Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 26, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Entity Registrant Name | GoDaddy Inc. | ||
Entity Central Index Key | 1,609,711 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 666,052,488 | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 67,906,317 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 89,833,354 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 348 | $ 139 |
Short-term investments | 4.5 | 3 |
Accounts and other receivables | 4.8 | 3.5 |
Registry deposits | 18.7 | 17.8 |
Prepaid domain name registry fees | 292.6 | 272.8 |
Prepaid expenses and other current assets | 25.3 | 23.3 |
Total current assets | 693.9 | 459.4 |
Property and equipment, net | 225 | 220.9 |
Prepaid domain name registry fees, net of current portion | 163.7 | 152.8 |
Goodwill | 1,663.4 | 1,661.2 |
Intangible assets, net | 735.3 | 749.7 |
Other assets | 12.1 | 14.3 |
Deferred tax assets | 5.4 | 2.4 |
Total assets | 3,498.8 | 3,260.7 |
Current liabilities: | ||
Accounts payable | 39.4 | 31.9 |
Accrued expenses and other current liabilities | 127 | 114.5 |
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 5.3 | 0 |
Current portion of deferred revenue | 937.7 | 821.4 |
Current portion of long-term debt | 4.2 | 4.4 |
Total current liabilities | 1,113.6 | 972.2 |
Deferred revenue, net of current portion | 478.5 | 429.2 |
Long-term debt, net of current portion | 1,039.8 | 1,410.4 |
Payable to related parties pursuant to tax receivable agreements | 151.6 | 0 |
Other long-term liabilities | $ 34.3 | $ 38.5 |
Commitments and contingencies | ||
Stockholders'/members' equity: | ||
Members' interest | $ 0 | $ 410.4 |
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding | 0 | 0 |
Additional paid-in capital | 454.6 | 0 |
Accumulated other comprehensive income | 3.2 | 0 |
Accumulated deficit | (32.2) | 0 |
Total stockholders' equity attributable to GoDaddy Inc./members' equity | 425.8 | 410.4 |
Non-controlling interests | 255.2 | 0 |
Total stockholders'/members’ equity | 681 | 410.4 |
Total liabilities and stockholders'/members’ equity | 3,498.8 | 3,260.7 |
Class A Common Stock | ||
Stockholders'/members' equity: | ||
Common stock | 0.1 | 0 |
Class B Common Stock | ||
Stockholders'/members' equity: | ||
Common stock | $ 0.1 | $ 0 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical | Dec. 31, 2015$ / sharesshares |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock shares authorized (in shares) | 50,000,000 |
Preferred stock shares issued (in shares) | 0 |
Preferred stock outstanding (in shares) | 0 |
Common stock outstanding (in shares) | 157,481,000 |
Class A Common Stock | |
Par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock shares authorized (in shares) | 1,000,000,000 |
Common stock shares issued (in shares) | 67,083,000 |
Common stock outstanding (in shares) | 67,083,000 |
Class B Common Stock | |
Par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock shares authorized (in shares) | 500,000,000 |
Common stock shares issued (in shares) | 90,398,000 |
Common stock outstanding (in shares) | 90,398,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenue | ||||
Revenue | $ 1,607.3 | $ 1,387.3 | $ 1,130.8 | |
Costs and operating expenses | ||||
Cost of revenue (excluding depreciation and amortization) | [1] | 565.9 | 518.4 | 473.9 |
Technology and development | [1] | 270.2 | 250.8 | 206 |
Marketing and advertising | [1] | 202.2 | 164.7 | 145.5 |
Customer care | [1] | 221.5 | 190.5 | 150.9 |
General and administrative | [1] | 219.7 | 172 | 145.8 |
Depreciation and amortization | [1] | 158.8 | 152.8 | 140.6 |
Total costs and operating expenses | 1,638.3 | 1,449.2 | 1,262.7 | |
Operating loss | (31) | (61.9) | (131.9) | |
Interest expense | (69.2) | (85) | (71) | |
Loss on debt extinguishment | (21.4) | 0 | 0 | |
Other income (expense), net | 1 | 0.8 | 1.9 | |
Loss before income taxes | (120.6) | (146.1) | (201) | |
Benefit for income taxes | 0.2 | 2.8 | 1.1 | |
Net loss | (120.4) | (143.3) | (199.9) | |
Less: net loss attributable to non-controlling interests | (44.8) | 0 | 0 | |
Net loss attributable to GoDaddy Inc. | $ (75.6) | $ (143.3) | $ (199.9) | |
Net loss per share—basic and diluted (in USD per share) | [2] | $ (0.81) | $ (1.11) | $ (1.58) |
Weighted-average shares outstanding—basic and diluted (in shares) | [2] | 58,676,000 | 38,826,000 | 38,826,000 |
Equity-based compensation expense | $ 40.4 | $ 30.1 | $ 16.4 | |
Common Stock | Class A Common Stock | ||||
Costs and operating expenses | ||||
Shares issued during IPO (in shares) | 26,000,000 | |||
Technology and development | ||||
Costs and operating expenses | ||||
Equity-based compensation expense | $ 18.2 | 10.4 | 4.7 | |
Marketing and advertising | ||||
Costs and operating expenses | ||||
Equity-based compensation expense | 6.1 | 6.1 | 2.6 | |
Customer care | ||||
Costs and operating expenses | ||||
Equity-based compensation expense | 2.9 | 0.8 | 0.6 | |
General and administrative | ||||
Costs and operating expenses | ||||
Equity-based compensation expense | 13.2 | 12.8 | 9.4 | |
Domains | ||||
Revenue | ||||
Revenue | 840.8 | 763.3 | 671.6 | |
Hosting and presence | ||||
Revenue | ||||
Revenue | 592 | 507.9 | 380.6 | |
Business applications | ||||
Revenue | ||||
Revenue | $ 174.5 | $ 116.1 | $ 78.6 | |
[1] | Costs and operating expenses include equity-based compensation expense as follows:Technology and development of $18.2, $10.4, and $4.7 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyMarketing and advertising of $6.1, $6.1, and $2.6 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyCustomer care of $2.9, $0.8, and $0.6 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyGeneral and administrative of $13.2, $12.8, and $9.4 for the | |||
[2] | Amounts for periods prior to our initial public offering have been retrospectively adjusted to give effect to the organizational transactions described in Note 1. The prior period amounts do not consider the 26,000 shares of Class A common stock sold in our initial public offering. See Note 13. |
Consolidated Statement of Stock
Consolidated Statement of Stockholders'/Members' Equity Statement - USD ($) shares in Thousands, $ in Millions | Total | Class A Common Stock | Class B Common Stock | Members' Equity | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non- Controlling Interest |
Stockholders' and Members' Equity at Dec. 31, 2012 | $ 1,013.7 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | $ (199.9) | (199.9) | ||||||||
Equity-based compensation expense | 16.4 | |||||||||
Change in value of redeemable units | (25.9) | |||||||||
Other | 8.2 | |||||||||
Stockholders' and Members' Equity at Dec. 31, 2013 | 812.5 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (143.3) | (143.3) | ||||||||
Equity-based compensation expense | 30.1 | |||||||||
Distributions to unit and option holders | (349.6) | |||||||||
Change in value of redeemable units | (16.9) | |||||||||
Reclassification of redeemable units to members' interest | 75.2 | |||||||||
Other | 2.4 | |||||||||
Stockholders' and Members' Equity at Dec. 31, 2014 | $ 410.4 | 410.4 | ||||||||
Common stock outstanding (in shares) at Dec. 31, 2014 | 129,003 | 38,826 | 90,177 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | $ (120.4) | |||||||||
Equity-based compensation expense | 31.7 | 8.7 | $ 31.7 | |||||||
Effect of the Reorganization Transactions | 375.9 | (375.9) | $ 0.1 | $ 0.1 | 61.6 | $ 314.1 | ||||
Effect of the Reorganization Transactions (in shares) | 38,826 | 90,425 | ||||||||
Issuance of Class A common stock in initial public offering, net of offering costs | 480.6 | 480.6 | ||||||||
Shares issued during IPO (in shares) | 26,000 | |||||||||
Liability pursuant to the tax receivable agreements resulting from the Reorganization Transactions | (151.6) | (151.6) | ||||||||
Stock option exercises and other | 12.3 | 0.2 | 20.8 | (8.5) | ||||||
Stock option exercises and other (in shares) | 1,582 | (27) | ||||||||
Issuance of Class A common stock under employee stock purchase plan | 11.5 | 11.5 | ||||||||
Issuance of Class A common stock under employee stock purchase plan (in shares) | 675 | |||||||||
Distributions to holders of LLC Units | (5.6) | (5.6) | ||||||||
Unrealized gain on foreign currency hedging derivatives | 3.4 | $ 3.4 | ||||||||
Other comprehensive income (loss) items | (0.2) | (0.2) | ||||||||
Stockholders' and Members' Equity at Dec. 31, 2015 | $ 681 | $ 0 | $ 0.1 | $ 0.1 | $ 454.6 | $ (32.2) | $ 3.2 | $ 255.2 | ||
Common stock outstanding (in shares) at Dec. 31, 2015 | 157,481 | 67,083 | 90,398 | 67,083 | 90,398 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Cash Flows [Abstract] | |||
Net loss | $ (120.4) | $ (143.3) | $ (199.9) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 158.8 | 152.8 | 140.6 |
Equity-based compensation | 40.4 | 30.1 | 16.4 |
Amortization of original issue discount and debt issuance costs | 7.9 | 9.1 | 9.3 |
Loss on debt extinguishment | 21.4 | 0 | 0 |
Deferred taxes | (3) | (6.8) | (3.5) |
Other | 4 | 1.3 | (0.1) |
Changes in operating assets and liabilities, net of amounts acquired: | |||
Accounts and other receivables | (1.2) | 1.8 | (2.4) |
Registry deposits | (0.9) | (2.7) | 0.2 |
Prepaid domain name registry fees | (30.7) | (21.6) | (29.2) |
Prepaid expenses and other current assets | 1.4 | 7 | (11.7) |
Other assets | (7.6) | (6.6) | 1.5 |
Accounts payable | 13.5 | 8.5 | 1.9 |
Accrued expenses and other current liabilities | 9.5 | (22.3) | 60.6 |
Deferred revenue | 165.6 | 166.4 | 169.1 |
Other long-term liabilities | 0.7 | 6.9 | 0.5 |
Net cash provided by operating activities | 259.4 | 180.6 | 153.3 |
Investing activities | |||
Purchases of short-term investments | (7.3) | (9) | (12.7) |
Maturities of short-term investments | 5.8 | 9.2 | 12.7 |
Business acquisitions, net of cash acquired | (66.2) | (40.7) | (156.8) |
Purchases of intangible assets | (23.5) | 0 | 0 |
Purchases of property and equipment, excluding improvements | (45.3) | (51.9) | (42.7) |
Purchases of leasehold and building improvements | (10.5) | (16) | (9.4) |
Other investing activities, net | 1.1 | 1.1 | 0.4 |
Net cash used in investing activities | (145.9) | (107.3) | (208.5) |
Financing activities | |||
Issuance of Class A common stock sold in initial public offering, net of offering costs | 482.4 | (1.8) | 0 |
Option and warrant exercises and other | 12.7 | 2.4 | 3.3 |
Issuance of Class A common stock under employee stock purchase plan | 11.5 | 0 | 0 |
Term loan | 0 | 263.8 | 100 |
Revolving credit loan | 0 | 75 | 0 |
Distributions to LLC Unit and option holders | (0.8) | (349) | 0 |
Repayment of senior note | (300) | 0 | 0 |
Repayment of revolving credit loan | (75) | 0 | 0 |
Repayment of term loan | (11) | (7.6) | (7.8) |
Financing-related costs | (13.5) | (8.4) | (4.1) |
Other financing obligations | (10.6) | (4.1) | (0.3) |
Net cash provided by (used in) financing activities | 95.7 | (29.7) | 91.1 |
Effect of exchange rate changes on cash and cash equivalents | (0.2) | 0 | 0 |
Net increase in cash and cash equivalents | 209 | 43.6 | 35.9 |
Cash and cash equivalents, beginning of period | 139 | 95.4 | 59.5 |
Cash and cash equivalents, end of period | 348 | 139 | 95.4 |
Cash paid during the period for: | |||
Interest on long-term debt | 59.1 | 75.4 | 61.8 |
Income taxes, net of refunds received | 2.3 | 2.3 | 2.5 |
Supplemental information for non-cash investing and financing activities: | |||
Fair value of contingent consideration in connection with business acquisitions | 0.9 | 2.3 | 0 |
Accrued capital expenditures, excluding improvements, at period end | 4.9 | 5.8 | 8.3 |
Accrued capital expenditures, leasehold and building improvements, at period end | 0.1 | 0.4 | 1.3 |
Property and equipment acquired under capital leases | 11.1 | 16.6 | 2.8 |
Building acquired under lease financing obligation | $ 0 | $ 18.1 | $ 5.3 |
Organization and Background
Organization and Background | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Background | Organization and Background Description of Business We are a leading technology provider to small businesses, web design professionals and individuals, delivering simple, easy-to-use cloud-based products and outcome-driven, personalized customer care. We operate the world’s largest domain marketplace and provide website building, hosting and security tools to help customers easily construct and protect their online presence and tackle the rapidly-changing technology landscape. As our customers grow, we provide applications helping them connect to their customers, manage and grow their businesses and get found online. Organization and Initial Public Offering We were incorporated on May 28, 2014 for the purpose of facilitating an initial public offering (IPO) and other related transactions in order to operate the business of Desert Newco, LLC (Desert Newco) and its subsidiaries. On April 7, 2015 , we completed our IPO and sold 26,000 shares of Class A common stock at a public offering price of $20.00 per share, including 2,500 shares purchased by affiliates of certain members of our board of directors (the Board). We received $491.8 million in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued limited liability company units (LLC Units) from Desert Newco at a price per unit equal to the IPO price. In connection with the IPO, we completed a series of organizational transactions on April 7, 2015 (the Reorganization Transactions), including: • the amendment and restatement of Desert Newco’s limited liability company agreement (the New LLC Agreement) to, among other things, appoint us as sole managing member and reclassify all LLC Units as non-voting units; • the issuance of shares of Class B common stock to each of Desert Newco’s pre-IPO owners (the Continuing LLC Owners) on a one-to-one basis with the number of LLC Units owned; and • the acquisition, by merger, of four members of Desert Newco (the Reorganization Parties), for which we issued 38,826 shares of Class A common stock as consideration (the Investor Corp Mergers). We are the sole managing member of Desert Newco. Although we have a minority economic interest, we have sole voting power in, and control the management of, Desert Newco. As a result, we consolidate Desert Newco's financial results and report a non-controlling interest related to the portion of Desert Newco not owned by us. As of December 31, 2015 , we owned approximately 43% of Desert Newco. The Reorganization Transactions were considered transactions between entities under common control. As a result, the financial statements for periods prior to the IPO and the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. On December 16, 2011 , investment funds managed by Kohlberg Kravis Roberts & Co. L.P. (KKR), Silver Lake Partners (Silver Lake) and Technology Crossover Ventures (TCV, and collectively with KKR and Silver Lake, the Sponsors) along with other investors purchased a controlling interest in Desert Newco from YAM Special Holdings, Inc., formerly known as The Go Daddy Group, Inc. (Holdings), an entity owned by Robert R. Parsons (Bob Parsons), Desert Newco’s founder and a member of our board of directors, in a transaction we refer to as the Merger. As a result of the Merger, we applied purchase accounting and a new basis of accounting beginning on December 17, 2011 . Basis of Presentation Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. We had no material components of other comprehensive income during any of the periods presented. As such, a consolidated statement of comprehensive income (loss) is not presented. Prior Period Reclassifications Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. Our more significant estimates include: • the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements; • the fair value of assets acquired and liabilities assumed in business combinations; • the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; • the estimated reserve for refunds; • the estimated useful lives of intangible and depreciable assets; • the grant date fair value of equity-based awards; • the recognition, measurement and valuation of current and deferred income taxes; • the recognition and measurement of amounts payable under tax receivable agreements; • the recognition and measurement of amounts payable as tax distributions to Desert Newco's owners; and • the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities. We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates. Segments and Reporting Units Our chief operating decision maker function is comprised of our Chief Executive Officer and Chief Operating Officer, who collectively review financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance for the entire company. Accordingly, we have a single operating segment and reporting unit structure. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, other highly liquid investments purchased with a remaining maturity of 90 days or less at the date of acquisition and payments related to third-party payment processor transactions normally received within 72 hours. Amounts receivable for payment processor transactions totaled $12.2 million and $ 11.6 million at December 31, 2015 and 2014 , respectively. Short-Term Investments Our short-term investments consist of certificates of deposit or bank time deposits with an original maturity in excess of 90 days, which are carried at fair value. The estimated fair value of our short-term investments is determined based on quoted market prices and approximated historical cost. We did not have any material realized or unrealized gains or losses on sales of short-term investments during any of the periods presented. We classify our short-term investments as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. We may sell our short-term investments at any time for use in current operations or for other purposes, such as consideration for acquisitions, even if they have not yet reached maturity. As a result, we classify our short-term investments, including investments with maturities beyond 12 months, as current assets. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at invoiced amounts. We evaluate our receivables for collectability and record an allowance for doubtful accounts as necessary. For all periods presented, the allowance was not material. Registry Deposits Registry deposits represent amounts on deposit with, or receivable from, various domain name registries to be used by us to make payments for future domain registrations or renewals. Prepaid Domain Name Registry Fees Prepaid domain name registry fees represent amounts charged by a registry at the time a domain is registered or renewed. These amounts are amortized to cost of revenue over the same period revenue is recognized for the related domain registration contract. Property and Equipment Property and equipment is stated at cost. Depreciation, including for assets acquired under capital leases, is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. We regularly evaluate the estimated remaining useful lives of our property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Property and equipment consisted of the following: Estimated Useful Lives December 31, 2015 2014 Land Indefinite $ 9.0 $ 9.0 Computer equipment 3 years 248.7 209.5 Buildings, including improvements 2-25 years 112.8 102.5 Software 3 years 28.5 24.6 Leasehold improvements Lesser of useful life or remaining lease term 34.1 28.0 Other 1-7 years 9.8 7.6 Building acquired under lease financing obligation 40 years 18.1 18.1 Total property and equipment 461.0 399.3 Less accumulated depreciation and amortization (236.0 ) (178.4 ) Property and equipment, net $ 225.0 $ 220.9 The gross carrying amount of property and equipment includes $31.7 million and $20.6 million of computer equipment under capital leases as of December 31, 2015 and 2014 , respectively. The accumulated depreciation of the leased computer equipment was $16.1 million and $5.9 million as of December 31, 2015 and 2014 , respectively. Depreciation and amortization expense related to property and equipment, including amounts related to assets under capital leases, was $61.3 million , $55.6 million and $50.2 million during 2015 , 2014 and 2013 , respectively. Capitalized Internal-Use Software Costs Costs incurred to develop software for internal-use during the application development phase and for our websites are capitalized and amortized over such software’s estimated useful life. Costs related to the design or maintenance of internal-use software are included in technology and development expenses as incurred. Costs capitalized during all periods presented have not been material. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Indefinite-lived intangible assets consist of trade names and branding acquired in the Merger and our acquired domain portfolio. Goodwill and indefinite-lived intangible assets are not amortized to earnings, but are assessed for impairment at least annually. As individual domains are sold, our indefinite-lived domain portfolio intangible asset is reduced by the allocated carrying cost of each domain, which is included in cost of revenue. We assess impairment annually for our single reporting unit during the fourth quarter of each year. We also perform an assessment at other times if events or changes in circumstances indicate the carrying value of our goodwill or indefinite-lived trade names and branding may not be recoverable. If, based on qualitative analysis, we determine it is more-likely-than-not the fair value of our reporting unit is less than its carrying amount, a two-step impairment test is performed. Our qualitative analysis did not indicate impairment of such assets during any of the periods presented. Our indefinite-lived domain portfolio is reviewed for impairment annually during the fourth quarter of each year. We also perform an assessment at other times if events or changes in circumstances indicate the carrying amount of the asset may not be fully recoverable. Any identified impairment loss is treated as a permanent reduction in the carrying amount of the asset. We did not record an impairment loss during any of the periods presented. Long-Lived Assets and Finite-Lived Intangible Assets Finite-lived intangible assets are amortized over their estimated useful lives, which are as follows: Customer relationships acquired in the Merger 9 years Customer relationships 1-5 years Developed technology 1-7 years Trade names 1-5 years Other 3 years Customer relationships are primarily amortized based on expected customer attrition. Developed technology, finite-lived trade names and other intangibles are amortized on a straight-line basis. We regularly evaluate the estimated remaining useful lives of our intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. Long-lived assets and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than the carrying amount of the asset being evaluated. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. We did not record an impairment loss during any of the periods presented. Debt Issuance Costs We defer and amortize issuance costs, underwriting fees and related expenses incurred in connection with the issuance of debt instruments using the effective interest method over the terms of the respective instruments. Debt issuance costs, other than those associated with our revolving credit loan, are reflected as a direct reduction of the carrying amount of the related debt liability. Debt issuance costs related to our revolving credit loan are reflected as an asset. Derivative Financial Instruments We enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in currencies other than the United States (U.S.) dollar. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. We do not hold or issue derivative instruments for speculative or trading purposes. At December 31, 2015 , the total notional amount of such contracts was $104.6 million , all having maturities of 12 months or less. We reflect gains or losses on the effective portion of a cash flow hedge as a component of accumulated other comprehensive income. Gains and losses, once realized, are recorded as a component of accumulated other comprehensive income and are amortized to revenue over the same period in which the underlying hedged amounts are recognized. Any ineffective portion of gains or losses are recorded as other income (expense), net. Such gains or losses were immaterial during all periods presented. Each period, we evaluate the effectiveness of each of our hedges. As of December 31, 2015 , all hedges were considered effective. Leases We lease office and data center space in various locations. Rent expense under operating leases is recognized on a straight-line basis over the lease term taking into consideration rent abatements, scheduled rent increases and any lease incentives. We record assets and liabilities for estimated construction costs incurred under build-to-suit lease arrangements to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon completion of the construction project, we evaluate our level of continuing involvement in the facility. If we maintain significant continuing involvement, we continue to account for the facility as a financing obligation. Otherwise, we record a sale of the facility back to the landlord, and accordingly, the related construction assets and liabilities are removed from our consolidated financial statements. Foreign Currency Our functional currency is the U.S. dollar. Assets denominated in foreign currencies are remeasured into U.S. dollars at period-end exchange rates. Foreign currency based revenue and expense transactions are measured at transaction date exchange rates. Foreign currency remeasurement gains and losses are recorded in other income (expense), net and were $(3.5) million , $(3.0) million and $(0.7) million during 2015 , 2014 and 2013 , respectively. The functional currency of certain of our foreign subsidiaries is their respective local currency. For these subsidiaries, we translate revenue and expense transactions at average exchange rates. We translate assets and liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of accumulated other comprehensive income. Such gains and losses were not material during any of the periods presented. Revenue Recognition Revenue is recorded when persuasive evidence of an arrangement exists, delivery of the product has occurred, the selling price is fixed or determinable and collectability is reasonably assured. Payments received in advance of revenue recognition are recorded as deferred revenue. 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 contract term of the applicable product compared to the amount originally expected. Consideration provided to customers for sales incentives or service disruption credits is recorded as a reduction of revenue at the later of the time the related revenue is recognized or when such consideration is offered. Such incentives and credits were not material in any of the periods presented. Revenue arrangements with multiple deliverables are divided into separate units of accounting if each deliverable has stand-alone value to the customer. The majority of our revenue arrangements consist of multiple-element arrangements, with revenue for each unit of accounting recognized as the product or service is delivered to the customer. Our multiple-element arrangements may include a combination of some or all of the following: domain registrations, website hosting products, website building products, Secure Sockets Layer (SSL) certificates and other cloud-based products. Each of these products has stand-alone value and are sold separately. Consideration is allocated to each deliverable at the inception of an arrangement based on relative selling prices. We determine the relative selling price for each deliverable based on our vendor-specific objective evidence of selling price (VSOE) or our best estimate of selling price (BESP), if VSOE is not available. We have determined third-party evidence of selling price (TPE) is not a practical alternative due primarily to the significant variability among available third-party pricing information for similar products and differences in the features of our product offerings compared to other parties. We establish VSOE for certain of our products when a consistent number of stand-alone sales of these products have been priced within a reasonably narrow range. We are unable to establish VSOE when we lack pricing consistency, primarily related to our marketing strategies and variability in pricing due to promotional activity. For products where VSOE is not available, we determine BESP by considering our overall pricing objectives and market conditions. Significant factors taken into consideration include historical and expected discounting practices, the size, volume and term length of transactions, customer demographics, the geographic areas in which our products are sold and our overall go-to-market strategy. We sell our products directly to customers and also through a network of resellers. In certain cases, we act as a reseller of products provided by others. The determination of gross or net revenue recognition is reviewed on a product by product basis and is dependent on whether we act as principal or agent in the transaction. Revenue associated with sales through our network of resellers is recorded on a gross basis as we have determined we are the primary obligor in the contractual arrangements with end customers. The commission paid to resellers is expensed as a cost of revenue over the same period in which the associated revenue is recognized. Domains. Domains revenue primarily consists of domain registrations and renewals, domain privacy, domain application fees, domain back-orders, aftermarket domain sales and fee surcharges paid to ICANN. 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. Fees are recorded as deferred revenue at the time of sale, and revenue, other than for aftermarket domain sales, is recognized as the product or service is delivered to the customer. Aftermarket domain revenue is recognized when control of the domain is transferred to the buyer. Hosting and presence. Hosting and presence revenue primarily consists of website hosting products, website building products, an online shopping cart, search engine optimization and SSL certificates for encrypting data between the online browser and the certificate owner’s server. Fees are recorded as deferred revenue at the time of sale, and revenue is recognized as the product or service is delivered to the customer. Business applications. Business applications revenue primarily consists of email accounts, online calendar, online data storage, third-party productivity applications, email marketing and enrollment fees paid by our resellers. Fees are recorded as deferred revenue at the time of sale, and revenue is recognized as the product or service is delivered to the customer. Operating Expenses Cost of Revenue (excluding depreciation and amortization) Substantially all cost of revenue relates to domain registration costs. Cost of revenue also includes payment processing fees, reseller commissions, software licensing fees directly related to products sold, professional website development personnel costs and costs associated with sales from our domain portfolio. Technology and Development Technology and development expenses primarily consist of personnel costs associated with the design, development, deployment, testing, operation and enhancement of our products as well as costs associated with the data centers, systems, storage and telecommunications infrastructure supporting those products (excluding depreciation expense). Technology and development expenses also include third-party development costs, localization costs incurred to translate products for international markets and technology licensing and support and maintenance costs. Marketing and Advertising Marketing and advertising expenses primarily consist of online traffic generation costs, television and radio advertising, spokesperson and event sponsorships, personnel costs associated with our marketing and public relations functions and affiliate program commissions. Advertising costs are expensed either as incurred, at the time a commercial initially airs or when a promotion first appears in the media. Advertising expenses were $177.6 million , $139.4 million and $121.1 million during 2015 , 2014 and 2013 , respectively. At December 31, 2015 , we had contractual commitments for certain marketing agreements with future payments totaling $20.4 million due in 2016 . Customer Care Customer care expenses primarily consist of personnel costs associated with our customer consultation and care team. Customer care expenses also include third-party customer care center operating costs. General and Administrative General and administrative expenses primarily consist of personnel and related overhead costs for our executive leadership, accounting, finance, legal and human resource functions. General and administrative expenses also include professional service fees for audit, legal, tax, accounting and acquisitions, rent for all office space, insurance and other general costs. Equity-Based Compensation Equity-based awards are accounted for using the fair value method. Grant date fair values are determined using the Black-Scholes option pricing model and a single option award approach. The measurement date for performance vesting options is the date on which the applicable performance criteria are approved by our Board. Key assumptions used in the determination of fair value are as follows: Expected term. The expected term represents the period equity-based awards are expected to be outstanding. Because of the lack of sufficient historical data necessary to calculate the expected term, we use the simple average of the vesting period and the contractual term to estimate the expected term for our equity-based awards. Expected volatility. We determine the expected stock price volatility based on the historical volatilities of our peer group since there is not a sufficient trading history for our Class A common stock. Industry peers consist of several public companies in the technology industry similar to us in size, stage of life cycle and financial leverage. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient trading history of our Class A common stock becomes available. If circumstances change such that the identified companies are no longer similar to us, we will revise our peer group to substitute more suitable companies in this calculation. Expected dividend yield. We use a dividend rate of 0.0% based on our expectation of not paying dividends in the foreseeable future. Risk-free interest rate. We base the risk-free interest rate on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the award on the grant date. The fair value of awards granted was estimated using the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013 Expected term (in years) 6.3 6.5 6.5 Expected volatility 39.1 % 42.2 % 43.9 % Expected dividend yield — — — Risk-free interest rate 1.7 % 1.9 % 1.2 % Historical data is used to estimate the expected number of future award forfeitures, which is adjusted based on actual experience. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to income taxes are included in benefit (provision) for income taxes, and were not material during any of the periods presented. Payable to Related Parties Pursuant to the TRAs Concurrent with the completion of the IPO, we became a party to five Tax Receivable Agreements (TRAs). Four of the TRAs are between us and each of the Reorganization Parties, with the fifth being between us and the Continuing LLC Owners. Under the TRAs with the Reorganization Parties, we generally will be required to pay to each Reorganization Party approximately 85% of the amount of calculated tax savings, if any, we are deemed to realize as a result of (1) any existing tax attributes of LLC Units acquired in the applicable Investor Corp Merger, (2) NOLs available as a result of the applicable Investor Corp Merger and (3) tax benefits related to imputed interest. The other TRA provides for payment to our pre-IPO owners of approximately 85% of the amount of the calculated tax savings, if any, we are deemed to realize due to the use of tax attributes acquired from exchanges of LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock. When LLC Units are exchanged, we receive certain tax attributes, including the original basis adjustments (the OBAs) created from the original acquisition of the LLC Units plus any anticipated basis adjustments. The OBAs entitle us to the depreciation and amortization previously allocable to the original owner of such units. The anticipated basis adjustments will increase, for tax purposes, our depreciation and amortization deductions. To the extent these deductions are used to reduce our taxable income, thereby resulting in actual tax savings, we will be required to pay the original owners approximately 85% of such savings, which is recorded as an additional liability under the TRAs when deemed probable. Adjustments to the liability under the TRAs based on changes in anticipated future taxable income are recorded in our consolidated statement of operations. Unutilized depreciation and amortization deductions related to the OBAs and the anticipated basis adjustments are converted to net operating loss (NOL) carryforwards. If the utilization of NOL carryforwards is considered to be more-likely-than-not, a liability under the TRAs relating to NOL carryforwards is recorded. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows: Level 1 —Observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2 —Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and Level 3 —Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions. We hold certain assets required to be measured at fair value on a recurring basis. These include reverse repurchase agreements and certificates of deposit, which are classified as either cash and cash equivalents or short-term investments. We classify these assets within Level 1 or Level 2 because we use either quoted market prices or alternative pricing sources utilizing market observable inputs to determine their fair value, as follows: December 31, 2015 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Reverse repurchase agreements $ — $ 40.0 $ — $ 40.0 Short-term investments: Certificates of deposit 4.5 — — 4.5 Total assets measured and recorded at fair value $ 4.5 $ 40.0 $ — $ 44.5 December 31, 2014 Level 1 Level 2 Level 3 Total Short-term investments: Bank time deposit $ 3.0 $ — $ — $ 3.0 Total assets measured and recorded at fair value $ 3.0 $ — $ — $ 3.0 We have no other material assets or liabilities measured at fair value on a recurring basis. Business Combinations We include the results of operations of acquired businesses as of the respective acquisition dates. Purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in general and administrative expenses. Acquisition related costs are expensed as incurred. Concentrations of Risks Our financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. Although we deposit cash with multiple banks, these deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may generally be redeemed upon demand and bear minimal risk. No single customer represented over 10% of our total revenue for any period presented. In order to reduce the risk of downtime of the products we provide, we have established data centers in various geographic regions. We have internal procedures to restore products in the event of disaster at any of our data center facilities. We serve our customers and users from data center facilities operated either by us or third parties, which are located in Mesa, Scottsdale and Phoenix, Arizona; Los Angeles, California; Ashburn, Virginia; Singapore and Amsterdam, The Netherlands. Even with these procedures for disaster recovery in place, the availability of our products could be significantly interrupted during the implementation of restoration procedures. Recent Accounting Pronouncements In May 2014 , the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition from contracts with customers. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015 , the FASB approved a one year deferral of the effective date making the new standard effective for annual and interim reporting periods beginning after December 15, 2017 , with early adoption permitted as of the original effective date. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently evaluating the timing of our adoption and the impact of this new standard on our consolidated financial statements. In February 2015 , the FASB issued new guidance related to consolidations. The new standard amends the guidelines for determining whether certain legal entities should be consolidated. The new standard is effective for annual and interim reporting periods beginning after December 15, 2015 . The adoption of this guidance in the fourth quarter of 2015 did not have a material impact on our consolidated financial statements. In April 2015 , the FASB issued new guidance related to accounting for fees paid in a cloud computing arrangement. The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for annual and interim reporting periods beginning after December 15, 2015 , with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016 , the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018 , and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating our expected adoption method and the impact of this new standard on our consolidated financial statements. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions 2015 Acquisitions During the year ended December 31, 2015 , we completed four acquisitions for cash of $64.7 million and additional contingent earn-out payments subject to the achievement of certain revenue targets. We recognized a liability of $0.9 million representing the initial estimated fair value of the contingent consideration at the acquisition date. These acquisitions are not material to our results of operations, and as a result, no proforma financial information is presented. The aggregate purchase price was allocated to the assets acquired and liabilities assumed based upon our assessment of fair values as of the respective acquisition dates with $60.2 million attributed to identified indefinite-lived intangible assets, $3.2 million to other identified finite-lived intangible assets, $2.2 million to goodwill, which is deductible for income tax purposes, and $0.9 million of net liabilities assumed. Identified intangible assets, which were valued using either income- or cost-based approaches, include an indefinite-lived domain portfolio and customer-related intangible assets, developed technology and branding. The acquired finite-lived intangible assets have a weighted-average amortization period of 2.0 years . 