GODADDY INC., 10-Q filed on 11/3/2016
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2016
Oct. 28, 2016
Class A Common Stock
Oct. 28, 2016
Class B Common Stock
Document Information [Line Items]
 
 
 
Entity Registrant Name
GoDaddy Inc. 
 
 
Entity Central Index Key
0001609711 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Sep. 30, 2016 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
Q3 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
87,469,399 
78,587,943 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 556.2 
$ 348.0 
Short-term investments
9.6 
4.5 
Accounts and other receivables
10.8 
4.8 
Registry deposits
21.6 
18.7 
Prepaid domain name registry fees
311.1 
292.6 
Prepaid expenses and other current assets
31.3 
25.3 
Total current assets
940.6 
693.9 
Property and equipment, net
230.8 
225.0 
Prepaid domain name registry fees, net of current portion
171.8 
163.7 
Goodwill
1,678.1 
1,663.4 
Intangible assets, net
705.5 
735.3 
Other assets
6.6 
12.1 
Deferred tax assets
7.8 
5.4 
Total assets
3,741.2 
3,498.8 
Current liabilities:
 
 
Accounts payable
63.2 
39.4 
Accrued expenses and other current liabilities
124.6 
127.0 
Payable to related parties for tax distributions
0 
5.3 
Deferred revenue
1,043.3 
937.7 
Long-term debt
4.1 
4.2 
Total current liabilities
1,235.2 
1,113.6 
Deferred revenue, net of current portion
528.4 
478.5 
Long-term debt, net of current portion
1,036.7 
1,039.8 
Payable to related parties pursuant to tax receivable agreements, net of current portion
199.5 
151.6 
Other long-term liabilities
39.1 
34.3 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding
0 
0 
Additional paid-in capital
548.0 
454.6 
Accumulated deficit
(46.8)
(32.2)
Accumulated other comprehensive income
2.7 
3.2 
Total stockholders' equity attributable to GoDaddy Inc.
504.1 
425.8 
Non-controlling interests
198.2 
255.2 
Total stockholders' equity
702.3 
681.0 
Total liabilities and stockholders' equity
3,741.2 
3,498.8 
Class A Common Stock
 
 
Stockholders' equity:
 
 
Common stock
0.1 
0.1 
Class B Common Stock
 
 
Stockholders' equity:
 
 
Common stock
$ 0.1 
$ 0.1 
Condensed Consolidated Balance Sheets Parenthetical (USD $)
Sep. 30, 2016
Dec. 31, 2015
Preferred stock par value (in dollars per share)
$ 0.001 
$ 0.001 
Preferred stock shares authorized (in shares)
50,000,000 
50,000,000 
Preferred stock shares issued (in shares)
0 
0 
Preferred stock outstanding (in shares)
0 
0 
Common stock outstanding (in shares)
165,334,000 
157,481,000 
Class A Common Stock
 
 
Par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock shares authorized (in shares)
1,000,000,000 
1,000,000,000 
Common stock shares issued (in shares)
86,413,000 
67,083,000 
Common stock outstanding (in shares)
86,413,000 
67,083,000 
Class B Common Stock
 
 
Par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock shares authorized (in shares)
500,000,000 
500,000,000 
Common stock shares issued (in shares)
78,921,000 
90,398,000 
Common stock outstanding (in shares)
78,921,000 
90,398,000 
Condensed Consolidated Statements of Operations (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Technology and development
Sep. 30, 2015
Technology and development
Sep. 30, 2016
Technology and development
Sep. 30, 2015
Technology and development
Sep. 30, 2016
Marketing and advertising
Sep. 30, 2015
Marketing and advertising
Sep. 30, 2016
Marketing and advertising
Sep. 30, 2015
Marketing and advertising
Sep. 30, 2016
Customer care
Sep. 30, 2015
Customer care
Sep. 30, 2016
Customer care
Sep. 30, 2015
Customer care
Sep. 30, 2016
General and administrative
Sep. 30, 2015
General and administrative
Sep. 30, 2016
General and administrative
Sep. 30, 2015
General and administrative
Sep. 30, 2016
Domains
Sep. 30, 2015
Domains
Sep. 30, 2016
Domains
Sep. 30, 2015
Domains
Sep. 30, 2016
Hosting and presence
Sep. 30, 2015
Hosting and presence
Sep. 30, 2016
Hosting and presence
Sep. 30, 2015
Hosting and presence
Sep. 30, 2016
Business applications
Sep. 30, 2015
Business applications
Sep. 30, 2016
Business applications
Sep. 30, 2015
Business applications
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 472.1 
$ 411.1 
$ 1,362.0 
$ 1,181.9 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 236.6 
$ 215.0 
$ 685.3 
$ 622.7 
$ 174.1 
$ 150.8 
$ 502.0 
$ 436.5 
$ 61.4 
$ 45.3 
$ 174.7 
$ 122.7 
Costs and operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue (excluding depreciation and amortization)
169.2 1
144.0 1
485.7 1
420.9 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Technology and development
72.3 1
67.3 1
214.2 1
201.2 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketing and advertising
53.4 1
49.3 1
170.9 1
150.8 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer care
59.8 1
54.8 1
183.6 1
167.2 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative
52.8 1
44.2 1
153.8 1
168.6 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
43.4 1
40.6 1
121.6 
116.4 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total costs and operating expenses
450.9 
400.2 
1,329.8 
1,225.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
21.2 
10.9 
32.2 
(43.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
(14.4)
(14.6)
(43.0)
(54.7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax receivable agreements liability adjustment
1.3 
(0.6)
(9.4)
(0.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on debt extinguishment
0 
0 
0 
(21.4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income (expense), net
(0.7)
0 
(0.8)
0.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
7.4 
(4.3)
(21.0)
(119.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit (provision) for income taxes
0.9 
(0.9)
(0.1)
(0.7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
8.3 
(5.2)
(21.1)
(119.9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: net income (loss) attributable to non-controlling interests
3.5 
(2.7)
(6.5)
(44.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to GoDaddy Inc.
4.8 
(2.5)
(14.6)
(75.7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share, basic (in USD per share)
$ 0.06 2
$ (0.04)2
$ (0.19)2
$ (0.82)2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share, diluted (in USD per share)
$ 0.05 2
$ (0.04)2
$ (0.19)2
$ (0.82)2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding, basic (in shares)
83,733,000 2
64,999,000 2
77,170,000 2
56,153,000 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average shares outstanding, diluted (in shares)
96,743,000 2
64,999,000 2
77,170,000 2
56,153,000 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity-based compensation expense
 
