filings.toolsItem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included in this Quarterly Report on Form 10-Q as well as our audited financial statements and related notes and the discussion in the "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our 2020 Form 10-K.
(Throughout this discussion and analysis, dollars are in millions and shares are in thousands.)
COVID-19 Pandemic
We have implemented a variety of measures to attempt to minimize the impact of the ongoing COVID-19 pandemic on our business, to ensure the availability and functioning of our critical infrastructure and to promote the safety and security of our employees. These measures have included remote working arrangements for nearly all of our workforce since March 2020 and safety protocols for any on-site personnel in accordance with federal, state and local regulations. Based on guidance from governmental authorities and health experts, we have started to bring our employees back to certain offices on a voluntary basis, and we expect to do this for other offices later this year and continuing into 2022. Incremental costs of these remote working arrangements have not been material, though such arrangements have increased the risk of cybersecurity incidents as individuals have been working through less secure network connections.
While the pandemic has not had a material impact on our results of operations so far, the extent to which it may impact our future results and operations will depend on future developments, including: i) the duration of the virus; ii) the widespread distribution and long-term efficacy of vaccines and the availability of effective treatments; iii) the duration and parameters of global governmental measures put in place to control the spread of the virus; and iv) the continuing economic impact. We are actively monitoring the pandemic and the potential impacts it may have on our financial position, results of operations and cash flows in the future. See "Risk Factors" for additional information.
Third Quarter Financial Highlights
Below are our key financial highlights for the three months ended September 30, 2021, with comparisons to the three months ended September 30, 2020.
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Total revenue of $964.0 million, an increase of 14.2%, or approximately 13.5% on a constant currency basis(1).
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International revenue of $319.7 million, an increase of 12.7%, or approximately 10.6% on a constant currency basis(1).
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Total bookings(2) of $1,038.1 million, an increase of 9.9%, or approximately 9.1% on a constant currency basis(1).
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Operating income of $131.3 million, an increase of 42.1%.
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Net cash provided by operating activities of $226.4 million, an increase of 14.7%.
(1) Discussion of constant currency is set forth in "Quantitative and Qualitative Disclosures about Market Risk."
(2) A reconciliation of total bookings to total revenue, its most directly comparable GAAP financial measure, is set forth in "Reconciliation of bookings" below.
Results of Operations
The following table sets forth our results of operations for the periods presented and as a percentage of our total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
| $ | % of Total Revenue | $ | % of Total Revenue | $ | % of Total Revenue | $ | % of Total Revenue | ||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Domains | $ | 453.2 | 47.0 | % | $ | 387.4 | 45.9 | % | $ | 1,312.6 | 46.9 | % | $ | 1,112.9 | 45.6 | % | |||||||||||||||||||||||||||||||
| Hosting and presence | 324.7 | 33.7 | % | 302.4 | 35.8 | % | 953.5 | 34.1 | % | 891.8 | 36.5 | % | |||||||||||||||||||||||||||||||||||
| Business applications | 186.1 | 19.3 | % | 154.6 | 18.3 | % | 530.3 | 19.0 | % | 438.1 | 17.9 | % | |||||||||||||||||||||||||||||||||||
| Total revenue | 964.0 | 100.0 | % | 844.4 | 100.0 | % | 2,796.4 | 100.0 | % | 2,442.8 | 100.0 | % | |||||||||||||||||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | 345.8 | 35.9 | % | 290.2 | 34.5 | % | 999.0 | 35.7 | % | 856.7 | 35.1 | % | |||||||||||||||||||||||||||||||||||
