{ "docId": "019dd923-622b-71dc-a6da-445b33693744", "docSlug": "fd00a6c24ffe", "documentTitle": "GoDaddy Inc. (GDDY)", "authorId": "03_Starboard_Value", "authorName": "Peter A. Feld", "documentKindSlug": "shareholder-letter", "documentKindLabel": "Shareholder letter", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2023-09-12 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 6, "pageCount": 8, "prevPage": 5, "nextPage": 7, "slideType": "propose_solution", "function": "propose_solution", "density": "overcrowded", "nDataPoints": 12, "notes": "The slide advocates for a 'growth + profitability' metric of 40% by end of 2024.", "elementsJson": [ "headline_text", "paragraph", "bar_chart_vertical", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6da-445b33693744/6", "deckHref": "/decks/019dd923-622b-71dc-a6da-445b33693744", "deckJsonHref": "/decks/019dd923-622b-71dc-a6da-445b33693744.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6da-445b33693744#slide-6", "components": [ { "bbox": null, "kind": "callout", "text": "When combining the opportunity to rationalize certain Technology and Development expenses with other growth and margin improvement opportunities, we believe GoDaddy should commit to delivering a growth + profitability metric of at least 40% by the end of 2024.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-78b7-702e-9638-d353630c2bcf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.64, "x": 0.18, "y": 0.21 }, "kind": "chart", "text": "Bar chart showing Tech & Dev expenses from FY2018 to Q2'23 Annualized, with % of revenue increasing from 16.3% to 20.9%.", "attrs": null, "subkind": "bar-vertical", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1e9341d5-788f-460c-95cf-a46c329fa501", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "Tech & Dev Expenses as % of Revenue: 20.9%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-78b7-702e-9638-d736194d9b9e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.402 }, "kind": "paragraph", "text": "When combining the opportunity to rationalize certain Technology and Development expenses with other growth and margin improvement opportunities, we believe GoDaddy should commit to delivering a growth + profitability metric of at least 40% by the end of 2024.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "55114a26-04fc-4587-92f8-163e34fdaf65", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.681 }, "kind": "paragraph", "text": "GoDaddy currently trades at just 11x 2023E FCF... If GoDaddy can achieve these run-rate results exiting 2024, the pro forma multiple would compress to approximately 7x, an even steeper discount to peers.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "75f4306f-60fa-4a65-b2f4-14ce2e5bf61e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.478 }, "kind": "paragraph", "text": "If GoDaddy is able to achieve its Q4 2023 commitment of 7% revenue growth and 28% Adjusted EBITDA margins... we believe the Company should be able to continue its progression and exit 2024 at a run rate of 40% or higher.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "94b5258f-7efb-4618-b19b-6a845706cc96", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.605 }, "kind": "paragraph", "text": "If GoDaddy can generate 7-8% revenue growth in 2024... and exit the year with 32-33% Adjusted EBITDA margins, the Company would be generating more than $1.5 billion of Adjusted EBITDA on a run-rate basis.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e59cc099-3d72-4c30-b83e-d535eeb4932f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.78, "x": 0.11, "y": 0.093 }, "kind": "paragraph", "text": "Company's Applications and Commerce segment, which is expected to grow approximately 10% in 2023, is meaningfully higher than the expense ratios shown below and suggests an opportunity for cost rationalization.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fdd4a10d-9503-4150-8904-a6a555892480", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.78, "x": 0.11, "y": 0.875 }, "kind": "source-note", "text": "Calculated as GAAP R&D – R&D acquisition related expenses... Based on Starboard estimates.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "759b6f90-5790-4519-b8d5-fdf86dca8b40", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.34, "x": 0.33, "y": 0.165 }, "kind": "title", "text": "Technology & Development Expenses", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9cb6572f-68fb-4f47-9a2d-94e033e5a181", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Before-After-Bridge", "slug": "before-after-bridge", "agent": "Storyteller", "layer": "slide", "matchId": "7f76dff2-ea91-4849-89b5-40a903bd1725", "evidence": "When combining the opportunity to rationalize certain Technology and Development expenses with other growth and margin improvement opportunities", "confidence": 0.7 }, { "name": "Waterfall chart", "slug": "waterfall-chart", "agent": null, "layer": "slide", "matchId": "3e26c7ab-c495-4ffe-84a9-6a06cbbac5b6", "evidence": "chart/bar-vertical: Bar chart showing Tech & Dev expenses from FY2018 to Q2'23 Annualized, with % of revenue increasing from 16.3% to 20.9%", "confidence": 0.8 } ], "frameworks": [], "arcBeats": [ { "to": 7, "from": 6, "beatId": "578fa785-cd32-477d-98f3-ef957f82243d", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution & Approach", "beatSlug": "consultants-gambit-solution-approach", "evidence": "The propose solution and peer benchmark slides offer a solution", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [ { "to": 7, "from": 6, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "0cdbcf87-0e8c-4028-b6d0-b6f151a7bc05", "evidence": "The propose solution slide", "position": 1, "objective": "Emphasize the need for change", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.6, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }