first lien secured debt less cash and cash equivalents to consolidated EBITDA (as defined in the Credit Facility).

All LIBOR- and SOFR-based interest rates under the Credit Facility are subject to a 0.0% floor.

Principal payments comprising 0.25% of the initial principal balances of the term loans are due quarterly. In addition to paying interest on the outstanding principal under the term loans, we are required to pay a commitment fee ranging from 0.125% to 0.375% per annum for any unutilized commitments under the Revolver, with the applicable fee determined based on our first lien secured leverage ratio.

Significant terms of the Credit Facility are as follows:

• we are required to prepay outstanding term loans, subject to certain exceptions, with percentages of excess cash flow, proceeds of non-ordinary course asset sales or dispositions of property, insurance or condemnation proceeds and proceeds from the incurrence of certain debt;

• we are restricted by certain covenants, including, among other things, limitations on our ability to incur additional indebtedness, sell assets, incur additional liens, make certain fundamental changes, pay distributions and make certain investments;

• with respect to the Revolver, we are required to maintain certain financial ratios when its usage exceeds 40.0% of the maximum capacity; and

• subject to certain exceptions and exclusions, all obligations are unconditionally guaranteed by all of our wholly-owned, material domestic subsidiaries and are secured by substantially all of our and such subsidiaries real and personal property.

At December 31, 2022, we had $1,000.0 million available for borrowing under the Revolver and were not in violation of any covenants of the Credit Facility.

Senior Notes

In June 2019, we issued the 2027 Senior Notes in an aggregate principal amount of $600.0 million in a private placement offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2027 Senior Notes were issued at par and bear interest at 5.25% per annum, with interest payable semiannually on June 1 and December 1. The aggregate principal amount outstanding is payable at maturity, subject to earlier repurchase or optional redemption as described below.

The 2027 Senior Notes are redeemable at our option, in whole or in part, at an amount equal to 102.625% of the principal amount, decreasing to 101.75% at June 1, 2023, 100.875% at June 1, 2024 and 100.0% at June 1, 2025, plus accrued and unpaid interest. Upon the occurrence of a change of control, we are required to offer to repurchase the 2027 Senior Notes from the holders at a price equal to 101.0% of the principal amount, plus accrued and unpaid interest.

In February 2021, we issued the 2029 Senior Notes in an aggregate principal amount of $800.0 million in a private placement offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2029 Senior Notes were issued at par and bear interest at 3.5% per annum, payable annually on March 1 and September 1. The aggregate principal is payable at maturity, subject to earlier to earlier repurchase or optional redemption as described below. In conjunction with the issuance of the 2029 Senior Notes, we capitalized $9.0 million in debt issuance costs.

The 2029 Senior Notes are redeemable at our option, in whole or in part, any time prior to March 1, 2024 at a redemption price equal to 100.0% of the principal amount, plus accrued and unpaid interest, plus an applicable premium equal to the greater of 1.0% or the remaining scheduled payments of interest discounted to a present value amount. In the event of an

equity offering prior to March 1, 2024, the 2029 Senior Notes may be partially redeemed with the net cash proceeds of such offering at our option at an amount equal to 103.5% of the principal amount, plus accrued and unpaid interest. On and after March 1, 2024, we may redeem the 2029 Senior Notes, in whole or in part, at an amount equal to 101.75% of the principal amount, decreasing to 100.875% at March 1, 2025 and 100.0% at March 1, 2026, plus accrued and unpaid interest. Upon the occurrence of a change of control, we are required to offer to repurchase the Senior Notes from the holders at a price equal to 101.0% of the principal amount, plus accrued and unpaid interest.

Significant terms of the 2027 Senior Notes and 2029 Senior Notes are as follows:

• they are subordinated to our existing secured debt, including the Credit Facility, and any future secured debt we may issue;

• all obligations are unconditionally guaranteed by all of our material domestic subsidiaries;

• we are restricted by certain covenants, including limitations on our ability to incur additional indebtedness, incur additional liens, consolidate with or merge with or into another entity and sell substantially all of our assets; and

• certain covenants may be suspended if we are able to obtain and maintain investment grade ratings and no event of default has occurred.

At December 31, 2022, we were not in violation of any covenants of the 2027 Senior Notes or the 2029 Senior Notes.