2014 Acquisition During 2014, we completed an acquisition for cash of $42.0 million and additional contingent earn-out payments of up to an additional $3.0 million payable upon the achievement of specified milestones. We recognized a liability of $2.3 million representing the estimated fair value of the contingent consideration at the acquisition date. This acquisition is not material to our results of operations. The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based upon our assessment of fair values as of the acquisition date with $33.6 million attributed to goodwill, which is deductible for income tax purposes, $10.8 million to identified intangible assets and $0.1 million of net liabilities assumed. The identified finite-lived intangible assets, which primarily include developed technology and customer relationships valued using either income- or cost-based approaches, have a weighted-average amortization period of 4.5 years . The acquisition was expected to provide enhanced online capabilities to our customers, and goodwill was primarily attributable to synergies expected to arise after the acquisition. 2013 Acquisitions During 2013, we completed five acquisitions for consideration consisting of: (1) cash of $158.5 million ; (2) 365 LLC Units valued at $4.1 million ; (3) warrants for the purchase of 126 LLC Units valued at $0.6 million ; and (4) the assumption of vested options valued at $0.2 million . These acquisitions are not material to our results of operations. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based upon our assessment of fair values as of the respective acquisition dates with $112.3 million attributed to goodwill, of which $30.8 million is not deductible for income tax purposes, $59.7 million to identified intangible assets, $7.4 million to property and equipment, $8.1 million to deferred revenue, $7.6 million to net deferred tax liabilities and $0.3 million of net liabilities assumed. The identified finite-lived intangible assets primarily include customer relationships, developed technology and trade names. In connection with one of the acquisitions, we issued 618 LLC Units valued at $7.0 million subject to employment-based vesting over a period of 30 months following the acquisition date. As vesting of these awards is subject to continuing employment, we record equity-based compensation expense over the vesting period, which is included in the amounts shown in Note 6 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes changes in our goodwill balance: Balance at December 31, 2013 $ 1,627.6 Goodwill related to acquisitions 33.6 Balance at December 31, 2014 1,661.2 Goodwill related to acquisitions 2.2 Balance at December 31, 2015 $ 1,663.4 Intangible assets, net are summarized as follows: December 31, 2015 Gross Carrying Amount Accumulated Amortization Domains Sold Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a n/a $ 445.0 Domain portfolio 61.2 n/a $ (3.7 ) 57.5 Finite-lived intangible assets: Customer-related 361.2 $ (196.8 ) n/a 164.4 Developed technology 210.1 (148.0 ) n/a 62.1 Trade names 11.2 (5.2 ) n/a 6.0 Other 1.1 (0.8 ) n/a 0.3 $ 1,089.8 $ (350.8 ) $ (3.7 ) $ 735.3 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Finite-lived intangible assets: Customer-related 336.9 $ (143.1 ) 193.8 Developed technology 209.5 (107.4 ) 102.1 Trade names 10.9 (2.8 ) 8.1 Other 1.1 (0.4 ) 0.7 $ 1,003.4 $ (253.7 ) $ 749.7 During 2015 , we purchased a customer-related intangible asset for $22.5 million in cash. The purchased intangible asset was valued at cost and will be amortized over 48 months based on expected customer attrition. Transaction costs were immaterial and were expensed as incurred. Customer-related intangible assets, developed technology, trade names and other intangible assets have weighted-average useful lives from the date of purchase of 99 months , 64 months , 58 months and 36 months , respectively. Amortization expense was $97.5 million , $97.2 million and $90.4 million during 2015 , 2014 and 2013 , respectively. The weighted-average remaining amortization period for amortizable intangible assets was 47 months as of December 31, 2015 . Based on the balance of finite-lived intangible assets at December 31, 2015 , expected future amortization expense is as follows: Year Ending December 31: 2016 $ 89.1 2017 52.8 2018 44.6 2019 25.9 2020 20.4 Thereafter — $ 232.8 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Restatement of Certificate of Incorporation Our Board approved an amended and restated certificate of incorporation (the Restated Certificate of Incorporation), which became effective on March 31, 2015 immediately prior to the effectiveness of the Registration Statement on Form S-1 (the Registration Statement) filed in connection with our IPO. The Restated Certificate of Incorporation authorized the issuance of up to 1,000,000 shares of Class A common stock, up to 500,000 shares of Class B common stock and up to 50,000 shares of undesignated preferred stock, each having a par value of $0.001 per share. Shares of Class A common stock have both economic and voting rights. Shares of Class B common stock have no economic rights, but do have voting rights. Holders of Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. We are required to, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock outstanding and the number of LLC Units owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing LLC Owners and the number of LLC Units owned by the Continuing LLC Owners. We may issue shares of Class B common stock only to the extent necessary to maintain these ratios. Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of a Continuing LLC Owner, exchange LLC Units for shares of Class A common stock. The Restated Certificate of Incorporation also established a classified board of directors, divided into three classes, the members of each of which will serve for staggered three-year terms. At each annual meeting of stockholders after the initial classification, the successors to the directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election. Desert Newco Recapitalization Desert Newco's board of directors adopted the New LLC Agreement, which became effective on March 31, 2015 immediately following the effectiveness of the Registration Statement. The New LLC Agreement, among other things, appointed us as Desert Newco's sole managing member and reclassified all outstanding LLC Units as non-voting units. The New LLC Agreement also revised the tax rate applicable to the tax distributions Desert Newco is required to make to the holders of LLC Units, including us, as described in Note 12. Investor Corp Mergers As described in Note 1 , we acquired the Reorganization Parties, to which we issued an aggregate of 38,826 shares of Class A common stock as consideration for the 38,826 aggregate LLC Units held by such entities. Upon consummation of the Investor Corp Mergers, we recognized the acquired LLC Units at carrying value, as these transactions are considered to be between entities under common control. We also acquired the tax attributes of the Reorganization Parties, which were recorded generally as deferred tax assets at the time of the Investor Corp Mergers. These attributes include NOLs, tax credit carryforwards and OBAs arising from the original acquisition of LLC Units by the Reorganization Parties, as described in Note 12 . Initial Public Offering As described in Note 1 , on April 7, 2015 , we completed our IPO and sold 26,000 shares of Class A common stock at a public offering price of $20.00 per share, receiving $ 491.8 million in proceeds, net of underwriting discounts and commissions, which we used to purchase newly-issued LLC Units from Desert Newco at a price per unit equal to the IPO price. In connection with the IPO, we issued 90,425 shares of Class B common stock to the Continuing LLC Owners. We incurred $11.2 million , including $1.8 million paid in 2014, of legal, accounting, printing and other professional fees related to the IPO, including $1.3 million and $0.1 million paid on behalf of the Sponsors and Bob Parsons, respectively. These amounts were charged against additional paid-in capital upon completion of the IPO. We primarily used the net IPO proceeds to make certain payments to the Sponsors and Bob Parsons as described in Note 15 and to repay the senior note payable to Holdings and all amounts drawn on our revolving credit loan as described in Note 9 . Distribution to Holders of LLC Units In May 2014, Desert Newco’s board of directors authorized a $350.0 million distribution to holders of LLC Units and to holders of certain assumed options, including amounts to be paid in future periods as certain restricted units vest. During 2015 and 2014 , Desert Newco paid $0.5 million and $349.0 million of the distribution, respectively. Holders of other equity-based awards received an approximate $2.60 per unit adjustment to the exercise price of their awards, in accordance with the antidilution provisions of the Desert Newco, LLC 2011 Unit Incentive Plan (the 2011 Plan), which is equivalent to the per unit amount of the cash distribution. These equitable adjustments preserved the intrinsic value among all equity-based awards. The distribution was considered an equity restructuring, and accordingly, modification accounting was applied. We evaluated whether any additional equity-based compensation expense would need to be recognized, to the extent the fair value of any modified awards plus the cash to be received (if applicable) exceeded the fair value of the original awards before the modification. No material additional equity-based compensation expense was required as a result of the modification. The equity restructuring was in accordance with a pre-existing contractual antidilution provision; therefore, the cash paid did not impact our earnings per share computation and the changes to the options not receiving a cash award were accounted for by increasing the denominator in our earnings per share computation using the treasury stock method. |
Equity-Based Compensation Plans
Equity-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation Plans | Equity-Based Compensation Plans Our Board adopted the 2015 Equity Incentive Plan (the 2015 Plan), which became effective on March 31, 2015 upon the effectiveness of the Registration Statement. We reserved a total of 6,050 shares of Class A common stock for issuance pursuant to the 2015 Plan. In addition, the shares reserved for issuance include 4,235 shares reserved but unissued under the 2011 Plan plus up to 28,133 shares rolled over from the 2011 Plan and from certain other option plans assumed in connection with acquisitions. The number of shares reserved for issuance will be increased automatically on January 1st of each year, beginning in 2016 , by a number equal to the least of (i) 20,571 shares, (ii) 4% of the total shares of all classes of common stock outstanding as of the last day of the preceding year or (iii) such other amount as may be determined by our Board. As of December 31, 2015, 9,581 shares were available for issuance as future awards under the 2015 Plan. Our Board adopted the 2015 Employee Stock Purchase Plan (the ESPP), which became effective on March 31, 2015 upon the effectiveness of the Registration Statement. We reserved a total of 2,000 shares of Class A common stock for issuance pursuant to the ESPP. The number of shares reserved for issuance will be increased automatically on January 1st of each year, beginning in 2016 , by a number equal to the least of (i) 1,000 shares, (ii) 1% of the total shares of all classes of common stock outstanding as of the last day of the preceding year or (iii) such other amount as may be determined by our Board. As of December 31, 2015, 1,325 shares were available for issuance as future awards under the ESPP. We grant options at exercise prices equal to the fair market value of our Class A Common Stock on the grant date. We recognize the grant date fair value of equity-based awards as compensation expense over the required service period of each award, taking into the account the probability of our achievement of associated predetermined performance targets. We apply the straight-line attribution method to recognize equity-based compensation expense associated with awards not subject to graded vesting. For awards subject to graded vesting and performance based awards, we recognize compensation expense separately for each vesting tranche. We also estimate when and if performance based awards will be earned. If an award is not considered probable of being earned, no amount of compensation expense is recognized. If the award is deemed probable of being earned, compensation expense is recorded over the estimated service period. We grant options vesting solely upon the continued employment of the recipient (Time Options) as well as options vesting upon the achievement of predetermined annual or cumulative financial-based targets coinciding with our fiscal year (Performance Options). According to the award terms, Time Options vest equally on each of the four or five successive anniversaries of the vesting commencement date, and Performance Options vest based on the achievement of predetermined performance targets in each of the successive four or five fiscal years. In the event the performance targets are not achieved in any given year, the Performance Options for such year will subsequently vest upon the achievement of cumulative performance targets in the following fiscal year. Vesting of the Time Options and Performance Options is also subject to acceleration in the event of a change in control. Each of these options, whether Time Options or Performance Options, have a contractual term of ten years. The following table summarizes our option activity: Number of Shares of Class A Common Stock (#) Weighted- Average Grant- Date Fair Value ($) Weighted- Average Exercise Price ($) Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value ($) Outstanding at December 31, 2012 16,288 $ 5.27 Grants, including 167 assumed in acquisitions 10,777 $ 4.98 8.32 Exercises (228 ) 5.09 Forfeitures (1,032 ) 7.93 Outstanding at December 31, 2013 25,805 6.42 Grants 4,787 7.83 16.70 Exercises (1,760 ) 4.26 Forfeitures (2,180 ) 8.14 Outstanding at December 31, 2014 26,652 8.27 Grants 3,926 9.77 23.66 Exercises (1,749 ) 7.65 Forfeitures (1,410 ) 13.47 Outstanding at December 31, 2015 27,419 10.25 6.9 $ 598.3 Vested at December 31, 2015 13,655 6.07 5.8 354.9 During 2015 , 2014 and 2013 , we recognized $40.4 million , $30.1 million , and $16.4 million of equity-based compensation expense, respectively, including $3.6 million , $3.7 million and $0 , respectively, of additional expense resulting from the modification of certain awards. At December 31, 2015 , total unrecognized compensation expense related to non-vested awards was $53.8 million with an expected remaining weighted-average recognition period of approximately 2.2 years. During 2013 , we determined the performance targets relating to a portion of our Performance Options would not be met, and accordingly, reversed $1.8 million of previously recognized equity-based compensation expense. We currently believe the performance targets related to the vesting of performance options will be achieved. If such targets are not achieved, or are subsequently determined to not be probable of being achieved, we will not recognize any compensation expense relating to performance options, and will reverse any previously recognized expense. The fair value of each ESPP share is estimated on the first day of each offering period using the Black-Scholes option pricing model, and is recognized as equity-based compensation expense on a straight-line basis over the term of each six-month offering period. Compensation expense recognized for ESPP shares is included in the totals noted above. As of December 31, 2015 , $2.4 million has been withheld on behalf of employees for future purchases under the ESPP, which is included in accrued expenses and other current liabilities. At December 31, 2015 , total unrecognized compensation expense related to ESPP shares was $2.8 million , which will be recognized during the first half of 2016 . |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consisted of the following: December 31, 2015 2014 Current: Domains $ 497.2 $ 462.9 Hosting and presence 330.8 283.4 Business applications 109.7 75.1 $ 937.7 $ 821.4 Noncurrent: Domains $ 288.5 $ 266.8 Hosting and presence 149.7 131.5 Business applications 40.3 30.9 $ 478.5 $ 429.2 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, 2015 2014 Accrued payroll and employee benefits $ 64.7 $ 55.3 Current portion of capital lease obligation 12.0 6.6 Accrued marketing and advertising expenses 10.7 13.3 Accrued indirect tax liabilities 7.1 5.9 Transaction-based taxes payable 4.3 3.4 Accrued other 28.2 30.0 $ 127.0 $ 114.5 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: December 31, 2015 2014 Term Loan due May 13, 2021 (effective interest rate of 5.1% at December 31, 2015 and 5.2% at December 31, 2014) $ 1,083.5 $ 1,094.5 9% Note payable to Holdings (Senior Note) — 300.0 Revolving Credit Loan due May 13, 2019 (effective interest rate of 4.0% at December 31, 2014) — 75.0 Total 1,083.5 1,469.5 Less unamortized original issue discounts on long-term debt (1) (36.8 ) (50.6 ) Less unamortized debt issuance costs (1) (2.7 ) (4.1 ) Less current portion of long-term debt (4.2 ) (4.4 ) $ 1,039.8 $ 1,410.4 (1) Original issue discounts and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the effective interest method. Term Loan and Revolving Credit Loan We originally entered into our secured credit agreement (the Credit Facility) on December 16, 2011 , consisting of a $750.0 million original balance term loan maturing on December 16, 2018 (the Term Loan) and an available $75.0 million revolving credit loan maturing on December 16, 2016 (the Revolving Credit Loan). The Term Loan was issued at a 5% discount on the face of the note at the time of original issuance for net proceeds totaling $712.5 million . We refinanced the Term Loan on multiple occasions lowering our effective interest rate. Additionally, on October 1, 2013 , we borrowed an additional $ 100.0 million on the Term Loan, bringing the then outstanding principal balance to $835.0 million . Our evaluations determined modification accounting applied for each refinancing and the additional borrowing. Modifications occurring less than one year apart were evaluated against the terms of the debt in place on year prior. In May 2014 , we amended and restated the Credit Facility to increase the Term Loan to $1,100.0 million and the available capacity on the Revolving Credit Loan to $150.0 million . The maturity dates of the Term Loan and Revolving Credit Loan were extended to May 13, 2021 and May 13, 2019 , respectively. Borrowings under the refinanced Credit Facility bear interest at a rate equal to, at our option, either (a) LIBOR (not less than 1.0% for the Term Loan only) plus 3.25% per annum or (b) 2.25% per annum plus the highest of (i) the Federal Funds Rate plus 0.5% , (ii) the Prime Rate, or (iii) one-month LIBOR plus 1.0% . The interest rate margins above reflect reductions of 0.25% following the IPO and an additional 0.25% due to our achievement of certain leverage criteria. In evaluating the May 2014 amendment, we compared the net present value cash flows of the Term Loan in place one year prior to the date of the amendment and the amended Term Loan, which varied by less than 1% , and concluded the loans were not substantially different. As a result, we accounted for the Term Loan amendment as a debt modification and fees paid to the lenders of $5.4 million were recorded as an additional discount on the Term Loan. In addition, as a result of the additional borrowing capacity of the Revolving Credit Loan, we accounted for the Revolving Credit Loan amendment as a modification. We incurred $1.6 million of financing-related fees related to the modification of the Revolving Credit Loan, which were recorded as an asset to be amortized to interest expense over the life of the related debt using the effective interest method. In addition to paying interest on outstanding principal under the Term Loan, we are required to pay a commitment fee to the lenders under the Revolving Credit Loan for any unutilized commitments. During 2015 , the commitment fee rate was reduced from 0.50% to 0.375% per annum due to our achievement of certain leverage criteria. The Credit Facility requires us to prepay outstanding term loans, subject to certain exceptions, with percentages of excess cash flow, proceeds of non-ordinary course asset sales or dispositions of property, insurance or condemnation proceeds and proceeds from the incurrence of certain debt. The Credit Facility contains certain covenants, including, among other things, covenants limiting our ability to incur additional indebtedness, sell assets, incur additional liens, make certain fundamental changes, pay distributions and make certain investments. Additionally, the Credit Facility also requires us to maintain certain financial ratios. All obligations under the Credit Facility are unconditionally guaranteed by the assets of substantially all of our subsidiaries. At