Q3 2021 GoDaddy Inc Earnings Call
Forward looking statements, which include those related to our future financial results are strategies or objectives with respect to future operations, new product introductions and innovations partner integrations, our ability to integrate acquisitions and achieve desired synergies and the impact of the COVID-19 pandemic on our business. These.
Forward looking statements are subject to risks and uncertainties that are discussed in detail in our documents filed with the SEC.
Actual results may differ materially from those contained in the forward looking statements.
Any forward looking statements that we make on this call are based on assumptions as of today November 3rd 2021, and we undertake no obligation to update these statements as a result of new information or future events unless required by law with that here's them on.
Thank you Mark and thank you all for joining US today Godaddy has made remarkable progress this quarter in our mission to make opportunity more inclusive for all and we are incredibly excited about what the future holds for our company. We've continued accelerating our product innovation mainly.
<unk> focused on getting for the customer traction and in September we celebrate it what we consider to be the most significant product launch in our company's history.
Godaddy products are designed this various types of customers with the millions of independent entrepreneurs seeking to create and grow their business both online and offline. We serve the professional makers of the web who leveraged our tools to build website for the online and we so.
A growing body of domain investors will elaborate the largest and most active domains aftermarket in the world too.
Today I'd like to highlight a few of the most impactful initiatives or these customers and help this audience understand a little bit better why I have never been more excited to be leading this great company.
Looking for at the macro environment, we track demand by monitoring a couple of key metrics, including search greater volume that is the number of potential customers searching online products, we sell as well as we look at growth customer at any given period.
We are pleased that some of the uneven demand signals seen over the summer did not prevent us from delivering strong results in Q3 relative to the demand signals. We were seeing in July we are starting to feel better as normal seasonality appears to be returning to the business. We are still hyper focused on <unk>.
<unk> customer value unlucky, you can and freezing new revenue streams, all about generating strong durable cash flow.
We have exciting updates to the three priorities, we laid out for you in 2021.
Driving success and commerce to present second winning with Godaddy pros and third innovating in domains.
As you heard me say consistently this year driving success in Congress to present is our top priority for 2021, and we took a giant leap forward in Q3 as many of you saw we had a huge product launch in September with the introduction of offline hardware solutions to complement our online.
<unk> solutions, we now have all tools insulate for omni commerce offering we introduced our omni commerce offerings for websites plus marketing, giving our customer the tools they need to sell anything anyway.
We have exciting plans for omni commerce beyond websites, plus marketing and look forward to sharing those updates with you soon.
<unk> said that 2021 would be about building the products and getting them out by the end of this year and that 2022 would be about experimentation with pricing go to market strategies bundling, new skewed and promotions one of the best things about getting the products launched three months early is that we get to <unk>.
Start the experimentation earlier too we have already begun exploring options for bundles, new skewed and go to market strategy is to make an ecommerce the easiest and simplest way for a merchant to set up an omnichannel commerce venture or Omnicom, a solution gives small businesses the ability to itself.
Track and manage their sales in more places than any other comparable platform in September we launched state of the art point of sale devices Smart term loan and card reader that communicate across system spanning online offline and third party platform.
The point of sale launch rounds out the godaddy payments and commerce packet comprised of E Commerce virtual terminal online failings and now offline transactions as well first.
<unk> were thrilled to see you go to a his commitment to their success when we introduced industry, leading pricing in our terminal and payment transaction fees. We believe godaddy has the most merchant friendly commerce solutions will end up in the industry right. Now we wanted to make these stunning innovative and feature rich point of sale device.
Accessible to the greatest number of potential merchants and our pricing reflects that priority.
These devices work with our website plus marketing solutions as well as the woo commerce and Wordpress platform furthering our commitment to seamlessly intuitive experiences godaddy customers can configure these devices online before they arrived including adding product listing logo and custom received.
So the device is ready for transaction as soon as it arrived two days later with free shipping and we're allowing our customers to keep more of each dollar. They earn we introduced the Louis effective payments pricing available in the U S. Godaddy will chart an in person transaction fee.