Fair Value

The estimated fair values of our long-term debt instruments are based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of December 31, 2022:

2027 Term Loans			$	725.4
2029 Term Loans			$	1,771.1
2027 Senior Notes			$	571.0
2029 Senior Notes			$	674.0

Future Debt Maturities

Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of December 31, 2022 are as follows:

Year Ending December 31:
2023			$	25.2
2024			25.2
2025			25.2
2026			25.2
2027			1,319.0
Thereafter			2,481.5
			$	3,901.3

11. Derivatives and Hedging

We are exposed to changes in foreign currency exchange rates, primarily relating to intercompany debt and certain forecasted sales transactions denominated in currencies other than the U.S. dollar, as well as to changes in interest rates as a result of our variable-rate debt. Consequently, we use derivative financial instruments to manage and mitigate such risk. We do not enter into derivative transactions for speculative or trading purposes.

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.

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)**
			December 31, 2022						December 31, 2021						December 31, 2022						December 31, 2021						December 31, 2022						December 31, 2021
Cash flow hedges:
Foreign exchange forward contracts			$	364.7					$	360.3					$	9.4					$	5.6					$	2.0					$	1.0
Cross-currency swaps(1)			549.7						1,346.8						15.8						—						2.2						80.9
Interest rate swaps			1,980.5						2,001.2						173.0						24.7						—						7.6
Net investment hedges:
Cross-currency swaps(1)			704.6						—						20.3						—						0.7						—
Total hedges			$	3,599.5					$	3,708.3					$	218.5					$	30.3					$	4.9					$	89.5

_________________________________

(1) The notional values of the cross-currency swap have been translated from Euros to U.S. dollars at the foreign currency rates in effect at December 31, 2022 and 2021 of approximately 1.07 and 1.14, respectively.

(2) 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 AOCI:

			Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss)
			Year Ended December 31,
			2022						2021						2020
Cash flow hedges:
Foreign exchange forward contracts(1)			$	24.3					$	16.3					$	(17.6)
Cross-currency swap			54.0						(15.5)						16.2
Interest rate swaps			158.3						48.4						(4.9)
Net investment hedges:
Cross-currency swaps			20.3						—						—
Total hedges			$	256.9					$	49.2					$	(6.3)

_________________________________

(1) Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.

The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships:

			Year Ended December 31,
			2022																		2021																		2020
			Revenue						Interest Expense						Other Income (Expense), Net						Revenue						Interest Expense						Other Income (Expense), Net						Revenue						Interest Expense						Other Income (Expense), Net
Cash flow hedges:
Foreign exchange forward contracts:
Reclassified from AOCI into income			$	5.3					$	—					$	—					$	(8.9)					$	—					$	—					$	2.7					$	—					$	—
Cross-currency swaps:
Reclassified from AOCI into income(1)			—						14.9						41.5						—						27.3						100.6						—						28.9						(120.4)
Interest rate swaps:
Reclassified from AOCI into income			—						(5.0)						—						—						(35.0)						—						—						(25.6)						—
Net investment hedges:
Cross-currency swaps:
Reclassified from AOCI into income			—						11.3						—						—						—						—						—						—						—
Total hedges			$	5.3					$	21.2					$	41.5					$	(8.9)					$	(7.7)					$	100.6					$	2.7					$	3.3					$	(120.4)

_________________________________

(1) The amounts reflected in other income (expense), net include $(41.3) million, $(101.8) million and $119.3 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during 2022, 2021 and 2020, respectively.

As of December 31, 2022, we estimate that $87.3 million of net deferred gains related to our cash flow hedges will be recognized in earnings over the next 12 months. No amounts were excluded from our effectiveness testing during any of the periods presented.

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 currency. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. At December 31, 2022, all such contracts had maturities of 18 months or less.

Cross-Currency Swap Contract

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.

Interest Rate Swap Contracts

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 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 Credit Facility refinancing discussed in Note 10, 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 relationship or financial results.

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.

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.

12. Leases

Our operating leases primarily consist of office and data center space expiring at various dates through November 2036. 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 December 31, 2022, operating leases have a remaining weighted average lease term of 7.0 years and our operating lease liabilities were measured using a weighted average discount rate of 5.3%.

