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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-29 · 164 added, 173 removed, 228 unchanged (60% of the section changed)

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(Throughout the tables and this discussion and analysis, dollars are in millions, excluding average revenue per user (ARPU), and shares are in thousands.)

We are a global leader serving a large market of entrepreneurs, developing and delivering easy-to-use products in a one-stop shop solution alongside personalized guidance.

We serve a large market of entrepreneurs, through the development and delivery of easy-to-use products in a one stop shop solution alongside personalized guidance.

We serve small businesses, individuals, organizations, developers, designers and domain investors.

We manage and report our business in the following two segments:

• Applications and Commerce (A&C) , which primarily consists of sales of products containing proprietary software, notably our website building products, as well as our commerce products and third-party email and productivity solutions and sales of certain products when they are included in bundled offerings of our proprietary software products.

• Core Platform (Core) , which primarily consists of sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.

• Applications and Commerce (A&C) , which primarily consists of sales of products containing proprietary software, notably our website building products, as well as our proprietary commerce solutions and third-party email and productivity solutions and sales of certain products when they are included in bundled offerings of our proprietary software products.

• Core Platform (Core) , which primarily consists of sales of domain registrations and renewals, aftermarket domain sales, domain protection, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.

We have developed a stable and durable business model driven by strong brand recognition, seamless technology, scale of our business and customer care.

We generate bookings and revenue, which help us measure the success of our efforts, from the sales of our product subscriptions.

In addition, we monitor total bookings as we believe it is an indicator of the expected growth in our revenue and is a supplemental measure of the operating performance of our business.

Total bookings and revenue derived from both of our product categories have increased in each of the last three years, with many of our non-domains products growing faster in recent periods.

The primary factors driving growth in our business are pricing and bundling, seamless technology experience, commerce, cost optimization and retention of high intent customers.

Our key priorities, developments and highlights in these areas include:

Seamless Technology and Airo .

We continue to expand our AI-powered experiences, including Airo, and incorporate AI innovations into our products, services and throughout our operations to make use of efficiencies and increase productivity.

We remain focused on expanding our solutions and operations to stay up to date with these developments in order to maintain and grow our business.

Cost Optimization and Profitability .

During the year ended December 31, 2024, the Company engaged in cost optimization initiatives, including reductions in headcount, decreases in rent and utilities expenses, and reductions in costs associated with data center and systems infrastructure as we continue to migrate to a cloud-based infrastructure.

Pricing and Bundling .

During the year ended December 31, 2024, pricing and bundling initiatives resulted in an increase in bookings and continued strong growth in A&C revenue.

We aim to continue to experiment and utilize various pricing strategies and price points for our solutions.

In addition, as we continue to incorporate AI innovations into our solutions, monetization trends could be affected.

We continue to grow our commerce offerings with tailored OmniCommerce solutions, including point-of-sale systems and SaaS plans with premium features and discounted transaction fees to merchants.

We also continue to enhance our offerings with new AI-powered features that simplify operations for our customers.

Customer Composition.

Strong customer retention continues to drive our business.

Our marketing efforts set out to educate current and potential customers about the depth and breadth of our offerings.

We aim to attract high-intent customers that attach more at the outset of our relationship and over time.

Our onboarding paths and seamless technology are designed to help customers more easily navigate the solutions for their one-stop-shop experience through an integrated platform.

We have focused our efforts here because we know through our long history and vast amount of data that customers with a greater number of products with us retain at higher rates and produce higher lifetime value.

For the year ended December 31, 2024, our customer retention rate was approximately 84%, a slight reduction from the approximate 85% in each of the four years prior, due to divestitures, migrations and the end of life of certain products as part of our efforts to streamline brands outside the GoDaddy platform.

For the year ended December 31, 2024, customer retention for customers within the GoDaddy platform, which represents the vast majority of our customers, was approximately 87%.

In addition, the retention rate for our customers who had been with us for over three years as of December 31, 2024 was approximately 90%.

Greater than 89% of our total revenue was generated by customers who were also customers in the prior year.

We believe the breadth and depth of our solutions, the intelligent and proactive AI-powered experiences and the high quality and responsiveness of our customer care team builds strong relationships with our customers and are key to our high level of customer retention.

To that end, we continue to monitor our customer cohorts to ensure growth and stability of our customer base.

We track revenue and retention rates generated by our annual customer cohorts over time, as well as corresponding marketing and advertising spend.

Financial Highlights

Below are our key consolidated financial highlights for 2024, with comparisons to 2023.

• Total revenue of $4,254.1 million, an increase of 4.0%, or approximately 4.6% on a constant currency basis (1) .

• Total revenue of $4,573.2 million, an increase of 7.5% on a reported and constant currency basis (1) .

• International revenue of $1,459.8 million, an increase of 5.7%, or approximately 5.8% on a constant currency basis (1) .

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• Operating income of $893.5 million, an increase of 63.2%.

• Net income of $1,375.6 million, an increase of 289.8%.

• Net income of $936.9 million, a decrease of 31.9%.

• Normalized EBITDA (3) of $1,395.9 million, an increase of 23.0%.

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(1) Discussion of constant currency is set forth in "Quantitative and Qualitative Disclosures about Market Risk."

(2) Our operating results for the year ended December 31, 2023 included $90.8 million in restructuring and other charges, as further discussed in Note 14 to our financial statements.

(2) Our operating results for the year ended December 31, 2024 and December 31, 2023 included $39.4 million and $90.8 million, respectively, in restructuring and other charges, as further discussed in Note 14 to our financial statements.

Net income for the year ended December 31, 2023 included a $971.8 million benefit for income taxes primarily due to a $1,014.0 million release of the majority of our domestic valuation allowance .

(3) A reconciliation of Normalized EBITDA to net income, its most directly comparable GAAP financial measure, is set forth in "Reconciliation of NEBITDA" below .

Our Financial Model

We have developed a stable and durable business model driven by strong brand recognition, efficient customer acquisition, high customer retention rates and increasing lifetime spend of our customers.

We have broadened our business model over the past several years to encompass a meaningful set of transactional relationships with our customers in areas such as aftermarket, commerce and payments and reseller agreements where one account may give us access to many users.

