GoDaddy Benefits From a Diversified Product Suite, but Macroeconomic Headwinds Weigh on Outlook

No-moat GoDaddy delivered a reasonable second-quarter fiscal 2022 result as demand for online presence solutions continue to decelerate amid a further tapering of pandemic era digitization tailwinds, challenging macroeconomic conditions, and geopolitical unrest in Europe. Group revenue increased 10% year on year on a constant-currency basis, led by strong demand for website design software, email, and commerce solutions, and secondary market domain sales. GoDaddy’s increasingly diversified product suite away from core domain registration supported higher average revenue per user during the quarter. Adjusted EBITDA margin expanded an impressive 420 basis points to 25.4%, underpinned by mix shift to higher margin products and an easing of marketing investment amid a softer demand environment.