Of 2.3% plus zero cents, while online transactions will be charged 2.3% plus 30 cents.
On average a customer would save over 20% with godaddy payments on transaction fees for online and in person when compared to other leading providers transaction fees.
Godaddy customers continue to grow the online and offline businesses in Q3 annualized G. M V across godaddy product increased nearly 30% year over year, two approximately 25 billion.
<unk> continues to account for the majority roughly 20 billion and Sellbrite and websites plus marketing both continue to grow your over your even with 2020th tough comps.
We're also pleased to share that across or create and grow products websites plus marketing manage wordpress Sellbrite and Godaddy Studios J R. R surpassed 400 million growing 17% year over year.
To help our customers navigate and grow their business relaunched the commerce up the commerce hub is designed to help customers easily manage and track every sale online offline or both similar to our godaddy Pro hub with Commerce have include an intuitive dashboard that provide.
Birds eye view metrics on business performance, including visualization mapping sales and orders combatant tool to help entrepreneurs see which channels up performing pest single sign on capabilities and access to inventory tracking tools.
We introduced all of this innovation at our virtual open 2021 event in September with our partner Naomi Osaka, who launched her own brand of skin care products with godaddy as the official E Commerce partner.
Open 2021 into the breakout sessions for our customers to learn more about branding marketing and sales growth and to help them network with other entrepreneurs.
More than 20000 people attended the virtual event materially surpassing the turnout we saw last year, even in the midst of the pandemic driven digitization of small business.
As you can see we have an ambitious view of what we can accomplish in commerce and presence and we're just getting started we're excited to show you more of what our products can do and share more of what we plan to accomplish with those products at our Investor day in a few short months moving onto prose.
We know that designer then developers prefer wordpress and godaddy remains the global champion of Wordpress, serving pro with both our legacy hosting and or manage Wordpress solution.
Earlier this year, we shared detail of the pro have lunch and we set out an ambitious goal of bringing 300000, new and current godaddy probe into the whole throw up by the end of the year we.
We are on track to reach this goal the powerful functionality of the pro simplifies throw this work and serve as another example of godaddy delivering on our commitment to increased value to our customers now.
The first step now well underway is getting froze in and engaged with the profile. So they can see first hand, how much easier it makes their professional life.
The second step, which is yet to come is to find ways to <expletive> economics and capture more wallet chair among those probe in a way that makes them more successful as well.
This quarter, we launched simple invoicing and payments solutions <unk> available within the profile, eliminating the need for clothes to track and manage yet another third party point tuition. This was a major pain point for godaddy prose invoicing and payments functionality was the most requested feet.
In our pro ecosystem.
We were happy to deliver and almost immediately we saw good adoption lastly, we continued facilitating and harnessing the exponential power of the Godaddy community hosting our first godaddy event in India, specifically for prose as you recall, we held the godaddy expand.
Event in April for designers developers and agency growth in the United States.
In September we expanded this event hosting in other countries specific godaddy expand event in India. We were humble to see thousands of prose Register for the event, giving US a forum to help them customer feedback from the expand event in India was very positive summed up well bye.
One customer who said I was blown away by the professional selection of topics and presenters.
Moving onto domains. This business has been fantastic for Godaddy this past year and it continues to outperform the industry by a large margin as we have been sharing throughout the year. Our teams continue to innovate in all areas primary registration the domains aftermarket and Godaddy registry.
Driving fantastic revenue growth aftermarket continues to drive significant year over year growth as we still benefit from the list of sale to introduce in Q4 of last year.
On registry, we are continuing to prove our ability to acquire integrate and accelerate a great example is a cohort performance within Godaddy registry when we acquired new stars registry acid in Q3 last year, it's new cohort for shrinking with new unit Registration's down 4%.
You're over here, we are now one year into the acquisition and we're pleased to report that within that first year, we have been able to accelerate new business significantly. We are now seeing you unit registration increased nearly 20% year over here all organically there is still significant room, but in.
<unk> an improvement in both the registry and registrar sides of our domain business and we have several exciting initiatives in the works were excited to share more about what we're cooking up in domains at our Investor day.
Before I finish up I wanted to take a moment to talk about our upcoming Investor day in February announced a few weeks ago. We.
We wanted to give people a heads up that it was coming because we expect to share some really exciting things.
We expect to discuss our long term strategy innovation initiatives financial framework capital allocation strategy and go forward financial reporting structure, we look forward to engaging with you to get your thoughts and feedback as we prepare for this event.
In closing, we're quite happy with the results this quarter and go that his ability to pursue enormous opportunities I had we are well positioned as a true global leader with increasing customer tuck-point and ability to provide essential technology solutions.
Godaddy added score is a great business that hat and will continue to generate predictable results with an attractive financial profile profitable growth at scale and durable cash flow <unk>.
Importantly will maintain <unk> focus on increasing shareholder value and have demonstrated the capability to invest capital prudently.
We are committed to continuing our pace of innovation, bringing important new solutions to customers driving progress across the entire industry and continued to drive the value creation flywheel with that here's mark.
Thanks Man I Wanna take a moment to discuss our financial results for the third quarter, and then moved to our financial outlook for the rest of the 2021.
Two three was a strong quarter, which showed up within the financial results total revenue came in at $964 million growing over 14% year over year, which includes 70 basis points of currency Taylor.
Our international business grew with 13% on a report it basis was approximately two points of currency killer.
Asthma.
Friends and top of the finals signals continue to people, though the elevated demand we saw last year, but in line with 2019.
Hosting and presence grew 7% year over year delivering at the high end of our expectations for mid single digit growth. We continue to see nice broke in our presence products like websites plus marketing tempered by slower growth, our legacy hosting and security business.
And while it's still too early to providing details. We are really pleased with what we were seeing so far from our armed commerce lots of September as well as the uptake we're seeing from godaddy payments more Broadway.
Within hosting a presence we're pleased to share an update to the previously disclosed a R. R. A metric from our create and grow group of products, which includes website supposed marketing managed Wordpress Sellbrite and Godaddy studios the.
The suite of products best 400 million in I R. A Q threat.
Within that sweet a are from websites plus marketing grew more than 20% year over year in Q3, and more specifically website supposed marketing commerce aircrew more than 30% year over your acute correct.
Lastly, annualized G M V across the Godaddy ecosystem was approximately 25 billion growing nearly 30% year over year.
So a growth across all channels, primarily driven by offline point of sale as we lap online tailwinds covered.
The mains grew 17% year over year innovation. The teams put in place late last year of driving performance in the aftermarket which was a large contributor to the grocery store in the third quarter. We also continue to see consistent renewals on primary registrations.
And finally business applications was our fastest growing product line, increasing 20 per cent year over year, we continue to see new customer attached strong renewals, an existing customers, adding additional seats of email and productivity solutions.
Bookings came in at 1.04 billion rising 10% year over year with 80 basis points of currency Taylor.
Strengthened bookings in the quarter reflect similar drivers to what we called out for revenue.
Gross margin came in at 64% in the quarter in line with what we saw both last quarter in the mid 60 range, we've got it too.
<unk> continues to drive the company's overall gross margin given the payments lunch and the pricing we announced that September we expect payments revenue to have two different margin and Patrick scales payments revenue will put some pressure on gross margins does the revenue stream gets larger in the coming quarters years. However, there are relatively low incremental operating costs once those customers or.
Wired and set up on godaddy payments. So we expect payments to be highly accretive to normalize EBITDA overtime investment in tech and Deb was consistent with last quarter as we continue to accelerate our pace of innovation, while maintaining fiscal discipline.
We continue to get leverage and gene a is traveling to other office expenses remain below historical levels insist.
Consistent with last quarter or marketing and advertising investment remains strong in Q3, though the year over year growth decelerated as we started to lap the elevated and investment we made to capture the extraordinary demand we saw last year.