| Technology and development | 172.4 | 17.9 | % | 141.4 | 16.7 | % | 530.8 | 19.0 | % | 411.8 | 16.9 | % | |||||||||||||||||||||||||||||||||||
| Marketing and advertising | 124.0 | 12.9 | % | 115.4 | 13.7 | % | 383.2 | 13.7 | % | 312.9 | 12.8 | % | |||||||||||||||||||||||||||||||||||
| Customer care | 74.0 | 7.7 | % | 73.6 | 8.7 | % | 230.9 | 8.3 | % | 242.6 | 9.9 | % | |||||||||||||||||||||||||||||||||||
| General and administrative | 81.2 | 8.4 | % | 76.4 | 9.0 | % | 260.9 | 9.3 | % | 244.1 | 10.0 | % | |||||||||||||||||||||||||||||||||||
| Restructuring and other | (15.4) | (1.6) | % | 4.3 | 0.5 | % | (15.4) | (0.6) | % | 43.7 | 1.8 | % | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 50.7 | 5.2 | % | 50.7 | 6.0 | % | 149.7 | 5.4 | % | 151.3 | 6.2 | % | |||||||||||||||||||||||||||||||||||
| Total costs and operating expenses | 832.7 | 86.4 | % | 752.0 | 89.1 | % | 2,539.1 | 90.8 | % | 2,263.1 | 92.7 | % | |||||||||||||||||||||||||||||||||||
| Operating income | 131.3 | 13.6 | % | 92.4 | 10.9 | % | 257.3 | 9.2 | % | 179.7 | 7.3 | % | |||||||||||||||||||||||||||||||||||
| Interest expense | (32.5) | (3.4) | % | (23.9) | (2.8) | % | (93.8) | (3.4) | % | (64.5) | (2.6) | % | |||||||||||||||||||||||||||||||||||
| Tax receivable agreements liability adjustment | — | — | % | — | — | % | — | — | % | (674.7) | (27.6) | % | |||||||||||||||||||||||||||||||||||
| Other income (expense), net | (1.2) | (0.1) | % | 1.2 | 0.1 | % | (1.4) | (0.1) | % | (1.3) | (0.1) | % | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | 97.6 | 10.1 | % | 69.7 | 8.2 | % | 162.1 | 5.7 | % | (560.8) | (23.0) | % | |||||||||||||||||||||||||||||||||||
| Benefit (provision) for income taxes | 0.1 | — | % | (4.6) | (0.5) | % | (6.7) | (0.2) | % | (4.1) | (0.2) | % | |||||||||||||||||||||||||||||||||||
| Net income (loss) | 97.7 | 10.1 | % | 65.1 | 7.7 | % | 155.4 | 5.5 | % | (564.9) | (23.2) | % | |||||||||||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interests | 0.2 | — | % | 0.4 | — | % | 0.3 | — | % | 0.7 | — | % | |||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to GoDaddy Inc. | $ | 97.5 | 10.1 | % | $ | 64.7 | 7.7 | % | $ | 155.1 | 5.5 | % | $ | (565.6) | (23.2) | % |
Revenue
We generate substantially all of our revenue from sales of subscriptions, including domain registrations and renewals, hosting and presence products and business applications products. Our subscriptions can range from monthly terms to multi-annual terms of up to ten years depending on the product. We generally collect the full amount of subscription fees at the time of sale, while revenue is recognized over the period in which the performance obligations are satisfied, which is generally over the contract term. Revenue is presented net of refunds, and we maintain a reserve to provide for refunds granted to customers.
Domains revenue primarily consists of revenue from the sale of domain registrations and renewals, aftermarket domain sales and domain add-ons such as domain protection.
Hosting and presence revenue primarily consists of revenue from the sale of subscriptions for website hosting, website security, website building and commerce products.
Business applications revenue primarily consists of revenue from the sale of subscriptions for third-party productivity applications, email accounts, email marketing tools and telephony solutions.
The following table presents our revenue for the periods indicated:
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Domains | $ | 453.2 | $ | 387.4 | $ | 65.8 | 17 | % | $ | 1,312.6 | $ | 1,112.9 | $ | 199.7 | 18 | % | |||||||||||||||||||||||||||||||
| Hosting and presence | 324.7 | 302.4 | 22.3 | 7 | % | 953.5 | 891.8 | 61.7 | 7 | % | |||||||||||||||||||||||||||||||||||||
| Business applications | 186.1 | 154.6 | 31.5 | 20 | % | 530.3 | 438.1 | 92.2 | 21 | % | |||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 964.0 | $ | 844.4 | $ | 119.6 | 14 | % | $ | 2,796.4 | $ | 2,442.8 | $ | 353.6 | 14 | % |
The 14.2% and 14.5% increases in total revenue for the three and nine months ended September 30, 2021, respectively, were driven by growth in total customers and average revenue per user as well as contributions from recent acquisitions. The increase in customers impacted each of our revenue categories, as the additional customers purchased subscriptions across our product portfolio.
