Go Daddy 2015 Annual Report Download - page 151
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Table of Contents
23
Year Ended December 31,
2015 2014 2013
Revenue:
Domains 52.3% 55.0% 59.4 %
Hosting and presence 36.8% 36.6% 33.7 %
Business applications 10.9% 8.4% 6.9 %
Total revenue 100.0% 100.0% 100.0 %
Costs and operating expenses:
Cost of revenue (excluding depreciation and amortization) 35.2 % 37.4 % 41.9 %
Technology and development 16.8 % 18.1 % 18.2 %
Marketing and advertising 12.6 % 11.9 % 12.9 %
Customer care 13.8 % 13.7 % 13.3 %
General and administrative 13.7 % 12.4 % 12.9 %
Depreciation and amortization 9.9 % 11.0 % 12.4 %
Total costs and operating expenses 102.0 % 104.5 % 111.6 %
Operating loss (2.0)% (4.5)% (11.6)%
Interest expense (4.3)% (6.1)% (6.4)%
Loss on debt extinguishment (1.3)% — % — %
Other income (expense), net 0.1 % 0.1 % 0.2 %
Loss before income taxes (7.5)% (10.5)% (17.8)%
Benefit for income taxes — % 0.2 % 0.1 %
Net loss (7.5)% (10.3)% (17.7)%
Less: net loss attributable to non-controlling interests (2.8)% — % — %
Net loss attributable to GoDaddy Inc. (4.7)% (10.3)% (17.7)%
Comparison of Years Ended December 31, 2015, 2014 and 2013
Revenue
We generate substantially all of our revenue from sales of product subscriptions, including domain registrations and
renewals, hosting and presence offerings and business applications. Our subscription terms are typically one year but can range
from monthly terms to multi-annual terms of up to 10 years depending on the product. We generally collect the full amount of
subscription fees at the time of sale, but recognize revenue ratably over the applicable contract term.
Domains revenue primarily consists of revenue from the sale of domain registration subscriptions, domain add-ons and
aftermarket domain sales. Domain registrations provide a customer with the exclusive use of a domain during the applicable
contract term. After the contract term expires, unless renewed, the customer can no longer access the domain.
Hosting and presence revenue primarily consists of revenue from the sale of subscriptions to our website hosting products,
website building products, online visibility products, security products and an online shopping cart.
Business applications revenue primarily consists of revenue from the sale of subscriptions for email accounts, online
calendar, online data storage, third-party productivity applications and email marketing tools.
Revenue is presented net of refunds, and we maintain a reserve to provide for refunds granted to customers. Our reserve is
an estimate based on historical refund experience. Refunds reduce deferred revenue at the time they are granted and result in a
reduced amount of revenue recognized over the applicable subscription terms compared to the amount originally expected. Our
annual refund rate has ranged from 6.9% to 7.2% of total bookings from 2013 to 2015.