Q2 2022 GoDaddy Inc Earnings Call
I will be referencing both GAAP and non-GAAP financial results and operating metrics such as total bookings unlevered free cash flow normalized EBITDA annualized recurring revenue or a our gross merchandise volume or G. M D and net debt growth rates presented represent year over year comparisons unless otherwise noted a discussion of why we.
We use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their GAAP equivalents may be found in the presentation posted to our Investor Relations site at investors Godaddy Dot net or in today's earnings release on our form 8-K furnished with the SEC with today's earnings release. The matters, we'll be discussing today include forward looking statements which include that.
It was related to our future financial results, our strategies or objectives with respect to future operations, including our approach to capital allocation, new product introductions and innovations and our ability to integrate acquisitions and achieve desired synergies. 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 forward looking statements.
Any forward looking statements that we make on this call are based on assumptions as of today August three 2022, and except to the extent required by law. We undertake no obligation to update these statements as a result of new information or future events with that here's a month.
Thank you Christie and thank you all for joining us today.
Our mission is to make opportunity more inclusive.
The best moments of my week, or when I'm engaging with godaddy customers.
Constantly inspired by their grit and determination and amazed by their resilience just a couple of weeks ago I spoke at a small business summit I've met so many godaddy customers, there and some who will hopefully become godaddy customers in the future.
While they worried about the current economic environment are found them driven ambitious upbeat and passionate about their businesses one customer walked up to me and started with mine life is on godaddy.
I am inspired to do more for her and all our customers to be better every day.
Our relentless focus on innovation deliver seamless and intuitive technology complemented by human care, helping customers grow their businesses and achieve their dreams.
Our strategy to attract high value customers continued to show success best illustrated by our customer retention rates, which have remained greater than 85%.
Q2 results demonstrate our steady operating discipline, 9% growth in revenue and 30% growth in normalized EBITDA, despite the challenging FX environment.
Godaddy is strong and diverse business enables us to navigate fluid global demand patterns and inflation concerns from our solid position and we are committed to attention and action on what we control as in the past, we aligned our marketing spend and other investments with demand signals.
On Centralia on success based disciplined and efficient spending we actively identify and deploy marketing spend where we find opportunities to deliver long term growth through this plan, we create balance across all components of our business without sacrificing our investment in technology and development for.
Future growth.
Our strategic priorities have been consistent over the past six quarters first driving commerce through presence second delivering for godaddy pros and third innovating in domains beginning with commerce. We are pleased to share that we continue to achieve positive trajectory without godaddy payments off.
<unk> and more specifically the attach rates to our other products for.
<unk> websites, plus marketing more than 80% of our commerce customers choose our payment solution and for managed Wordpress, 30% of our commerce customers choose our payment solution.
Annualized <unk> also continues to rise with Q2 at 28 billion growing 12% year over year.
We continue to drive strong sales in payments hardware devices, enabling robust in store capabilities for customers. While also steadily approving payment applications, while our payments offering is still relatively new godaddy is differentiated omni commerce solution is well positioned in this.
Space, regardless of the consumers' preferences, whether they are shopping online or in person our solution empowers our customers to benefit from our industry low transaction rates in all locations. We also rolled out Apple pay on godaddy payments, improving the buying experience and app.
<unk> selected godaddy as a tap to pay partner, we are excited to work with Apple to bring tap to pay on iPhone to godaddy customers. Later this year and as always we will share more information about this partnership as it becomes more meaningful.
We embedded more capabilities within websites plus marketing plans to make it easier for entrepreneurs to market their products sell online manage their business and grow new capabilities include product image enhancement, including background removal quick view and buyer capabilities, enabling single click ad.
The card integrated discounting shipping labels online appointment features making calendaring and appointments more intuitive enhancing our products helps our customers grow their business, while building retention and creating greater lifetime value for Godaddy. We also continue to test price increases for a highly competitive.
<unk> and feature rich websites plus marketing product.
Our approach to pricing is nuanced taking into consideration the right balance of increased price and market share. While also closely monitoring shifts in customer behavior due to macro factors. We have limited the use of heavy discounting programs that frequent this space, while maintaining our competitive position by <unk>.