Domains
The 17.0% and 17.9% increases in domains revenue for the three and nine months ended September 30, 2021, respectively, were primarily driven by the increase in domains under management from 81.8 million as of September 30, 2020 to 84.1 million as of September 30, 2021, increased aftermarket domain sales and contributions from recent acquisitions.
Hosting and presence
The 7.4% and 6.9% increases in hosting and presence revenue for the three and nine months ended September 30, 2021, respectively, were primarily driven by increased demand for our website building and website security products as well as contributions from recent acquisitions, including commerce related revenue from Poynt. The increase in the nine month period was partially offset by lower demand for certain higher-priced subscriptions, such as GoDaddy Social.
Business applications
The 20.4% and 21.0% increases in business applications revenue for the three and nine months ended September 30, 2021, respectively, were primarily driven by increased customer adoption of our productivity solutions.
Bookings
In addition to revenue, we also believe total bookings is a useful supplement in evaluating our performance and helps provide an enhanced understanding of our business:
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Total bookings | $ | 1,038.1 | $ | 945.0 | $ | 93.1 | 10 | % | $ | 3,181.6 | $ | 2,832.4 | $ | 349.2 | 12 | % |
Total bookings. Total bookings represents cash receipts from the sale of products to customers in a given period adjusted for products where we recognize revenue on a net basis and without giving effect to certain adjustments, primarily net refunds granted in the period. Total bookings provides valuable insight into the sales of our products and the performance of our business since we typically collect payment at the time of sale and recognize revenue ratably over the term of our customer contracts. We report total bookings without giving effect to refunds granted in the period because refunds often occur in periods different from the period of sale for reasons unrelated to the marketing efforts leading to the initial sale. Accordingly, by excluding net refunds, we believe total bookings reflects the effectiveness of our sales efforts in a given period.
The 9.9% and 12.3% increases in total bookings for the three and nine months ended September 30, 2021, respectively, were primarily driven by increases in total customers and domains under management, increased aftermarket domain sales, broadened customer adoption of non-domain products and contributions from recent acquisitions. Additionally, total bookings was favorably impacted by approximately 80 and 120 basis points for the three and nine months ended September 30, 2021, respectively, due to movements in foreign currency exchange rates.
Reconciliation of bookings
The following table reconciles total bookings to total revenue, its most directly comparable GAAP financial measure:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Total bookings: | |||||||||||||||||||||||
| Total revenue | $ | 964.0 | $ | 844.4 | $ | 2,796.4 | $ | 2,442.8 | |||||||||||||||
| Change in deferred revenue(1) | 19.3 | 42.9 | 208.1 | 198.6 | |||||||||||||||||||
| Net refunds | 54.1 | 58.4 | 172.1 | 191.4 | |||||||||||||||||||
| Other | 0.7 | (0.7) | 5.0 | (0.4) | |||||||||||||||||||
| Total bookings | $ | 1,038.1 | $ | 945.0 | $ | 3,181.6 | $ | 2,832.4 |
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(1)Change in deferred revenue also includes the impact of realized gains or losses from the hedging of bookings in foreign currencies.
