UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-36904

GoDaddy Inc.

(Exact name of registrant as specified in its charter)

Delaware	46-5769934
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

2155 E. GoDaddy Way

Tempe, Arizona 85284

(Address of principal executive offices, including zip code)

(480) 505-8800

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share	GDDY	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    ☒    No    ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                    Yes    ☒    No    ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                         ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    ☐    No    ☒

As of October 27, 2023, there were 140,824,771 shares of GoDaddy Inc.'s Class A common stock, $0.001 par value per share, outstanding and 305,740 shares of GoDaddy Inc.'s Class B common stock, $0.001 par value per share, outstanding.

GoDaddy Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended September 30, 2023

TABLE OF CONTENTS

Note About Forward-Looking Statements		ii
PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Stockholders' Deficit	4
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	40
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	41
Item 1A	Risk Factors	41
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3	Defaults Upon Senior Securities	81
Item 4	Mine Safety Disclosures	81
Item 5	Other Information	81
Item 6	Exhibits	81
Signatures		82

i

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this Quarterly Report), including the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors," contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), involving substantial risks and uncertainties. The words "believe," "may," "will," "potentially," "plan," "could," "should," "predict," "ongoing," "estimate," "continue," "anticipate," "intend," "project," "expect," "seek," or the negative of these words, or terms or similar expressions conveying uncertainty of future events or outcomes, or that concern our expectations, strategy, plans or intentions, are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or expected. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements discussed under the heading "Risk Factors" and in our publicly available filings and press releases. These statements include, among other things, those regarding:

•our ability to continue to add new customers and increase sales to our existing customers;

•our ability to develop new solutions and bring them to market in a timely manner;

•our ability to timely and effectively scale and adapt our existing solutions;

•our dependence on establishing and maintaining a strong brand;

•the occurrence of service interruptions and security or privacy breaches and related remediation efforts and fines;

•system failures or capacity constraints;

•the rate of growth of, and anticipated trends and challenges in, our business and in the market for our products;

•our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including changes in technology and development, marketing and advertising, general and administrative and customer care expenses, and our ability to achieve and maintain future profitability;

•our ability to continue to efficiently acquire customers, maintain our high customer retention rates and maintain the level of our customers' lifetime spend;

•our ability to provide high quality customer care;

•the effects of increased competition in our markets and our ability to compete effectively;

•our ability to grow internationally;

•the impact of fluctuations in foreign currency exchange rates on our business and our ability to effectively manage the exposure to such fluctuations;

•our ability to effectively manage our growth and associated investments, including our migration of the vast majority of our applications and services to the public cloud;

•our ability to integrate acquisitions or our entry into new lines of business and our ability to achieve expected results from our integrations and new lines of business;

•our ability to maintain our relationships with our partners;

•adverse consequences of our substantial level of indebtedness and our ability to repay our debt;

•our ability to maintain, protect and enhance our intellectual property;

•our ability to maintain or improve our market share;

•sufficiency of cash and cash equivalents to meet our needs for at least the next 12 months;

•beliefs and objectives for future operations;

•our ability to stay in compliance with laws and regulations currently applicable to, or which may become applicable to, our business both in the United States (U.S.) and internationally;

•economic and industry trends or trend analysis;

•our ability to attract and retain qualified employees and key personnel;

ii

NOTE ABOUT FORWARD-LOOKING STATEMENTS (continued)

•anticipated income tax rates, tax estimates and tax standards;

•interest rate changes;

•the future trading prices of our Class A common stock;

•our expectations regarding the outcome of any regulatory investigation or litigation;

•the amount and timing of future repurchases of our Class A common stock under any share repurchase program;

•the potential impact of shareholder activism on our business and operations;

•our expectations regarding the effectiveness of our 2023 restructuring efforts;

as well as other statements regarding our future operations, financial condition, growth prospects and business strategies.