<unk> offering products that our customers value our customer retention rates remained strong with consistent 15 month cohort retention, which is trending higher than prior year cohorts and our overall customer retention metric has stayed above 85%, even as we observed some pressure for customers due to <unk>.
Crow factors. This is something we are extremely proud of because it is a sign that we continue to deliver for and often left behind customer. The micro businesses that are the backbone of their local communities. We are proud that websites plus marketing delivers websites for customers that are highly performance we.
Have pushed the bar further on that and have implemented significant behind the scenes changes that result in improved website performance for millions of sites. These powerful improvements enable godaddy customers achieve improved page speed insights and core web vital scores.
For example, our core web vitals pass rate for our customers as sites increase by 75%, making us the leader in this category. These improvements ensure godaddy customers as websites ranked higher in search results and for small businesses. This is extremely important moving.
To go Daddy Pros this quarter, we launched a beta with SaaS solution to allow us to reach a larger customers those with sales of $1 million to a few million dollars. These larger customers will be able to sell anywhere including in person.
On their online store and in online marketplaces, and social platforms and benefit from omni channel payment processing all managed in one place. This new online store offering provides growing merchants virtually infinite flexibility of Wordpress plus will commerce combined with highly performance scale.
<unk> and secure cloud hosting technology, and a seamless intuitive and comprehensive software user experience there.
Fully managed technology stack allows our customers to focus on running their business. We brought together a team of experts in multiple technology domains to create this new premium offering which includes exclusive functionality with three premium extension and exclusive capabilities such as an expert level.
Dedicated support team.
Our customers want a one stop shop offering from us and the <unk> SaaS solution is the latest proof point of Godaddy has ability to move slightly up market over time.
The beta program started in Q2 with an invite only group of all commerce merchants and partners testing the integration and unification of multiple acquired technologies to offer a seamlessly manage all in one experience for all commerce stores. We are excited about the possibilities and looking forward.
For a full marketing launch.
On our third priority. We are excited about the upcoming full launch of payable domains in Q3, a limited pilot program in Q2 focused on learnings demonstrated that customers value of the offering.
Also saw some green shoots in terms of meaningful <unk> in the pilot being driven by customers without a website.
In our Q3 launch payable domains will be included for free and by default with every domain purchase creating a frictionless out of the box experience for new businesses. We believe this will simplify the online payments process for our customers by giving them a professional branded checkout experience.
And the freedom to accept online payments without meeting any other subscription.
In closing I want to acknowledge that while we are all in uncertain times Godaddy is relentless focus on executing against our strategic priorities delivering for our customers building seamless and intuitive technology for our customers to succeed backed by human care our scale.
And vast portfolio of offerings steadily drives godaddy is consistent financial results, our incredible customers inspire us to continue to innovate and do even more for them. We will continue to be prudent stewards of capital investing behind long term growth drivers and staying committed to deliver.
<unk> value to our customers employees and shareholders with that here's mark.
Thanks, <unk> and thank you everyone for joining us today.
Godaddy is resiliency and durable top line growth profitability at scale and robust cash flow are evident in our Q2 financial results and enable godaddy to continue to invest to deliver long term value, while returning excess capital to investors in the form of share buybacks revenue.
<unk>.
In Q2 was $1 billion.
Growing 9% on a reported basis and 10% on a constant currency basis.
Excluding the currency impact.
Our reported revenue would have come in at the high end of our Q2 guidance.
Within total revenue International revenue grew 4% on a reported basis and 7% on a constant currency basis.
Applications in Commerce revenue grew 15% within the target range of 14% to 16% driven by continued strength in our create and grow products and email attach.
The AAR are for applications in commerce grew 12% to more than $1 2 billion.
And within that the IRR from our create and grow products grew 10% to $420 million.
Additionally, annualized GMC across the godaddy ecosystem was approximately 28 billion.
Rolling 12%.
Core platform revenue grew 7% delivering at the high end of our 5% to 7% Q2 guidance.
Primarily due to strengthened domain registration aftermarket and security.
Offset by a slight decrease in our hosting business.
