Investor demands attainable growth targets with improved margins.
Activist investor Starboard has sent another letter (pdf) to GoDaddy’s (NYSE: GDDY) management and board, pushing the company to hit growth and margin targets.
The investor first revealed a 6.5% stake in GoDaddy in 2021. Last year, it sent an open letter to the company admonishing it for missing revenue growth targets and demanding that it make significant cost cuts.
In the letter, Starboard pats GoDaddy on the back for recent performance but says it’s closely watching the Q4 earnings call and March’s Investor Day.
It wants GoDaddy to target a 40% growth-plus-profitability measure for 2025, which it says is in-line with peers. At the same time, it doesn’t want to see a repeat of last year’s Investor Day, in which it set growth targets that it missed. (The letter referred to 2022’s Investor Day, but the letter it sent last year was about 2023 Investor Day targets, so it’s unclear which year it’s referring to. To be fair to GoDaddy, it was very difficult to forecast growth coming out of the pandemic, which saw unprecedented demand for websites and domain names.)
Starboard continues to push for margin expansion and cost-cutting.
Finally, Starboard recommends that GoDaddy continue to plow free cash flows back into share repurchases of GoDaddy’s “undervalued shares”.
J.R. says
Starboard has made it clear that, if revenues don’t improve they will work to fire the CEO and Board.
Many more layoffs coming at GoDaddy in 2024.
A still not fully tapped liquid rev source is the Namefind portfolio.
Prices need to come down and GD needs to refocus on being a registrar not a domainer.
Mark Thorpe says
Starboard is just another blood sucking vampire hedge fund that ruins good businesses.
Go private GoDaddy!
Mr geek says
GoDaddy is the worst registrar company ever… I own a IT support firm and we have moved almost all our customers out of GoDaddy… Their support is god-awful… Their office 365 sucks worse than anything just Google GoDaddy office 365 and you’ll see what I mean. Their interface sucks…. Everything about them just bad.
rubensk says
They will likely just increase domain registration prices.
WeKnowNames says
This is the very problem with Wall Street and corporate greed. They push for dividend increases quarter to quarter, with no regard to the abundance and bounty they have already been blessed with. Gratitude is replaced with entitled expectation. Eventually boundaries get crossed, customer service is reduced, and it becomes “anything goes” in an attempt to outperform their own delusional status quo. The world cannot sustain itself with the sociopathic tendencies our executive leaders demonstrate on a daily basis. Conform, or the laws of necessity will provide its own natural dictatorial solution simply out of base preservation. The greed of a very few is destroying opportunities for billions.