A number of publicly traded companies in the hosting and cloud ecosystem reported fourth quarter and full year financial results for 2016 this week. While GoDaddy and Wix beat analyst expectations, Endurance International Group struggled with high costs in the last quarter.
GoDaddy’s fourth quarter revenue was $486 million, over 14 percent higher than Q4 2015, and overall company revenues increased 15 percent to $1.8 billion for the full 2016 fiscal year. Its gross margin was higher than the previous quarter, but lower year-over-year, while operating expenses in the quarter were 5 percent higher than last quarter, and 10 percent higher than last year. After reporting a net loss of 2 cents per share a year ago, GoDaddy’s 10 cents per share adjusted Q4 earnings beat analysts’ consensus estimate by 2 cents.
Domains continued to be the company’s largest source of revenue, contributing half of the total for Q4, but quarterly business applications revenue rose almost 29 percent from a year earlier.
GoDaddy expects revenue growth of 18 to 20 percent in 2017, buoyed by the acquisition of Host Group Europe and the launch of GoCentral. GoDaddy said in a statement it will divest HEG’s managed hosting business PlusServer during fiscal 2017, and included no contribution from it in its 2017 outlook.
Wix reported quarterly profits of 6 cents per share, doubling analysts’ estimates, on the strength of $84.2 million in Q4 revenues. In Q4 2015, Wix reported a loss of 13 cents per share, but company year-over-year revenue was up by over 48 percent.
For the full year, its revenue grew by 42 percent to $342 million.
Asked during an earnings call what caused the company’s major gains in the U.S. market over the third quarter, CEO Avishai Abrahami compared the clarity of Wix focus on website building to the more diversified service portfolios of competitors like Squarespace and GoDaddy.
“I think that one is our brand getting more and more recognized,” Abrahami said, as transcribed by Seeking Alpha. “And I think that the more that our brand is being recognized, more people compare us to our competitors.”
Wix Chief Financial Officer Lior Shemesh said in the call that conversions, renewals, and ARPU all improved for the company in Q4.
Endurance International Group
Endurance International Group missed analyst estimates by $0.57 per share in Q4, posting a 26 cent loss per share. Analysts had expected profits of $0.31 per share, on revenues of $277.58 million, which Endurance actually beat, with $292.1 million in revenue for the period. In Q4 2015 EIG posted a 7 cent per share loss.
Total revenues for fiscal 2016 jumped 50 percent to $1.11 billion, almost mirroring its year-over-year revenue increase for Q4. Endurance’s net loss, however, increased from $25.8 million in fiscal 2015 to $81.2 million. The company noted that cash flow was significantly impacted by increased interest payments and continued costs associated with the acquisition of Constant Contact, which closed in early 2016.
Since the new year Endurance has announced that it is both hiring in Arizona and cutting jobs in Texas and Utah.