GoDaddy CEO Scott Wagner steps down for health reasons, shares drag

Internet domain provider GoDaddy Inc said its Chief Executive Officer Scott Wagner would step down after it reported a quarterly loss on sluggish customer growth and higher costs, sending shares down as much as 5% in extended trading.

The company said Wagner, leaving for health reasons, would be replaced by Aman Bhutani, who most recently served as president of Brand Expedia Group.

Since the company went public in 2015, it has been under pressure to generate better returns and therefore has been spending aggressively on marketing and product development to expand its customer base.

Its efforts, however, led to a 5.5% increase in new customers in the reported quarter, down from 6.5% in the year-ago period. Meanwhile, costs rose nearly 18% to $718.3 million (£592.8 million), compared with the average analyst estimate of $441 million.

The company said it would stick to its full-year forecast of $2.97 billion to $3 billion in revenue and expects third-quarter revenue between $755 million and $765 million, the mid-point of which was below analysts’ estimate of $761.3 million.

Net loss attributable to the company was $12.6 million, or 7 cents per class A share, in the quarter ended June 30, compared with a net income of $18.1 million, or 11 cents per class A share, a year earlier.

Excluding one-time items, the company posted earnings of 1 cent, below analysts’ estimate of 16 cents, according to IBES data from Refinitiv.

Total revenue rose by 13.1% to $737.2 million, beating analysts’ estimate of $735.4 million.

Shares of the company, which manages roughly a fifth of all global domains, were down 2.3% at $72.50 in extended trading.