Costs and Operating Expenses
Cost of revenue
Costs of revenue are the direct costs incurred in connection with selling an incremental product to our customers. Substantially all cost of revenue relates to domain registration fees, payment processing fees, third-party commissions and licensing fees for third-party productivity applications. Similar to our billing practices, we pay domain costs at the time of purchase for the life of each subscription, but recognize the costs of service ratably over the term of our customer contracts. The terms of registry pricing are established by agreements between registries and registrars, and can vary significantly depending on the TLD. We expect cost of revenue to increase in absolute dollars in future periods related to the expansion of our domains business, higher sales of third-party productivity applications and growth in our customer base. However, cost of revenue may fluctuate as a percentage of total revenue, depending on the mix of products sold in a particular period.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | $ | 345.8 | $ | 290.2 | $ | 55.6 | 19 | % | $ | 999.0 | $ | 856.7 | $ | 142.3 | 17 | % |
The 19.2% and 16.6% increases in cost of revenue for the three and nine months ended September 30, 2021, respectively, were primarily attributable to higher domain costs, which were driven by the increase in domains under management, increased aftermarket domain sales and costs associated with our recently acquired registry business, as well as increased software licensing fees resulting from higher sales of productivity solutions and increased payment processing fees resulting from our bookings growth.
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. We expect technology and development expense to increase in absolute dollars as we continue to invest in product development and migrate our infrastructure to a cloud-based third-party provider. Technology and development expenses may fluctuate as a percentage of total revenue depending on our level of investment in additional personnel and the pace of our infrastructure transition.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Technology and development | $ | 172.4 | $ | 141.4 | $ | 31.0 | 22 | % | $ | 530.8 | $ | 411.8 | $ | 119.0 | 29 | % |
The 21.9% and 28.9% increases in technology and development expenses for the three and nine months ended September 30, 2021, respectively, were primarily due to increased personnel costs driven by higher average headcount associated with our continued investment in product development as well as increased technology costs associated with the growth of our business and our migration to a cloud-based infrastructure. Additionally, in the three and nine months ended September 30, 2021, we recorded approximately $5.0 million and $38.0 million, respectively, in compensation expense resulting from our acquisitions, primarily Poynt.
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. We expect marketing and advertising expenses to fluctuate depending on both the mix of internal and external marketing resources used, the size and scope of our future campaigns and the level of discretionary investments we make in marketing to drive future sales.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Marketing and advertising | $ | 124.0 | $ | 115.4 | $ | 8.6 | 7 | % | $ | 383.2 | $ | 312.9 | $ | 70.3 | 22 | % |
The 7.5% and 22.5% increases in marketing and advertising expenses for the three and nine months ended September 30, 2021, respectively, were primarily attributable to increased discretionary spending associated with the marketing investments we made to drive additional growth. The year-over-year increase decelerated in the three month period due to the significant investments we made in 2020 to capture higher demand.
Customer care
Customer care expenses represent the costs to guide and service our customers, primarily consisting of personnel costs. We expect customer care expenses to fluctuate depending on the level of personnel required to support our business.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Customer care | $ | 74.0 | $ | 73.6 | $ | 0.4 | 1 | % | $ | 230.9 | $ | 242.6 | $ | (11.7) | (5) | % |
The 4.8% decrease in customer care expenses for the nine months ended September 30, 2021 was primarily due to the headcount reductions related to the restructuring plan we implemented during the second quarter of 2020 as well as operating efficiencies gained as we scale our business and increase our use of alternative methods of customer interaction.
There were no material changes in customer care expenses for the three months ended September 30, 2021.
General and administrative
General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent for all locations, all employee travel expenses, acquisition-related expenses and other general costs. We expect general and administrative expenses to fluctuate depending on the level of personnel and other administrative costs required to support our business as well as the significance of any strategic acquisitions we choose to pursue.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 81.2 | $ | 76.4 | $ | 4.8 | 6 | % | $ | 260.9 | $ | 244.1 | $ | 16.8 | 7 | % | |||||||||||||||||||||||||||||||
The 6.3% and 6.9% increases in general and administrative expenses for the three and nine months ended September 30, 2021, respectively, were primarily due to increased acquisition-related expenses and professional fees. The increase for the nine month period was partially offset by the reversal of equity-based compensation expense resulting from the forfeiture of unvested awards as a result of certain executive departures.
Restructuring and other
Restructuring and other for the three and nine months ended September 30, 2021 includes the $15.4 million gain on sale of the land and buildings of our former corporate headquarters.
During the three and nine months ended September 30, 2020, we recorded $4.3 million and $43.7 million, respectively, in pre-tax restructuring charges pursuant to a restructuring plan implemented in June 2020, as further discussed in our 2020 Form 10-K. There were no such charges recorded in 2021.
