GoDaddy (NYSE:GDDY), the web domain registration service, went public on the New York Stock Exchange on Wednesday, after raising $440 million in its IPO. After pricing at $20 per share, the stock rose almost 31% on its first day of trading, closing the day at $26.15, with a market cap of $6.3 billion.
GoDaddy CEO Blake Irving spoke to the FOX Business Network about their business model, which has come under fire for still being unprofitable after eighteen years.
The company lost $143 million last year and $200 million the year before.Yet GoDaddy has seen revenue growth, coming in at $1.4 billion last year -- up from $1.1 billion in 2013 and $911 million in 2012.
Irving pointed to the top line growth and positive cash flow, explaining that GoDaddy’s accounting methods require them to recognize costs up front and bill revenue over the course of the year.
“Investors understand the story. Investors look for consistent top line growth,” Irving said. “You can’t eat lunch with accounting methodology, but you can eat lunch with cash. Cash wins in the end and we’re doing a great job from a cash flow perspective.”
Echoing the sentiment, Jackie Kelley, IPO Leader at Ernst & Young, said that GoDaddy is “a mature company that offers investors solid cash flow and long-term growth opportunities. Kelley added that she expects “GoDaddy to bring positive momentum to our U.S. IPO markets.”
Known for its racy ads, including ones featuring race car driver Danica Patrick, the company says it has about 13 million customers worldwide and manages 50 million domain names. In addition to its web domain service, GoDaddy helps small business owners build their online presence.
It is a competitive landscape, and both Endurance International Group (NASDAQ:EIGI) and Wix (NASDAQ:WIX) are already public. Both stocks traded up over 5% this month.
Founder and Director Bob Parsons is the largest GoDaddy shareholder, with a 40% stake. Private equity firm KKR (NYSE:KKR) owns 21% and Silver Lake owns 22%.
The lead underwriters are Morgan Stanley (NYSE:MS), J.P Morgan (NYSE:JPM), and Citigroup (NYSE:C). Barclays, Deutsche Bank and RBC Capital Markets are also working on the transaction.
The Scottsdale, Ariz.-based GoDaddy was founded in 1997, and first filed for an IPO in 2006, but canceled, citing market conditions.