The components of operating lease expense were as follows:

			Year Ended December 31,
			2022						2021						2020
Operating lease costs			$	44.5					$	48.2					$	53.2
Variable lease costs			12.0						10.4						9.2
Sublease income			(8.3)						(4.3)						(3.0)
			$	48.2					$	54.3					$	59.4

We recognized impairment charges related to certain operating lease assets during 2022, 2021 and 2020, as discussed in Note 14.

Maturities of operating lease liabilities as of December 31, 2022 were as follows:

Year Ending December 31:
2023			$	40.1
2024			28.0
2025			23.7
2026			20.6
2027			15.3
Thereafter			50.3
Total lease payments			178.0
Less: imputed interest			(28.2)
			$	149.8

13. Commitments and Contingencies

Service Agreements

We have entered into long-term agreements with certain vendors to provide for software and equipment maintenance, specified levels of bandwidth and other services. Under these arrangements, we are required to make periodic payments. Future minimum obligations under these non-cancelable agreements with initial terms in excess of one year at December 31, 2022 are as follows:

Year Ending December 31:
2023			$	145.3
2024			96.8
2025			84.8
2026			79.6
2027			103.3
Thereafter			8.8
			$	518.6

Litigation

From time-to-time, we are a party to litigation and subject to claims incident to 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 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 estimable.

On June 13, 2019, we entered into an agreement in principle to settle the class action complaint, Jason Bennett v. GoDaddy.com (Case No. 2:16-cv-03908-DLR) (D. Ariz.), filed on June 20, 2016. The complaint alleges violation of the Telephone Consumer Protection Act of 1991 (the TCPA). On September 23, 2019, the parties fully executed a written settlement agreement. On December 16, 2019, we amended the settlement agreement to include two additional putative class action cases, which also alleged violations of the TCPA: John Herrick v. GoDaddy.com, LLC (Case No. 2:16-cv-00254 (D. Ariz.), appeal pending 18-16048 (9th Cir.)) and Susan Drazen v. GoDaddy.com, LLC (Case No 19-cv-00563) (S.D. Ala.). In 2019, we recorded an $18.1 million charge to general and administrative expense, representing our original estimated loss provision for this settlement.

Under the terms of the final settlement agreement, we made available a total of up to $35.0 million to pay: (i) class members, at their election, either a cash settlement or a credit to be used for future purchases of products from us; (ii) an incentive payment to the class representatives; (iii) notice and administration costs in connection with the settlement; and (iv) attorneys' fees to legal counsel representing the class.

On April 22, 2020, the parties filed statements in response to a request from the S.D. Ala. Court (the Court) to refine the class definition, resulting in a reduction in the total number of class members from the original estimated class. On May 14, 2020, the Court granted approval of the plaintiffs' unopposed motion for preliminary certification of the settlement class,

subject to the parties' execution of an amended settlement agreement to remove John Herrick as a class representative. The parties executed such amendment on May 26, 2020, and on June 9, 2020, the Court granted preliminary approval of the final settlement agreement. The Court's order also set October 7, 2020 as the deadline for class members to submit claims and December 14, 2020 as the hearing date regarding final approval of the settlement.

On September 1, 2020, the Court issued an amended order reducing the attorneys' fees to be paid to legal counsel representing the class. Additionally, the actual number of claims made by class members through the October 7, 2020 deadline was lower than our original estimates.

On December 23, 2020, the Court issued a final judgment and order approving the class settlement, which further reduced the attorneys' fees to be paid to legal counsel representing the class and denied the plaintiffs' request for an incentive payment. Additionally, the actual notice and administration costs were lower than originally estimated.

As a result of the above developments, during 2020, we recorded a cumulative $10.0 million reduction to general and administrative expense, lowering our estimated loss provision for this settlement to $8.1 million as of December 31, 2020.

On January 19, 2021, a single objector to the settlement filed a notice of appeal to the 11th Circuit Court of Appeals, which remains pending as of the date of this filing. We made no changes to our estimated loss provision for this settlement during 2021. The timing of any settlement payments is pending resolution of the appeal.

