Go Daddy 2015 Annual Report Download - page 152

Table of Contents
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The following table presents our revenue during the years ended December 31, 2015, 2014 and 2013:
Year Ended December 31, 2015 to 2014 2014 to 2013
2015 2014 2013 $ change % change $ change % change
Domains $ 840.8 $ 763.3 $ 671.6 $ 77.5 10% $ 91.7 14%
Hosting and presence 592.0 507.9 380.6 84.1 17% 127.3 33%
Business applications 174.5 116.1 78.6 58.4 50% 37.5 48%
Total revenue $ 1,607.3 $ 1,387.3 $ 1,130.8 $ 220.0 16% $ 256.5 23%
As a result of the Merger, and to a lesser extent the other business acquisitions we have completed since the Merger, we
were required by GAAP to record all assets and liabilities, including deferred revenue, prepaid domain name registry fees and
long-lived assets, at fair value, which in some cases was different than historical book values. Recording deferred revenue at
fair value in purchase accounting had the effect of reducing acquired deferred revenue and thereby reducing the recognition of
revenue in subsequent periods as compared to the amounts we would have otherwise recognized. To the extent our customers
renew their contracts, the full amount of renewal revenue will be recognized in future periods.
The impact on revenue related to purchase accounting limits the comparability of our revenue between periods. The
following table reflects the impact of purchase accounting to our total revenue during the years ended December 31, 2015, 2014
and 2013:
Year Ended December 31,
2015 2014 2013
Impact of purchase accounting: (unaudited)
Total revenue $ 1,607.3 $ 1,387.3 $ 1,130.8
Impact of purchase accounting on revenue 8.5 18.7 43.3
Total revenue excluding impact of purchase accounting (1) $ 1,615.8 $ 1,406.0 $ 1,174.1
(1) This amount represents the amount of revenue we would have recognized if not for the impact of purchase accounting.
2015 compared to 2014
Total revenue increased $220.0 million, or 15.9%, from $1,387.3 million in 2014 to $1,607.3 million in 2015. The
increase was primarily driven by growth in total customers and ARPU. Total customers increased 1.1 million, or 8.7%, from
12.7 million as of December 31, 2014 to 13.8 million as of December 31, 2015. The increase in customers impacted each of our
revenue lines, as the additional customers purchased subscriptions across our product portfolio.
Domains. Domains revenue increased $77.5 million, or 10.2%, from $763.3 million in 2014 to $840.8 million in 2015.
The increase was primarily attributable to a $54.6 million increase in revenue from domain registrations and renewals and a
$19.6 million increase in revenue from aftermarket domain sales. Domains under management increased 4.6% from
58.9 million as of December 31, 2014 to 61.6 million as of December 31, 2015.
Hosting and presence. Hosting and presence revenue increased $84.1 million, or 16.6%, from $507.9 million in 2014 to
$592.0 million in 2015. The increase was primarily attributable to a $47.0 million increase in revenue from our website hosting
and website building products and a $22.4 million increase in revenue from sales of our security products.
Business applications. Business applications revenue increased $58.4 million, or 50.3%, from $116.1 million in 2014 to
$174.5 million in 2015. These increases were primarily driven by our offering of expanded email and productivity solutions and
increased customer adoption of our business applications products.
2014 compared to 2013
Total revenue increased $256.5 million, or 22.7%, from $1,130.8 million in 2013 to $1,387.3 million in 2014. The
increase primarily resulted from a $179.4 million increase in total revenue from new and existing customers, $52.4 million of