Depreciation and amortization
Depreciation and amortization expenses consist of charges relating to the depreciation of the property and equipment used in our operations and the amortization of acquired intangible assets. These expenses may increase or decrease in absolute dollars in future periods depending on our future level of capital investments in hardware and other equipment as well as the significance of any future acquisitions.
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 50.7 | $ | 50.7 | $ | — | — | % | $ | 149.7 | $ | 151.3 | $ | (1.6) | (1) | % |
There were no material changes in depreciation and amortization.
Interest expense
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | $ | 32.5 | $ | 23.9 | $ | 8.6 | 36 | % | $ | 93.8 | $ | 64.5 | $ | 29.3 | 45 | % |
The 36.0% and 45.4% increases in interest expense for the three and nine months ended September 30, 2021, respectively, were primarily driven by the issuance of the 2027 Term Loans in August 2020 and the 2029 Senior Notes in February 2021, as further discussed in Note 9 to our financial statements, partially offset by a decrease in the effective interest rate on our variable rate borrowings.
Tax receivable agreements liability adjustment
During the nine months ended September 30, 2020, we recorded a $674.7 million charge related to the settlement of our prior tax receivable agreements, as further described in our 2020 Form 10-K.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity have been cash flow generated from operations, long-term debt borrowings and stock option exercises. Our principal uses of cash have been to fund operations, acquisitions and capital expenditures, as well as to make mandatory principal and interest payments on our long-term debt and to repurchase shares of our Class A common stock.
In general, we seek to deploy our capital in a prioritized manner focusing first on requirements for our operations, then on growth investments, and finally on stockholder returns. Our strategy is to deploy capital, whether debt, equity or internally generated cash, depending on the adequacy and availability of the source of capital and which source may be used most efficiently and at the lowest cost at such time. Therefore, while cash from operations is our primary source of operating liquidity and we believe our internally-generated cash flows are sufficient to support our day-to-day operations, we may use a variety of capital sources to fund our needs for less predictable investment decisions such as strategic acquisitions and share repurchases.
We have incurred significant long-term debt, primarily to fund acquisitions, share repurchases and the settlement of our prior tax receivable agreements. As a result, we are limited as to how we conduct our business and may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities, strategic acquisitions or share repurchases. However, the restrictions under our long-term debt agreements are subject to a number of qualifications and may be amended with the consent of the lenders and the holders of the senior notes, as applicable.
We believe our existing cash and cash equivalents and cash generated by operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months. However, our future capital requirements will depend on many factors, including our growth rate, macroeconomic activity, potential business disruptions associated with the ongoing COVID-19 pandemic, the timing and extent of spending to support domestic and international development efforts, continued brand development and advertising spend, the level of customer care and general and administrative activities, the introduction of new and enhanced product offerings, the costs to support new and replacement capital equipment, the completion of strategic acquisitions or share repurchases and other factors. Should we pursue additional strategic acquisitions or share repurchases, we may need to raise additional capital, which may be in the form of long-term debt or equity financings.
Credit Facility and Senior Notes
Our long-term debt consists of the Credit Facility and the senior notes. In February 2021, we issued the $800.0 million 2029 Senior Notes, which bear interest at 3.50%. The proceeds were retained for general corporate purposes, which may include working capital, capital expenditures, potential acquisitions and strategic transactions. In addition, in March 2021, we refinanced the 2027 Term Loans to lower the interest rate margins by 0.5%. See Note 9 to our financial statements for additional information regarding our long-term debt.
Our long-term debt agreements contain covenants restricting, among other things, our ability, or the ability of our subsidiaries, to incur indebtedness, issue certain types of equity, incur liens, enter into fundamental changes including mergers and consolidations, sell assets, make restricted payments including dividends, distributions and investments, prepay junior indebtedness and engage in operations other than in connection with acting as a holding company, subject to customary exceptions. As of September 30, 2021, we were in compliance with all such covenants and had no amounts drawn on our Revolver.
As further discussed in Note 10 to our financial statements, we have hedged a portion of our long-term debt through the use of cross-currency and interest rate swap derivative instruments. These instruments help us manage and mitigate our risk of exposure to changes in foreign currency exchange rates and interest rates. See "Quantitative and Qualitative Disclosures About Market Risk" for additional discussion of our hedging activities.
Share Repurchases
In May 2021, our board of directors approved the repurchase of up to an additional $775.0 million of our Class A common stock. During the nine months ended September 30, 2021, we repurchased a total of 3,500 shares in the open market for an aggregate purchase price of $275.9 million, including commissions, and entered into an ASR in August 2021 in which we repurchased an additional 3,425 shares for $250.0 million. See Note 5 to our financial statements for additional information.
As of the date of this filing, we have $749.2 million remaining available for repurchases.
Acquisitions
In February 2021, we completed the acquisition of Poynt for $297.1 million in cash consideration to expand our commerce capabilities. 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. See Note 3 to our financial statements for additional discussion.
During the nine months ended September 30, 2021, we purchased intangible assets for a total of $201.8 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. See Note 4 to our financial statements for additional discussion.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| Net cash provided by operating activities | $ | 657.1 | $ | 598.7 | ||||||||||||||||
| Net cash used in investing activities | (570.3) | (435.9) | ||||||||||||||||||
| Net cash provided by (used in) financing activities | 292.4 | (604.1) | ||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1.0) | 0.3 | ||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 378.2 | $ | (441.0) |
Operating Activities
Our primary source of cash from operating activities has been cash collections from our customers. Our primary uses of cash from operating activities have been for domain registration costs paid to registries, software licensing fees related to third-party productivity solutions, personnel costs, discretionary marketing and advertising costs, technology and development costs and interest payments.
Net cash provided by operating activities increased $58.4 million from $598.7 million during the nine months ended September 30, 2020 to $657.1 million during the nine months ended September 30, 2021, primarily driven by our bookings growth. This increase was partially offset by $29.4 million in compensatory payments made in connection with the closing of our acquisition of Poynt as well as increased discretionary spending associated with the marketing investments we made to drive additional growth.
Investing Activities
Our investing activities generally consist of strategic acquisitions and purchases of property and equipment to support the overall growth of our business and our increased international presence.
Net cash used in investing activities increased $134.4 million from $435.9 million during the nine months ended September 30, 2020 to $570.3 million during the nine months ended September 30, 2021, primarily driven by $201.8 million in purchases of intangible assets and $40.0 million in purchases of equity investments in 2021, partially offset by a $100.6 million decrease in spending for business acquisitions.
Financing Activities
Our financing activities generally consist of long-term debt borrowings, the repayment of principal on long-term debt, stock option exercises and share repurchases.
Net cash from financing activities increased $896.5 million from $604.1 million used during the nine months ended September 30, 2020 to $292.4 million provided during the nine months ended September 30, 2021, primarily due to $849.8 million in payments made to settle our prior tax receivable agreements in 2020 and $800.0 million in proceeds from the issuance of the 2029 Senior Notes in 2021, partially offset by the receipt of $746.3 million in net proceeds from the issuance of the 2027 Term Loans in 2020.
Deferred Revenue
See Note 7 to our financial statements for details regarding the expected future recognition of deferred revenue.
Off-Balance Sheet Arrangements
As of September 30, 2021 and December 31, 2020, we had no off-balance sheet arrangements that had, or which are reasonably likely to have, a material effect on our financial statements.
Critical Accounting Policies and Estimates
We prepare our financial statements in accordance with GAAP, and in doing so, we make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances, and we evaluate these estimates, assumptions and judgments on an ongoing basis. Different assumptions and judgments would change the estimates used in the preparation of our financial statements, which, in turn, could change our results from those reported. We refer to estimates, assumptions and judgments of this type as our critical accounting policies and estimates, which we discussed in our 2020 Form 10-K. We review our critical accounting policies and estimates with the audit and finance committee of our board of directors on an annual basis.
There have been no material changes in our critical accounting policies from those disclosed in our 2020 Form 10-K.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, see Note 2 to our financial statements.
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