December 31, 2015 , we were not in violation of any covenants of the Credit Facility. In April 2015 , we made a payment of $75.0 million to repay all amounts drawn on the Revolving Credit Loan. At December 31, 2015 , we have $150.0 million available for borrowing under the Revolving Credit Loan. The estimated fair value of the Term Loan was $1,080.8 million at December 31, 2015 based on observable market prices for this loan, which is traded in a less active market and is therefore classified as a Level 2 fair value measurement. Senior Note On December 16, 2011 , we issued the 9% Senior Note to Holdings. In April 2015, we made a payment to Holdings totaling $316.0 million to repay the Senior Note, consisting of principal of $300.0 million , prepayment premium of $13.5 million , which was recorded as a loss on debt extinguishment, and accrued interest of $2.5 million . Additionally, in connection with the repayment, $7.1 million of unamortized original issue discount and $0.8 million of deferred financing costs were recorded as a loss on debt extinguishment. Following this payment, the Senior Note was canceled. Reclassification of Debt Issuance Costs In conjunction with the original issuance of the Term Loan, Revolving Credit Loan and Senior Note during 2011 and the modification of the Revolving Credit Loan in May 2014, we incurred a total of $10.7 million of financing-related fees. In 2015 , we adopted newly-issued guidance regarding the presentation of debt issuance costs, and accordingly, we retrospectively reclassified $4.1 million of debt issuance costs related to the Term Loan and Senior Note from prepaid expenses and other current assets and other assets to be a direct deduction of the carrying amount of the debt liability at December 31, 2014 . As of December 31, 2015 and 2014 , $2.1 million and $2.7 million of unamortized debt issuance costs related to the Revolving Credit Loan are recorded as an asset. Such amounts are not recorded as a reduction of the debt liability because doing so would reduce the debt liability for Revolving Credit Loan below $0 . Future Debt Maturities Aggregate principal payments, exclusive of any unamortized original issue discounts and debt issuance costs, due on long-term debt as of December 31, 2015 are as follows: Year Ending December 31: 2016 $ 11.0 2017 11.0 2018 11.0 2019 11.0 2020 11.0 Thereafter 1,028.5 $ 1,083.5 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Financing Obligation In April 2013, we entered into an 11 year lease agreement for new office space in Tempe, Arizona under which we occupied the total available space commencing in September 2014 . The lease agreement allowed for rent abatement during the first full year, with rent payments of $0.3 million per month thereafter, consisting of both base rent and a tenant improvement allowance. The lease provides us with two consecutive options to extend the term for five years each. In the event we choose to extend the term of the lease, the monthly rent for each additional term will be based on 95% of the then-prevailing market rate. As a result of our involvement during the construction period, we were considered to be the owner of the construction project for accounting purposes. Upon completion of construction in September 2014 , we did not meet the sale-leaseback criteria for derecognition of the building assets and liabilities; therefore, we were required to record an asset representing the total cost of the building paid by the lessor and the lease is accounted for as a financing obligation. We capitalized $18.1 million of construction costs incurred by the lessor, which are being depreciated over an estimated useful life of 40 years. Rent payments are treated as principal and interest payments on the lease financing obligation, with an amount recorded as estimated land lease expense each period. The lease financing obligation at the end of the lease term will approximate the net book value of the building to be relinquished to the lessor. As of December 31, 2015 , the lease financing obligation totaled $19.9 million , of which $19.8 million is included in other long-term liabilities. Future minimum payments under this lease as of December 31, 2015 are as follows: Year Ending December 31: 2016 $ 3.2 2017 3.2 2018 3.2 2019 3.2 2020 3.5 Thereafter 15.7 $ 32.0 Leases We lease office space, data center space (including commitments for specified levels of power), vehicles and certain computer equipment under operating and capital leases expiring at various dates through September 2026 . Total operating lease rent expense was $42.2 million , $39.3 million and $29.6 million during 2015 , 2014 and 2013 , respectively. Future minimum lease obligations under capital leases and non-cancelable operating leases with initial terms in excess of one year at December 31, 2015 are as follows: Year Ending December 31: Capital Operating 2016 $ 12.4 $ 40.1 2017 4.5 21.4 2018 0.3 14.8 2019 — 9.9 2020 — 8.2 Thereafter — 34.8 Total minimum payments 17.2 $ 129.2 Less: amount representing interest (0.4 ) Capital lease obligation $ 16.8 Service Agreements We have entered into long-term agreements with certain vendors to provide for software and equipment maintenance, specified levels of bandwidth and other services. Under these arrangements, we are required to make periodic payments. Future minimum obligations under these non-cancelable agreements with initial terms in excess of one year at December 31, 2015 are as follows: Year Ending December 31: 2016 $ 10.9 2017 3.2 2018 0.1 Thereafter — Total minimum payments $ 14.2 Litigation From time-to-time, we are a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate these claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. While the results of such normal course claims and legal proceedings cannot be predicted with certainty, management does not believe, based on current knowledge and the likely timing of resolution of various matters, any additional reasonably possible potential losses above the amount accrued for such matters would be material to our consolidated financial statements. Regardless of the outcome, legal proceedings may have an adverse effect on us because of defense costs, diversion of management resources and other factors. In December 2014 , we entered into a settlement agreement with an insurance carrier under which we would receive $7.5 million . As a result of this settlement, we reduced general and administrative expenses by $5.1 million in 2014 , representing the total costs incurred through December 31, 2014 . We also recorded $2.4 million in other long-term liabilities, as such amount represented our best estimate of the potential future losses. The full amount of the settlement was recorded in prepaid expenses and other current assets as of December 31, 2014 and was received from the insurance carrier in January 2015 . During 2015, we determined there was no longer a probable future loss and reversed the remaining accrued amount as a reduction of general and administrative expenses. Indemnifications In the normal course of business, we have made certain indemnities under which we may be required to make payments in relation to certain transactions. These include indemnities to our directors and officers to the maximum extent permitted under applicable state laws and indemnifications related to certain lease agreements. In addition, certain advertiser and reseller partner agreements contain indemnification provisions, which are generally consistent with those prevalent in the industry. We have not incurred material obligations under indemnification provisions historically, and do not expect to incur material obligations in the future. Accordingly, we have not recorded any liabilities related to such indemnities as of December 31, 2015 and 2014 . We include service level commitments to our customers guaranteeing certain levels of uptime reliability and performance for our hosting and premium DNS products. These guarantees permit those customers to receive credits in the event we fail to meet those levels, with exceptions for certain service interruptions including but not limited to periodic maintenance. We have not incurred any material costs as a result of such commitments during any of the periods presented, and have not recorded any liabilities related to such obligations as of December 31, 2015 and 2014 . Indirect Taxes We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject communications and commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the U.S. and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the businesses of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generate based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals. In 2013 , we recorded an indirect tax liability of $26.5 million in general and administrative expense, reflecting our best estimate of the probable liability, based on an analysis of our business activities, revenues likely subject to indirect taxes and applicable regulations in each taxing jurisdiction. Of this amount, $10.1 million related to periods prior to December 16, 2011 and was indemnified by Holdings, for which an indemnification asset was recognized. During 2014 , we continued our process of evaluating those jurisdictions in which nexus exists, and where products are taxable under applicable tax regulations. We revised our indirect tax liability calculation and identified an error related to the over accrual of the indirect tax liability and related indemnification asset as of December 31, 2013 . Based on this additional analysis, we determined $6.4 million of the amount recorded in 2013 was in error, of which $2.9 million related to periods indemnified by Holdings and $1.8 million related to 2012 . We reversed $3.5 million of previously recorded expense for indirect taxes to correct this error based on our revised analysis, and determined the amounts related to prior annual and interim periods were not material to our consolidated financial statements. During 2014 , we made payments totaling $17.2 million to various jurisdictions for indirect tax liabilities relating to prior periods. We recorded an expense of $4.1 million to increase our indirect tax liability for current period sales activity and reduced our liability by $1.2 million due to changes in estimates. We also received $6.6 million from Holdings as payment for the indemnified portion of the indirect tax liability, and as a result, agreed to release Holdings from its indemnification obligation for certain transaction-based taxes. As of December 31, 2015 and 2014 , our accrual for estimated indirect tax liabilities was $7.1 million and $5.9 million , respectively, reflecting our best estimate of the probable liability based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations in each jurisdiction. Although we believe our indirect tax estimates and associated reserves are reasonable, the final determination of indirect tax audits and any related litigation could be different than the amounts established for indirect tax contingencies. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan We maintain a defined contribution 401(k) plan covering all eligible employees, who may contribute up to 100% of their compensation, subject to limitations established by the Internal Revenue Code. We match employee contributions on a discretionary basis. Expense for our matching contributions was $8.6 million , $7.7 million and $6.8 million during 2015 , 2014 and 2013 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are required to file federal and applicable state corporate income tax returns and recognize income taxes on pre-tax income, which in prior years consisted primarily of our share of Desert Newco's pre-tax income. Desert Newco has been and will continue to be treated as a partnership for U.S. income tax purposes. As such, Desert Newco is considered a pass-through entity and generally does not pay income taxes on its taxable income in most jurisdictions. Instead, Desert Newco's members, of which we are one, are liable for U.S. federal and state income taxes based on their taxable income. Desert Newco is liable for income taxes in certain foreign jurisdictions, in those states not recognizing its pass-through status and for certain subsidiaries not taxed as pass-through entities. We have acquired the outstanding stock of various entities taxed as corporations, which are now owned 100% by us or our subsidiaries and are treated as an independent consolidated group for federal income tax purposes. Where required or allowed, these subsidiaries also file as a consolidated group for state income tax purposes. We anticipate this structure to remain in existence for the foreseeable future. Our tax provision includes federal, state and foreign income taxes. The domestic and foreign components of our loss before income taxes were as follows: Year Ended December 31, 2015 2014 2013 U.S. loss before tax $ (121.2 ) $ (149.0 ) $ (203.4 ) Foreign income before tax 0.6 2.9 2.4 Loss before income taxes $ (120.6 ) $ (146.1 ) $ (201.0 ) The benefit for income taxes was as follows: Year Ended December 31, 2015 2014 2013 Current: Federal $ (0.3 ) $ (0.1 ) $ (0.1 ) State (0.1 ) (0.3 ) — Foreign (2.4 ) (3.6 ) (1.9 ) (2.8 ) (4.0 ) (2.0 ) Deferred: Federal 2.4 4.9 2.9 State 0.4 1.7 0.4 Foreign 0.2 0.2 (0.2 ) 3.0 6.8 3.1 Benefit for income taxes $ 0.2 $ 2.8 $ 1.1 A reconciliation of the statutory federal income tax rate to our effective income tax rate was as follows: Year Ended December 31, 2015 2014 2013 Expected benefit at federal statutory tax rate (35% for 2015, 34% for 2014 and 2013) $ 42.2 $ 49.7 $ 68.3 Effect of rates due to pass-through entities — (45.8 ) (66.0 ) Income of non-controlling interest (15.6 ) — — Foreign earnings taxed at lower rates (2.2 ) (2.5 ) (1.8 ) State taxes, net of federal benefit 5.4 1.5 0.4 Effect of rates different than statutory 2.8 — — Other (0.7 ) (0.1 ) 0.2 Valuation allowance (31.7 ) — — Benefit for income taxes $ 0.2 $ 2.8 $ 1.1 Our effective tax rate differs from statutory rates primarily due to Desert Newco’s pass-through structure for U.S. income tax purposes, while being treated as taxable in certain states and various foreign jurisdictions as well as for certain subsidiaries. In all foreign jurisdictions where we conduct business, except Canada, we are subject to income tax in both the U.S. and the local jurisdictions. The components of the net deferred tax assets were as follows: December 31, 2015 2014 Deferred tax assets: Net operating losses $ 131.9 $ 13.9 Credits and incentives 2.6 0.3 Employee compensation 0.5 0.7 Depreciation 0.3 0.1 Investment in Desert Newco 4.7 — Other 0.7 0.9 Valuation allowance (126.9 ) — Total deferred tax assets 13.8 15.9 Deferred tax liabilities: Identified intangible assets (8.4 ) (13.5 ) Total deferred tax liabilities (8.4 ) (13.5 ) Net deferred tax assets $ 5.4 $ 2.4 In 2015 , we adopted newly-issued guidance which simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax assets and liabilities into current and noncurrent amounts. This new guidance requires all deferred tax assets and liabilities to be classified as noncurrent. Accordingly, we retrospectively reclassified $0.9 million of current deferred tax assets to noncurrent deferred tax assets as of December 31, 2014 . As a result of the Reorganization Transactions and the IPO, we acquired LLC Units and have recognized a deferred tax asset for the difference between the financial reporting and tax basis of our investment in Desert Newco. In addition, we acquired certain tax attributes, including $91.8 million of NOL and credit carryforwards, net of tax. Based on our limited operating history and future projections of taxable income, we believe there is significant uncertainty as to when we will be able to utilize these NOL and credit carryforwards. Therefore, we have concluded these deferred tax assets will not be realized and have recorded a valuation allowance against these deferred tax assets. Additionally, $35.1 million of our other deferred tax assets (primarily other GoDaddy Inc. NOL carryforwards) are subject to a valuation allowance as we believe such deferred tax assets will not be realized. As of December 31, 2015 , we have $131.9 million (net of tax) of future tax benefits related to U.S. federal, state and foreign NOLs and $2.6 million of benefits related to federal and state credits and incentives. This includes $12.2 million of U.S. federal, state and foreign NOLs belonging to our taxable subsidiaries filing separate income tax returns. A portion of the operating losses will begin to expire in 2028 and continue through 2035 . As of December 31, 2015 , we have determined undistributed net earnings of $5.1 million related to certain subsidiaries are indefinitely reinvested in operations outside the U.S. These earnings could become subject to additional taxes if remitted as dividends or loaned to a U.S. affiliate. The resulting U.S. income tax liabilities could be offset, in whole or in part, by credits allowable for taxes paid to foreign jurisdictions. The actual tax costs will depend on the income tax laws and circumstances at the time of the realization events. We have filed income tax returns for years through 2014 . These returns are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they were filed. Based on our analysis of tax positions taken on income tax returns filed, we have determined a liability related to uncertain income tax positions is not required. Although we believe the amounts reflected in our tax returns substantially comply with applicable federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully changed by a taxing authority could result in an adjustment to our benefit for income taxes in the period in which a final determination is made. Payable to Related Parties Pursuant to the TRAs In the Investor Corp Mergers, we received certain tax attributes, including the OBAs and NOL carryforwards, from the Reorganization Parties. These OBAs entitle us to the depreciation and amortization previously allocable to the Reorganization Parties. These deductions are allowed prior to the utilization of any NOL or tax credit carryforwards against income taxes. Based on current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipate having enough taxable income to utilize a portion of these specially allocated deductions related to the OBAs. Accordingly, during the second quarter of 2015 , we initially recorded a liability of $170.4 million payable to the Reorganization Parties under the TRAs, representing approximately 85% of the calculated tax savings based on the portion of the OBAs we anticipate being able to utilize in future years. During the third quarter of 2015, we increased this liability to $170.9 million , with the $0.5 million charge recorded as an increase in general and administrative expenses. During the fourth quarter of 2015, we corrected an immaterial error in the determination of the liability we currently deem probable and estimable under the TRAs and reduced this liability to $151.6 million , as of December 31, 2015, with $18.8 million recorded as an increase to additional paid-in capital and $0.5 million recorded as a reduction in general and administrative expenses. The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact the liability under the TRAs. Because we anticipate these additional depreciation and amortization deductions being greater than our taxable income, the excess deductions allocated to us will increase the amount of our NOL carryforwards. We have determined we will be unable to utilize all of our deferred tax assets subject to the TRAs; therefore, we have not recorded a liability under the TRAs related to the tax savings we may realize from the utilization of NOL carryforwards. If utilization of these NOL carryforwards becomes more-likely-than-not in the future, at such time, we will record a liability under the TRAs of up to an additional $112.4 million related to the tax attributes received in the Investor Corp Mergers, which will be recorded as a charge to our consolidated statement of operations. Additionally, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRAs. In this scenario, the reduction of the liability under the TRAs would result in a benefit to our consolidated statement of operations. Tax Distributions to Desert Newco's Owners Desert Newco is subject to an operating agreement put in place at the date of the Merger. The agreement has numerous provisions related to allocations of income and loss, as well as timing and amounts of distributions to its owners. This agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Desert Newco. These tax distributions are computed based on an assumed income tax rate equal to the sum of (i) the maximum marginal federal income tax rate applicable to an individual and (ii) 7% . The assumed income tax rate currently totals 46.6% , which will increase to 50.4% in certain cases when the tax on net investment income is applicable. In addition, under the tax rules, Desert Newco is required to allocate taxable income disproportionately to its unit holders. Because tax distributions are determined based on the holder of LLC Units who is allocated the largest amount of taxable income on a per unit basis, but are made pro rata based on ownership, Desert Newco is required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes Desert Newco would have otherwise paid. Desert Newco is subject to entity level taxation in certain states, and certain of its subsidiaries are subject to entity level U.S. and foreign income taxes. As a result, the accompanying consolidated statements of income include income tax expense related to those states and to U.S. and foreign jurisdictions where we or any of our subsidiaries are subject to income tax. During 2015 , Desert Newco paid tax distributions of $0.3 million to its owners, excluding us, including $0.1 million each to Holdings, KKR and SLP. As of December 31, 2015 , we have accrued $5.3 million for estimated tax distributions to Desert Newco's owners, excluding us, which are included in accrued expenses and other current liabilities and will be paid in March 2016. This accrued amount will be paid based on ownership as of the payment date and is estimated as follows: $2.1 million to Holdings, $1.1 million to KKR, $1.1 million to SLP, $0.6 million to TCV and $0.4 million to other Desert Newco owners. No tax distributions were paid in 2014 or 2013 . |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss attributable to GoDaddy Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted loss per share is computed giving effect to all potentially dilutive shares, including outstanding options, RSUs and warrants. Diluted loss per share for all periods presented is the same as basic loss per share as the inclusion of potentially issuable shares would be antidilutive. For purposes of calculating loss per share for periods prior to the IPO, including 2015 for which a portion of the period preceded the IPO, we treated the Reorganization Transactions as a merger of entities under common control. Therefore, we have retrospectively reflected loss per share as though these transactions had occurred as of the earliest period presented. For all periods prior to the IPO, we allocated our historical net loss between the Class A stockholders and the non-controlling interest based on their respective share ownership. For these allocations, the weighted average shares of Class A common stock outstanding was based upon the number of LLC Units held by the Reorganization Parties, while the weighted average shares of Class B common stock outstanding for the non-controlling interest was based upon the LLC Units held by the Continuing LLC Owners. These calculations do not consider the 26,000 shares of Class A common stock sold in our IPO. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share is as follows: Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (120.4 ) $ (143.3 ) $ (199.9 ) Less: net loss attributable to non-controlling interests (73.0 ) (100.1 ) (138.6 ) Net loss attributable to GoDaddy Inc. $ (47.4 ) $ (43.2 ) $ (61.3 ) Denominator: Weighted-average shares of Class A common stock outstanding—basic 58,676 38,826 38,826 Effect of dilutive securities — — — Weighted-average shares of Class A common stock outstanding—diluted 58,676 38,826 38,826 Net loss per share of Class A common stock—basic and diluted $ (0.81 ) $ (1.11 ) $ (1.58 ) During 2015 , 2014 and 2013 , we had 15,298 , 10,519 and 5,232 weighted-average potentially dilutive shares (options, RSUs and warrants), respectively, which were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive. Shares of Class B common stock do not share in our earnings and are not participating securities. Accordingly, separate presentation of loss per share of Class B common stock under the two-class method has not been presented. Each share of Class B common stock (together with a corresponding LLC Unit) is exchangeable for one share of Class A common stock. The shares of Class B common stock were determined to be antidilutive under the if-converted and two-class methods; therefore, they are not included in the computation of net loss per share. Total shares of common stock outstanding were as follows: December 31, 2015 2014 (1) Class A common stock 67,083 38,826 Class B common stock 90,398 90,177 157,481 129,003 (1) Shares for December 31, 2014 have been retrospectively adjusted to give effect to the Reorganization Transactions. |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Revenue by geography is based on the customer's address, and was as follows: Year Ended December 31, 2015 2014 2013 U.S. $ 1,192.6 $ 1,038.8 $ 862.8 International 414.7 348.5 268.0 $ 1,607.3 $ 1,387.3 $ 1,130.8 No individual international country represented more than 10% of total revenue in any period presented. Substantially all of our assets are located in the U.S. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Sponsors Amounts paid to affiliates of the Sponsors related to their participation as lenders under our Credit Facility were as follows: Year Ended December 31, 2015 2014 2013 Principal $ 5.3 $ 0.2 $ 16.7 Interest and other fees 1.4 1.5 1.5 Debt financing fees — 0.7 0.5 As of December 31, 2015 and 2014 , affiliates of KKR held $28.8 million and $29.1 million , respectively, of the outstanding principal balance of the Term Loan as participating lenders. Additionally, as of December 31, 2014 , affiliates of KKR held $5.0 million of the outstanding principal balance of the Revolving Credit Loan as participating lenders, which was repaid in April 2015 . On December 16, 2011 , we entered into a transaction and monitoring fee agreement with affiliates of certain of the Sponsors pursuant to which those entities provided management and advisory services. In April 2015, we made a final aggregate payment of $26.7 million upon the termination of this agreement following the completion of the IPO, which was charged to general and administrative expenses. This payment was equal to the present value of the management fees that would have been payable during the ten-year period following termination. Following this payment, we have no further obligations under this agreement. During 2015 , 2014 , and 2013 , we paid $27.3 million , $2.3 million , and $2.2 million respectively, under this arrangement. In addition, on December 16, 2011 , we entered into a separate indemnification agreement with such parties, pursuant to which we agreed to provide customary indemnification to them and their affiliates. We received consulting services from an affiliate of KKR. We paid $0.1 million and $3.1 million under this arrangement during 2014 and 2013 , respectively. We did not receive any consulting services during 2015 . Desert Newco pays tax distributions to its owners, including the Sponsors. See Note 12 for details of the amounts paid and payable to the Sponsors. Bob Parsons and Holdings On December 16, 2011 , we entered into a services agreement with Bob Parsons pursuant to which we were obligated to provide customary benefits and to reimburse up to $0.5 million of business expenses annually. In April 2015 , we paid $3.0 million upon the termination of this agreement following the completion of the IPO, which was charged to general and administrative expenses. Following this payment, we have no further obligations under this agreement. We made no other material payments under this arrangement during any of the periods presented. Holdings participated as a lender under our Credit Facility until March 2013 and we also paid interest to Holdings under the Senior Note prior to its repayment in April 2015. Payments made to Holdings under these arrangements, other than those associated with the repayment of the Senior Note described in Note 9 , were as follows: Year Ended December 31, 2015 2014 2013 Interest on the Senior Note $ 9.2 $ 27.0 $ 27.0 Principal payments under the Credit Facility — — 49.5 Interest and other fees under the Credit Facility — — 0.5 Holdings has indemnified us for certain taxes related to periods prior to December 16, 2011 and we have agreed to provide customary indemnification to Bob Parsons related to his service to us. Desert Newco pays tax distributions to its owners, including Holdings. See Note 12 for details of the amounts paid and payable to Holdings. Other In the ordinary course of business, we purchase and lease computer equipment, technology licensing and software maintenance and support from affiliates of Dell Inc. (Dell). Silver Lake and its affiliates have a material ownership interest in Dell. During 2015 , 2014 , and 2013 , we paid $17.5 million , $16.1 million and $19.1 million , respectively, to Dell. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table contains selected unaudited consolidated statement of operations information for each quarter of 2015 and 2014. The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Our unaudited quarterly results were as follows: Three Months Ended Dec. 31, 2015 Sept. 30, 2015 Jun. 30, 2015 Mar. 31, 2015 Dec. 31, 2014 Sept. 30, 2014 Jun. 30, 2014 Mar. 31, 2014 Total revenue $ 425.4 $ 411.1 $ 394.5 $ 376.3 $ 371.7 $ 356.9 $ 338.5 $ 320.2 Operating income (loss) $ 12.8 $ 10.3 $ (33.6 ) $ (20.5 ) $ (2.7 ) $ (6.6 ) $ (18.5 ) $ (34.1 ) Net loss $ (0.5 ) $ (5.2 ) $ (71.3 ) $ (43.4 ) $ (26.8 ) $ (27.6 ) $ (37.6 ) $ (51.3 ) Net income (loss) attributable to GoDaddy Inc. $ 0.1 $ (2.5 ) $ (29.8 ) $ (43.4 ) $ (26.8 ) $ (27.6 ) $ (37.6 ) $ (51.3 ) Net income (loss) per share of Class A common stock—basic and diluted $ 0.00 $ (0.04 ) $ (0.46 ) $ (0.34 ) $ (0.21 ) $ (0.21 ) $ (0.29 ) $ (0.40 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In January and February 2016 , we granted options to purchase an aggregate of 634 shares of Class A common stock with a weighted-average exercise price of $28.65 per option. The weighted-average grant date fair value of these awards was determined to be $11.20 per option, which will be recognized as compensation expense over the required future service period of each award, taking into account the probability of our achievement of any associated predetermined performance targets. In February 2016 , we granted 1,267 RSUs with a weighted-average grant date fair value of $29.34 per share, which will be recognized as compensation expense over the required future service period of each award, taking into account the probability of our achievement of any associated predetermined performance targets. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation |
Prior Period Reclassifications | Prior Period Reclassifications Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. Our more significant estimates include: • the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements; • the fair value of assets acquired and liabilities assumed in business combinations; • the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets; • the estimated reserve for refunds; • the estimated useful lives of intangible and depreciable assets; • the grant date fair value of equity-based awards; • the recognition, measurement and valuation of current and deferred income taxes; • the recognition and measurement of amounts payable under tax receivable agreements; • the recognition and measurement of amounts payable as tax distributions to Desert Newco's owners; and • the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities. We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates. |
Segments and Reporting Units | Segments and Reporting Units Our chief operating decision maker function is comprised of our Chief Executive Officer and Chief Operating Officer, who collectively review financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance for the entire company. Accordingly, we have a single operating segment and reporting unit structure. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, other highly liquid investments purchased with a remaining maturity of 90 days or less at the date of acquisition and payments related to third-party payment processor transactions normally received within 72 hours. |
Short-Term Investments | Short-Term Investments Our short-term investments consist of certificates of deposit or bank time deposits with an original maturity in excess of 90 days, which are carried at fair value. The estimated fair value of our short-term investments is determined based on quoted market prices and approximated historical cost. We did not have any material realized or unrealized gains or losses on sales of short-term investments during any of the periods presented. We classify our short-term investments as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. We may sell our short-term investments at any time for use in current operations or for other purposes, such as consideration for acquisitions, even if they have not yet reached maturity. As a result, we classify our short-term investments, including investments with maturities beyond 12 months, as current assets. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are carried at invoiced amounts. We evaluate our receivables for collectability and record an allowance for doubtful accounts as necessary. |
Prepaid Domain Name Registry Fees | Prepaid Domain Name Registry Fees Prepaid domain name registry fees represent amounts charged by a registry at the time a domain is registered or renewed. These amounts are amortized to cost of revenue over the same period revenue is recognized for the related domain registration contract. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation, including for assets acquired under capital leases, is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service. We regularly evaluate the estimated remaining useful lives of our property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are charged to expense as incurred. Property and equipment consisted of the following: Estimated Useful Lives December 31, 2015 2014 Land Indefinite $ 9.0 $ 9.0 Computer equipment 3 years 248.7 209.5 Buildings, including improvements 2-25 years 112.8 102.5 Software 3 years 28.5 24.6 Leasehold improvements Lesser of useful life or remaining lease term 34.1 28.0 Other 1-7 years 9.8 7.6 Building acquired under lease financing obligation 40 years 18.1 18.1 Total property and equipment 461.0 399.3 Less accumulated depreciation and amortization (236.0 ) (178.4 ) Property and equipment, net $ 225.0 $ 220.9 |
Capitalized Internal-Use Software Costs | Capitalized Internal-Use Software Costs Costs incurred to develop software for internal-use during the application development phase and for our websites are capitalized and amortized over such software’s estimated useful life. Costs related to the design or maintenance of internal-use software are included in technology and development expenses as incurred. Costs capitalized during all periods presented have not been material. |
Goodwill | Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Indefinite-lived intangible assets consist of trade names and branding acquired in the Merger and our acquired domain portfolio. Goodwill and indefinite-lived intangible assets are not amortized to earnings, but are assessed for impairment at least annually. As individual domains are sold, our indefinite-lived domain portfolio intangible asset is reduced by the allocated carrying cost of each domain, which is included in cost of revenue. We assess impairment annually for our single reporting unit during the fourth quarter of each year. We also perform an assessment at other times if events or changes in circumstances indicate the carrying value of our goodwill or indefinite-lived trade names and branding may not be recoverable. If, based on qualitative analysis, we determine it is more-likely-than-not the fair value of our reporting unit is less than its carrying amount, a two-step impairment test is performed. Our qualitative analysis did not indicate impairment of such assets during any of the periods presented. |
Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. Indefinite-lived intangible assets consist of trade names and branding acquired in the Merger and our acquired domain portfolio. Goodwill and indefinite-lived intangible assets are not amortized to earnings, but are assessed for impairment at least annually. As individual domains are sold, our indefinite-lived domain portfolio intangible asset is reduced by the allocated carrying cost of each domain, which is included in cost of revenue. We assess impairment annually for our single reporting unit during the fourth quarter of each year. We also perform an assessment at other times if events or changes in circumstances indicate the carrying value of our goodwill or indefinite-lived trade names and branding may not be recoverable. If, based on qualitative analysis, we determine it is more-likely-than-not the fair value of our reporting unit is less than its carrying amount, a two-step impairment test is performed. Our qualitative analysis did not indicate impairment of such assets during any of the periods presented. |
Finite-Lived Intangible Assets | Long-Lived Assets and Finite-Lived Intangible Assets Finite-lived intangible assets are amortized over their estimated useful lives, which are as follows: Customer relationships acquired in the Merger 9 years Customer relationships 1-5 years Developed technology 1-7 years Trade names 1-5 years Other 3 years Customer relationships are primarily amortized based on expected customer attrition. Developed technology, finite-lived trade names and other intangibles are amortized on a straight-line basis. We regularly evaluate the estimated remaining useful lives of our intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. |
Impairment of Long-Lived and Finite-Lived Intangible Assets | Long-lived assets and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than the carrying amount of the asset being evaluated. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. |
Debt Issuance Costs | Debt Issuance Costs We defer and amortize issuance costs, underwriting fees and related expenses incurred in connection with the issuance of debt instruments using the effective interest method over the terms of the respective instruments. Debt issuance costs, other than those associated with our revolving credit loan, are reflected as a direct reduction of the carrying amount of the related debt liability. Debt issuance costs related to our revolving credit loan are reflected as an asset. |
Derivative Financial Instruments | Derivative Financial Instruments We enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in currencies other than the United States (U.S.) dollar. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. We do not hold or issue derivative instruments for speculative or trading purposes. At December 31, 2015 , the total notional amount of such contracts was $104.6 million , all having maturities of 12 months or less. We reflect gains or losses on the effective portion of a cash flow hedge as a component of accumulated other comprehensive income. Gains and losses, once realized, are recorded as a component of accumulated other comprehensive income and are amortized to revenue over the same period in which the underlying hedged amounts are recognized. Any ineffective portion of gains or losses are recorded as other income (expense), net. Such gains or losses were immaterial during all periods presented. Each period, we evaluate the effectiveness of each of our hedges. As of December 31, 2015 , all hedges were considered effective. |
Leases | Leases We lease office and data center space in various locations. Rent expense under operating leases is recognized on a straight-line basis over the lease term taking into consideration rent abatements, scheduled rent increases and any lease incentives. We record assets and liabilities for estimated construction costs incurred under build-to-suit lease arrangements to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon completion of the construction project, we evaluate our level of continuing involvement in the facility. If we maintain significant continuing involvement, we continue to account for the facility as a financing obligation. Otherwise, we record a sale of the facility back to the landlord, and accordingly, the related construction assets and liabilities are removed from our consolidated financial statements. |