We operate in very competitive and rapidly-changing environments, and new risks emerge from time-to-time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Quarterly Report may not occur, and actual results could differ materially and adversely from those implied in our forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this Quarterly Report to conform such statements to actual results or to changes in our expectations, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context suggests otherwise, references to "GoDaddy," "Company," "company," "we," "us" and "our" refer to GoDaddy Inc. and its consolidated subsidiaries, including Desert Newco, LLC and its subsidiaries (Desert Newco).

iii

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

GoDaddy Inc.

Consolidated Balance Sheets (unaudited)

(In millions, except shares in thousands and per share amounts)

	September 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	329.2	$	774.0
Accounts and other receivables	75.3		60.1
Prepaid domain name registry fees	469.5		435.7
Prepaid expenses and other current assets	325.3		312.8
Total current assets	1,199.3		1,582.6
Property and equipment, net	198.7		225.6
Operating lease assets	67.5		84.1
Prepaid domain name registry fees, net of current portion	210.0		197.1
Goodwill	3,523.4		3,536.9
Intangible assets, net	1,187.5		1,252.2
Other assets	112.8		95.0
Total assets	$	6,499.2	$	6,973.5
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	125.2	$	130.9
Accrued expenses and other current liabilities	409.7		356.7
Deferred revenue	2,094.7		1,954.0
Long-term debt	18.0		18.2
Total current liabilities	2,647.6		2,459.8
Deferred revenue, net of current portion	803.2		770.3
Long-term debt, net of current portion	3,802.3		3,812.9
Operating lease liabilities, net of current portion	97.2		116.5
Other long-term liabilities	86.1		87.1
Deferred tax liabilities	36.2		56.2
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding	—		—
Class A common stock, $0.001 par value - 1,000,000 shares authorized; 141,989 and 153,830 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	0.1		0.2
Class B common stock, $0.001 par value - 500,000 shares authorized; 307 and 312 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	2,170.0		1,912.6
Accumulated deficit	(3,315.3)		(2,422.6)
Accumulated other comprehensive income	168.9		178.0
Total stockholders' deficit attributable to GoDaddy Inc.	(976.3)		(331.8)
Non-controlling interests	2.9		2.5
Total stockholders' deficit	(973.4)		(329.3)
Total liabilities and stockholders' deficit	$	6,499.2	$	6,973.5

See accompanying notes to consolidated financial statements.

1

GoDaddy Inc.

Consolidated Statements of Operations (unaudited)

(In millions, except shares in thousands and per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Applications & commerce	$	363.3	$	326.0	$	1,053.0	$	946.3
Core platform	706.4		707.2		2,100.8		2,105.1
Total revenue	1,069.7		1,033.2		3,153.8		3,051.4
Costs and operating expenses(1):
Cost of revenue (excluding depreciation and amortization)	396.9		374.3		1,171.4		1,105.0
Technology and development	201.6		199.5		635.8		587.7
Marketing and advertising	86.4		100.4		268.3		317.4
Customer care	75.7		74.0		230.2		230.6
General and administrative	91.6		101.6		278.4		286.9
Restructuring and other	9.8		5.2		79.6		14.8
Depreciation and amortization	40.6		48.5		132.6		145.1
Total costs and operating expenses	902.6		903.5		2,796.3		2,687.5
Operating income	167.1		129.7		357.5		363.9
Interest expense	(44.0)		(35.6)		(135.4)		(104.1)
Loss on debt extinguishment	(1.5)		—		(1.5)		—
Other income (expense), net	6.3		3.1		35.7		0.8
Income before income taxes	127.9		97.2		256.3		260.6
Benefit (provision) for income taxes	3.1		2.8		5.2		(1.5)
Net income	131.0		100.0		261.5		259.1
Less: net income attributable to non-controlling interests	0.3		0.2		0.6		0.5
Net income attributable to GoDaddy Inc.	$	130.7	$	99.8	$	260.9	$	258.6
Net income attributable to GoDaddy Inc. per share of Class A common stock:
Basic	$	0.90	$	0.64	$	1.73	$	1.61
Diluted	$	0.89	$	0.63	$	1.71	$	1.59
Weighted-average shares of Class A common stock outstanding:
Basic	145,484		156,393		150,614		160,150
Diluted	147,291		158,418		153,303		162,665
___________________________
(1) Costs and operating expenses include equity-based compensation expense as follows:
Cost of revenue	$	0.3	$	0.4	$	1.1	$	1.1
Technology and development	42.2		34.4		123.2		102.4
Marketing and advertising	7.1		7.2		21.0		21.7
Customer care	6.1		4.9		18.0		14.6
General and administrative	20.5		18.5		62.0		53.5
Restructuring and other	—		—		2.3		—
Total equity-based compensation expense	$	76.2	$	65.4	$	227.6	$	193.3

