GoDaddy Stock Plummets After Earnings Report and Market Controversies

GoDaddy (NYSE: GDDY), a global leader in domain registration and hosting services, faced a sharp stock decline following its latest earnings report. Despite reporting Q4 revenue of $1.19 billion, surpassing its previous guidance of $1.165 billion – $1.185 billion, the company’s earnings per share (EPS) missed investor expectations, triggering a 14% drop in stock price.

Earnings Highlights and Market Reaction

1. Slow Growth in Core Business:

• GoDaddy’s Core Platform (domains, aftermarket, and legacy hosting) revenue grew only 3.9% YoY, indicating stagnation.

• The Applications & Commerce sector performed better, increasing by 16.9% YoY.

2. Weak Aftermarket Performance:

• Aftermarket revenue for Q4 reached $117 million, a 1% decline YoY, reflecting a slowdown in domain investing.

• However, the annual aftermarket revenue increased by 5% to $457 million.

3. Annual Growth but Uncertain Outlook:

• GoDaddy’s total 2024 revenue rose by 7.5% to $4.57 billion.

• However, 2025 guidance of $4.86 billion – $4.94 billion suggests slowing growth.

This underwhelming performance led to a loss of investor confidence, resulting in the significant stock sell-off.

GoDaddy’s Controversial Decisions Hurt Its Brand

Beyond financial performance, GoDaddy’s recent strategic moves have triggered industry-wide criticism and brand damage:

1. Dan.com Acquisition and Shutdown

In 2022, GoDaddy acquired Dan.com, a popular domain marketplace known for its lease-to-own options, flexible payment methods, and low commissions. However, in late 2024, GoDaddy abruptly announced Dan.com’s closure, forcing users to migrate to Afternic, sparking widespread backlash.

• Impact:

• Disrupting the Domain Market Ecosystem: The shutdown reduces competition, limits seller options, and may lead to higher commission fees and a worse user experience.

• Damaging Trust in GoDaddy: Many domain investors are frustrated with GoDaddy’s unpredictable policies and are migrating to alternative platforms such as Sedo, Squadhelp, and Efty.

2. Afternic’s Subpar User Experience

While GoDaddy is pushing Afternic as its sole marketplace, the platform has been criticized for poor usability, complex verification processes, and a lack of transparency in transactions. Unlike Dan.com, Afternic’s inefficiencies are driving users toward competitors.

3. High Commissions and Unclear Policies

• GoDaddy charges a 20% commission on aftermarket sales, significantly higher than Dan.com’s 9%-15%, increasing seller costs.

• With reduced competition, GoDaddy may raise commissions further, exacerbating frustration among domain investors.

Conclusion: GoDaddy Faces Growth Challenges and Trust Issues

GoDaddy’s latest earnings report highlights slowing growth, particularly in its core domain and aftermarket businesses. Additionally, the closure of Dan.com has damaged its reputation, alienating domain investors and potentially reducing market share.

With competitors like Sedo, Efty, and Squadhelp gaining traction, GoDaddy must rebuild trust, enhance user experience, and adopt a more customer-friendly approach to maintain its leadership in the domain industry.