On July 27, 2022, the 11th Circuit vacated the settlement approval order and remanded the case for further action due to standing issues among the class members. On August 18, 2022, the plaintiffs filed a petition for a rehearing before the 11th Circuit, which remains pending as of the date of this filing. On December 7, 2022, the 11th Circuit was notified of the death of one of the plaintiffs, Jason Bennett. The parties are currently briefing the effect, if any, of his death on the appeal. Given the pending nature of this petition, the possibility for one or more parties to seek relief from the Supreme Court and the ongoing briefing regarding the effect of the plaintiff's death, the finality and/or impact of the July 27, 2022 decision is uncertain. As a result, we have not adjusted our estimated loss provision for this settlement as of December 31, 2022.

We have denied and continue to deny the allegations in the complaints. Nothing in the final settlement agreement shall be deemed to assign or reflect any admission of fault, wrongdoing or liability, or of the appropriateness of a class action in such litigation. We received a full release from the settlement class concerning the claims asserted, or that could have been asserted, with respect to the claims released in the final settlement agreement. Our legal fees associated with this matter have been recorded to general and administrative expense as incurred and were not material.

The amounts currently accrued for other matters are not material. While the results of such normal course claims and legal proceedings, regardless of the underlying nature of the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely timing of resolution of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would not be material. Regardless of the outcome, claims and legal proceedings may have an adverse effect on us because of defense costs, diversion of management resources and other factors. We may also receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. The final outcome of any current or future claims or lawsuits could adversely affect our business, financial condition or results of operations.

Indemnifications

In the normal course of business, we have made indemnities under which we may be required to make payments in relation to certain transactions, including to our directors and officers to the maximum extent permitted under applicable state laws and indemnifications related to certain lease agreements. In addition, certain advertiser and reseller partner agreements contain indemnification provisions, which are generally consistent with those prevalent in the industry. We have not incurred material obligations under indemnification provisions historically, and do not expect to incur material obligations in the future. Accordingly, we have not recorded any liabilities related to such indemnities as of December 31, 2022 and 2021.

We include service level commitments to our customers guaranteeing certain levels of uptime reliability and performance for our hosting and premium DNS products. These guarantees permit those customers to receive credits in the event we fail to meet those levels, with exceptions for certain service interruptions including but not limited to periodic maintenance. We have not incurred any material costs as a result of such commitments during any of the periods presented, and have not recorded any liabilities related to such obligations as of December 31, 2022 and 2021.

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.

As of December 31, 2022 and 2021, our accrual for estimated indirect tax liabilities was $18.9 million and $8.2 million, 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.

14. Restructuring and Other

In June 2020, we announced a restructuring plan related to our outbound sales and operations and recorded $43.6 million of pre-tax restructuring charges during 2020. The aggregate charges included: (i) $14.6 million in severance and related benefits to be paid to, or on behalf of, the impacted employees, as well as professional fees incurred in connection with the restructuring; (ii) a $27.9 million impairment of operating lease assets associated with the closure of our leased offices in Austin, Texas; and (iii) $1.1 million of accelerated depreciation and operating lease assets amortization related to the office closures. Cash payments of $14.4 million related to the restructuring were made during 2020.

During 2021, we recorded other charges and credits, which included (i) the $15.4 million gain on sale of the land and buildings of our former corporate headquarters and (ii) a $15.1 million charge due to the impairment of certain operating lease assets and related leasehold improvements associated with the decision to close one of our leased offices.

Restructuring and other during 2022 of $15.7 million primarily includes the impairment and loss on disposition of certain assets.

15. Defined Contribution Plan

We maintain defined contribution 401(k) plans covering eligible U.S. employees, who may contribute up to 100% of their compensation, subject to limitations established by the Internal Revenue Code. We match employee contributions on a discretionary basis. Expense for our matching contributions was $15.9 million, $15.0 million and $14.5 million during 2022, 2021 and 2020, respectively.

We maintain defined contribution benefit plans covering eligible foreign employees. Expense related to such plans was not material in any period presented.

16. Income Taxes

Overview

We are subject to U.S. federal, state and foreign income taxes with respect to our allocable share of any taxable income or loss of Desert Newco, as well as any stand-alone income or loss we generate. Desert Newco is treated as a partnership for U.S. income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions. Instead, Desert Newco's taxable income or loss is passed through to its members, including us. Despite its partnership treatment, Desert Newco is liable for income taxes in certain foreign jurisdictions in which it operates, in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities. We have acquired the outstanding stock of various domestic and foreign entities taxed as corporations, which are now wholly-owned by us or our subsidiaries. Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for U.S.

federal and state income tax purposes and internationally, primarily within the United Kingdom (UK), Germany and India. We anticipate this structure to remain in existence for the foreseeable future.