We have also observed an increase in users that have converted from owning paid to free subscriptions during this time, coinciding with our experimentation with freemium services as our customers engage in more varied types of business with us.

We grew our total customers from 20.1 million as of December 31, 2020 to 21.0 million as of December 31, 2023, through a combination of our industry leading products built on a cloud platform, brand advertising, direct marketing efforts, customer referrals, world-class customer care and acquisitions.

In each of the five years ended December 31, 2023, our customer retention rate was approximately 85%, and in 2023, our retention rate for customers who had been with us for over three years was approximately 92%.

We believe the breadth and depth of our product offerings and the high quality and responsiveness of our customer care team build strong relationships with our customers and are key to our high level of customer retention.

We generate bookings and revenue from sales of product subscriptions.

We offer our subscriptions on a variety of terms, which can range from monthly to multi-annual terms of up to ten years depending on the product.

We monitor total bookings as we typically collect payment at the time of sale and generally recognize revenue ratably over the term of our customer contracts.

Accordingly, we believe total bookings is an indicator of the expected growth in our revenue and is a supplemental measure of the operating performance of our business.

Applications and Commerce .

We generated 33.6% of our 2023 total revenue from the sale of A&C products.

A&C revenue primarily consists of revenue from sales of products containing proprietary software such as Websites + Marketing and Managed WordPress and commerce products such as payment processing fees and point-of-sale (POS) hardware as well as sales of third-party email and productivity solutions such as Microsoft 365.

Total revenue from A&C products grew at a compound annual growth rate (CAGR) of 15.6% over the three years ended December 31, 2023.

Core Platform .

We generated 66.4% of our 2023 total revenue from our Core platform.

Core revenue primarily consists of revenue from sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products.

Total revenue from Core Platform products grew at a CAGR of 5.7% over the three years ended December 31, 2023.

Revenue derived from both of our product categories has increased in each of the last three years, with many of our non-domains products growing faster in recent periods.

In each of the five years ended December 31, 2023, greater than 85% of our total revenue was generated by customers who were also customers in the prior year.

To track our growth and the stability of our customer base, we monitor, among other things, revenue and retention rates generated by our annual customer cohorts over time, as well as corresponding marketing and advertising spend.

We define an annual customer cohort to include each customer who first became a customer during a calendar year.

For example, in 2017, we acquired approximately 5.0 million gross customers, who we collectively refer to as our 2017 cohort, and spent $253.2 million in marketing and advertising expenses.

By the end of 2023, the 2017 cohort had generated an aggregate of approximately $1.9 billion of total bookings and we expect this cohort will continue to generate bookings and revenue in the future.

For the five years ended December 31, 2023, the average annual revenue retention rate of the 2017 cohort was more than 93%, which is calculated by averaging the ratio of the cohort's annual revenue for each of the five years to its annual revenue for each respective preceding year.

We selected the 2017 cohort as an example for this analysis, which we believe helps to illustrate the long-term value of our customers.

Results of Operations

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$ 936.9 20.5 % $ 1,374.8 32.3 % $ 352.2 8.6 %

Non-GAAP Financial Measure and Other Operating Metrics

In addition to our results determined in accordance with GAAP, we believe that Normalized EBITDA, a non-GAAP financial measure, and the following other operating metrics are useful as supplements in evaluating our ongoing operational performance and help provide an enhanced understanding of our business:

Non-GAAP Financial Measures, Operating Metrics and Business Metrics

In addition to our results determined in accordance with GAAP, we believe that the following non-GAAP financial measures, operating metrics and business metrics may be useful as supplements in evaluating our ongoing operational performance:

Year Ended December 31,

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Total customers at period end (in thousands) 20,511 21,026 20,897

Average revenue per user $ 203 $ 197 $ 187

ARPU $ 220 $ 203 $ 197

Domains under management (in thousands) 81,013 83,554 83,857

Normalized EBITDA (NEBITDA).

NEBITDA is a supplemental measure of our operating performance used by management and investors to evaluate our business.

NEBITDA is a supplemental measure of our operating performance used by management to evaluate our business.

We calculate NEBITDA as net income excluding depreciation and amortization, interest expense (net), provision or benefit for income taxes, equity-based compensation expense, acquisition-related costs, restructuring-related expenses and certain other items.

We believe that the inclusion or exclusion of certain recurring and non-recurring items provides a supplementary measure of our core operating results and permits useful alternative period-over-period comparisons of our operations but should not be viewed as a substitute for comparable GAAP measures.

NEBITDA should not be viewed as a substitute for comparable GAAP measures.

Annualized recurring revenue (ARR).

ARR is an operating metric defined as quarterly recurring revenue (QRR) multiplied by four.

QRR represents the quarterly recurring GAAP revenue, net of refunds, from new and renewed subscription-based services.

ARR is an operating metric defined as annualized quarterly recurring GAAP revenue, net of refunds, from new and renewed subscription-based services.

ARR is exclusive of any revenue that is non-recurring, including, without limitation, domain aftermarket, domain transfers, one-time set-up or migration fees and non-recurring professional website services fees.

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Total customers .

We define a customer as an individual or entity with paid transactions in the trailing twelve months or with paid subscriptions as of the end of the period.

A single user may be counted as a customer more than once if they maintain paid subscriptions or transactions in multiple accounts.

Total customers is one way we measure the scale of our business and is an important part of our ability to increase our revenue base.

Average revenue per user .

We define a customer as an individual or entity, each with a unique account and paid transactions in the trailing twelve months or with paid subscriptions as of the end of the period.

Total customers is one way we measure the scale of our business and can be a contributing factor to our ability to increase our revenue base.

Average revenue per user (ARPU) .

We calculate ARPU as total revenue during the preceding 12 month period divided by the average of the number of total customers at the beginning and end of the period.

ARPU provides insight into our ability to sell additional products to customers, though the impact to date has been muted due to our continued growth in total customers.

ARPU is one measure that provides insight into our ability to sell additional products to our customers.

Reconciliation of NEBITDA

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Depreciation and amortization 135.3 171.3 194.6

Equity-based compensation (1)

294.0 264.4 207.9

Interest expense, net 155.4 135.0 124.9

Acquisition-related expenses (2)

Equity-based compensation expense (1)

299.1 294.0 264.4

Interest expense, net of interest income 130.4 155.4 135.0

Acquisition-related expenses, net of reimbursements 0.2 12.1 35.1

Restructuring and other (2)

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_________________________________

(1) The year ended December 31, 2023 excludes $2.3 million of equity-based compensation expense associated with our restructuring plan, which is included within restructuring and other.

(2) The year ended December 31, 2023 includes an adjustment of $6.0 million to a previously-recognized acquisition milestone liability.

(3) In addition to the restructuring and other charges in our statement of operations, other charges include lease-related expenses associated with closed facilities, charges related to certain legal matters, adjustments to the fair value of our equity investments, expenses incurred in relation to the refinancing of our long-term debt and incremental expenses associated with certain professional services.

(1) The year ended December 31, 2024 and 2023 excludes $0.8 million and $2.3 million, respectively, of equity-based compensation expense associated with our restructuring activities, which is included within restructuring and other.

(2) In addition to the restructuring and other in our statements of operations, other charges are primarily composed of lease-related expenses associated with closed facilities, charges related to certain legal matters, adjustments to the fair value of our equity investments, expenses incurred in relation to the refinancing of our long-term debt, and incremental expenses associated with certain professional services.

Year-Over-Year Comparison

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2024 2023 2022 $ change % change $ change % change

Applications & commerce $ 1,430.4 $ 1,279.7 $ 1,128.3 $ 150.7 12 % $ 151.4 13 %

Applications and commerce $ 1,653.0 $ 1,430.4 $ 1,279.7 $ 222.6 16 % $ 150.7 12 %

Core platform 2,920.2 2,823.7 2,811.6 96.5 3 % 12.1 0 %

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Total revenue increased 7.5%, due to the increases in our A&C and Core revenues, as described below:

The 11.8% increase in A&C revenue was primarily driven by:

(i) 11.2% growth in revenue related to our productivity applications, most notably our email solutions;

(ii) 8.2% growth in revenue due to continued customer adoption of our subscription-based products designed to establish and grow online presence;

The 15.6% increase in A&C revenue for the year ended December 31, 2024 was driven by:

(i) 20.3% growth in revenue related to our productivity applications, most notably from our pricing and bundling initiatives;

(ii) 8.7% growth in revenues due to continued customer adoption of our subscription-based products designed to establish and grow an online presence;

and (iii) 40.1% growth in revenue related to our commerce solutions, as continued customer adoption has resulted in an increase in payment volume.

The 0.4% increase in Core revenue was primarily driven by 4.1% growth in domain-related revenues and the continued growth of our registry business, partially offset by a 7.8% decrease in hosting revenues primarily due to end-of-life migrations from certain products, and the divestiture of certain hosting assets during the year.

The 3.4% increase in Core revenue for the year ended December 31, 2024 was driven by 7.1% growth in domain registration and add-on revenues and 5.0% growth in aftermarket revenues due to increasing sales volume.

Partially offsetting these increases was an 11.6% decrease in hosting revenues primarily due to end-of-life and migration activities from certain products and disposition of certain hosting assets.

The following table presents our total bookings for the periods indicated:

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$ 5,038.8 $ 4,603.1 $ 4,413.8 $ 435.7 9 % $ 189.3 4 %

The 4.3% increase in total bookings was primarily driven by continued customer adoption of our productivity solutions and our Websites + Marketing product, partially offset by decreased hosting bookings following the divestiture of certain hosting assets during 2023.

Our bookings growth rate was also impacted by uneven demand patterns related to inflation and continued economic uncertainty.

Our annual refund rate has declined from 5.3% of total bookings in 2021 to 4.4% in 2023.

The 9.5% increase in total bookings for the year ended December 31, 2024 was primarily driven by continued customer adoption of our productivity solutions and related add-ons as well as pricing and bundling initiatives , strength in domains, and continued strong adoption of our website-building presence products and commerce solutions.

Costs and Operating Expenses

Cost of revenue

Costs of revenue are primarily the direct costs incurred in connection with selling an incremental product to our customers.

Substantially all cost of revenue relates to domain registration fees, payment processing fees, third-party commissions and licensing fees for third-party productivity applications.

Cost of revenue primarily represents the direct costs incurred in connection with selling an incremental product to our customers.

Such costs primarily relate to domain registration fees, payment processing fees, third-party commissions and licensing fees for third-party productivity applications.

Similar to our billing practices, we pay domain costs at the time of purchase for the life of each subscription but recognize the costs of service ratably over the term of our customer contracts.

The terms for domain costs are established by agreements between registries and registrars and can vary significantly depending on the TLD.

We expect cost of revenue to increase in absolute dollars in future periods due to increased sales of domains and third-party productivity applications as well as continued growth in our customer base.

The terms for domain costs are established by agreements between registries and registrars and can vary significantly depending on the top-level domain (TLD).

We expect cost of revenue to increase in absolute dollars in future periods due to increased sales of domains and third-party productivity applications.

However, cost of revenue may fluctuate as a percentage of total revenue, depending on the mix of products sold in a particular period.

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$ 1,652.0 $ 1,573.6 $ 1,484.5 $ 78.4 5 % $ 89.1 6 %

The 6.0% increase in cost of revenue was primarily attributable to (i) increased software licensing fees resulting from higher sales of productivity solutions, (ii) higher domain costs, which were primarily driven by the increased domain registration revenue as well as cost increases implemented by various TLD registries and (iii) increased costs associated with the growth of our payment processing business.

These increases were partially offset by a decrease in cost of revenue related to our hosting business, which is consistent with the decline in revenue for this business due to end of life migrations away from certain products, the divestiture of certain hosting assets during 2023 and lower demand amid the uncertain macroeconomic environment.

The 5.0% increase in cost of revenue for the year ended December 31, 2024 was driven by:

(i) 7.1% growth in domain registration and add-on revenues and 5.0% growth in aftermarket revenues;

(ii) 20.3% growth in revenue related to our productivity applications, most notably our pricing and bundling initiatives;

(iii) 8.7% growth in revenues due to continued customer adoption of our subscription-based products designed to establish and grow an online presence;

and (iv) 40.1% growth in revenue related to our commerce solutions.

Technology and development

Technology and development expenses represent the costs associated with the creation, development and distribution of our products and websites.

These 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 and systems infrastructure supporting those products, excluding depreciation expense.

We expect technology and development expense to decrease as a percentage of revenue in future periods following a period of investment in product development and migration toward a unified infrastructure platform.

These 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 operation of our data centers and systems infrastructure supporting those products, excluding depreciation expense.

We expect technology and development expenses to decrease as a percentage of revenue in future periods following a period of investment in product development and migration toward a unified infrastructure platform.

Year Ended December 31, 2024 to 2023 2023 to 2022

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$ 814.4 $ 839.6 $ 794.0 $ (25.2) (3) % $ 45.6 6 %

The 5.7% increase in technology and development expenses was primarily due to increased personnel costs driven by higher average headcount associated with our continued investment in product development.

This increase was partially offset by an adjustment recognized during 2023 to a previously-recognized acquisition milestone liability following reassessment of its achievement probability, cloud provider credits recognized in 2023 and decreases in professional fees and infrastructure migration costs.

The 3.0% decrease in technology and development expenses for the year ended December 31, 2024 was attributable to a $13.0 million decrease in personnel costs driven by lower average headcount and acquisition related employee retention payments, and a $6.8 million decrease in legal, professional, and technology license costs.

Additionally, data center and systems infrastructure costs decreased by $12.4 million, offset by a $9.3 million increase in public cloud cost as we migrate to a cloud-based infrastructure.

Marketing and advertising

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$ 356.9 $ 352.9 $ 412.3 $ 4.0 1 % $ (59.4) (14) %

The 14.4% decrease in marketing and advertising expenses was primarily attributable to a lower level of discretionary spending and headcount reductions resulting from our restructuring activities as discussed in Note 14 to our financial statements.

The 1.1% increase in marketing and advertising for the year ended December 31, 2024 was primarily attributable to increased discretionary advertising spend in support of our strategic initiatives.

Customer care

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$ 287.5 $ 304.5 $ 305.9 $ (17.0) (6) % $ (1.4) 0 %

There were no material changes in customer care expenses.

The 5.6% decrease in customer care for the year ended December 31, 2024 was attributable to a $20.1 million decrease in personnel costs driven by lower average headcount in conjunction with cost optimization initiatives including our use of alternative technologies and an increase in hiring in lower cost regions.

General and administrative

General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent for all locations, all employee travel expenses, acquisition-related expenses and other general costs.

General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent for all locations, acquisition-related expenses and other general costs.

We expect general and administrative expenses to fluctuate depending on the level of personnel and other administrative costs required to support our business as well as the significance of any strategic acquisitions we choose to pursue.

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$ 394.2 $ 374.0 $ 385.5 $ 20.2 5 % $ (11.5) (3) %

The 3.0% decrease in general and administrative expenses was primarily due to decreases in acquisition-related costs and facilities expenses, partially offset by increases in indirect tax-related reserves and equity-based compensation expense.

The 5.4% increase in general and administrative expenses for the year ended December 31, 2024 was primarily attributable to a $14.8 million increase in personnel costs, driven by higher stock-based compensation, and an $11.4 million increase in legal and professional costs.

These increases were partially offset by a $6.1 million reduction in rent and utilities expenses, primarily the result of closed facilities and lease abandonments during 2024.

Restructuring and other

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$ 39.4 $ 90.8 $ 15.7 $ (51.4) (57) % $ 75.1 478 %

Restructuring and other of $90.8 million during 2023 primarily includes costs incurred pursuant to restructuring activities in the first and third quarters of 2023, as further discussed in Note 14 to our financial statements, as well as a charge of $17.0 million related to the termination of a revenue sharing agreement.

Restructuring and other of $15.7 million during 2022 primarily includes the impairment and loss on disposition of certain assets.

Restructuring and other of $39.4 million during 2024 primarily includes $18.2 million in severance, employee benefits and equity-based compensation, as well as individually immaterial amounts resulting from non-cash impairment charges and abandonment of certain operating leases.

Restructuring and other of $90.8 million during 2023 primarily includes costs incurred pursuant to restructuring activities as further discussed in Note 14 to our financial statements, as well as a charge of $17.0 million related to the termination of a revenue sharing agreement.

Depreciation and amortization

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$ 135.3 $ 171.3 $ 194.6 $ (36.0) (21) % $ (23.3) (12) %

The $23.3 million decrease in depreciation and amortization expenses was primarily due to technology and customer-related intangible asset dispositions in conjunction with the restructuring activities in 2023 and certain acquired intangibles reaching the end of their useful lives.

The 21.0% decrease for the year ended December 31, 2024 was attributable to a $26.4 million decrease in amortization of acquired intangible assets driven by certain intangible assets reaching the end of their useful life and an $8.1 million decrease in depreciation primarily due to property and equipment being fully depreciated or disposed of during the period.

Interest expense

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$ 158.3 $ 179.0 $ 146.3 $ (20.7) (12) % $ 32.7 22 %

The 22.4% increase in interest expense was primarily driven by the higher effective interest rates on the unhedged portion of our variable-rate debt partially offset by the refinancing of the 2029 Term Loans which reduced our interest margin.

The 11.6% decrease in interest expense for the year ended December 31, 2024 was attributable to the refinancing of the 2029 Term Loans in July 2023, January 2024 and December 2024 and the 2031 Term Loans in May 2024, each of which reduced our interest margin.

See Note 10 to our financial statements for additional discussion.

Other income (expense), net

Year Ended December 31, 2024 to 2023 2023 to 2022

2024 2023 2022 $ change % change $ change % change

Other income (expense), net

$ 34.8 $ 36.9 $ 7.6 $ (2.1) (6) % $ 29.3 386 %

The 5.7% decrease in other income (expense), net for the year ended December 31, 2024 was attributable to the $12.1 million increase in the carrying value of one of our equity investments during the year ended December 31, 2023 which did not occur during the year ended December 31, 2024 as well as a $4.8 million decrease in foreign exchange gains, driven by the

strengthening of the USD relative to other currencies in 2024.

This decrease was partially offset by a $4.4 million increase in interest income from higher invested cash balances.

Loss on debt extinguishment

In 2023, we recognized a loss on debt extinguishment of $1.5 million, primarily related to the refinancing of the 2029 Term Loans.

In 2024, we recognized a loss on debt extinguishment of $4.6 million related to the refinancing of the 2027 and 2029 Term Loans.

In 2023, we recognized a loss on debt extinguishment of $1.5 million related to the refinancing of the 2029 Term Loans.

See Note 10 to our financial statements for additional discussion.

Benefit (provision) for income taxes

During 2023, we released a majority of our domestic valuation allowance on a portion of our deferred tax assets resulting in a $1,014.0 million non-cash income tax benefit, as discussed in Note 16 to our financial statements.

As described below, on January 1, 2024, we completed the DNC Restructure and Desert Newco was converted from a partnership to a disregarded entity for U.S.

income tax purposes, which resulted in a one-time non-cash income tax benefit in the first quarter of 2024 of $267.4 million.

During 2023, we released a majority of our domestic valuation allowance on a portion of our deferred tax assets resulting in a $1,014.0 million non-cash income tax benefit.

This release was related to our U.S.

federal and state domestic NOLs, credit carryforwards and other deferred tax assets (DTAs).

In determining the need for a valuation allowance, we consider both the positive and negative evidence including our ability to forecast future operating results, historical tax losses and our ability to utilize DTAs within the requisite carryforward periods.

In December 2023, management applied judgement and determined the positive evidence outweighed the negative evidence and released the majority of our valuation allowance due to the following factors:

we have been in a three year cumulative consolidated book income position for two years, our operating results and profitability continue to improve, our projections showed sufficient utilization of tax attributes within their requisite carryforward periods and we have not had a history of expiration of tax attributes.

We continue to maintain a valuation allowance against the DTAs for which we concluded it is more-likely-than-not they will not be realized due to certain limitations on character or carryforward period.

The ultimate realization of our DTAs is dependent upon a number of uncertainties including future taxable income of the appropriate character during the requisite carryforward periods.

Our ability to project future operating results was an important factor in determining the need for our valuation allowance.

To assess the amount of tax attributes that could be utilized in the requisite carryforward periods, we prepared projections based on historical results, assessment of business initiatives and the current macroeconomic environment.

Over the last few years, we have continued to grow revenues, expand our profit margins and increase pre-tax income which was used as the basis to form our projections.

In addition, we considered various sensitivities to our projections that included scenarios below our current projections.

In such scenarios, we were able to utilize substantially all our DTAs within the allowed carryforward periods on a more-likely-than-not basis.

Segment Results of Operations

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See Note 18 to our financial statements for a reconciliation of Segment EBITDA to net income, its most directly comparable GAAP financial measure.

Applications & Commerce

Applications and Commerce

The following table presents the results for our A&C segment for the periods indicated:

Year Ended December 31, 2024 to 2023 2023 to 2022

2023 2022 2021 $ change % change $ change % change

2024 2023 2022 $ change %/bps change $ change %/bps change

$ 1,653.0 $ 1,430.4 $ 1,279.7 $ 222.6 16 % $ 150.7 12 %

Segment EBITDA $ 739.3 $ 594.2 $ 522.8 $ 145.1 24 % $ 71.4 14 %

The 11.8% increase in A&C revenue was primarily driven by:

(i) 11.2% growth in revenue related to our productivity applications, most notably our email solutions;

(ii) 8.2% growth in revenues due to continued customer adoption of our subscription-based products designed to establish and grow online presence;

and (iii) 54.0% growth in commerce-related revenue.

The 13.7% increase in A&C Segment EBITDA primarily resulted from the revenue increases noted above, in conjunction with lower discretionary marketing spend.

These increases were partially offset by increased personnel costs resulting from a higher average headcount made to support the continued development of our A&C products.

Segment EBITDA Margin 44.7 % 41.5 % 40.9 % n/a 320 bps n/a 60 bps

The 24.4% increase in A&C Segment EBITDA for the year ended December 31, 2024 was attributed to a $222.6 million increase in revenue as described above.

This increase was partially offset by an increase in cost of revenue resulting from 20.3% growth in revenue related to our productivity applications, most notably our pricing and bundling initiatives and increased adoption of our products containing proprietary software, a 40.1% growth in revenue related to our commerce solutions, and a $20.4 million increase in operating expenses (excluding acquisition-related costs, equity-based compensation expense and depreciation and amortization) attributable to higher technology and development costs and marketing costs.

Core Platform

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Year Ended December 31, 2024 to 2023 2023 to 2022

2023 2022 2021 $ change % change $ change % change

2024 2023 2022 $ change %/bps change $ change %/bps change

$ 2,920.2 $ 2,823.7 $ 2,811.6 $ 96.5 3 % $ 12.1 0 %

Segment EBITDA $ 931.7 $ 816.4 $ 783.7 $ 115.3 14 % $ 32.7 4 %

The 4.2% increase in Core Segment EBITDA primarily resulted from the revenue increases noted above, in conjunction with lower discretionary marketing spend.

These increases were partially offset by cost increases implemented by various TLD registries.

Segment EBITDA Margin 31.9 % 28.9 % 27.9 % n/a 300 bps n/a 100 bps

The 14.1% increase in Core Segment EBITDA for the year ended December 31, 2024 was attributed to a $96.6 million increase in revenue as described above and a $42.1 million decrease in operating expenses (excluding acquisition-related costs and equity-based compensation expense and depreciation and amortization) attributable to lower marketing, customer care and technology and development costs.

Partially offsetting these increases was an increase in cost of revenue due to 7.1% growth in domain registration and add-on revenues and 5.0% growth in aftermarket revenues.

Liquidity and Capital Resources

Our principal sources of liquidity have been cash flow generated from operations, long-term debt borrowings, stock option exercises and Employee Stock Purchase Plan (ESPP) proceeds.

Our principal uses of cash have been to fund operations, acquisitions and capital expenditures, as well as to make mandatory principal and interest payments on our long-term debt and to repurchase shares of our Class A common stock.

Our principal sources of liquidity have been cash flow generated from operations and long-term debt borrowings.

Our principal uses of cash have been to fund operations and capital expenditures, to make mandatory principal and interest payments on our long-term debt and to effectuate our share repurchase program.

Our liquidity position also benefits from U.S.

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federal or state income taxes.

We acquired the right to benefit from the majority of our DTAs when we settled the Tax Receivable Agreements (collectively TRA Settlement Agreements) in 2020.

In connection with executing the TRA Settlement Agreements, we pai d $850.0 million for approximately $1,400.0 million of cash tax benefits, with substantially all of them expected to be realized within the next ten years.

In general, we seek to deploy our capital in a prioritized manner fo cusing first on requirements for our operations, then on growth investments, and finally on stockholder returns.

In general, we seek to deploy our capital by focusing on requirements for our operations, on growth investments and on stockholder returns.

Our strategy is to deploy capital, whether debt, equity or internally generated cash, depending on the adequacy and availability of the source of capital and which source may be used most efficiently and at the lowest cost at such time.

Therefore, while cash from operations is our primary source of operating liquidity and we believe our internally-generated cash flows are sufficient to support our day-to-day operations, we may use a variety of capital sources to fund our needs for less predictable investment decisions such as strategic acquisitions and share repurchases.

We have incurred significant long-term debt, primarily to fund acquisitions, share repurchases and the TRA Settlement Agreements.

As a result, we are limited as to how we conduct our business and may be unable to raise additional debt or equity

financing to compete effectively or to take advantage of new business opportunities, strategic acquisitions or share repurchases.

However, the restrictions under our long-term debt agreements are subject to a number of qualifications and may be amended with the consent of the lenders and the holders of the Senior Notes, as applicable.

We believe our existing cash and cash equivalents and cash generated by operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months.

However, our future capital requirements will depend on many factors, including our growth rate, macroeconomic activity, the timing and extent of spending to support domestic and international development efforts, continued brand development and advertising spend, the level of customer care and general and administrative activities, the introduction of new and enhanced product offerings, the costs to support new and replacement capital equipment, the completion of strategic acquisitions or share repurchases and other factors.

Should we pursue additional strategic acquisitions or share repurchases, we may need to raise additional capital, which may be in the form of long-term debt or equity financings.

Credit Facility and Senior Notes

Our long-term debt consists of the Credit Facility, which includes two tranches of term loans and a revolving credit facility, and the Senior Notes.

In May 2023, we entered into an amendment to the Credit Facility to replace LIBOR on our 2027 Term Loans with the Secured Overnight Financing Rate (SOFR), beginning in July 2023.

In July 2023, we entered into an amendment to the Credit Facility to refinance the 2029 Term Loans.

See Note 10 to our financial statements for additional information regarding our long-term debt.

In January 2024, we entered into an amendment to the Credit Facility to refinance the 2029 Term Loans, as discussed in Note 20 to our financial statements.

Our long-term debt agreements contain covenants restricting, among other things, our ability, or the ability of our subsidiaries, to incur indebtedness, issue certain types of equity, incur liens, enter into fundamental changes including mergers and consolidations, sell assets, make restricted payments including dividends, distributions and investments, prepay junior indebtedness and engage in operations other than in connection with acting as a holding company, subject to customary exceptions.

As of December 31, 2023, we were in compliance with all such covenants and had no amounts drawn on our revolving credit facility.

As discussed in Note 11 to our financial statements, we have hedged a portion of our long-term debt through the use of cross-currency and interest rate swap derivative instruments.

These instruments help us manage and mitigate our risk of exposure to changes in foreign currency exchange rates and interest rates.

See "Quantitative and Qualitative Disclosures About Market Risk" for additional discussion of our hedging activities.

Share Repurchases

As discussed in Note 5 to our financial statements, we are authorized to repurchase up to $4,000.0 million of our Class A common stock.

During the year ended December 31, 2023, we repurchased a total of 17,356 shares of our Class A common stock in the open market for an aggregate purchase price of $1,264.4 million.

As of December 31, 2023, we had $1,435.5 million of remaining authorization available for repurchases.

Restructuring and Other

As further discussed in Note 14 to our financial statements, we undertook restructuring activities in 2023 to reduce future operating expenses and improve cash flows through a combination of reductions in force and a commitment to sell certain assets and liabilities of our hosting business within our Core segment.

Cash payments of $38.7 million related to restructuring activities were made during 2023, with approximately $7.4 million remaining to be paid in 2024.

We expect to make substantially all remaining restructuring payments pursuant to these activities by the end of the second quarter of 2024.

In addition, we made a cash payment of $17.0 million related to the termination of a revenue sharing agreement during 2023.

The following table summarizes our cash flows for the periods indicated:

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Net cash provided by operating activities $ 1,287.7 $ 1,047.6 $ 979.7

Net cash used in investing activities (102.4) (132.0) (635.6)

Net cash provided by (used in) financing activities (1,261.7) (1,326.7) 298.1

Net cash provided by (used in) investing activities 21.5 (102.4) (132.0)

Net cash used in financing activities (677.4) (1,261.7) (1,326.7)

Effect of exchange rate changes on cash and cash equivalents (1.6) 1.3 (2.7)

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Our primary uses of cash from operating activities have been for domain registration costs paid to registries, software licensing fees related to third-party productivity solutions, personnel costs, discretionary marketing and advertising costs, technology and development costs and interest payments.

We expect cash outflows from operating activities to be affected by the timing of payments we make to registries as well as increases in personnel and other operating costs as we continue to grow our business.

Net cash provided by operating activities increased $67.9 million from $979.7 million in 2022 to $1,047.6 million in 2023, primarily driven by the growth in total bookings as well as lower discretionary marketing spending.

These increases were partially offset by payments made pursuant to our restructuring activities, as discussed in Note 14 to our financial statements, higher software licensing fees related to increased sales of third-party productivity solutions, increased costs associated with the growth of our payment processing business and increased cash interest payments.

We expect cash outflows from operating activities to be affected by the timing of payments we make to registries and other operating costs as we continue to grow our business.

Net cash provided by operating activities increased $240.1 million from $1,047.6 million in 2023 to $1,287.7 million in 2024, primarily driven by the growth in total bookings.

Bookings growth was due to strong adoption across our A&C product suite, particularly within productivity solutions as a result of our pricing and bundling initiatives, as well as continued strength in domains.

The increase was also driven by lower restructuring related payments as well as lower technology and development related spending.

Investing Activities

Our investing activities generally consist of strategic acquisitions and purchases of property and equipment to support the overall growth of our business.

Our investing activities generally consist of strategic acquisitions, dispositions and purchases of property and equipment to support the overall growth of our business.

We expect our investing cash flows to be affected by the timing of payments we make for capital expenditures, strategic acquisitions or other growth opportunities we decide to pursue.

Net cash used in investing activities decreased $29.6 million from $132.0 million in 2022 to $102.4 million in 2023, primarily due to a $72.5 million decrease in spending for business acquisitions, partially offset by a $35.0 million increase in purchases of intangible assets and the purchase of short-term investments totaling $40.0 million.

Net cash provided by investing activities increased $123.9 million from $102.4 million net cash used in 2023 to $21.5 million net cash provided in 2024, due to maturities of short-term investments of $40.0 million, a $15.4 million reduction in capital expenditures and $35.4 million of intangible asset purchases that occurred in 2023.

Financing Activities

Our financing activities generally consist of long-term debt borrowings, the repayment of principal on long-term debt, stock option exercise proceeds, ESPP proceeds, payment of certain acquisition-related obligations and share repurchases.

Net cash used in financing activities decreased $65.0 million from $1,326.7 million used in 2022 to $1,261.7 million used in 2023, primarily due to a $34.6 million increase in net proceeds received from the issuance of term loans as a result of the 2029 Term Loans refinancing completed in July 2023 as compared to proceeds from the November 2022 amendment, as discussed in Note 10 to our financial statements, as well as a $24.4 million decrease in share repurchases.

Our financing activities generally consist of long-term debt borrowings, the repayment of principal on long-term debt, stock option exercises, Employee Stock Purchase Plan (ESPP) proceeds and share repurchases.

Net cash used in financing activities decreased $584.3 million from $1,261.7 million used in 2023 to $677.4 million used in 2024, primarily due to a $593.7 million decrease in share repurchases.

Deferred Revenue

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As of December 31, 2024 and 2023, we had no off-balance sheet arrangements that had, or which are reasonably likely to have, a material effect on our financial statements.

Material Cash Requirements and Uses of Cash

Credit Facility and Senior Notes

Our long-term debt consists of the Credit Facility, which includes two tranches of term loans and a revolving credit facility, and the Senior Notes.

In December 2024, we entered into an amendment to the Credit Facility to provide for a new tranche of term loans maturing in 2029 (the 2029 Term Loans).

In May 2024, we entered into an amendment to the Credit Facility to provide for a new tranche of term loans maturing in 2031 (the 2031 Terms Loans), the proceeds of which were used to refinance and extend the maturity of all outstanding 2027 Term Loans and repay a portion of our 2029 Term Loans.

See Note 10 to our financial statements for additional information regarding our long-term debt.

As of December 31, 2024, we were in compliance with all such covenants and had $998.7 million available for borrowing under the Revolver.

As discussed in Note 11 to our financial statements, we have hedged a portion of our long-term debt through the use of cross-currency and interest rate swap derivative instruments.

These instruments help us manage and mitigate our risk of exposure to changes in foreign currency exchange rates and interest rates.

See "Quantitative and Qualitative Disclosures About Market Risk" for additional discussion of our hedging activities.

Share Repurchases

As discussed in Note 5 to our financial statements, we are authorized to repurchase up to $4,000.0 million of our Class A common stock.

During the year ended December 31, 2024, we repurchased a total of 5,179 shares of our Class A common stock in the open market and through accelerated share repurchase (ASR) transactions for an aggregate purchase price of $668.1 million.

As of December 31, 2024, we had $767.4 million of remaining authorization available for repurchases.

Restructuring and Other

As discussed in Note 14 to our financial statements, we undertook restructuring activities in 2024.

Cash payments of $24.4 million related to restructuring activities were made during 2024, with approximately $0.8 million remaining to be paid in 2024 relating to the restructuring activities undertaken during the year.

We expect to make substantially all remaining restructuring payments pursuant to these activities by the end of the second quarter of 2025.

Critical Accounting Policies and Estimates

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We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances, and we evaluate these estimates, assumptions and judgments on an ongoing basis.

Different assumptions and judgments would change the estimates used in the preparation of our financial statements, which, in turn, could change our results from those reported.

Different assumptions and judgments could change the estimates used in the preparation of our financial statements, which, in turn, could change our results from those reported.

We refer to estimates, assumptions and judgments of this type as our critical accounting policies and estimates, which we discuss further below.

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Revenue Recognition

Revenue is recognized when control of a promised good or service (product) is transferred to the customer, in an amount reflecting the consideration we expect to be entitled to in exchange for such product.

Revenue is recognized net of allowances for returns and applicable transaction taxes collected from customers.

Refunds are estimated at contract inception using the expected value method based upon historical refund experience.

Domain registration and renewal revenue is recognized ratably over the registration period as the customer simultaneously receives and consumes the benefits over the contract term.

For each domain registration or renewal, we have one performance obligation consisting of two promises to ensure:

(1) the customer has exclusive use of the domain during the applicable registration term and (2) the domain is accessible and appropriately directed to its underlying content.

After the contract term expires, unless renewed, the customer can no longer access or use the domain.

We have determined these promises are not distinct within our contracts as they are highly interdependent and interrelated and are inputs to a combined benefit.

Accordingly, we concluded that each domain registration or renewal represents one product offering and is a single performance obligation.

We sell our products directly to customers and also through a network of resellers.

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The determination of whether we are a principal or an agent is dependent on whether we control the specific good or service before it is transferred to the customer, including whether we have primary fulfillment responsibility and obligation to perform the services being sold to the customer, whether we have inventory risk and whether we have latitude in establishing pricing.

Revenue associated with sales of our products through a network of resellers is generally recorded on a net basis.

Revenue associated with sales of aftermarket domains and third party solutions, including Microsoft 365, where we act as a reseller of products provided by others is generally recorded on a gross basis as we have determined that we control the product before transferring it to our end customers.

Revenue associated with sales of certain third party solutions, including Microsoft 365, where we act as a reseller of products provided by others is recorded on a gross basis as we have determined that we control the product before transferring it to our end customers.

Revenue associated with aftermarket domain sales, excluding certain immaterial reseller arrangements, is recorded on a gross basis as we have determined that we take control of the domain before transferring it to our end customers.

The determination of gross or net revenue recognition is reviewed on a product-by-product basis.

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See Notes 2 and 3 to our financial statements for additional information regarding business acquisitions.

Goodwill and Indefinite-Lived Intangible Assets

We make estimates, assumptions and judgments when valuing goodwill and other intangible assets in connection with the initial purchase price allocations of business acquisitions, as well as when evaluating the recoverability of our goodwill and other intangible assets on an ongoing basis.

We assess our goodwill and indefinite-lived intangible assets for impairment at least annually during the fourth quarter.

Indefinite-Lived Intangible Assets

We make estimates, assumptions and judgments when valuing indefinite-lived intangible assets in connection with the initial purchase price allocations of business acquisitions, as well as when evaluating the recoverability of our indefinite-lived intangible assets on an ongoing basis.

We assess our indefinite-lived intangible assets for impairment at least annually during the fourth quarter.

We will also perform an assessment at other times if and when events or changes in circumstances indicate the carrying value of these assets may not be recoverable.

We perform our impairment assessment based on qualitative analysis, which includes considering various factors including macroeconomic conditions, industry and market conditions and our historical and projected operating results.

If, based on our qualitative analysis, we were to determine it is more-likely-than-not the fair value of either of our reporting units is less than its carrying amount, a quantitative impairment test would be performed to determine if an impairment loss should be recorded.

Our qualitative analyses during 2023, 2022 and 2021 did not indicate any impairment.

As of December 31, 2023, we believe such assets are recoverable;

however, there can be no assurance these assets will not be impaired in future periods.

Any future impairment charges could adversely impact our results of operations.

See Notes 2 and 4 to our financial statements for additional information regarding goodwill and indefinite-lived intangible assets.

If, based on our qualitative analysis, we were to determine it is more-likely-than-not that the indefinite-lived intangible asset is impaired, a quantitative impairment test would be performed to determine if an impairment loss should be recorded.

Our qualitative assessment during 2024 indicated it was more-likely-than-not that certain indefinite-lived intangible assets were impaired.

We performed a quantitative impairment test and recognized an immaterial non-cash impairment charge which was included within restructuring and other in our consolidated statement of operations.

Our qualitative assessment during 2023 and 2022 did not indicate any impairment.

See Notes 2 and 4 to our financial statements for additional information regarding indefinite-lived intangible assets.

We are subject to U.S.

federal, state and foreign income taxes with respect to our allocable share of any taxable income or loss of Desert Newco, as well as any stand-alone income or loss we generate.

Significant judgment is required in determining our provision or benefit for income taxes and in evaluating uncertain tax positions.

On December 11, 2023, we completed a series of transactions (the DNC Restructure) designed to simplify our then-existing capital structure, commonly referred to as an "Up-C" structure, and provide us with additional strategic flexibility.

Completion of these transactions resulted in Desert Newco becoming a wholly-owned subsidiary of GoDaddy Inc.

Subsequent to the DNC Restructure, on January 1, 2024, Desert Newco was converted from a partnership to a disregarded entity and as a result we are now treated as a consolidated C corporation group for U.S.

income tax purposes.

Judgment is required in determining our provision or benefit for income taxes and in evaluating uncertain tax positions.

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (DTAs) and d eferred tax liabilities (DTLs) for the expected future tax consequences of events included in our financial statements.

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In evaluating our ability to realize our DTAs, in full or in part, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, prudent and feasible tax planning strategies and recent results of operations.

The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we use to manage our business.

The assumptions utilized in determining future taxable income require judgment and are consistent with the plans and estimates we use to manage our business.

Actual operating results in future years could differ from our current assumptions, judgments and estimates, which could have a material impact on the amount of DTAs we ultimately realize.

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The tax benefits recognized from such positions are measured based on the largest benefit having a greater than 50% likelihood of being realized.

See Notes 2 and 16 to our financial statements for additional information regarding income taxes and the release of the majority of the domestic valuation allowance against our DTAs.

Loss Contingencies

We are subject to the possibility of various loss contingencies arising from uncertain and unresolved matters in the ordinary course of business and from events or actions by others having the potential to result in a future loss.

Such contingencies may include, but are not limited to, intellectual property claims, putative class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims, regulatory proceedings, product service level commitments and

losses resulting from other events and developments.

We consider the likelihood of loss, the impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies.

When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss.

When there appears to be a range of possible costs with equal likelihood, a liability is recorded based on the low-end of such range.

However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties impacting the ultimate resolution of the contingency.

It is also not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated to determine both the likelihood of potential loss and whether it is possible to reasonably estimate a range of possible loss.

When a loss is probable but a reasonable estimate cannot be made, disclosure is provided.

Disclosure is also provided when it is reasonably possible a loss will be incurred or when it is reasonably possible the amount of a loss will exceed the recorded amounts.

We regularly review all contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made.

Development of a meaningful estimate of loss, or a range of potential loss, is complex when the outcome is directly dependent on negotiations with, or decisions by, third parties such as regulatory agencies, court systems in various jurisdictions and other interested parties.

Such factors bear directly on whether it is possible to reasonably estimate a range of potential loss and boundaries of high and low estimates.

Until the final resolution of such matters, there may be an exposure to loss in excess of the amounts recorded, and such amounts could be material.

Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material impact on our business, operating results or financial condition.

See Note 13 to our financial statements for additional information regarding loss contingencies.

See Notes 2 and 16 to our financial statements for additional information regarding income taxes.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis