Revenue growth will be slow in Q4 thanks in part to a strong aftermarket last year.
GoDaddy (NYSE: GDDY) reported earnings this afternoon. The headline numbers are single-digit growth: Q3 revenue was up 7% year over year to $1.0 billion and bookings were up 5% to $1.1 billion. The numbers were negatively impacted by exchange rates.
Revenue for Core Platform, which includes domains, aftermarket, hosting, and security, was up 5% year over year. The company expects Core Platform revenue to be flat in Q4 and overall revenue to tick up 2% compared to Q4 last year.
Part of the reason for the forecast of low growth in Core Platform for the rest of the year is that Q4 was very strong for the domain aftermarket last year. The company isn’t comfortable predicting a repeat of those sales this year. On the conference call today, GoDaddy CFO Mark McCaffrey stated:
Additionally, we are facing a tough compare in our Aftermarket business. While our Aftermarket business showed strength in the fourth quarter last year, the demand for high value sales has been difficult to predict due to its short lead times and fast close rates. Our current guide does not factor in the same strength we experienced last year due to the current macro trends. Said simply, we do not expect Aftermarket demand in Q4 to enable the same revenue out performance we achieved in the year-ago quarter.
In other domain-related news, GoDaddy CEO Aman Bhutani commented about updates to the GoDaddy auction and aftermarket platforms:
We also released a new Auctions user experience that improves the buying experience with new bulk bidding and Buy-It-Now options, improved uptime, and a simpler and consistent design. We also launched a Domain Portfolio Manager for all customers giving them modern domain management capabilities aimed at increasing their efficiency and ease of use. While we are learning more about how the macro environment impacts the Aftermarket, we continue to focus on what we control, which is to improve the experience for domain investor customers and integrate Dan.com’s capabilities into the broader GoDaddy secondary market.