Benefit (Provision) for Income Taxes

Our benefit (provision) for income taxes includes U.S. federal, state and foreign income taxes. The domestic and foreign components of our income (loss) before income taxes were as follows:

			Year Ended December 31,
			2022						2021						2020
U.S.			$	418.6					$	310.3					$	(423.4)
Foreign			(62.1)						(56.7)						(72.0)
Income (loss) before income taxes			$	356.5					$	253.6					$	(495.4)

Our benefit (provision) for income taxes was as follows:

			Year Ended December 31,
			2022						2021						2020
Current:
Federal			$	(1.3)					$	(2.1)					$	(3.4)
State			(0.9)						(2.9)						(1.1)
Foreign			(16.9)						(22.6)						(19.3)
			(19.1)						(27.6)						(23.8)
Deferred:
Federal			(0.7)						2.3						2.9
State			(0.5)						0.2						1.5
Foreign			16.7						14.3						20.7
			15.5						16.8						25.1
Benefit (provision) for income taxes			$	(3.6)					$	(10.8)					$	1.3

A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate was as follows:

			Year Ended December 31,
			2022						2021						2020
Expected benefit (provision) at U.S. federal statutory tax rate			$	(74.9)					$	(53.3)					$	104.0
Effect of investment in Desert Newco			(22.0)						(50.4)						10.4
Research and development credits			29.2						21.9						75.0
TRA liability adjustment			—						—						(5.3)
Foreign earnings			3.7						(0.9)						(5.4)
Effect of changes in tax rates			—						(3.6)						—
Uncertain tax positions			(10.6)						(10.7)						(5.6)
State taxes, net of federal benefit			2.9						(31.5)						44.9
Effect of restructurings of domestic subsidiary			(7.0)						—						—
Other			(1.9)						3.8						0.9
Effect of changes in valuation allowances			77.0						113.9						(217.6)
Benefit (provision) for income taxes			$	(3.6)					$	(10.8)					$	1.3

Deferred Taxes

The components of our deferred taxes were as follows:

			December 31,
			2022						2021
DTAs:
Investment in Desert Newco			$	800.0					$	900.8
NOLs			523.2						599.7
Tax credits			134.4						101.4
Deferred interest			38.2						40.0
Operating lease liabilities			17.8						19.4
Other			9.9						6.1
Valuation allowance			(1,504.8)						(1,644.6)
Total DTAs			18.7						22.8
DTLs:
Identified intangible assets			(61.3)						(83.7)
Operating lease assets			(8.1)						(9.1)
Total DTLs			(69.4)						(92.8)
Net DTLs			$	(50.7)					$	(70.0)

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (IRA Act), which is effective January 1, 2023 and contains provisions implementing a 15% minimum corporate income tax and a 1% excise tax on stock repurchases. While we are continuing to evaluate the impact of the IRA Act, at this time, we do not believe it will have a material impact on our consolidated financial statements.

Provisions enacted in the Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental expenditures became effective on January 1, 2022. These provisions require us to capitalize research and experimental expenditures and amortize them on the U.S. tax return over five or fifteen years, depending on where research is conducted. The enacted provision did not have a material impact on our consolidated financial statements.

In determining the need for a valuation allowance, we prepare quarterly estimates using historical and forecasted future operating results, based upon approved business plans, including a review of the eligible carryforward periods and tax planning strategies. Based primarily on the negative evidence outweighing the positive evidence as of December 31, 2022, we believe there is uncertainty as to when we will be able to utilize certain of our domestic net operating losses (NOLs), credit carryforwards and other deferred tax assets (DTAs). This negative evidence includes our historical tax losses, the difficulty in forecasting excess tax benefits related to equity-based compensation, as well as the difficulty in forecasting profits due to the current uncertain macroeconomic conditions, such as inflation and the possibility of a recession or an economic slowdown in the U.S. Therefore, we have recorded a valuation allowance against the DTAs for which we have concluded it is more-likely-than-not they will not be realized.