Revenue Recognition | Revenue Recognition Revenue is recorded when persuasive evidence of an arrangement exists, delivery of the product has occurred, the selling price is fixed or determinable and collectability is reasonably assured. Payments received in advance of revenue recognition are recorded as deferred revenue. 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 contract term of the applicable product compared to the amount originally expected. Consideration provided to customers for sales incentives or service disruption credits is recorded as a reduction of revenue at the later of the time the related revenue is recognized or when such consideration is offered. Such incentives and credits were not material in any of the periods presented. Revenue arrangements with multiple deliverables are divided into separate units of accounting if each deliverable has stand-alone value to the customer. The majority of our revenue arrangements consist of multiple-element arrangements, with revenue for each unit of accounting recognized as the product or service is delivered to the customer. Our multiple-element arrangements may include a combination of some or all of the following: domain registrations, website hosting products, website building products, Secure Sockets Layer (SSL) certificates and other cloud-based products. Each of these products has stand-alone value and are sold separately. Consideration is allocated to each deliverable at the inception of an arrangement based on relative selling prices. We determine the relative selling price for each deliverable based on our vendor-specific objective evidence of selling price (VSOE) or our best estimate of selling price (BESP), if VSOE is not available. We have determined third-party evidence of selling price (TPE) is not a practical alternative due primarily to the significant variability among available third-party pricing information for similar products and differences in the features of our product offerings compared to other parties. We establish VSOE for certain of our products when a consistent number of stand-alone sales of these products have been priced within a reasonably narrow range. We are unable to establish VSOE when we lack pricing consistency, primarily related to our marketing strategies and variability in pricing due to promotional activity. For products where VSOE is not available, we determine BESP by considering our overall pricing objectives and market conditions. Significant factors taken into consideration include historical and expected discounting practices, the size, volume and term length of transactions, customer demographics, the geographic areas in which our products are sold and our overall go-to-market strategy. We sell our products directly to customers and also through a network of resellers. In certain cases, we act as a reseller of products provided by others. The determination of gross or net revenue recognition is reviewed on a product by product basis and is dependent on whether we act as principal or agent in the transaction. Revenue associated with sales through our network of resellers is recorded on a gross basis as we have determined we are the primary obligor in the contractual arrangements with end customers. The commission paid to resellers is expensed as a cost of revenue over the same period in which the associated revenue is recognized. Domains. Domains revenue primarily consists of domain registrations and renewals, domain privacy, domain application fees, domain back-orders, aftermarket domain sales and fee surcharges paid to ICANN. 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. Fees are recorded as deferred revenue at the time of sale, and revenue, other than for aftermarket domain sales, is recognized as the product or service is delivered to the customer. Aftermarket domain revenue is recognized when control of the domain is transferred to the buyer. Hosting and presence. Hosting and presence revenue primarily consists of website hosting products, website building products, an online shopping cart, search engine optimization and SSL certificates for encrypting data between the online browser and the certificate owner’s server. Fees are recorded as deferred revenue at the time of sale, and revenue is recognized as the product or service is delivered to the customer. Business applications. Business applications revenue primarily consists of email accounts, online calendar, online data storage, third-party productivity applications, email marketing and enrollment fees paid by our resellers. Fees are recorded as deferred revenue at the time of sale, and revenue is recognized as the product or service is delivered to the customer. |
Cost of Revenues | Cost of Revenue (excluding depreciation and amortization) Substantially all cost of revenue relates to domain registration costs. Cost of revenue also includes payment processing fees, reseller commissions, software licensing fees directly related to products sold, professional website development personnel costs and costs associated with sales from our domain portfolio. |
Technology and Development | Technology and Development Technology and development expenses primarily consist of personnel costs associated with the design, development, deployment, testing, operation and enhancement of our products as well as costs associated with the data centers, systems, storage and telecommunications infrastructure supporting those products (excluding depreciation expense). Technology and development expenses also include third-party development costs, localization costs incurred to translate products for international markets and technology licensing and support and maintenance costs. |
Marketing and Advertising, Customer Care and General and Administrative | Marketing and Advertising Marketing and advertising expenses primarily consist of online traffic generation costs, television and radio advertising, spokesperson and event sponsorships, personnel costs associated with our marketing and public relations functions and affiliate program commissions. Advertising costs are expensed either as incurred, at the time a commercial initially airs or when a promotion first appears in the media. Advertising expenses were $177.6 million , $139.4 million and $121.1 million during 2015 , 2014 and 2013 , respectively. At December 31, 2015 , we had contractual commitments for certain marketing agreements with future payments totaling $20.4 million due in 2016 . Customer Care Customer care expenses primarily consist of personnel costs associated with our customer consultation and care team. Customer care expenses also include third-party customer care center operating costs. General and Administrative General and administrative expenses primarily consist of personnel and related overhead costs for our executive leadership, accounting, finance, legal and human resource functions. General and administrative expenses also include professional service fees for audit, legal, tax, accounting and acquisitions, rent for all office space, insurance and other general costs. |
Equity-Based Compensation | Equity-Based Compensation Equity-based awards are accounted for using the fair value method. Grant date fair values are determined using the Black-Scholes option pricing model and a single option award approach. The measurement date for performance vesting options is the date on which the applicable performance criteria are approved by our Board. Key assumptions used in the determination of fair value are as follows: Expected term. The expected term represents the period equity-based awards are expected to be outstanding. Because of the lack of sufficient historical data necessary to calculate the expected term, we use the simple average of the vesting period and the contractual term to estimate the expected term for our equity-based awards. Expected volatility. We determine the expected stock price volatility based on the historical volatilities of our peer group since there is not a sufficient trading history for our Class A common stock. Industry peers consist of several public companies in the technology industry similar to us in size, stage of life cycle and financial leverage. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient trading history of our Class A common stock becomes available. If circumstances change such that the identified companies are no longer similar to us, we will revise our peer group to substitute more suitable companies in this calculation. Expected dividend yield. We use a dividend rate of 0.0% based on our expectation of not paying dividends in the foreseeable future. Risk-free interest rate. We base the risk-free interest rate on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the award on the grant date. The fair value of awards granted was estimated using the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013 Expected term (in years) 6.3 6.5 6.5 Expected volatility 39.1 % 42.2 % 43.9 % Expected dividend yield — — — Risk-free interest rate 1.7 % 1.9 % 1.2 % Historical data is used to estimate the expected number of future award forfeitures, which is adjusted based on actual experience. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to income taxes are included in benefit (provision) for income taxes, and were not material during any of the periods presented. |
Business Combinations | Business Combinations We include the results of operations of acquired businesses as of the respective acquisition dates. Purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. If applicable, we estimate the fair value of contingent consideration payments in determining the purchase price. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date. Contingent consideration is adjusted to fair value in subsequent periods as an increase or decrease in general and administrative expenses. Acquisition related costs are expensed as incurred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014 , the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition from contracts with customers. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015 , the FASB approved a one year deferral of the effective date making the new standard effective for annual and interim reporting periods beginning after December 15, 2017 , with early adoption permitted as of the original effective date. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. We are currently evaluating the timing of our adoption and the impact of this new standard on our consolidated financial statements. In February 2015 , the FASB issued new guidance related to consolidations. The new standard amends the guidelines for determining whether certain legal entities should be consolidated. The new standard is effective for annual and interim reporting periods beginning after December 15, 2015 . The adoption of this guidance in the fourth quarter of 2015 did not have a material impact on our consolidated financial statements. In April 2015 , the FASB issued new guidance related to accounting for fees paid in a cloud computing arrangement. The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for annual and interim reporting periods beginning after December 15, 2015 , with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016 , the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018 , and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating our expected adoption method and the impact of this new standard on our consolidated financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Property and equipment consisted of the following: Estimated Useful Lives December 31, 2015 2014 Land Indefinite $ 9.0 $ 9.0 Computer equipment 3 years 248.7 209.5 Buildings, including improvements 2-25 years 112.8 102.5 Software 3 years 28.5 24.6 Leasehold improvements Lesser of useful life or remaining lease term 34.1 28.0 Other 1-7 years 9.8 7.6 Building acquired under lease financing obligation 40 years 18.1 18.1 Total property and equipment 461.0 399.3 Less accumulated depreciation and amortization (236.0 ) (178.4 ) Property and equipment, net $ 225.0 $ 220.9 |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets are amortized over their estimated useful lives, which are as follows: Customer relationships acquired in the Merger 9 years Customer relationships 1-5 years Developed technology 1-7 years Trade names 1-5 years Other 3 years Intangible assets, net are summarized as follows: December 31, 2015 Gross Carrying Amount Accumulated Amortization Domains Sold Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a n/a $ 445.0 Domain portfolio 61.2 n/a $ (3.7 ) 57.5 Finite-lived intangible assets: Customer-related 361.2 $ (196.8 ) n/a 164.4 Developed technology 210.1 (148.0 ) n/a 62.1 Trade names 11.2 (5.2 ) n/a 6.0 Other 1.1 (0.8 ) n/a 0.3 $ 1,089.8 $ (350.8 ) $ (3.7 ) $ 735.3 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Finite-lived intangible assets: Customer-related 336.9 $ (143.1 ) 193.8 Developed technology 209.5 (107.4 ) 102.1 Trade names 10.9 (2.8 ) 8.1 Other 1.1 (0.4 ) 0.7 $ 1,003.4 $ (253.7 ) $ 749.7 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of awards granted was estimated using the following weighted-average assumptions: Year Ended December 31, 2015 2014 2013 Expected term (in years) 6.3 6.5 6.5 Expected volatility 39.1 % 42.2 % 43.9 % Expected dividend yield — — — Risk-free interest rate 1.7 % 1.9 % 1.2 % |
Fair Value, Assets Measured on Recurring Basis | We classify these assets within Level 1 or Level 2 because we use either quoted market prices or alternative pricing sources utilizing market observable inputs to determine their fair value, as follows: December 31, 2015 Level 1 Level 2 Level 3 Total Cash and cash equivalents: Reverse repurchase agreements $ — $ 40.0 $ — $ 40.0 Short-term investments: Certificates of deposit 4.5 — — 4.5 Total assets measured and recorded at fair value $ 4.5 $ 40.0 $ — $ 44.5 December 31, 2014 Level 1 Level 2 Level 3 Total Short-term investments: Bank time deposit $ 3.0 $ — $ — $ 3.0 Total assets measured and recorded at fair value $ 3.0 $ — $ — $ 3.0 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in our goodwill balance: Balance at December 31, 2013 $ 1,627.6 Goodwill related to acquisitions 33.6 Balance at December 31, 2014 1,661.2 Goodwill related to acquisitions 2.2 Balance at December 31, 2015 $ 1,663.4 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net are summarized as follows: December 31, 2015 Gross Carrying Amount Accumulated Amortization Domains Sold Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a n/a $ 445.0 Domain portfolio 61.2 n/a $ (3.7 ) 57.5 Finite-lived intangible assets: Customer-related 361.2 $ (196.8 ) n/a 164.4 Developed technology 210.1 (148.0 ) n/a 62.1 Trade names 11.2 (5.2 ) n/a 6.0 Other 1.1 (0.8 ) n/a 0.3 $ 1,089.8 $ (350.8 ) $ (3.7 ) $ 735.3 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Finite-lived intangible assets: Customer-related 336.9 $ (143.1 ) 193.8 Developed technology 209.5 (107.4 ) 102.1 Trade names 10.9 (2.8 ) 8.1 Other 1.1 (0.4 ) 0.7 $ 1,003.4 $ (253.7 ) $ 749.7 |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets are amortized over their estimated useful lives, which are as follows: Customer relationships acquired in the Merger 9 years Customer relationships 1-5 years Developed technology 1-7 years Trade names 1-5 years Other 3 years Intangible assets, net are summarized as follows: December 31, 2015 Gross Carrying Amount Accumulated Amortization Domains Sold Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a n/a $ 445.0 Domain portfolio 61.2 n/a $ (3.7 ) 57.5 Finite-lived intangible assets: Customer-related 361.2 $ (196.8 ) n/a 164.4 Developed technology 210.1 (148.0 ) n/a 62.1 Trade names 11.2 (5.2 ) n/a 6.0 Other 1.1 (0.8 ) n/a 0.3 $ 1,089.8 $ (350.8 ) $ (3.7 ) $ 735.3 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names and branding $ 445.0 n/a $ 445.0 Finite-lived intangible assets: Customer-related 336.9 $ (143.1 ) 193.8 Developed technology 209.5 (107.4 ) 102.1 Trade names 10.9 (2.8 ) 8.1 Other 1.1 (0.4 ) 0.7 $ 1,003.4 $ (253.7 ) $ 749.7 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Based on the balance of finite-lived intangible assets at December 31, 2015 , expected future amortization expense is as follows: Year Ending December 31: 2016 $ 89.1 2017 52.8 2018 44.6 2019 25.9 2020 20.4 Thereafter — $ 232.8 |
Equity-Based Compensation Pla27
Equity-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table summarizes our option activity: Number of Shares of Class A Common Stock (#) Weighted- Average Grant- Date Fair Value ($) Weighted- Average Exercise Price ($) Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value ($) Outstanding at December 31, 2012 16,288 $ 5.27 Grants, including 167 assumed in acquisitions 10,777 $ 4.98 8.32 Exercises (228 ) 5.09 Forfeitures (1,032 ) 7.93 Outstanding at December 31, 2013 25,805 6.42 Grants 4,787 7.83 16.70 Exercises (1,760 ) 4.26 Forfeitures (2,180 ) 8.14 Outstanding at December 31, 2014 26,652 8.27 Grants 3,926 9.77 23.66 Exercises (1,749 ) 7.65 Forfeitures (1,410 ) 13.47 Outstanding at December 31, 2015 27,419 10.25 6.9 $ 598.3 Vested at December 31, 2015 13,655 6.07 5.8 354.9 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenue, by Arrangement | Deferred revenue consisted of the following: December 31, 2015 2014 Current: Domains $ 497.2 $ 462.9 Hosting and presence 330.8 283.4 Business applications 109.7 75.1 $ 937.7 $ 821.4 Noncurrent: Domains $ 288.5 $ 266.8 Hosting and presence 149.7 131.5 Business applications 40.3 30.9 $ 478.5 $ 429.2 |
Accrued Expenses and Other Cu29
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following: December 31, 2015 2014 Accrued payroll and employee benefits $ 64.7 $ 55.3 Current portion of capital lease obligation 12.0 6.6 Accrued marketing and advertising expenses 10.7 13.3 Accrued indirect tax liabilities 7.1 5.9 Transaction-based taxes payable 4.3 3.4 Accrued other 28.2 30.0 $ 127.0 $ 114.5 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: December 31, 2015 2014 Term Loan due May 13, 2021 (effective interest rate of 5.1% at December 31, 2015 and 5.2% at December 31, 2014) $ 1,083.5 $ 1,094.5 9% Note payable to Holdings (Senior Note) — 300.0 Revolving Credit Loan due May 13, 2019 (effective interest rate of 4.0% at December 31, 2014) — 75.0 Total 1,083.5 1,469.5 Less unamortized original issue discounts on long-term debt (1) (36.8 ) (50.6 ) Less unamortized debt issuance costs (1) (2.7 ) (4.1 ) Less current portion of long-term debt (4.2 ) (4.4 ) $ 1,039.8 $ 1,410.4 (1) Original issue discounts and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the effective interest method. |
Schedule of Maturities of Long-term Debt | Aggregate principal payments, exclusive of any unamortized original issue discounts and debt issuance costs, due on long-term debt as of December 31, 2015 are as follows: Year Ending December 31: 2016 $ 11.0 2017 11.0 2018 11.0 2019 11.0 2020 11.0 Thereafter 1,028.5 $ 1,083.5 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease obligations under capital leases and non-cancelable operating leases with initial terms in excess of one year at December 31, 2015 are as follows: Year Ending December 31: Capital Operating 2016 $ 12.4 $ 40.1 2017 4.5 21.4 2018 0.3 14.8 2019 — 9.9 2020 — 8.2 Thereafter — 34.8 Total minimum payments 17.2 $ 129.2 Less: amount representing interest (0.4 ) Capital lease obligation $ 16.8 |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum payments under this lease as of December 31, 2015 are as follows: Year Ending December 31: 2016 $ 3.2 2017 3.2 2018 3.2 2019 3.2 2020 3.5 Thereafter 15.7 $ 32.0 Future minimum lease obligations under capital leases and non-cancelable operating leases with initial terms in excess of one year at December 31, 2015 are as follows: Year Ending December 31: Capital Operating 2016 $ 12.4 $ 40.1 2017 4.5 21.4 2018 0.3 14.8 2019 — 9.9 2020 — 8.2 Thereafter — 34.8 Total minimum payments 17.2 $ 129.2 Less: amount representing interest (0.4 ) Capital lease obligation $ 16.8 |
Long-term Purchase Commitment | Future minimum obligations under these non-cancelable agreements with initial terms in excess of one year at December 31, 2015 are as follows: Year Ending December 31: 2016 $ 10.9 2017 3.2 2018 0.1 Thereafter — Total minimum payments $ 14.2 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Our tax provision includes federal, state and foreign income taxes. The domestic and foreign components of our loss before income taxes were as follows: Year Ended December 31, 2015 2014 2013 U.S. loss before tax $ (121.2 ) $ (149.0 ) $ (203.4 ) Foreign income before tax 0.6 2.9 2.4 Loss before income taxes $ (120.6 ) $ (146.1 ) $ (201.0 ) The benefit for income taxes was as follows: Year Ended December 31, 2015 2014 2013 Current: Federal $ (0.3 ) $ (0.1 ) $ (0.1 ) State (0.1 ) (0.3 ) — Foreign (2.4 ) (3.6 ) (1.9 ) (2.8 ) (4.0 ) (2.0 ) Deferred: Federal 2.4 4.9 2.9 State 0.4 1.7 0.4 Foreign 0.2 0.2 (0.2 ) 3.0 6.8 3.1 Benefit for income taxes $ 0.2 $ 2.8 $ 1.1 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax rate to our effective income tax rate was as follows: Year Ended December 31, 2015 2014 2013 Expected benefit at federal statutory tax rate (35% for 2015, 34% for 2014 and 2013) $ 42.2 $ 49.7 $ 68.3 Effect of rates due to pass-through entities — (45.8 ) (66.0 ) Income of non-controlling interest (15.6 ) — — Foreign earnings taxed at lower rates (2.2 ) (2.5 ) (1.8 ) State taxes, net of federal benefit 5.4 1.5 0.4 Effect of rates different than statutory 2.8 — — Other (0.7 ) (0.1 ) 0.2 Valuation allowance (31.7 ) — — Benefit for income taxes $ 0.2 $ 2.8 $ 1.1 |
Schedule of Deferred Tax Assets and Liabilities | The components of the net deferred tax assets were as follows: December 31, 2015 2014 Deferred tax assets: Net operating losses $ 131.9 $ 13.9 Credits and incentives 2.6 0.3 Employee compensation 0.5 0.7 Depreciation 0.3 0.1 Investment in Desert Newco 4.7 — Other 0.7 0.9 Valuation allowance (126.9 ) — Total deferred tax assets 13.8 15.9 Deferred tax liabilities: Identified intangible assets (8.4 ) (13.5 ) Total deferred tax liabilities (8.4 ) (13.5 ) Net deferred tax assets $ 5.4 $ 2.4 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share is as follows: Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (120.4 ) $ (143.3 ) $ (199.9 ) Less: net loss attributable to non-controlling interests (73.0 ) (100.1 ) (138.6 ) Net loss attributable to GoDaddy Inc. $ (47.4 ) $ (43.2 ) $ (61.3 ) Denominator: Weighted-average shares of Class A common stock outstanding—basic 58,676 38,826 38,826 Effect of dilutive securities — — — Weighted-average shares of Class A common stock outstanding—diluted 58,676 38,826 38,826 Net loss per share of Class A common stock—basic and diluted $ (0.81 ) $ (1.11 ) $ (1.58 ) |
Schedule of Stock by Class | Total shares of common stock outstanding were as follows: December 31, 2015 2014 (1) Class A common stock 67,083 38,826 Class B common stock 90,398 90,177 157,481 129,003 (1) Shares for December 31, 2014 have been retrospectively adjusted to give effect to the Reorganization Transactions. |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas | Revenue by geography is based on the customer's address, and was as follows: Year Ended December 31, 2015 2014 2013 U.S. $ 1,192.6 $ 1,038.8 $ 862.8 International 414.7 348.5 268.0 $ 1,607.3 $ 1,387.3 $ 1,130.8 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Payments made to Holdings under these arrangements, other than those associated with the repayment of the Senior Note described in Note 9 , were as follows: Year Ended December 31, 2015 2014 2013 Interest on the Senior Note $ 9.2 $ 27.0 $ 27.0 Principal payments under the Credit Facility — — 49.5 Interest and other fees under the Credit Facility — — 0.5 Amounts paid to affiliates of the Sponsors related to their participation as lenders under our Credit Facility were as follows: Year Ended December 31, 2015 2014 2013 Principal $ 5.3 $ 0.2 $ 16.7 Interest and other fees 1.4 1.5 1.5 Debt financing fees — 0.7 0.5 |
Selected Quarterly Financial 36
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The operating results for any quarter are not necessarily indicative of results for any future period. Our unaudited quarterly results were as follows: Three Months Ended Dec. 31, 2015 Sept. 30, 2015 Jun. 30, 2015 Mar. 31, 2015 Dec. 31, 2014 Sept. 30, 2014 Jun. 30, 2014 Mar. 31, 2014 Total revenue $ 425.4 $ 411.1 $ 394.5 $ 376.3 $ 371.7 $ 356.9 $ 338.5 $ 320.2 Operating income (loss) $ 12.8 $ 10.3 $ (33.6 ) $ (20.5 ) $ (2.7 ) $ (6.6 ) $ (18.5 ) $ (34.1 ) Net loss $ (0.5 ) $ (5.2 ) $ (71.3 ) $ (43.4 ) $ (26.8 ) $ (27.6 ) $ (37.6 ) $ (51.3 ) Net income (loss) attributable to GoDaddy Inc. $ 0.1 $ (2.5 ) $ (29.8 ) $ (43.4 ) $ (26.8 ) $ (27.6 ) $ (37.6 ) $ (51.3 ) Net income (loss) per share of Class A common stock—basic and diluted $ 0.00 $ (0.04 ) $ (0.46 ) $ (0.34 ) $ (0.21 ) $ (0.21 ) $ (0.29 ) $ (0.40 ) |
Organization and Background (D
Organization and Background (Details) $ / shares in Units, $ in Millions | Dec. 31, 2015 | Apr. 07, 2015USD ($)member$ / sharesshares | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Class of Stock [Line Items] | |||||
Proceeds from issuance of IPO | $ | $ 482.4 | $ (1.8) | $ 0 | ||
Number of reporting units | segment | 1 | ||||
Number of operating segments | segment | 1 | ||||
Desert Newco, LLC | |||||
Class of Stock [Line Items] | |||||
Ownership percent in Desert Newco | 43.00% | ||||
Investor Corp Mergers | |||||
Class of Stock [Line Items] | |||||
Number of members acquired | member | 4 | ||||
Class A Common Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued during IPO (in shares) | 26,000,000 | ||||
Share price (in USD per share) | $ / shares | $ 20 | ||||
Proceeds from issuance of IPO | $ | $ 491.8 | ||||
Class A Common Stock | Investor Corp Mergers | Private Placement | |||||
Class of Stock [Line Items] | |||||
Shares issued during IPO (in shares) | 38,826,000 | ||||
Class A Common Stock | Affiliated Entity | Unidentified Affiliated Shareholders | |||||
Class of Stock [Line Items] | |||||
Shares issued during IPO (in shares) | 2,500,000 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details) $ in Millions | Apr. 07, 2015agreement | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Entity Information [Line Items] | ||||
Cash and cash equivalents related to payment processor transactions | $ 12.2 | $ 11.6 | ||
Advertising expense | 177.6 | 139.4 | $ 121.1 | |
Reorganization Parties and Continuing LLC Owners | Investor | Tax Receivable Agreement | ||||
Entity Information [Line Items] | ||||
Number of tax receivable agreements | agreement | 5 | |||
Percent of tax benefits owed under tax receivable agreement | 85.00% | |||
Reorganization Parties | Investor | Tax Receivable Agreement | ||||
Entity Information [Line Items] | ||||
Number of tax receivable agreements | agreement | 4 | |||
Cash Flow Hedging | Designated as Hedging Instrument | Foreign Exchange Forward Contract | ||||
Entity Information [Line Items] | ||||
Derivative notional amount | 104.6 | |||
Marketing Agreement | ||||
Entity Information [Line Items] | ||||
Remaining contractual commitment for certain marketing agreements | 20.4 | |||
Other Nonoperating Income (Expense) | ||||
Entity Information [Line Items] | ||||
Foreign currency gain (loss) | $ (3.5) | $ (3) | $ (0.7) |
Summary of Significant Accoun39
Summary of Significant Accounting Policies Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 461 | $ 399.3 | |
Less accumulated depreciation and amortization | (236) | (178.4) | |
Property and equipment, net | 225 | 220.9 | |
Accumulated depreciation | 236 | 178.4 | |
Depreciation | 61.3 | 55.6 | $ 50.2 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 9 | 9 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 248.7 | 209.5 | |
Property and equipment, useful life | 3 years | ||
Buildings, including improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 112.8 | 102.5 | |
Buildings, including improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 2 years | ||
Buildings, including improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 25 years | ||
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 28.5 | 24.6 | |
Property and equipment, useful life | 3 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 34.1 | 28 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 9.8 | 7.6 | |
Other | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 1 year | ||
Other | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 7 years | ||
Building acquired under lease financing obligation | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 18.1 | 18.1 | |
Property and equipment, useful life | 40 years | ||
Acquired under capital lease agreement | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 31.7 | 20.6 | |
Less accumulated depreciation and amortization | (16.1) | (5.9) | |
Accumulated depreciation | $ 16.1 | $ 5.9 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies Schedule of Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Acquired finite-lived intangible assets, estimated useful life | 9 years |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 1 year |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 5 years |
Developed technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 1 year |
Developed technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 7 years |
Trade names | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 1 year |
Trade names | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 5 years |
Other | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 3 years |
Summary of Significant Accoun41
Summary of Significant Accounting Policies Assumptions Used in Valuing Stock Options (Details) - Employee Stock Option | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months 18 days | 6 years 6 months | 6 years 6 months |
Expected volatility | 39.10% | 42.20% | 43.90% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.70% | 1.90% | 1.20% |
Summary of Significant Accoun42
Summary of Significant Accounting Policies Fair value of Assets Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | $ 44.5 | $ 3 |
Reverse repurchase agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | 40 | |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, fair value | 4.5 | 3 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 4.5 | 3 |
Level 1 | Reverse repurchase agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | 0 | |
Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, fair value | 4.5 | 3 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 40 | 0 |
Level 2 | Reverse repurchase agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | 40 | |
Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 0 | 0 |
Level 3 | Reverse repurchase agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | 0 | |
Level 3 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, fair value | $ 0 | $ 0 |
Business Acquisitions (Details)
Business Acquisitions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Business | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)Businessshares | |
Business Acquisition [Line Items] | |||
Aggregate consideration transferred | $ 66.2 | $ 40.7 | $ 156.8 |
Goodwill | $ 1,663.4 | 1,661.2 | $ 1,627.6 |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | Business | 4 | 5 | |
Aggregate consideration transferred | $ 64.7 | 42 | $ 158.5 |
Contingent liability | 0.9 | 2.3 | |
Identified indefinite-lived intangible assets acquired | 60.2 | 10.8 | 59.7 |
Other identified intangible assets acquired | 3.2 | ||
Goodwill | 2.2 | 33.6 | 112.3 |
Net liabilities assumed | $ 0.9 | $ 0.1 | 0.3 |
Weighted average useful life | 2 years 12 days | 4 years 6 months | |
Contingent consideration | $ 3 | ||
Property and equipment acquired | 7.4 | ||
Deferred revenue assumed | 8.1 | ||
Deferred tax liabilities assumed | 7.6 | ||
Business acquisition, value of options assumed | 0.2 | ||
Business acquisition, good not deductible for income taxes | $ 30.8 | ||
Series of Individually Immaterial Business Acquisitions | LLC units | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of shares issued | shares | 365 | ||
Business acquisition, value of shares issued | $ 4.1 | ||
Series of Individually Immaterial Business Acquisitions | Warrants for the purchase of LLC units | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of shares issued | shares | 126 | ||
Business acquisition, value of shares issued | $ 0.6 | ||
One of a Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
LLC units granted as part of employment based vesting | shares | 618 | ||
Value of LLC units granted as part of employment based vesting | $ 7 | ||
Vesting period for units issued | 30 months |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Goodwill [Roll Forward] | ||
Balance, beginning of period | $ 1,661.2 | |
Goodwill related to acquisitions | 2.2 | $ 33.6 |
Balance, end of period | $ 1,663.4 | $ 1,627.6 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (350.8) | $ (253.7) |
Finite-lived intangible assets, net | 232.8 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Domains sold | (3.7) | |
Intangible assets, gross (excluding goodwill) | 1,089.8 | 1,003.4 |
Intangible assets, net (excluding goodwill) | 735.3 | 749.7 |
Trade names and branding | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 445 | 445 |
Domain Portfolio | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill) | 57.5 | |
Indefinite-lived intangible assets (excluding goodwill), gross | 61.2 | |
Domains sold | (3.7) | |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 361.2 | 336.9 |
Finite-lived intangible assets, accumulated amortization | (196.8) | (143.1) |
Finite-lived intangible assets, net | 164.4 | 193.8 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 210.1 | 209.5 |
Finite-lived intangible assets, accumulated amortization | (148) | (107.4) |
Finite-lived intangible assets, net | 62.1 | 102.1 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 11.2 | 10.9 |
Finite-lived intangible assets, accumulated amortization | (5.2) | (2.8) |
Finite-lived intangible assets, net | 6 | 8.1 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1.1 | 1.1 |
Finite-lived intangible assets, accumulated amortization | (0.8) | (0.4) |
Finite-lived intangible assets, net | $ 0.3 | $ 0.7 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets purchased | $ 23.5 | $ 0 | $ 0 |
Amortization expense | $ 97.5 | $ 97.2 | $ 90.4 |
Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average remaining amortization period | 47 months | ||
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets purchased | $ 22.5 | ||
Useful life | 48 months | ||
Customer-related | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 99 months | ||
Developed technology | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 64 months | ||
Trade names | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 58 months | ||
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 3 years | ||
Other | Weighted Average | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life | 36 months |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets - Future Amortization of Finite Lived Intangible Assets (Details) $ in Millions | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 89.1 |
2,017 | 52.8 |
2,018 | 44.6 |
2,019 | 25.9 |
2,020 | 20.4 |
Thereafter | 0 |
Finite-lived intangible assets, net | $ 232.8 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Apr. 07, 2015 | Mar. 31, 2015 | May. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 06, 2015 |
Class of Stock [Line Items] | |||||||
Preferred stock shares authorized | 50,000,000 | 50,000,000 | |||||
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Proceeds from issuance of IPO | $ 482,400,000 | $ (1,800,000) | $ 0 | ||||
Common stock outstanding (in shares) | 157,481,000 | 129,003,000 | |||||
Payments of stock issuance costs | $ 1,800,000 | $ 11,200,000 | |||||
Affiliated Entity | Expense Reimbursement With Related Parties | Sponsors | |||||||
Class of Stock [Line Items] | |||||||
Payments of stock issuance costs | $ 1,300,000 | ||||||
Desert Newco, LLC | |||||||
Class of Stock [Line Items] | |||||||
Assumed blended state income tax rate | 7.00% | ||||||
Assumed income tax rate | 46.60% | ||||||
Assumed income tax rate including tax on net investment income | 50.40% | ||||||
Distributions paid | $ 500,000 | $ 349,000,000 | |||||
Distributions authorized | $ 350,000,000 | ||||||
Desert Newco, LLC | 2011 Unit Incentive Plan | |||||||
Class of Stock [Line Items] | |||||||
Adjustment to exercise price of awards due to antidilution provisions (in USD per share) | $ 2.60 | ||||||
Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock shares authorized | 1,000,000,000 | 1,000,000,000 | |||||
Par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Shares issued | 26,000,000 | ||||||
Share price (in USD per share) | $ 20 | ||||||
Proceeds from issuance of IPO | $ 491,800,000 | ||||||
Common stock outstanding (in shares) | 67,083,000 | 38,826,000 | |||||
Class A Common Stock | Investor Corp Mergers | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Shares issued | 38,826,000 | ||||||
Class B Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock shares authorized | 500,000,000 | 500,000,000 | |||||
Par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Common stock outstanding (in shares) | 90,425,000 | 90,398,000 | 90,177,000 | ||||
LLC Units | Desert Newco, LLC | Investor Corp Mergers | |||||||
Class of Stock [Line Items] | |||||||
Shares issued | 38,826,000 |
Equity-Based Compensation Pla49
Equity-Based Compensation Plans (Details) - USD ($) shares in Thousands | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 40,400,000 | $ 30,100,000 | $ 16,400,000 | |
Additional expense resulting from modification of certain awards | 3,600,000 | $ 3,700,000 | 0 | |
Unrecognized compensation costs | $ 53,800,000 | |||
Weighted average recognition period | 2 years 2 months 12 days | |||
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | $ 2,800,000 | |||
Funds withheld on behalf of employees for future purchases under the ESPP | $ 2,400,000 | |||
2015 Equity Incentive Plan | Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance | 6,050 | |||
Shares rolled over | 9,581 | |||
Annual increase in shares reserved for issuance under equity incentive plan | 20,571 | |||
Annual increase in shares reserved for issuance under equity incentive plan, percent | 4.00% | |||
2015 Equity Incentive Plan | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term | 10 years | |||
2015 Equity Incentive Plan | Employee Stock Option | Time Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for units issued | 4 years | |||
2015 Equity Incentive Plan | Employee Stock Option | Time Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for units issued | 5 years | |||
2015 Equity Incentive Plan | Employee Stock Option | Performance Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ (1,800,000) | |||
2015 Equity Incentive Plan | Employee Stock Option | Performance Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for units issued | 4 years | |||
2015 Equity Incentive Plan | Employee Stock Option | Performance Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period for units issued | 5 years | |||
2011 Unit Incentive Plan | Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance | 4,235 | |||
2011 Unit Incentive Plan and Other Unidentified Plan | Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares rolled over | 28,133 | |||
2015 Employee Stock Purchase Plan | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance | 2,000 | |||
Shares rolled over | 1,325 | |||
Annual increase in shares reserved for issuance under equity incentive plan | 1,000 | |||
Annual increase in shares reserved for issuance under equity incentive plan, percent | 1.00% |
Equity-Based Compensation Pla50
Equity-Based Compensation Plans Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options Outstanding [Roll Forward] | |||
Options outstanding, beginning of period (in shares) | 26,652 | 25,805 | 16,288 |
Grants (in shares) | 3,926 | 4,787 | 10,777 |
Exercises (in shares) | (1,749) | (1,760) | (228) |
Forfeitures (in shares) | (1,410) | (2,180) | (1,032) |
Options outstanding, end of period (in shares) | 27,419 | 26,652 | 25,805 |
Weighted-average grant date fair value of options granted (in dollars per share) | $ 9.77 | $ 7.83 | $ 4.98 |
Weighted Average Exercise Price | |||
Options outstanding, weighted average exercise price, beginning of period (in dollars per share) | 8.27 | 6.42 | 5.27 |
Weighted-average exercise price of options granted (in dollars per share) | 23.66 | 16.70 | 8.32 |
Weighted-average exercise price of options exercised (in dollars per share) | 7.65 | 4.26 | 5.09 |
Weighted-average exercise price of options forfeited (in dollars per share) | 13.47 | 8.14 | 7.93 |
Options outstanding, weighted average exercise price, end of period (in dollars per share) | $ 10.25 | $ 8.27 | $ 6.42 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Options outstanding, weighted average remaining contractual life (in years) | 6 years 10 months 24 days | ||
Options outstanding, aggregate intrinsic value | $ 598.3 | ||
Options vested | 13,655 | ||
Options vested, weighted average exercise price (in dollars per share) | $ 6.07 | ||
Options vested, weighted average remaining contractual life (in years) | 5 years 9 months 18 days | ||
Options vested, aggregate intrinsic value | $ 354.9 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | $ 937.7 | $ 821.4 |
Deferred revenue, noncurrent | 478.5 | 429.2 |
Domains | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 497.2 | 462.9 |
Deferred revenue, noncurrent | 288.5 | 266.8 |
Hosting and presence | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 330.8 | 283.4 |
Deferred revenue, noncurrent | 149.7 | 131.5 |
Business applications | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 109.7 | 75.1 |
Deferred revenue, noncurrent | $ 40.3 | $ 30.9 |
Accrued Expenses and Other Cu52
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 64.7 | $ 55.3 |
Current portion of capital lease obligation | 12 | 6.6 |
Accrued marketing and advertising expenses | 10.7 | 13.3 |
Accrued indirect tax liabilities | 7.1 | 5.9 |
Transaction-based taxes payable | 4.3 | 3.4 |
Accrued other | 28.2 | 30 |
Accrued expenses and other current liabilities | $ 127 | $ 114.5 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | May. 31, 2014 |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,083.5 | $ 1,469.5 | |
Less unamortized original issue discounts on long-term debt | (36.8) | (50.6) | |
Less unamortized deferred financing fees | (2.7) | (4.1) | |
Less current portion of long-term debt | (4.2) | (4.4) | |
Long-term debt, net of current portion | 1,039.8 | 1,410.4 | |
Term Loan | Term Loan Due May 2021 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,083.5 | $ 1,094.5 | |
Less unamortized original issue discounts on long-term debt | $ (5.4) | ||
Effective interest rate | 5.10% | 5.20% | |
Senior Notes | Note Payable Due December 2019 | |||
Debt Instrument [Line Items] | |||
Interest rate | 9.00% | 9.00% | |
Senior Notes | Note Payable Due December 2019 | YAM Special Holdings, Inc | Loans Held by Related Parties | Affiliated Entity | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 0 | $ 300 | |
Line of Credit | Revolving Credit Loan Due May 2019 | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 4.00% | ||
Line of Credit | Revolving Credit Loan Due May 2019 | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 0 | $ 75 | |
Less unamortized deferred financing fees | $ (2.1) | $ (2.7) |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | May. 13, 2014 | Oct. 01, 2013 | Dec. 16, 2011 | Apr. 30, 2015 | May. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 31, 2014 |
Debt Instrument [Line Items] | |||||||||
Long-term Debt | $ 1,083,500,000 | $ 1,469,500,000 | |||||||
Debt discount | 36,800,000 | 50,600,000 | |||||||
Repayment of revolving credit loan | 11,000,000 | 7,600,000 | $ 7,800,000 | ||||||
Interest on long-term debt | 59,100,000 | 75,400,000 | 61,800,000 | ||||||
Unamortized debt discount recorded as loss on debt extinguishment | 7,900,000 | 9,100,000 | 9,300,000 | ||||||
Debt issuance costs | $ 10,700,000 | ||||||||
Unamortized deferred financing fees | 2,700,000 | 4,100,000 | |||||||
Other Current Assets | New Accounting Pronouncement, Early Adoption, Effect | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized deferred financing fees | (4,100,000) | ||||||||
Long-term Debt | New Accounting Pronouncement, Early Adoption, Effect | |||||||||
Debt Instrument [Line Items] | |||||||||
Unamortized deferred financing fees | 4,100,000 | ||||||||
Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Reduction in interest rate margin due to IPO | 0.25% | ||||||||
Reduction of interest rate margin due to meeting leverage covenant | 0.25% | ||||||||
Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Base rate | 1.00% | ||||||||
Basis spread on variable rate | 3.25% | ||||||||
Credit Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Base rate | 2.25% | ||||||||
Basis spread on variable rate | 0.50% | ||||||||
Credit Facility | One-Month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Note Payable Due December 2019 | YAM Special Holdings, Inc | Affiliated Entity | Loans Held by Related Parties | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 9.00% | ||||||||
Repayments of related party debt | $ 316,000,000 | ||||||||
Repayments of principal | 300,000,000 | ||||||||
Prepayment premiums | 13,500,000 | ||||||||
Interest on long-term debt | 2,500,000 | ||||||||
Unamortized debt discount recorded as loss on debt extinguishment | 7,100,000 | ||||||||
Write off of deferred financing costs | 800,000 | ||||||||
Term Loan | Term Loan Due December 2018 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt | $ 750,000,000 | ||||||||
Debt discount, percent | 5.00% | ||||||||
Proceeds from issuance of debt | $ 100,000,000 | $ 712,500,000 | |||||||
Long-term Debt | $ 835,000,000 | ||||||||
Term Loan | Term Loan Due May 2021 | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt | $ 1,100,000,000 | ||||||||
Long-term Debt | 1,083,500,000 | 1,094,500,000 | |||||||
Variance in net present value of cash flows of term loan due to amendment, less than | 1.00% | ||||||||
Debt discount | $ 5,400,000 | 5,400,000 | |||||||
Term Loan | Term Loan Due May 2021 | Level 2 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, fair value | 1,080,800,000 | ||||||||
Line of Credit | Revolving Credit Loan Due December 2016 | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||||
Line of Credit | Revolving Credit Loan Due May 2019 | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||||
Long-term Debt | $ 0 | 75,000,000 | |||||||
Deferred financing fees | $ 1,600,000 | $ 1,600,000 | |||||||
Unused commitment fee | 0.50% | ||||||||
Unused commitment fee upon achievement of certain financial ratios | 0.375% | ||||||||
Repayment of revolving credit loan | $ 75,000,000 | ||||||||
Available borrowing capacity | $ 150,000,000 | ||||||||
Unamortized deferred financing fees | $ 2,100,000 | $ 2,700,000 | |||||||
Senior Notes | Note Payable Due December 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 9.00% | 9.00% | |||||||
Senior Notes | Note Payable Due December 2019 | YAM Special Holdings, Inc | Affiliated Entity | Loans Held by Related Parties | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term Debt | $ 0 | $ 300,000,000 | |||||||
Interest on long-term debt | $ 9,200,000 | $ 27,000,000 | $ 27,000,000 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 11 | |
2,017 | 11 | |
2,018 | 11 | |
2,019 | 11 | |
2,020 | 11 | |
Thereafter | 1,028.5 | |
Long-term Debt | $ 1,083.5 | $ 1,469.5 |
Commitments and Contingencies56
Commitments and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Lease term | 11 years | |||
Monthly rent | $ 0.3 | |||
Renewal term | 5 years | |||
Monthly rent for renewal term, as percent of prevailing market rates | 95.00% | |||
Schedule of Capital Lease Obligations [Line Items] | ||||
Rent expense | $ 42.2 | $ 39.3 | $ 29.6 | |
Lease finance obligation | ||||
Schedule of Capital Lease Obligations [Line Items] | ||||
Capitalized construction costs | $ 18.1 | |||
Property and equipment, useful life | 40 years | |||
Lease financing obligation | 19.9 | |||
Lease finance obligation | Other long-term liabilities | ||||
Schedule of Capital Lease Obligations [Line Items] | ||||
Lease financing obligation, long-term | $ 19.8 |
Commitments and Contingencies F
Commitments and Contingencies Future Minimum Payments (Details) $ in Millions | Dec. 31, 2015USD ($) |
Operating Leases | |
2,016 | $ 40.1 |
2,017 | 21.4 |
2,018 | 14.8 |
2,019 | 9.9 |
2,020 | 8.2 |
Thereafter | 34.8 |
Total minimum payments | 129.2 |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2,016 | 10.9 |
2,017 | 3.2 |
2,018 | 0.1 |
Thereafter | 0 |
Total minimum payments | 14.2 |
Lease finance obligation | |
Schedule of Capital Lease Obligations [Line Items] | |
2,016 | 3.2 |
2,017 | 3.2 |
2,018 | 3.2 |
2,019 | 3.2 |
2,020 | 3.5 |
Thereafter | 15.7 |
Total minimum payments | 32 |
Other capital lease | |
Schedule of Capital Lease Obligations [Line Items] | |
2,016 | 12.4 |
2,017 | 4.5 |
2,018 | 0.3 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Total minimum payments | 17.2 |
Less: amount representing interest | (0.4) |
Capital lease obligation | $ 16.8 |
Commitments and Contingencies L
Commitments and Contingencies Litigation and Indemnifications (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Loss Contingencies [Line Items] | |||||
General and administrative expense | [1] | $ (219.7) | $ (172) | $ (145.8) | |
Sales tax liability | 26.5 | ||||
Accrual (reversal) of sales tax liability | (1.2) | ||||
Payments made against sales tax liability | 17.2 | ||||
Current period sales tax liability expense | 4.1 | ||||
Sales tax liability | $ 5.9 | $ 7.1 | 5.9 | ||
Change in Calculation of Sale Tax | |||||
Loss Contingencies [Line Items] | |||||
Accrual (reversal) of sales tax liability | (3.5) | ||||
Change in Calculation of Sale Tax | Tax Year 2013 | |||||
Loss Contingencies [Line Items] | |||||
Accrual (reversal) of sales tax liability | 6.4 | ||||
Change in Calculation of Sale Tax | Tax Year 2012 | |||||
Loss Contingencies [Line Items] | |||||
Accrual (reversal) of sales tax liability | 1.8 | ||||
Indemnification Agreement | YAM Special Holdings, Inc | |||||
Loss Contingencies [Line Items] | |||||
Sales tax liability | $ 10.1 | ||||
Payments made against sales tax liability | 6.6 | ||||
Indemnification Agreement | YAM Special Holdings, Inc | Change in Calculation of Sale Tax | |||||
Loss Contingencies [Line Items] | |||||
Accrual (reversal) of sales tax liability | 2.9 | ||||
Settlement With an Insurance Carrier | Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement | 7.5 | ||||
General and administrative expense | 5.1 | ||||
Settlement With an Insurance Carrier | Other long-term liabilities | Settled Litigation | Uncollectible Receivables | |||||
Loss Contingencies [Line Items] | |||||
Accrual for estimated loss | $ 2.4 | $ 2.4 | |||
[1] | Costs and operating expenses include equity-based compensation expense as follows:Technology and development of $18.2, $10.4, and $4.7 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyMarketing and advertising of $6.1, $6.1, and $2.6 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyCustomer care of $2.9, $0.8, and $0.6 for the twelve months ended December 31, 2015, 2014, and 2013 respectivelyGeneral and administrative of $13.2, $12.8, and $9.4 for the |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Maximum employee contributions, percent | 100.00% | ||
Employer discretionary matching contribution | $ 8.6 | $ 7.7 | $ 6.8 |
Income Taxes Components of Inco
Income Taxes Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
U.S. loss before tax | $ (121.2) | $ (149) | $ (203.4) |
Foreign income before tax | 0.6 | 2.9 | 2.4 |
Loss before income taxes | (120.6) | (146.1) | (201) |
Current: | |||
Federal | (0.3) | (0.1) | (0.1) |
State | (0.1) | (0.3) | 0 |
Foreign | (2.4) | (3.6) | (1.9) |
Current Income Tax Expense (Benefit) | (2.8) | (4) | (2) |
Deferred: | |||
Federal | 2.4 | 4.9 | 2.9 |
State | 0.4 | 1.7 | 0.4 |
Foreign | 0.2 | 0.2 | (0.2) |
Deferred Income Tax Expense (Benefit) | 3 | 6.8 | 3.1 |
Benefit for income taxes | $ 0.2 | $ 2.8 | $ 1.1 |
Income Taxes Income Tax Rate Re
Income Taxes Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Expected benefit at federal statutory tax rate (35% for 2015, 34% for 2014 and 2013) | $ 42.2 | $ 49.7 | $ 68.3 |
Effect of rates due to pass-through entities | 0 | (45.8) | (66) |
Income of non-controlling interest | (15.6) | 0 | 0 |
Foreign earnings taxed at lower rates | (2.2) | (2.5) | (1.8) |
State taxes, net of federal benefit | 5.4 | 1.5 | 0.4 |
Effect of rates different than statutory | 2.8 | 0 | 0 |
Other | (0.7) | (0.1) | 0.2 |
Valuation allowance | (31.7) | 0 | 0 |
Benefit for income taxes | $ 0.2 | $ 2.8 | $ 1.1 |
Federal statutory rate | 35.00% | 34.00% | 34.00% |
Income Taxes Net Deferred Tax A
Income Taxes Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating losses | $ 131.9 | $ 13.9 |
Credits and incentives | 2.6 | 0.3 |
Employee compensation | 0.5 | 0.7 |
Depreciation | 0.3 | 0.1 |
Investment in Desert Newco | 4.7 | 0 |
Other | 0.7 | 0.9 |
Valuation allowance | (126.9) | 0 |
Total deferred tax assets | 13.8 | 15.9 |
Deferred tax liabilities: | ||
Identified intangible assets | (8.4) | (13.5) |
Total deferred tax liabilities | (8.4) | (13.5) |
Total deferred tax assets | $ 5.4 | $ 2.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Mar. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | Apr. 07, 2015 |
Related Party Transaction [Line Items] | |||||||
Operating loss and tax credit carryforwards | $ 91.8 | ||||||
Valuation allowance | $ 126.9 | $ 0 | |||||
Net operating losses | 131.9 | 13.9 | |||||
Credits and incentives | 2.6 | 0.3 | |||||
Undistributed foreign earnings | 5.1 | ||||||
Additional paid-in capital | 454.6 | 0 | |||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 5.3 | 0 | |||||
Reorganization Parties and Continuing LLC Owners | Investor | Correction of immaterial error in determination of tax-related payable to related parties | |||||||
Related Party Transaction [Line Items] | |||||||
Additional paid-in capital | 18.8 | ||||||
Reorganization Parties and Continuing LLC Owners | Investor | General and administrative | Correction of immaterial error in determination of tax-related payable to related parties | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties pursuant to tax receivable agreements | 0.5 | ||||||
Tax Receivable Agreement | Reorganization Parties and Continuing LLC Owners | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties pursuant to tax receivable agreements | $ 170.9 | 151.6 | $ 170.4 | ||||
Percent of tax benefits owed under tax receivable agreement | 85.00% | ||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 5.3 | ||||||
Potential additional liability under TRA | 112.4 | ||||||
Tax Receivable Agreement | Reorganization Parties and Continuing LLC Owners | Investor | General and administrative | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties pursuant to tax receivable agreements | 0.5 | ||||||
Tax Receivable Agreement | YAM Special Holdings, Inc | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 2.1 | ||||||
Tax Receivable Agreement | Kohlberg Kravis Roberts & Co LP | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 1.1 | ||||||
Tax Receivable Agreement | Silver Lake Partners | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 1.1 | ||||||
Tax Receivable Agreement | Technology Crossover Venture | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | 0.6 | ||||||
Tax Receivable Agreement | Other Desert Newco Owners | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to related parties for tax distributions to Desert Newco, LLC's owners | $ 0.4 | ||||||
Subsidiaries | |||||||
Related Party Transaction [Line Items] | |||||||
Net operating losses | 12.2 | ||||||
Desert Newco, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Assumed blended state income tax rate | 7.00% | ||||||
Assumed income tax rate | 46.60% | ||||||
Assumed income tax rate including tax on net investment income | 50.40% | ||||||
Tax distributions | 0.3 | 0 | $ 0 | ||||
Desert Newco, LLC | YAM Special Holdings, Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Tax distributions | 0.1 | ||||||
Desert Newco, LLC | Kohlberg Kravis Roberts & Co LP | |||||||
Related Party Transaction [Line Items] | |||||||
Tax distributions | 0.1 | ||||||
Desert Newco, LLC | Silver Lake Partners | |||||||
Related Party Transaction [Line Items] | |||||||
Tax distributions | $ 0.1 | ||||||
Deferred Tax Assets, Other | |||||||
Related Party Transaction [Line Items] | |||||||
Valuation allowance | $ 35.1 | ||||||
New Accounting Pronouncement, Early Adoption, Effect | |||||||
Related Party Transaction [Line Items] | |||||||
Deferred tax assets, net | $ (0.9) |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 07, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | ||||||||||||||
Net loss | $ (0.5) | $ (5.2) | $ (71.3) | $ (43.4) | $ (26.8) | $ (27.6) | $ (37.6) | $ (51.3) | $ (77) | $ (120.4) | $ (143.3) | $ (199.9) | ||
Less: net loss attributable to non-controlling interests | (44.8) | 0 | 0 | |||||||||||
Net loss attributable to GoDaddy Inc. | $ 0.1 | $ (2.5) | $ (29.8) | $ (43.4) | $ (26.8) | $ (27.6) | $ (37.6) | $ (51.3) | $ (75.6) | $ (143.3) | $ (199.9) | |||
Denominator: | ||||||||||||||
Weighted-average shares of Class A common stock outstanding—basic | 58,676,000 | 38,826,000 | 38,826,000 | |||||||||||
Effect of dilutive securities | 0 | 0 | 0 | |||||||||||
Weighted-average shares of Class A Common stock outstanding—diluted | 58,676,000 | 38,826,000 | 38,826,000 | |||||||||||
Net loss per share—basic and diluted (in USD per share) | [1] | $ 0 | $ (0.04) | $ (0.46) | $ (0.34) | $ (0.21) | $ (0.21) | $ (0.29) | $ (0.40) | $ (0.81) | $ (1.11) | $ (1.58) | ||
Antidilutive securities excluded from diluted loss per unit calculation (in shares) | 15,298,000 | 10,519,000 | 5,232,000 | |||||||||||
Pro Forma | ||||||||||||||
Numerator: | ||||||||||||||
Less: net loss attributable to non-controlling interests | $ (73) | $ (100.1) | $ (138.6) | |||||||||||
Net loss attributable to GoDaddy Inc. | $ (47.4) | $ (43.2) | $ (61.3) | |||||||||||
Class A Common Stock | ||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||
Shares issued during IPO (in shares) | 26,000,000 | |||||||||||||
Class B Common Stock | ||||||||||||||
Denominator: | ||||||||||||||
Conversion feature of Class B common stock, number of Class A common shares | 1 | 1 | 1 | |||||||||||
Common Stock | Class A Common Stock | ||||||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||||
Shares issued during IPO (in shares) | 26,000,000 | 26,000,000 | ||||||||||||
[1] | Amounts for periods prior to our initial public offering have been retrospectively adjusted to give effect to the organizational transactions described in Note 1. The prior period amounts do not consider the 26,000 shares of Class A common stock sold in our initial public offering. See Note 13. |
Loss Per Share Schedule of Shar
Loss Per Share Schedule of Shares Outstanding (Details) - shares shares in Thousands | Dec. 31, 2015 | Apr. 07, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | |||
Common stock outstanding (in shares) | 157,481 | 129,003 | |
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock outstanding (in shares) | 67,083 | 38,826 | |
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock outstanding (in shares) | 90,398 | 90,425 | 90,177 |
Geographic Information (Details
Geographic Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 425.4 | $ 411.1 | $ 394.5 | $ 376.3 | $ 371.7 | $ 356.9 | $ 338.5 | $ 320.2 | $ 1,607.3 | $ 1,387.3 | $ 1,130.8 |
U.S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 1,192.6 | 1,038.8 | 862.8 | ||||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 414.7 | $ 348.5 | $ 268 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 16, 2011 | |
Related Party Transaction [Line Items] | |||||
Debt financing fees | $ 13.5 | $ 8.4 | $ 4.1 | ||
Long-term Debt | 1,083.5 | 1,469.5 | |||
Interest on long-term debt | 59.1 | 75.4 | 61.8 | ||
Sponsors | Affiliated Entity | Termination Payment for Transaction and Fee Monitoring Agreement | General and administrative expense | |||||
Related Party Transaction [Line Items] | |||||
Transaction and monitoring fees | $ 26.7 | ||||
Sponsors | Affiliated Entity | Transaction and Fee Monitoring Agreement | |||||
Related Party Transaction [Line Items] | |||||
Transaction and monitoring fees | 27.3 | 2.3 | 2.2 | ||
Affiliate of Shareholder | Affiliated Entity | Consulting Service Agreement | |||||
Related Party Transaction [Line Items] | |||||
Transaction and monitoring fees | 0.1 | 3.1 | |||
YAM Special Holdings, Inc | Board of Directors Chairman | Expense Reimbursement With Related Parties | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Annual expense reimbursement | $ 0.5 | ||||
YAM Special Holdings, Inc | Board of Directors Chairman | Special Termination Benefits | |||||
Related Party Transaction [Line Items] | |||||
Transaction and monitoring fees | 3 | ||||
Dell Inc | Affiliated Entity | Purchase and Lease of Computer Equipment, Technology Licensing, Maintenance and Support | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related party | 17.5 | 16.1 | 19.1 | ||
Credit Facility | Affiliates of KKR | Affiliated Entity | Loans Held by Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Repayments of principal | 5.3 | 0.2 | 16.7 | ||
Interest and other fees | 1.4 | 1.5 | 1.5 | ||
Debt financing fees | 0 | 0.7 | 0.5 | ||
Credit Facility | YAM Special Holdings, Inc | Affiliated Entity | Loans Held by Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Repayments of principal | 49.5 | ||||
Interest and other fees | 0.5 | ||||
Term Loan Due May 2021 | Term Loan | |||||
Related Party Transaction [Line Items] | |||||
Long-term Debt | 1,083.5 | 1,094.5 | |||
Term Loan Due May 2021 | Affiliates of KKR | Affiliated Entity | Term Loan | Loans Held by Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Long-term Debt | 28.8 | 29.1 | |||
Revolving Credit Loan Due May 2019 | Affiliates of KKR | Affiliated Entity | Line of Credit | Loans Held by Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Long-term Debt | 5 | ||||
Note Payable Due December 2019 | YAM Special Holdings, Inc | Affiliated Entity | Loans Held by Related Parties | Senior Notes | |||||
Related Party Transaction [Line Items] | |||||
Interest on long-term debt | $ 2.5 | ||||
Note Payable Due December 2019 | YAM Special Holdings, Inc | Affiliated Entity | Senior Notes | Loans Held by Related Parties | |||||
Related Party Transaction [Line Items] | |||||
Long-term Debt | 0 | 300 | |||
Interest on long-term debt | $ 9.2 | $ 27 | $ 27 |
Selected Quarterly Financial 68
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Total revenue | $ 425.4 | $ 411.1 | $ 394.5 | $ 376.3 | $ 371.7 | $ 356.9 | $ 338.5 | $ 320.2 | $ 1,607.3 | $ 1,387.3 | $ 1,130.8 | ||
Operating income (loss) | 12.8 | 10.3 | (33.6) | (20.5) | (2.7) | (6.6) | (18.5) | (34.1) | (31) | (61.9) | (131.9) | ||
Net loss | (0.5) | (5.2) | (71.3) | (43.4) | (26.8) | (27.6) | (37.6) | (51.3) | $ (77) | (120.4) | (143.3) | (199.9) | |
Net income (loss) attributable to GoDaddy Inc. | $ 0.1 | $ (2.5) | $ (29.8) | $ (43.4) | $ (26.8) | $ (27.6) | $ (37.6) | $ (51.3) | $ (75.6) | $ (143.3) | $ (199.9) | ||
Net income (loss) per share—basic and diluted (in USD per share) | [1] | $ 0 | $ (0.04) | $ (0.46) | $ (0.34) | $ (0.21) | $ (0.21) | $ (0.29) | $ (0.40) | $ (0.81) | $ (1.11) | $ (1.58) | |
[1] | Amounts for periods prior to our initial public offering have been retrospectively adjusted to give effect to the organizational transactions described in Note 1. The prior period amounts do not consider the 26,000 shares of Class A common stock sold in our initial public offering. See Note 13. |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares shares in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 29, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted in period | 3,926 | 4,787 | 10,777 | ||
Weighted-average exercise price of options granted (in dollars per share) | $ 23.66 | $ 16.70 | $ 8.32 | ||
Weighted-average grant date fair value of options granted (in dollars per share) | $ 9.77 | $ 7.83 | $ 4.98 | ||
Subsequent Event [Member] | Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted in period | 634 | ||||
Weighted-average exercise price of options granted (in dollars per share) | $ 28.65 | ||||
Weighted-average grant date fair value of options granted (in dollars per share) | $ 11.20 | ||||
Subsequent Event [Member] | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs granted | 1,267 | ||||
Weighted-average grant date fair value of RSUs granted (in dollars per share) | $ 29.34 |
Uncategorized Items - gddy-2015
Label | Element | Value |
Member Units [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ (43,400,000) |
Noncontrolling Interest [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (44,800,000) |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (32,200,000) |
YAM Special Holdings, Inc [Member] | Expense Reimbursement With Related Parties [Member] | Board of Directors Chairman [Member] | ||
Payments of Stock Issuance Costs | us-gaap_PaymentsOfStockIssuanceCosts | $ 100,000 |