 
 
 
$ 7.0 
$ 4.4 
$ 16.9 
$ 12.5 
$ 2.3 
$ 1.5 
$ 5.8 
$ 4.5 
$ 1.6 
$ 0.9 
$ 3.0 
$ 2.1 
$ 6.6 
$ 3.2 
$ 14.6 
$ 9.4 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statement of Stockholders' Equity Statement (USD $)
In Millions, except Share data in Thousands
Total
USD ($)
Class A Common Stock
Class B Common Stock
Common Stock
Class A Common Stock
USD ($)
Common Stock
Class B Common Stock
USD ($)
Additional Paid-in Capital
USD ($)
Accumulated Deficit
USD ($)
Accumulated Other Comprehensive Income
USD ($)
Non- Controlling Interest
USD ($)
Equity at beginning of period at Dec. 31, 2015
$ 681.0 
 
 
$ 0.1 
$ 0.1 
$ 454.6 
$ (32.2)
$ 3.2 
$ 255.2 
Common stock outstanding (in shares) at Dec. 31, 2015
157,481 
67,083 
90,398 
67,083 
90,398 
 
 
 
 
Net income (loss)
(21.1)
 
 
 
 
 
(14.6)
 
(6.5)
Equity-based compensation expense
40.3 
 
 
 
 
40.3 
 
 
 
Stock option and warrant exercises (in shares)
 
 
 
7,853 
 
 
 
 
 
Stock option and warrant exercises
45.9 
 
 
 
 
78.1 
 
 
(32.2)
Effect of exchanges of LLC Units (in shares)
 
 
 
11,477 
(11,477)
 
 
 
 
Effect of exchanges of LLC Units
 
 
 
 
 
13.3 
 
 
(13.3)
Liability pursuant to the tax receivable agreements resulting from exchanges of LLC Units
(38.5)
 
 
 
 
(38.5)
 
 
 
Distributions to holders of LLC Units
(5.0)
 
 
 
 
 
 
 
(5.0)
Other
(0.3)
 
 
 
 
0.2 
 
(0.5)
 
Equity at end of period at Sep. 30, 2016
$ 702.3 
 
 
$ 0.1 
$ 0.1 
$ 548.0 
$ (46.8)
$ 2.7 
$ 198.2 
Common stock outstanding (in shares) at Sep. 30, 2016
165,334 
86,413 
78,921 
86,413 
78,921 
 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Statement of Cash Flows [Abstract]
 
 
Net income (loss)
$ (21.1)
$ (119.9)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Depreciation and amortization
121.6 
116.4 
Equity-based compensation
40.3 
28.5 
Loss on debt extinguishment
0 
21.4 
Other
13.4 
7.5 
Changes in operating assets and liabilities, net of amounts acquired:
 
 
Registry deposits
(2.9)
(3.4)
Prepaid domain name registry fees
(26.6)
(32.5)
Deferred revenue
156.6 
161.9 
Other operating assets and liabilities
16.1 
18.2 
Net cash provided by operating activities
297.4 
198.1 
Investing activities
 
 
Purchases of short-term investments
(10.5)
(7.3)
Maturities of short-term investments
5.4 
4.9 
Business acquisitions, net of cash acquired
(57.9)
(30.7)
Purchases of intangible assets
0 
(22.5)
Purchases of property and equipment, excluding improvements
(37.8)
(31.3)
Purchases of leasehold and building improvements
(5.0)
(3.0)
Other investing activities, net
0 
1.1 
Net cash used in investing activities
(105.8)
(88.8)
Financing activities
 