If the current uncertain macroeconomic conditions dissipate making it easier to forecast in the long-term, our operating results continue to improve and our projections show sufficient utilization of tax attributes, we will consider that as significant positive evidence and our future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. If this were to occur, any reversal of the valuation allowance would result in a corresponding non-cash income tax benefit, thereby increasing total DTAs.

As of December 31, 2022, we had U.S. federal, state and foreign gross NOLs and tax credits, a portion of which will begin to expire in 2030, as follows:

			Gross NOLs and Tax Credits						Portion Subject to a Valuation Allowance
Federal			$	2,148.4					2,148.4
State			2,410.8						2,410.8
Foreign			33.7						21.7
			$	4,592.9					$	4,580.9

As of December 31, 2022, we have provided income taxes on the earnings of foreign subsidiaries, except to the extent such earnings are considered indefinitely reinvested. We have determined the amount of unrecognized DTL related to these temporary differences to be immaterial.

Uncertain Tax Positions

Our liability for unrecognized tax benefits was as follows:

			December 31,
			2022						2021
Balance at beginning of period			$	120.7					$	51.8
Gross increases - tax positions in prior period			7.2						41.0
Gross increases - tax positions in current period			11.8						21.5
Current year acquisitions			—						6.4
Balance at end of period			$	139.7					$	120.7

The total amount of gross unrecognized tax benefits was $139.7 million as of December 31, 2022, of which $41.5 million, if fully recognized, would decrease our effective tax rate.

We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. Other long-term liabilities includes accrued interest and penalties related to unrecognized tax benefits of $28.2 million and $19.0 million as of December 31, 2022 and 2021, respectively. We do not expect a significant decrease in our liability for unrecognized tax benefits in the next 12 months.

We have filed all income tax returns for years through 2021, other than for the UK, Germany and the Netherlands. These returns are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they were filed. Although we believe the amounts reflected in our tax returns substantially comply with applicable U.S. federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our benefit for income taxes in the period in which a final determination is made.

17. Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) attributable to GoDaddy Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows:

			Year Ended December 31,
			2022						2021						2020
Numerator:
Net income			$	352.9					$	242.8					$	(494.1)
Less: net income attributable to non-controlling interests			0.7						0.5						1.0
Net income (loss) attributable to GoDaddy Inc.			$	352.2					$	242.3					$	(495.1)
Denominator:
Weighted-average shares of Class A common stock outstanding—basic			158,788						167,906						168,636
Effect of dilutive securities:
Class B common stock			313						414						—
Stock options			678						1,127						—
RSUs, PSUs and ESPP shares			1,678						1,658						—
Weighted-average shares of Class A Common stock outstanding—diluted			161,457						171,105						168,636
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—basic			$	2.22					$	1.44					$	(2.94)
Net income (loss) attributable to GoDaddy Inc. per share of Class A common stock—diluted(1)			$	2.19					$	1.42					$	(2.94)

_________________________________

(1) The diluted income (loss) per share calculations exclude net income attributable to non-controlling interests, unless the effect is antidilutive.

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such shares would have been antidilutive:

			Year Ended December 31,
			2022						2021						2020
Class B common stock			—						—						1,145
Stock options			234						544						3,259
RSUs, PSUs and ESPP shares			492						881						2,045
			726						1,425						6,449

Shares of Class B common stock do not share in our earnings and are not participating securities. Accordingly, separate presentation of income per share of Class B common stock under the two-class method has not been presented. Each share of Class B common stock (together with a corresponding LLC Unit) is exchangeable for one share of Class A common stock.

18. Segment Information

Beginning in the first quarter of 2022, we revised the presentation of segment information to reflect changes in the way we manage and evaluate our business. Effective January 1, 2022, we report our operating results through two reportable segments: A&C and Core. Previously we had a single operating and reportable segment.

Our chief operating decision maker (CODM), which, as of December 31, 2022, was our Chief Executive Officer, evaluates the performance of and allocates resources to our segments based on each segment's revenue and earnings before interest, taxes, depreciation and amortization (Segment EBITDA). Segment EBITDA is defined as segment revenues less costs and operating expenses, excluding depreciation and amortization, interest expense (net), provision or benefit for income taxes, equity-based compensation expense, acquisition-related costs, restructuring-related expenses and certain other items. We believe Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segments' performance on a consistent basis.

