GoDaddy Inc. GDDY
GoDaddy is a scale-leading infrastructure business trading at 11x FCF; replaying Starboard's Splunk/Wix/Salesforce margin-expansion playbook can close a 37% peer gap and re-rate the stock.
Thesis
GoDaddy is the scale leader in small-business cloud infrastructure, with 3-5x more customers than public peers, $4.1bn of FY22 revenue, and a $14bn enterprise value at roughly 11x forward free cash flow. Yet a deteriorating combination of revenue growth plus profitability has driven 37% YTD underperformance against peers in 2023. Starboard argues GoDaddy's situation mirrors Splunk, Wix, and Salesforce one year earlier, each of which turned sharply positive in 2023 by expanding margins in the face of slowing growth. Management's 2022 Investor Day targets, including a $1.3bn FY2024 free-cash-flow goal, are a step in the right direction but leave meaningful room for outperformance on margin. Starboard, which filed a Schedule 13D in December 2021, wants the Company to execute on growth, profitability, and capital allocation to unlock significant shareholder value.
SCQA
GoDaddy is the scale-leading cloud platform for micro and small businesses, with 3-5x the customers of public peers, $4.1bn in FY22 revenue, and roughly $14bn of enterprise value at 11x FY23 free cash flow.
A worsening growth-plus-profitability profile has produced 37% YTD underperformance in 2023; management's 2022 Investor Day plan and $1.3bn FY24 FCF target leave meaningful upside on margin execution.
Run the Splunk/Wix/Salesforce playbook: expand operating margins in the face of slowing growth and improve capital allocation, while exploiting the infrastructure-like recurring-revenue base.
Close a 37-point peer gap and re-rate a high-quality infrastructure business, replicating the 2023 share price gains of Splunk (+72%), Salesforce (+54%), and Wix (+8%) once margins inflected.
The three reasons
- 1
GoDaddy is the clear scale leader with 3-5x more customers than public peers
- 2
Worsening growth-plus-profitability profile drove 37% YTD underperformance in 2023
- 3
Margin-expansion playbook already worked at Splunk, Wix, and Salesforce
Primary demands
- Improve GoDaddy's combination of revenue growth and profitability (margin expansion)
- Improve capital allocation strategy
- Deliver outperformance vs. the Company's 2022 Investor Day targets, particularly on margins
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Splunk margin expansion (Starboard campaign)
- Salesforce margin expansion (Starboard campaign)
- Wix margin expansion (Starboard campaign)
Notable slides (5)
Notes
Presented at the 13D Monitor Active-Passive Investor Summit (October 2023). Filename prefix '2023-02-2023' appears to be a repository artifact; cover page and disclaimer watermark confirm October 2023 as the presentation date, and market data footnotes reference 10/13/23. Starboard disclosed its GoDaddy stake via 13D in December 2021, so this is a follow-up update, not the initial thesis. The core rhetorical device is analogical: Starboard lays out how Splunk, Wix, and Salesforce (its prior campaigns) re-rated sharply in 2023 after margin inflection, then argues GoDaddy is the next candidate for the same playbook. Source PDF appears truncated at exactly 1,048,576 bytes — only the first ~17 of the 28 pages rendered after a ghostscript repair, so the closing slides (ask, valuation bridge, summary) were not directly inspected; closing_ask left null as a result.