Our growth and investment in the second quarter resulted in normalized EBITDA of 228 million representing growth of 15% year over here.
Unlevered free cash flow for the quarter was 252 million growing 12% year over year, driven by strong profitability continued positive impacts from working capital and disciplined Capex investment as we continue shifting workloads to the cloud. We note. However, due to the global supply kind of issues impacting technology hardware like servers some of our plan.
[noise] capex spending shifted into Q4, we expect to continue or a capex investment in queue for bringing unlevered free cash flow in line with her phone you're got now onto the balance sheet and capital allocation. We finished Q2 with 1.1 billion in cash in total liquidity at 1.7 billion.
<unk> that stands at 2.8 billion below three times that leverage on a trailing 12 month basis and near the midpoint of our targeted range of two to four times.
So that he has a strong liquidity position access to both debt and equity capital markets and resilient cash generating operations during the third quarter, we executed an accelerated share repurchase by 3.4 million shares for an aggregate purchase price of 250 million. We also allocated nearly 200 million to acquisitions in the registry space as we think about.
Capital priorities, we will continue to balance M&A in share repurchases to make sure capitalist deployed and the way that we believe will generate the best long term returns for shareholders.
After the completion of the S. R mentioned above we have approximately 750 million remaining on our repurchase authorization.
Moving onto our outlook Godaddy is on track to App on the initial revenue in on the liver Creek Cashflow targets, we've laid out at the beginning of the year.
Looking at Q4, we expect total revenue of approximately 970 million or 11 per cent growth year over year.
Based on our outperformance in Q3, and our expectations for Q4, we're raising our full year revenue guidance to approximately $3.765 billion 14 per cent growth year over year.
As I noted earlier some of our Capex spending has shifted from Q3 to queue for based on our continued plan for approximately 60 million of Capex spending for the full year and the strong performance, we've seen year to date of raising the unlevered free cashflow guidance to 960 million or 16 per cent growth year over year as.
As we mentioned last quarter, we still expect bookings both to be a couple of points below revenue growth in the final quarter of year is F X Tailwinds continue to a bait and we face the tough compares for Q4 of last year.
Thank you for we expect the means revenue grill low double digits as we laughed the tougher compares in the aftermarket from the impact of the list for sale tool any other improvements introduced in queue for last year that we talked about last quarter. The aftermarket as you know as a non subscription business. Therefore does not impact are deferred revenue at the end of the period, we expect.
Hosting and presence revenue deliver mid single digit growth critical year, we continue to see low single digit growth and our legacy hosting business. We're also lap and very difficult comps and or higher growth products like websites plus marketing of the top of the subtle softness we saw over the summer will take some time to rebuild even with the improvements seen in September and October.
We've got a strong track record of driving growth and with an impressive slate of new offerings coming to market. We remain optimistic that we will be able to accelerate the growth of posting and presence next year. We continue to expect high teens growth and business applications for the full year given by customer attached cheek rose among existing customers and upgrades to higher price tiers of productivity Salou.
<unk>.
With respect to investments in expenses will continue investing into tech endeavour as we work to maintain the product momentum whose senior to date.
And the current demand environment, we're expecting our absolute marketing spent a relatively flat sequentially in queue for we continue to expect investments to be largely offset by continued leveraging customer care Gina.
We are still comfortable with the 411 targets would set out early last year and will provide more specific formal guidance in February some other revenue streams that we expect to become more impactful overtime payments and aftermarket a recognized immediately so we would expect bookings growth in revenue growth to converge over time.
Godaddy has an incredibly bright road ahead, and as well equipped with both the innovation in the financial resources needed to pursue and capture the Mets opportunity before us are consistent cast generation gives us multiple levers to generate significant returns for our shareholders and we're committed to doing just that.
As we prepare for our Investor day in February I'm excited about the direction of the company or strategic vegan and the plans. We we're putting in place to enhance investor communication and outrage godaddy is committed to providing investors with the information they need each quarter. The model of the business confidently value of the business effectively and hold us accountable for executing it gets our stated objectives.
It's going to be an exciting day, and we look forward to being with all of you that with that we'll have Christie masoner from our Investor relations to open up the call for questions.
Thanks, Max as a reminder, if you would like to ask a question. Please me is the Raytheon feature at the bottom of the 11 asking to be added to the account.
Our first task has been online at eight dollar onions, and lettuce at all please go ahead.
A good afternoon, guys I guess I'll start at the at.
At the highest level and I'm just trying to understand you you had some.
Good solid outperformance across the board in Greek you Uhm.
Mmm talked about customer softness uhm at last earnings you know it was kind of like the peak of the summer and vacation shipped to travel and entertainment and all that talk about how the customer transferred.
<unk> since then why.
And why the outperformance in light of those headwinds it feel like they were the strongest over the summer aren't translating into your guidance for cute or there.
Thanks ago, Alright can take that uhm, obviously, we're very happy that are strong execution enabled us to deliver stronger those and two three even though as we'd shared with you. There was so uneven demand signals that we were skiing over the summer Uhm to answer your question and give you a little bit of sort of chronological view on it you know we saw the draw.
[noise] most in July it was a stabilization in August and then go debate in September and October.
Working out in line with with September so weird with the continuing to monitor but you know it cautiously optimistic about normal seasonality returning to the business and that's what you're seeing in the guidance.
We would like to share with you exactly what we see which we did last time and we're looking to do that again this time.
Uhm, okay. Thanks.
Okay, I'll I'll ask about the new star and and in the cohort gross there.
Can you just let me give a little bit more color on you know what what exactly is happening there that is.
Turning that turning the business around from preeminent to put that money.
Yeah Super excited and proud of the team they'll Godaddy registry team is coming to go Daddy. If it had to go through the integration there where we're growing scale for them as you know and you know we have new businesses integrated with them, but also had the maiden name really strong execution you know so it's it's really about.
Good strong execution the team coming together, a small team, but they they have done a fantastic job and of course, you know as much as we can we have the ability of you know.
That team working with Godaddy leaders and looking for opportunities I'm looking to find and as I said in the past will continue to share with you specific innovations that come forward, but this one is just dry execution.
Alright, thanks, so much.
Our next question personal line Elkhart, Jeffrey Sandpiper, Sandra crack. Please go ahead.
[noise] Hello, great to see another quarter of strong as old ahead of guidance I I wanted to understand what the expectations are for girls look rose from to create and grow products I know as we you know we're exiting tough compared with some of that top of fellow softness you called out I just want to understand what kind of gross right you would orient us too looking beyond 20.
21, and maybe even a slot talking about beyond 2021 could you help us maybe understand some historical context to what that segment withdrawing sort of pre pandemic.
Yeah, I'll I'll, Thanks, Clark and I'll take the the first part of it and then maybe you can have the two amount for the historical part you know what we're seeing you know positive signs in or create growth and we are really happy with the a R. R. Around websites just marketing with 20 per cent and what size Coke marketing commerce with 30% now.
<unk> softness in and looking at the queue for Ya that funnel slowdown will will take a little bit of time to rebuild like we send in a comment but we <unk>. We're really optimistic on the positive signs you know as we also said we're comfortable with the 411 moving forward and we are really looking forward to catching up with one everybody an investor day and putting all it all together.
Leather so we can communicate to you.
Great and then you know now with the omni commerce solution out and market I I just wanted to understand you know what allows you to released industry, leading pricing on on T. O S transactions, you know 2.3 plus 30.
Yeah, what what gives you the flexibility to to grant that's kind of pricing compared to peers.
Yeah, I'm happy to start there uhm.
Real build here is to look at it from the ground up and say what are our customers need to make these products accessible for them and we broke down the pricing structure and it's about technology and innovation and as you know we have a fantastic team from point and article as the non lose any money in payments or or in hardware I'll go with the <unk>.
Build it up from the bottom innovate pass on the values of the customer and you know I'm excited about the idea that customers looked at the spicing them, they adopt and that we see a lot of demand for our products.
Perfect. Thank you very much.
Okay.
Alright next question comes nine of movie channels and the city next please go ahead.
Great. Thanks for taking my questions I guess, that's on the domains business are you seeing any success kind of tilting domains shoppers towards the T. L DS.
Uhm that you own as opposed to that'd be dot com, but today is generally more popular and then the second question is can you remind us how the the verisign kind of dotcom price increases will trickle through I think it's it's likely to become a bigger impact next year as it flows through Dotcoms and I think people are expected to take another price increase sometime next.
Here so the other two questions.
Thank you and <unk> on the you know, giving preferential treatment to certain P. L. D that we may own. We we don't do that all T. L. D work on a register a side in terms of their marriage, you know, it's about value to the customer whatever works best eras.
Irrespective of whether we own the registry site or not that that's what will sell in front of the customer you know we do.
To your question on Verisign price increases as you well know I think we are pricing is quite and once we have pricing that's different by customer populations. We have pricing that's different by geography with pricing that differs when we bundle as an example, so we're always experimenting with pricing we're always looking.
To optimize and we realized that is good at it you know we have an opportunity to truly look at our options and and if it makes sense and as you know you know overtime registrars have asked registry price increases to the customer we have the option to do that but we also have the option to not pass the price and look for opportunity.
Really optimize or for profit dollars and alternative Mark and maybe Mark if you have something bad on that yeah. Thanks, a month, one just to to enforce pricing for pressing wasn't an impact on Q3 for us just as an F Y I. When we do look at pricing we are solving for gross profit, but if it come.
<unk> two market share versus gross profit, we will we will go with marketshare and we do not use any type of broad brush approach to pricing increases, we really look at it on the market by market basis.
Got it and then if I could just follow up on the first question and maybe he said a different way and they get you to give it a statistic that like 50 per cent of people searching for a domain don't kind of find the handle are looking for right away. So I'll play you know they may be tilted more toward the dotcom or are you able to kind of present more options with a handle they want that maybe at the building.
Sure.
Purchase it until the day that you are I guess I wrote that kind of helps clarify where where I was going with it next yeah make this to quickly respond to that you know what you're right. You know a lot of customers don't get the dot com. They are looking for because it's already taken right Joe's pizza Dot com somebody's already got it you know what we do is with improving our search.
<unk> more and more with you know we used machine learning and a I to give the customer option and those those options include T. L. D. As in it's actually very specific to the search so it's really not about what T. L. D. We might on it's really about what the searches and then providing the customers high up on third as it makes them with those options with them.
T L D as in letting the customer make the choice.
Great. Thank you and I'll just add to that amount.
After markets does help us present to them names that they might not be able to get otherwise. So it does is driving some memory aftermarket growth as well.
Okay.
Our next question comes to the line upfront Bill from Jesse Frank. Please go ahead.
Great. Thanks is just relates to the seasonality I'm curious <unk>.
It seems like the <unk>.
You mentioned, there's a rebound I'm curious kind of when you think about <unk>.
The trajectory of of this rebounding and can you can you can maybe put it in context, it historic and white, what your what you're hearing.
From that side, and then I had to quit faller.
Sure Brian <unk> couple of data points here is his way of looking at overall demand you know sort of Google search traffic I as an example, and we're looking at how that can you give me from moving and obviously I know you have access to that data too, but we parse. It. So we said OK the a shift in the overall universe and then we're looking at folks.
Coming to our site you know the girls customer add anything okay. What percentage of that population is actually becoming customers will go daddy or or approaching godaddy. So what what you see in the guy the assumption minute around what we see over the last four or five months and we see signals match up in the broader macro.
With with our data in terms of answer your question on what with how does it compare to the past, obviously 2020 with a very large demand cycle. It was big cohorts and so on so what we're really combatting against is 2019 and the demand signals and more in line with 2019 and <unk>.
Okay that the screen and it was just a quick follow up on the financials I mean, the delta between bookings in revenue and I know, there's a lot of factors, but it's never I think in this wide at 9% FX versus 13, and a half and so what what what what is the diversions why is it so large and I know you mentioned, they're gonna converge.
Why why why we're seeing that right now.
<unk>, you know I I kind of look at it as a cycle. We we we saw a divergence now we're seeing a convergence come back the other way and and we do like you said expect them to equal out overtime and we're starting to see that happen now, but we had large cohorts last year you know they they went in.
To work deferred revenue, they're being amortized out now and is there being replaced by smaller cole cohorts in a way it's gonna. It's gonna result in that divergence, you're saying right now.
Great. Thank you.
Our next question comes in line and Elisabeth Elliot kind of Morgan Stanley Elizabeth.
Hi, Thank you so much that question.
I just wanted to make it a little bit on I'm payments and Super helpful color on it at 20% savings on Theophrastus other providers any color you could share with us some kind of a mix of new eligible users.
Many of them are opting for go Daddy payments.
Thanks, Elizabeth it's really too early to talk about universes existing users you know as you know we did a big Orange called open Uhm 21, and attracted a lot of customers.
20000 Bucks plus got to see it we have thousands of folks engaged in detail sessions, where we talked about how to.
Do their marketing how to sort of manage that offline and online portfolio them get into into the big markets and platforms, so, but but it's all very very early and unfortunately, it's too early to comment on on any specific numbers.
Gotcha. Thank you Elizabeth I'll, just add what we're seeing you know really excited about it and the great thing about watching a quarter earliest we'll get to see data a quarter. Early so we're really looking forward to adding some color an investor deck.
Yeah.
Great and then just.
A quick follow up for me.
<unk> have a great you can kind of get on track for that.
300000 go I'm I'm proud.
Yeah, I know that the habit southgate phrase any color you can provide on just the ability to grab a mix of priorities and attached kinda more products.
Order to monetize the opportunity [noise].
Yeah. As you know we have 1.5 million web froze on our platform you know given the businesses wherein we have access to a lot of these pros, but we but we build the hub. So we could have engagement with them on a regular basis give them ways to save them time, giving them Wade to be able to do their jobs better and focus on ongoing customer than their business you know the.
Those focus on Wordpress, that's what the hub. It's all about you know optimizing that experience and ultimately what we're looking for it to get a bigger share of wallet with.
With Godaddy for him you know, we we know approach support lots and lots of side. They have a percentage with us and we know it's a very very large opportunity for us to get a piece of the red other <unk> other places where you'll see some monetization experiment you know of course, we launched invoicing. So that that's a good tool you know create lots of stickiness, but also cream.
<unk>. So I'm economics were also experimenting with special offers within the hub. So with you know we can try to see what encouraged as opposed to sort of buy something with godaddy was coming out and you know just it's the idea that is let's try to share with them and say hey, if if you sell this product will give you a P.
So those are the types of experiments, you'll see handled also create economics for us.
Great. Thank you very much the caller. Thank you.
The next question comes from the line is Jeremy Hattie from J P. Morgan seven. Please go ahead.
Yeah. Thanks, Hi, guys. So I'm curious if you could give us some color geographically on the trends that you talked about so in other words, the sluggishness, that's turning into improving signs back to 2019, how does that look in the U S versus Europe vs, Brazil et cetera.
Thanks thoroughly it truly follows you know so.
The Covid dark that we've talked about and with that I'm likely you see as well you know the the demand environment that I've talked about actually covered you as an international and see we we see a lot of similarities having said that in in certain <unk>. There is a bigger impact and go in and we see demand balance around.
A little bit in those areas, but overall in the godaddy portfolio that small so if I look at the overall portfolio. There isn't really one G O to specifically called out as having any significant impact and broadly the trends are similar.
Alright, Great and then one follow up on the payment side, you've mentioned given the opportunity to experiment with with pricing. So is that to mean that the lowest pricing that you just announced is something that's kind of a testbed in and could fluctuate or what is it that you you want to experiment with.
Sterling the pricing that we announced the 2.3% <unk> zero cents in store and two per.
<unk> for 30 cents online that's the pricing for payments, but you know we have a lot of opportunity to build skews unbundled.
Including new value for the so the experimentation will be looking at <unk> news cues that offer the full suite with customers get the full shebang. If you will you know and how do we price those things when we bundle things differently you know the pricing for the hardware those are the areas that you'll see us experiment more.
Excellent. Thank you. Thank you.
Our next question comes to mind at Trevor Young and Black please.
Please go ahead.
Oh, I think we might have lost herself now that if you are available now that <unk> <unk> <unk> <unk>.
Please go ahead.
Yeah. Thank you can you hear me okay. She can.
Okay. So the.
The 20 million off and damn, we kind of trying to point, maybe get you touch on the opportunity to maybe.
Gradually maybe more where some of this on your own reticent Godaddy payment <unk> says the legacy in and what are the things you can what are the different levels you can pull to do that.
Thanks, and I'll have it up as you know point built its customer base predominantly to channel partners and those channel apartment.
<unk> bank wanted to use their meals for payments, but what that G. M. V. Does show is customer success that customers at a very large scale.
Having a lot of success using this tool set and obviously art pieces of having point to be a part of godaddy is about selling director customers.
So I I would look at that 20 billion as customer success, and you know over time more and more G. P V flowing directly as we sell directly to customers.
Got it and then a quick follow up if I may.
Let's look at marketing efficiency seems like it's improved sequentially.
Any changes that you might've made to a channel Max how should we just kind of think about just go ahead and forward.
Yeah overall, we're happy with the good returns on our marketing spend and what you really see here is you know what are the last your the man Jose Hi, we wanted to maintain a voice we wanted to lean into into that demand and as the man came down and we didn't want to pull back and marketing so hard that we actually pulled demand down.
For ourselves so we let the demand pull the marketing spend now you're seeing some of that in the efficiency. You're also seeing some optimizations across channels, but no no specific comment on channel that we're doing more on or less an overall or demand profile, especially in the way we get bookings bodily remains the same.
I'll add Nevada.
We expect it to be flat for Q4, just in case, you were asking that question as well.
Yeah No that's helpful. Thank you.
Our next question comes to the line at sharing some Barclay temporary. Please go ahead.
Great. Thanks, Uhm, just too if I may on payments first acknowledging that it's kind of early days can you talk about the initial adoption on payments feedback on the P. O S devices, what seems to be resonating well with merchants versus maybe what need some refinement and then mark.
Your comments were helpful. On the margin profile sounds like maybe a lot lower gross margin, but higher overall O M over time, but can you help us on pack the fees there like in terms of interchange fees brought in security other cost of revenue lines, and then opex and opportunities for savings there as it scales. Thank you.
Thanks, Trevor on payments the feedback on the products has been positive you know one thing I've talked about previously you remember we had introduced just godaddy payments not I'm not talking about omnicom's godaddy payments and the website was sparkling flow and we have chest that we've seen good adoption from customers on payment we can.
Continues to see good adoption there. So we know that it's been holding over the last few months and in terms of you know other numbers related to Army Congress, you know the devices or get in shape for the U S. So you'll you'll see them soon but it's really too early to comment on specifics, except the the customer feedback is good.
And Trevor I'll I'll, just do it for not getting into the breakdown of some of the pricing just a couple of data points. One you know we don't plan to lose money on the hardware and the payments and you know our expectation, although we'll see a little bit of a margin pressure at the gross level it should be accretive to a normal life EBITDA going forward.
Great. Thank you both.
Thank you.
Thank you for doing today I'd also never to online for closing remarks.
Thank you Cristi I'll just end with thanking you for joining we appreciate your questions look forward to engaging with you over time and seeing you at our Investor Day in February quick. Thank you to all the godaddy teams a lot goes on for us to be able to deliver the stronger those in the border and a big Thank you to everyone I've godaddy. Thank.
You very much.