<unk> for our core platform grew 5% to $2 3 billion.
Q2 bookings totaled $1, one 2 billion.
Growing 6% on a reported basis and 8% on a constant currency basis applications in commerce bookings grew 10%.
And core platform bookings grew 4% on a similar growth factors noted for revenue.
Normalized EBITDA grew 30% to $258 million.
Our 25% margin represented over four points of margin expansion, primarily because of expanded gross margins on product mix and reduced marketing spend.
The decreased marketing spend is the result of disciplined moderation of our investments as we zero in on success based marketing and flex our spending to capture attractive returns.
Our technology and development expenses increased as a percent of revenue this quarter as we advanced our commerce and innovation strategies.
Lastly, we recognized a $10 million impairment charge related to licenses and facilities as we continue to simplify our infrastructure.
Unlevered free cash flow for the quarter totaled $274 million growing 16% driven by strong profitability.
Additionally year to date, we completed $1 billion of share buybacks.
Purchasing 12 8 million shares.
Using our fully diluted share count by approximately 8% since year end.
Free cash flow per share rose to $5 67.
On a trailing 12 month basis versus the prior year cash flow per share of $4 78.
A 19% increase on strong cash flow and share repurchases.
On the balance sheet.
We finished Q2 with $770 million in cash and total liquidity of $1 4 billion.
Net debt stands at $3 1 billion.
At the midpoint of our targeted range of two to four times.
Moving on to our outlook.
Continue to be confident in our ability to execute in the second half of 2022.
We are on target to meet our full year operational and strategic goals, including our targets around normalized EBITDA unlevered free cash flow and cash flow per share.
With that said, we are not immune to the macro environment of the strengthening dollar and the impact that it has on our topline performance.
Assuming a continuation of today's rates over the rest of the year, we expect that the adverse FX impact for the full year to be approximately $35 million.
Or approximately 1% compared to our full year revenue guidance issued in February .
As a result, we revised our 2022 full year revenue outlook to $4 one to $4, one 3 billion.
We remain focused on driving strong financial results and are committed to delivering $1 1 billion and unlevered free cash flow and $6 plus free cash flow per share is laid out earlier this year.
We are also increasing our margin expectations for normalized EBITDA to 24% to 25% for the full year based on strong execution and disciplined investments.
For Q3, we are targeting total revenue in the range of 1.0 to.
To 1.045 billion.
Representing growth of 8% at the midpoint.
Adverse FX impact to the range, assuming continuation of today's rates would be approximately $10 million or.
Or 1%.
Flowing through this impact we expect applications in commerce revenue to grow between 13, and 15% and core platform revenue to grow between four and 6%.
For Q3, and full year bookings, we expect growth to be approximately two points below revenue.
Primarily driven by FX pressure.
We will continue investing in technology and development to drive a robust product launch momentum while balancing our goal for margin expansion through efficiencies in customer care and marketing.
Normalized EBITDA for Q3 is expected to be in the range of $250 million to $260 million, which would represent growth of 12% at the midpoint. Our capital allocation strategy remains the same we fulfilled our $1 billion buyback target for 2022, and we'll continue to evaluate.
<unk> use of cash options for the remainder of the year.
In line with our disciplined capital allocation framework.
Lastly, as we said last quarter.
We will evaluate the impact of rising interest rates and explore refinancing our term loan and revolver with the intention of maintaining our leverage ratio of two to four times.
Before I close I want to remind folks that economic times like now.
Our strong balance sheet, consistent cash flow and strength of execution enable us to improve upon our market leading position.
Prudent investments and market share gains growing the business long term, while also delivering on our profit and cash flow goals.
Our 21 million customers create a foundation for our resiliency.
We enjoy exceptional retention and we continue to execute on our strategic priorities build deeper relationships and partner alongside entrepreneurs on their journey. We are laser focused on operational execution and we are dedicated to delivering 10% plus top line CAGR 15.
Percent, plus normalized EBITDA, CAGR, and 20% or better free cash flow per share CAGR through 2024 and.
And with $1 billion of buybacks complete halfway through the year, we remain committed to executing against the remaining $2 billion of shares under our current authorization through 2024.
With that we will have Christie masoner from our Investor Relations team open up the call for questions.
Thanks, Mark as a reminder, if you'd like to ask a question. Please use the latest and feature at the bottom of the webinar stone can be added to the queue.
Our first question comes from the line of covering analyst from Barclays. Please go ahead.
Great. Thanks, two if I may.
First what drove the sequential uptick in gross margin how much of an impact was FX on GM, given that maybe a bit more cogs there such as like domain pass through costs and infrastructure are incurred in dollars versus the revenue mix and then second on the price testing amount I think you alluded to it and it looks like what we saw on.
Both basic premium and commerce plans saw increases mid July ranging from like 1% to $3, a month, which translates to some pretty healthy increases on a percentage basis could you. Just clarify are these increases just for new customers versus existing subs as a domestic versus worldwide and what do you expect the weighted average increase to be once this is Paul.
They rolled out.
Mark do you want to take the gross margin, yes, no problem, Hey, Trevor how are you doing so so I would say most of the gross margin mix was changing.
Change was based on product mix, the FX impact to that was pretty nominal.
And then on pricing. So what you saw over was US testing some changes in those words.
Thus for websites plus marketing in terms of taking that international.
Before the price testing for us is quite nuanced, we base it on geography on sort of customer expectation training on market share. So youll see it appear in certain geographies, but not in others.
That's really helpful and just mark just to clarify on the gross margin if FX rates stay where they're at today should we expect some impact on gross margin and the balance of the year from currency.
Yes, so so most of the impact on the FX effects, our bookings or our costs are pretty much fixed and in line with the U S. Dollar. So I would say look for most of the FX impact or flow through to bookings and then ultimately to revenue with minimal impact on the on the cost and our structure today.
Hey.
Great. Thank you.
Our next question comes from the line of Matt Pfau.
From William Blair. Please go ahead.
Alright.
Great. Thanks, guys.
Yes.
You've called out and retention rates continue to remain strong at you did see.
Some pressure from macro factors are there certain areas, where youre seeing the macro impact your business more than others, maybe both on the product side as well as on geography, yes.
Yes, Thanks, Matt.
Perhaps one thing to call out geographically is that we've seen some greater pressure for European customers right now given inflation what are the other macro factors. So that's something we're keeping an eye on but overall, we have continued to focus our efforts to bring in customers that have high LTV have amazing tenant.
To build businesses to stay with us so thats, allowing us to stay with the high retention rates. The 85, plus so we're pretty happy with that overall.
Got it and then just a question on the marketing spend you adjusted that for demand should we expect if macro improves and demand ramps back up that then we could see that go back up as as a percentage of revenue or how do you think about that.
Adjusting that dialed going forward, yes.
Yes, my broad view on marketing spending that we let it trailed the demand and the signals, we see and we look at both sort of external signals in terms of the Google universe on such giving US data, but also our customers' data and what we're seeing in from the return on marketing investment. So what you can expect as the demand spikes again our mine.
Cutting spending will follow but we're also constantly improving the success based metric for our marketing. So you will see potentially some optimization that continue to Colin.
As an example in Investor day, we shared some improvements in our SCM spend mutual is all based on improvement rather than just a month.
So youll see a mix of vote and ethanol and we continue to expect to get leverage out of our marketing line.
Especially as our business and our solutions are broader as we get into more commerce, we get into more of aftermarket.
Yes.
Once customers are in the entrepreneur wheel our efficiency in marketing gets better. So so over time, we expect to get leverage out of that marketing line will continue to be able to expand our normalized EBITDA margins based on that.
Okay, great. Thanks, guys.
Our next question comes from.
From Jefferies. Please go ahead.
Thanks.
Many of the companies in the peer group, Ron F&B, and calling out higher churn impact from macro I'm. Just curious if you can kind of drilling and ultimately give us a sense of what is leading you more immune to this and what what's resonating and the new product set and then.
Adequate follow up.
Yes, sure Bryan so let's start with the customer.
<unk> average customer is the micro business and a third of our micro business customers our solo corners.
We add to that the fact that the products, we sell create tremendous value for our customers and the price we charge leaves plenty of consumer surplus for our customers right. So even if they have to adapt to changing economic environment. The products, we typically sell to them tend to be the last products. They walk away from so.
That's why we see sort of a continued.
Higher retention rates for customers, but also keep in mind the more.
More we have focused in terms of attracting the customers to whom we can attach more and more products and reach higher LTV that sort of limits some of the <unk> disc.
Discounting and.
Other techniques that.
Companies might use to attract a lot of customers that may not have sort of a good retention rates, but obviously our strategy is to attract the customers that have Iot we have good retention rates.
I'll just throw in there the care relationship becomes extremely important in these times and having that relationship in a person to go to to help fix come up with some more economic solutions to provide value.
Seems to be and continue to be a winning formula.
In these times, even more important to that customer base.
Okay and real quick I think the street on Unlevered free cash flow number is a little bit your number was a little bit below what the street wanted was there anything to read into the number this quarter I know youre reiterating the long term that anything to comment there relative to the stream nothing we're really happy with our progress.
We continue to work towards our annual goal.
Excellent. Thanks.
Thank you.
Our next question comes from the line of all over the quarter from Morgan Stanley . Please go ahead.
Great. Thank you so much.
The entrepreneurs wallets get a little bit stretched with inflation and higher interest rates.
Seeing any change in behavior or willingness to pay up for more expensive tier is our functionality across the portfolio. Thanks.
Thanks Elizabeth.
The higher premium tier offerings.
Especially in the case of websites plus marketing with the new Commerce, plus offering is relatively new for US right and we're just super excited and announcing.
The launch of our new SaaS solution, which is also going to be a premium offering but all of these businesses are very new for US right. We have 21 base of 21 million customers.
Have great relationships and care.
Early in the process I am not of course, we realize that customers feel the pinch of inflation with these businesses small for us in our core products. It has delivered tremendous amounts of value and one of the things, we sometimes say here.
People don't give up their dream because of an economic downturn, so they're not going to give up the domain name.
Got it and then as a follow up.
I was hoping you could provide more color on what youre seeing in terms of the macro impacts on demand.
<unk> recorded a weaker outlook on your names, which raised some questions.
It sounds like churn is holding in pretty well. So just any incremental you can provide particularly on kind of new customer demand would be really helpful.
We're definitely in a fluid demand environment and it's different by geography.
He didn't make a small comment earlier about the European demand.
Weaker, but just to take a step back and look at the customer or the domains business overall.
If we look at Godaddy business, it's very very broad obviously week fell 400, <unk>, we have a primary market we have a secondary market the aftermarket business in both cases, we are leaders in those businesses. We've invested in our corporate domains business you saw us take on our registry business over the last couple of years and that's growing very well.
So when we look at our domains business, we feel its a much broader business with many levers that obviously, we we use to continue to grow it compared to any one registry out there that may have one or a <unk>. So we think our business is quite different.
Great. Thank you so much thank you.
Our next question comes from the line of Aaron Kessler from Raymond James.
Please go ahead.
Great.
Maybe just if you can talk a little bit about the AD environment kind of hearing that pricing kind of coming down are you seeing kind of less competition.
And maybe getting some more efficiencies from a pricing coming down whether its Google search or other areas.
Can you just talk a little bit about the M&A environment in terms of are you seeing valuations get more attractive with obviously public equity is coming down as well. Thank you.
Yes.
The sort of ad environment.
It's always a competitive marketplace.
I would never.
However, recall that easy, but as we shared with you at Investor Day, We've continued to sort of push more success based improve our abilities with bidding with machine learning to get better and better efficiency. So you do see some of that in our marketing.
Leverage improvements, but overall I would just say.
The competitive dynamics are still the competitive dynamics, obviously in third quarter, that's a bit easier than others, but overall I wouldn't say, there's some huge huge shift in it yet and mark on and on.
M&A our approach hasn't changed we have our capital allocation strategy that we've talked about we have our M&A strategy that we've talked about has to fit strategically has to has to work financially and has to be able to be integrated.
We will evaluate any anything that comes along those lines. Obviously, you don't talk about anything active in any way shape or form.
But we try to balance our decisions for today based on keeping an eye on our long term objectives and we can remain laser focused on executing our objectives right now.
And we feel good about having a strong and solid year.
Alright, thank you.
Our next question comes from the line of Marc Edwards from Benchmark. Please go ahead.
Thanks Christy.
Just.
Couple of questions quick ones on payments and then.
One of the macro.
Payments, you mentioned that 30% stat.
Wordpress customers using your payments I'm curious how.
How you sort of move that number up.
Sort of what you see is.
Sort of a trajectory over the next couple of years and then in terms of Apple pay we added.
Was that simply.
Our cart conversion decision or is there some.
Potential pull in of.
Of new subscribers.
Potentially comes with that.
And then on a macro level.
Maybe just two sides of the coin one.
Tulsa centered around marketing.
Much of your marketing budget reduction is aligned to just lower absolute demand and then on the flip side of that in terms of the success that youre seeing upselling products, what what is the characteristic.
That.
Of that subscriber that is buying new product is it simply duration.
Subscriber or is there or the regional tier characteristics anything.
On that side of the claim to be interesting as well. Thanks.
Sure. Thanks, Martin, let me take the payments some apple pay piece and maybe.
And I can tag team on the other two items so on payments Godaddy payments will manage wordpress Super excited to move that number for 25% to 30% and who asks what are the types of things that we do customers actually have a choice of I think it's a 140 options that they can choose from and Wordpress. So we're continually.
Improving the experience for customers, so it's easier and easier for them to make that choice for them to be able to differentiate between those choices and pick the best choice.
In that window simplification and improvements we've seen.
This improvement to 30% in terms of.
Without commenting on sort of specific numbers that will be added in a couple of years.
What I would say is we're very very focused on simplifying the customer experience. We're very very focused on delivering the one stop shop to our customers whether they are selling in store on their online store or on social media or the major marketplaces, so giving that one subscription to our customers and letting them do everything.
Want to do from one place clearly is our objective.
In terms of Apple pay and so there are a couple of things there.
The Apple pay support in the tap to pay partnership I think youre referencing the tap to pay partnership in this Super early this just got announced by Apple.
Definitely share more with you of that.
Sort of partnership develops.
And I'll start on the macro and the marketing budget.
No doubt the management fluid in 2022, but overall, it's been pretty solid.
We look at marketing more efficiency and optimization.
We do look at things like Mark mentioned demand is down in Europe , and we just accordingly, but.
We continue to look at the ROI and optimize it based on not only our expanded product offerings, but how successful we are on the Ark entrepreneurs meal and our ability to attach so so it's.
Yes.
Like I said demand is definitely fluid, but the marketing is being efficient and optimize to make sure. We're capturing the demand that makes sense.
And as I think there was a.
Im apologize Theres a few questions in there I think we had yes.
Yes, sorry. The other question was the other side of that coin in terms of the upsell the success Youre, having upselling products, just curious I guess the subscriber.
Characteristics that are there.
They're absorbing those products is it regional or is it just the duration laundry there with you the more likely.
They're going to.
Bye.
Yes.
Sure. So the core funnel for us continues to be folks coming in to buy domains and attaching email attaching website attaching website, Linda attaching commerce and we're laser focused on optimizing conversion through those funnel. We're also very very focused on attracting the customer.
That has that intention.
If our marketing is intense focus and the conversion funnel is good that's what allows us to attach more and more products and of course, we shared at Investor day.
A lot of good data in terms of penetration for email for example, with our 21 million customer base.
Also creating new products and bringing them to the market. The best example of that is favorable domains, where you don't have to attach payments to a domain new buyer domain you get of checkout page that you can customize that's enabled for your domain automatically so.
Literally by the domain and you can start taking payments right and that's a bit of a different movement in that we're not selling the product and then attaching more bundling it in right with the first purchase and literally putting and the idea. There is put commerce on every surface. We have because that is in a sense the omni commerce ethos wherever electrons.
I think whatever surface you are creating your commerce or micro business is enabled in there.
Thank you Super helpful. Thank you.
Our next question comes from the line of Mark Mahaney from Evercore ISI. Please go ahead.
Okay. Thanks, Christy too.
Two questions one international revenue growth I think it's pretty consistently trailed that of your.
Global growth is there anything there that you need to solve for to change that.
And then secondly, mark on share repurchases.
Repurchase what you said you were going to do.
On trailer are on track or even a little bit faster. So just thinking about it going forward.
<unk> a lot of free cash flow what would cause you to.
Even up that range like what would you have to see.
That would make buying back the stock even more attractive than it's already been I don't want to im not asking what.
More can you do for us, but I guess I am asking that a little bit obviously purchased back a lot of stock you had the ability to purchase more of what would cause you to amp that up faster. Thanks.
Why don't you take the first part of that ill take the second thanks, Mark Yes, we're very happy with the international business.
Over $9 million of our 21 million customers are outside the U S and presents tremendous opportunity as we bring more and more products to that customer base outside the U S. So super bullish Super happy with it.
Macro headwinds there of course FX is is that and we see some demand challenges to let structurally no concern with the international business continue to be very happy with it continuing to allocate marketing dollars, where we see the best return and over the last two or three years I will say you've seen us move those dollars back and forth a bit and that has some impact.
No.
Super happy with it overall.
And mark Thanks for pointing out we have a lot of free cash flow.
Obviously, that's a good thing.
Especially in this day and age.
We're really happy we've been able to execute on $1 billion six months.
And.
We are continuing to balance our decisions today.
Based on what our objectives are in driving long term value.
I would say the best way to answer that question is we have a very disciplined capital allocation strategy.
We'll continue to look at use of cash.
Active discussion between us and the board at right now.
Authorized a $3 billion.
Okay. Okay. Thank you Mark Thank you Juan.
Thank you.
Yes.
As a reminder, if you'd like to ask the question on the call. Please is the right path speech at the bottom of the webinar.
Our next question comes from the line of Novack on France, right now, but please go ahead.
Alright.
Yes, hi, thank you.
Maybe let me just wanted just can you talk about the price increase.
The testing incident.
Discounting less is that sort of the the way I'm thinking about it or are you also delaying <unk>.
<unk> pricing <unk>.
And this thing of customers how should we understand from the outside looking in and then I don't know if <unk> touched on this already I joined a little late.
But let me just talk about demand trends.
And finally just month on month.
Did you see any changes through the course of the quarter our July looked like.
Any color would be helpful.
Yes on the pricing. So I think there was a specific example, solar sites plus marketing pricing and the earlier question, but let me sort of pull it back a little bit and talk about <unk>.
Our pricing is nuance not just by geographies or customer shifts with macro but also customer populations. So I think in the past you and I have talked about how for certain populations. For example are the main investor customer the pricing that we will have will be different from let's say a micro business customer so.
We take a look at all of that that's the testing that happens right. Then when we find the best balance of AD versus share depending on geography, depending on customer population you see us roll those out and I think mark can comment on it but those get built into our plan in to our forecast basically so it's not sort of a sick.
<unk> event type thing.
Large sort of broad portfolio of products. So we're constantly evaluating and doing pass and seeing where we should take pricing typically we're taking price. After we have added more value for the customer right.
We want to continue to push the willingness to pay up and then take price so that the surplus for the consumer continues to be maintain them.
Customers pay Super Happy happy with US and then I think you had a question about the second part was around the overall demand trends.
Did comment a little bit about about Europe .
Being a bit weaker but overall month to month, there are some small shifts depending on different businesses, but we're not seeing a tidal wave change.
Okay.
Yes.
That would all add on the pricing part of it or anything we plan on doing our pricing has been included in our forecast and we always keep in mind that 85% of our revenue comes from our existing 21 million customers.
<unk>.
We're very very particular about making sure that the pricing. We do do is matched up to value, we're providing them with them.
And we see it in our retention rates staying at a stronger at higher than 85%.
Got it thank you both.
That concludes our Q&A session.
Session I'll now turn the call over Shannon for closing remarks. Thank you Christy I'll just say thank you all for joining and a big Thank you to all godaddy employees around the world for another solid quarter.