Our CODM does not use assets by segment to evaluate performance or allocate resources; therefore, we do not provide disclosure of assets by segment. See Note 2 for property, plant, and equipment, net as well as revenue disaggregated by geography.

The A&C and Core segments provide a view into the product-focused organization of our business and generate revenue as follows:

• A&C primarily consists of sales of products containing proprietary software, commerce products and third-party email and productivity solutions as well as sales of certain products when they are included in bundled offerings of our proprietary software products.

• Core primarily consists of sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.

There are no internal revenue transactions between our reportable segments.

Corporate overhead primarily includes general and administrative expenses and items not allocated to either segment as well as those costs specifically excluded from Segment EBITDA, our segment measure of profitability, such as depreciation and amortization, interest expense and income and provision or benefit for income taxes.

The following table presents our segment information for the periods indicated:

			Year Ended December 31,
			2022						2021						2020
Revenue:
A&C			$	1,279.7					$	1,128.3					$	926.1
Core			2,811.6						2,687.4						2,390.6
Total revenue			$	4,091.3					$	3,815.7					$	3,316.7
Segment EBITDA:
A&C			$	522.8					$	447.7					$	349.7
Core			783.7						679.7						628.2
Total Segment EBITDA			1,306.5						1,127.4						977.9
Unallocated corporate overhead			(293.5)						(255.2)						(255.7)
Depreciation and amortization			(194.6)						(199.6)						(202.7)
Equity-based compensation expense			(264.4)						(207.9)						(191.5)
Interest expense, net of interest income			(135.0)						(124.9)						(86.9)
Tax receivable agreements liability adjustment			—						—						(674.7)
Acquisition-related expenses			(35.1)						(78.2)						(25.0)
Restructuring and other(1)			(27.4)						(8.0)						(36.8)
Income before income taxes			356.5						253.6						(495.4)
Benefit (provision) for income taxes			(3.6)						(10.8)						1.3
Net income (loss)			$	352.9					$	242.8					$	(494.1)

_________________________________

(1)Includes lease-related expenses associated with closed facilities, charges related to certain legal matters, and expenses incurred in relation to the refinancing of our long-term debt.

19. Accumulated Other Comprehensive Loss

The following table presents AOCI activity in equity:

			Foreign Currency Translation Adjustments						Net Unrealized Gains (Losses) on Cash Flow Hedges**(1)**						Total AOCI
Gross balance as of December 31, 2020(2)			$	(98.8)					$	(32.8)					$	(131.6)
Other comprehensive income (loss) before reclassifications			45.9						(37.0)						8.9
Amounts reclassified from AOCI			—						84.0						84.0
Other comprehensive income - 2021			45.9						47.0						92.9
			$	(52.9)					$	14.2					(38.7)
Less: AOCI attributable to non-controlling interests															0.1
Balance as of December 31, 2021															$	(38.6)
Gross balance as of December 31, 2021(2)			$	(52.9)					$	14.2					$	(38.7)
Other comprehensive income (loss) before reclassifications			(22.1)						171.2						149.1
Amounts reclassified from AOCI			—						68.0						68.0
Other comprehensive income - 2022			(22.1)						239.2						217.1
			$	(75.0)					$	253.4					178.4
Less: AOCI attributable to non-controlling interests															(0.4)
Balance as of December 31, 2022															$	178.0

_________________________________

(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.

(2) Beginning balance is presented on a gross basis, excluding the allocation of AOCI attributable to non-controlling interests.

See Note 11 for the effect on net income of amounts reclassified from AOCI related to our cash flow hedging instruments.

20. Subsequent Events

On February 8, 2023, the audit and finance committee of our board of directors authorized a restructuring plan to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a rationalization of our portfolio. As part of this plan, we announced a reduction in our current workforce of approximately 550 employees, representing approximately 8% of our total employees.

We estimate we will incur approximately $55.0 million to $65.0 million of pre-tax restructuring and exit related charges, of which $30.0 million to $40.0 million represents future cash expenditures for the payment of severance and related benefit costs and approximately $25.0 million represents non-cash pre-tax charges in connection with the disposition of certain assets. We expect that the majority of these charges will be incurred in the first quarter of 2023 and that the restructuring will be substantially complete in the first half of 2023.