See accompanying notes to consolidated financial statements.

2

GoDaddy Inc.

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income	$	131.0	$	100.0	$	261.5	$	259.1
Foreign exchange forward contracts gain (loss), net	8.7		24.2		(7.2)		48.0
Unrealized swap gain (loss), net(1)	7.8		77.7		2.0		216.7
Change in foreign currency translation adjustment	(9.9)		5.4		(3.9)		(19.9)
Comprehensive income	137.6		207.3		252.4		503.9
Less: comprehensive income attributable to non-controlling interests	0.3		0.4		0.6		1.0
Comprehensive income attributable to GoDaddy Inc.	$	137.3	$	206.9	$	251.8	$	502.9
___________________________
(1) Amounts are net of the tax effects reflected below:
Unrealized swap gain (loss), net	$	—	$	—	$	—	$	(2.5)

See accompanying notes to consolidated financial statements.

3

GoDaddy Inc.

Consolidated Statements of Stockholders' Deficit (unaudited)

(In millions, except shares in thousands)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Non- Controlling Interests		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	153,830	$	0.2	312	$	—	$	1,912.6	$	(2,422.6)	$	178.0	$	2.5	$	(329.3)
Net income	—	—		—	—		—		47.3		—		0.1		47.4
Equity-based compensation, including amounts capitalized	—	—		—	—		74.5		—		—		—		74.5
Stock option exercises	132	—		—	—		3.2		—		—		—		3.2
Repurchases of Class A common stock	(1,553)	—		—	—		—		(113.9)		—		—		(113.9)
Impact of derivatives, net	—	—		—	—		—		—		(39.5)		—		(39.5)
Change in foreign currency translation adjustment	—	—		—	—		—		—		2.1		—		2.1
Vesting of restricted stock units and other	1,705	—		(5)	—		0.2		(0.1)		0.1		(0.2)		—
Balance at March 31, 2023	154,114	0.2		307	—		1,990.5		(2,489.3)		140.7		2.4		(355.5)
Net income	—	—		—	—		—		82.9		—		0.2		83.1
Equity-based compensation, including amounts capitalized	—	—		—	—		78.0		—		—		—		78.0
Stock option exercises	115	—		—	—		1.6		—		—		(0.1)		1.5
Repurchases of Class A common stock(1)	(7,019)	(0.1)		—	—		—		(511.5)		—		—		(511.6)
Issuance of Class A common stock under Employee Stock Purchase Plan (ESPP)	299	—		—	—		18.2		—		—		—		18.2
Impact of derivatives, net	—	—		—	—		—		—		17.8		—		17.8
Change in foreign currency translation adjustment	—	—		—	—		—		—		3.9		—		3.9
Vesting of restricted stock units and other	784	—		—	—		(0.1)		0.1				0.1		0.1
Balance at June 30, 2023	148,293	0.1		307	—		2,088.2		(2,917.8)		162.4		2.6		(664.5)
___________________________________________ (1)Includes a 1% excise tax on shares repurchased, net of the fair market value of new share issuances, of $3.8 million.

4

GoDaddy Inc.

Condensed Consolidated Statements of Stockholders' Deficit (unaudited) (continued)

(In millions, except shares in thousands)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Non- Controlling Interests		Total
	Shares	Amount		Shares	Amount
Net income	—	—		—	—		—		130.7		—		0.3		131.0
Equity-based compensation, including amounts capitalized	—	—		—	—		76.7		—		—		—		76.7
Stock option exercises	59	—		—	—		4.9		—		—		—		4.9
Repurchases of Class A common stock(1)	(7,166)	—		—	—		—		(528.2)		—		—		(528.2)
Impact of derivatives, net	—	—		—	—		—		—		16.5		—		16.5
Change in foreign currency translation adjustment	—	—		—	—		—		—		(9.9)		—		(9.9)
Vesting of restricted stock units and other	803	—		—	—		0.2		—		(0.1)		—		0.1
Balance at September 30, 2023	141,989	$	0.1	307	$	—	$	2,170.0	$	(3,315.3)	$	168.9	$	2.9	$	(973.4)

_________________________________

(1)Includes a 1% excise tax on shares repurchased, net of the fair market value of new share issuances, of $4.6 million.

5

GoDaddy Inc.

Condensed Consolidated Statements of Stockholders' Deficit (unaudited) (continued)

(In millions, except shares in thousands)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Non- Controlling Interests		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	166,901	$	0.2	320	$	—	$	1,594.7	$	(1,474.6)	$	(38.6)	$	1.5	$	83.2
Net income	—	—		—	—		—		68.4		—		0.2		68.6
Equity-based compensation, including amounts capitalized	—	—		—	—		62.2		—		—		—		62.2
Stock option exercises	202	—		—	—		8.5		—		—		—		8.5
Repurchases of Class A common stock	(6,532)	—		—	—		—		(750.2)		—		—		(750.2)
Impact of derivatives, net	—	—		—	—		—		—		93.1		—		93.1
Change in foreign currency translation adjustment	—	—		—	—		—		—		(34.3)		—		(34.3)
Vesting of restricted stock units and other	1,115	—		(8)	—		0.2		—		(0.1)		0.1		0.2
Balance at March 31, 2022	161,686	0.2		312	—		1,665.6		(2,156.4)		20.1		1.8		(468.7)
Net income	—	—		—	—		—		90.4		—		0.1		90.5
Equity-based compensation, including amounts capitalized	—	—		—	—		67.5		—		—		—		67.5
Stock option exercises	158	—		—	—		4.9		—		—		—		4.9
Repurchases of Class A common stock	(6,059)	—		—	—		—		(236.3)		—		—		(236.3)
Issuance of Class A common stock under ESPP	302	—		—	—		18.4		—		—		—		18.4
Impact of derivatives, net	—	—		—	—		—		—		69.7		—		69.7
Change in foreign currency translation adjustment	—	—		—	—		—		—		9.0		—		9.0
Vesting of restricted stock units and other	458	—		—	—		(0.1)		—		(0.2)		—		(0.3)
Balance at June 30, 2022	156,545	0.2		312	—		1,756.3		(2,302.3)		98.6		1.9		(445.3)

6

GoDaddy Inc.

Condensed Consolidated Statements of Stockholders' Deficit (unaudited) (continued)

(In millions, except shares in thousands)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Non- Controlling Interests		Total
	Shares	Amount		Shares	Amount
Net income	—	—		—	—		—		99.8		—		0.2		100.0
Equity-based compensation, including amounts capitalized	—	—		—	—		66.1		—		—		—		66.1
Stock option exercises	138	—		—	—		5.5		—		—		(0.1)		5.4
Repurchases of Class A common stock	(1,466)	—		—	—		—		(109.6)		—		—		(109.6)
Impact of derivatives, net	—	—		—	—		—		—		101.9		—		101.9
Change in foreign currency translation adjustment	—	—		—	—		—		—		5.4		—		5.4
Vesting of restricted stock units and other	487	—		—	—		(0.1)		—		(0.2)		0.4		0.1
Balance at September 30, 2022	155,704	$	0.2	312	$	—	$	1,827.8	$	(2,312.1)	$	205.7	$	2.4	$	(276.0)

See accompanying notes to consolidated financial statements.

7

GoDaddy Inc.

Consolidated Statements of Cash Flows (unaudited)

(In millions)

	Nine Months Ended September 30,
	2023		2022
Operating activities
Net income	$	261.5	$	259.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	132.6		145.1
Equity-based compensation expense	227.6		193.3
(Gain) loss on derivative instruments	(9.2)		21.7
Non-cash restructuring charges	—		10.4
Loss on debt extinguishment	1.5		—
Loss on dispositions	16.8		—
Other	16.5		34.4
Changes in operating assets and liabilities, net of amounts acquired:
Prepaid domain name registry fees	(47.3)		(30.3)
Deferred revenue	173.4		132.9
Other operating assets and liabilities	(23.5)		5.1
Net cash provided by operating activities	749.9		771.7
Investing activities
Business acquisitions, net of cash acquired	—		(72.5)
Purchases of intangible assets	(35.4)		(0.4)
Net proceeds received from dispositions	12.4		—
Purchases of property and equipment	(38.0)		(42.6)
Other investing activities	(0.4)		—
Net cash used in investing activities	(61.4)		(115.5)
Financing activities
Proceeds received from:
Issuance of term loans	1,759.9		—
Stock option exercises	9.6		18.8
Issuance of Class A common stock under ESPP	18.2		18.4
Payments made for:
Repurchases of Class A common stock	(1,133.2)		(1,090.5)
Repayment of term loans	(1,780.0)		(24.4)
Other financing obligations	(7.8)		(3.3)
Net cash used in financing activities	(1,133.3)		(1,081.0)
Effect of exchange rate changes on cash and cash equivalents	—		(4.7)
Net decrease in cash and cash equivalents	(444.8)		(429.5)
Cash and cash equivalents, beginning of period	774.0		1,255.7
Cash and cash equivalents, end of period	$	329.2	$	826.2

Cash paid during the period for:
Interest on long-term debt, including impact of interest rate swaps	$	128.3	$	90.7
Income taxes, net of refunds received	$	7.2	$	9.3
Amounts included in the measurement of operating lease liabilities	$	34.0	$	39.4
Supplemental disclosure of non-cash transactions
Operating lease assets obtained in exchange for operating lease liabilities	$	8.4	$	10.3
Accrued purchases of property and equipment at period end	$	1.0	$	5.5
Share repurchases not yet settled	$	17.9	$	5.6

See accompanying notes to consolidated financial statements.

8

GoDaddy Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except shares in thousands and per share amounts)

Note 1	Organization and Background	9
Note 2	Summary of Significant Accounting Policies	10
Note 3	Goodwill and Intangible Assets	12
Note 4	Stockholders' Equity	13
Note 5	Prepaid Expenses and Other Current Assets	14
Note 6	Equity-Based Compensation Plans	14
Note 7	Deferred Revenue	15
Note 8	Accrued Expenses and Other Current Liabilities	16
Note 9	Long-Term Debt	16
Note 10	Derivatives and Hedging	17
Note 11	Leases	20
Note 12	Commitments and Contingencies	21
Note 13	Restructuring and Other Charges and Disposition of Businesses and Related Assets	22
Note 14	Income Taxes	23
Note 15	Income Per Share	23
Note 16	Segment Information	24
Note 17	Accumulated Other Comprehensive Income (Loss)	26

1.    Organization and Background

Organization

We are the sole managing member of Desert Newco, and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by other members. The calculation of non-controlling interests excludes any net income attributable directly to GoDaddy Inc. As of September 30, 2023, we owned approximately 99.8% of Desert Newco.

Basis of Presentation

Our 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.

Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2023.

These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the 2022 Form 10-K).

Use of Estimates

GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ.

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Segments

We report our operating results through two reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 16.

2.    Summary of Significant Accounting Policies

Property and Equipment

Property and equipment, net by geography was as follows:

	September 30, 2023		December 31, 2022
U.S.	$	155.9	$	167.5
France	22.5		28.8
All other international	20.3		29.3
	$	198.7	$	225.6

No other international country represented more than 10% of property and equipment, net in any period presented.

Equity Investments

We hold investments in privately held equity securities, which are recorded in other assets, and were as follows:

	Equity Investments
Equity investments as of December 31, 2022	$	40.5
Fair market value adjustments(1)	14.4
Impairment losses(1)	(2.3)
Additional investments	0.5
Equity investments as of September 30, 2023	$	53.1

_________________________________

(1)Fair market value adjustments and impairment losses are recorded in other income (expense), net.

Revenue Recognition

Disaggregated Revenue

Revenue by major product type was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Applications and commerce	$	363.3	$	326.0	$	1,053.0	$	946.3
Core platform: domains	508.2		494.0		1,493.0		1,462.9
Core platform: other	198.2		213.2		607.8		642.2
	$	1,069.7	$	1,033.2	$	3,153.8	$	3,051.4

No single customer represented over 10% of our total revenue for any period presented.

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Revenue by geography is based on the customer's billing address and was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
U.S.	$	724.2	$	700.6	$	2,126.6	$	2,058.2
International	345.5		332.6		1,027.2		993.2
	$	1,069.7	$	1,033.2	$	3,153.8	$	3,051.4

No international country represented more than 10% of total revenue in any period presented.

See Note 7 for information regarding our deferred revenue.

Assets Recognized from Contract Costs

Fees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the asset relates. Amortization expense of such asset was $194.4 million and $180.3 million for the three months ended September 30, 2023 and 2022, respectively and was $571.6 million and $532.0 million for the nine months ended September 30, 2023 and 2022, respectively.

Restructuring and Other

Restructuring and other primarily represents: (i) charges related to the restructuring activities implemented in the first and third quarters of 2023, which were undertaken to reduce future operating expenses and improve cash flows through a combination of reductions in force and the sale of certain assets and liabilities of our hosting business within our Core segment; and (ii) a charge incurred in the second quarter of 2023 related to the termination of a revenue sharing agreement. See Note 13 for further discussion.

Fair Value Measurements

The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis:

	September 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Time deposits	$	71.0	—		—		$	71.0
Derivative assets	—		219.1		—		219.1
Total assets	$	71.0	$	219.1	$	—	$	290.1
Liabilities:
Derivative liabilities	$	—	$	1.2	$	—	$	1.2
Total liabilities	$	—	$	1.2	$	—	$	1.2

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	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Commercial paper	$	—	$	120.0	$	—	$	120.0
Time deposits	347.3		—		—		347.3
Derivative assets	—		218.5		—		218.5
Total assets	$	347.3	$	338.5	$	—	$	685.8
Liabilities:
Derivative liabilities	$	—	$	4.9	$	—	$	4.9
Total liabilities	$	—	$	4.9	$	—	$	4.9

We have no other material assets or liabilities measured at fair value on a recurring basis.

3.    Goodwill and Intangible Assets

The following table summarizes changes in our goodwill balance by segment:

	A&C		Core		Total
Balance at December 31, 2022	$	1,497.0	$	2,039.9	$	3,536.9
Impact of foreign currency translation	(2.6)		(3.7)		(6.3)
Less: goodwill related to disposition of businesses	—		(3.3)		(3.3)
Other adjustments	—		(3.9)		(3.9)
Balance at September 30, 2023	$	1,494.4	$	2,029.0	$	3,523.4

Intangible assets, net are summarized as follows:

	September 30, 2023
	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding	$	445.0	n/a		$	445.0
Domain portfolio	240.8		n/a		240.8
Contractual-based assets	292.7		n/a		292.7
Finite-lived intangible assets:
Customer-related	446.4		$	(326.3)	120.1
Developed technology	243.4		(196.7)		46.7
Trade names and other	102.5		(60.3)		42.2
	$	1,770.8	$	(583.3)	$	1,187.5

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	December 31, 2022
	Gross  Carrying Amount		Accumulated Amortization		Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding	$	445.0	n/a		$	445.0
Domain portfolio	243.2		n/a		243.2
Contractual-based assets	256.8		n/a		256.8
Finite-lived intangible assets:
Customer-related	487.7		$	(309.0)	178.7
Developed technology	243.9		(171.1)		72.8
Trade names and other	109.8		(54.1)		55.7
	$	1,786.4	$	(534.2)	$	1,252.2

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