 
Issuance of Class A common stock sold in IPO, net of offering costs
0 
482.4 
Stock option and warrant exercises
45.9 
1.2 
Distributions to holders of LLC Units
(10.8)
0 
Repayment of senior note
0 
(300.0)
Repayment of revolving credit loan
0 
(75.0)
Repayment of term loan
(8.2)
(8.2)
Financing-related costs
0 
(13.5)
Contingent consideration for business acquisitions
(1.5)
0 
Capital leases and other financing obligations
(8.8)
(7.4)
Net cash provided by financing activities
16.6 
79.5 
Effect of exchange rate changes on cash and cash equivalents
0 
(0.1)
Net increase in cash and cash equivalents
208.2 
188.7 
Cash and cash equivalents, beginning of period
348.0 
139.0 
Cash and cash equivalents, end of period
556.2 
327.7 
Supplemental cash flow information:
 
 
Interest on long-term debt
35.0 
47.3 
Income taxes, net of refunds received
2.7 
1.6 
Supplemental information for non-cash investing and financing activities:
 
 
Fair value of contingent consideration in connection with business acquisitions
1.0 
0.9 
Accrued capital expenditures, excluding improvements, at period end
12.8 
5.0 
Accrued capital expenditures, leasehold and building improvements, at period end
0.7 
0.6 
Property and equipment acquired under capital leases
$ 7.0 
$ 11.1 
Organization and Background
Organization and Background
Organization and Background
Organization
We were incorporated on May 28, 2014 for the purpose of facilitating an IPO and other related organizational transactions, completed on April 7, 2015, in order to operate and control all of the business and affairs of Desert Newco. As sole managing member, we have all voting power in, and control the management of, Desert Newco. As a result, we consolidate Desert Newco’s financial results and report a non-controlling interest representing the economic interest held by the other members of Desert Newco. As discussed in Note 5, in April 2016, we completed a secondary offering in which certain stockholders exchanged 10,382 LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock, increasing our ownership in Desert Newco to approximately 52% as of September 30, 2016.
Basis of Presentation
Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
We had no material components of other comprehensive income (loss) during any of the periods presented. As such, a consolidated statement of comprehensive income (loss) is not presented.
Our interim condensed consolidated financial statements are unaudited. These financial statements have been prepared in accordance with GAAP, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the interim periods presented. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2016.
These financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2015, as amended (2015 Form 10-K).
Prior Period Reclassifications
Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. Our more significant estimates include:
•
the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements;
•
the fair value of assets acquired and liabilities assumed in business acquisitions;
•
the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;
•
the estimated reserve for refunds;
•
the estimated useful lives of intangible and depreciable assets;
•
the grant date fair value of equity-based awards;
•
the recognition, measurement and valuation of current and deferred income taxes;
•
the recognition and measurement of amounts payable under tax receivable agreements;
•
the recognition and measurement of amounts payable as tax distributions to Desert Newco's owners; and
•
the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities.
We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates.
Segments and Reporting Units
Our chief operating decision maker function is comprised of our Chief Executive Officer and Chief Operating Officer who collectively review financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance for the entire company. Accordingly, we have a single operating segment and reporting unit.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Derivative Financial Instruments
We enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in currencies other than the United States (U.S.) dollar. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. We do not hold or issue derivative instruments for speculative or trading purposes. At September 30, 2016, the total notional amount of outstanding contracts was $26.1 million, all having remaining maturities of 3 months or less.
We reflect unrealized gains or losses on the effective portion of a cash flow hedge as a component of accumulated other comprehensive income. Gains and losses, once realized, are recorded as a component of accumulated other comprehensive income and are amortized to revenue over the same period in which the underlying hedged amounts are recognized. Any ineffective portion of gains or losses are recorded as other income (expense), net and were immaterial during all periods presented. Each period, we evaluate the effectiveness of each of our hedges. As of September 30, 2016, all hedges were determined to be effective.
Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows:
Level 1—Observable inputs such as quoted prices for identical assets or liabilities in active markets;
Level 2—Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and
Level 3—Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions.
We hold certain assets required to be measured at fair value on a recurring basis. These may include reverse repurchase agreements, commercial paper or other securities, which are classified as either cash and cash equivalents or short-term investments. We classify these assets within Level 1 or Level 2 because we use either quoted market prices or alternative pricing sources utilizing market observable inputs to determine their fair value, as follows:
 
September 30, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents:
 
 
 
 
 
 
 
Reverse repurchase agreements(1)
$
—

 
$
135.0

 
$
—

 
$
135.0

Commercial paper
—

 
50.0

 
—

 
50.0

Short-term investments:
 
 
 
 
 
 

Certificates of deposit and time deposits
9.6

 
—

 
—

 
9.6

Total assets measured and recorded at fair value
$
9.6

 
$
185.0

 
$
—

 
$
194.6

 
 
(1)
Reverse repurchase agreements include an $80.0 million repurchase agreement with Morgan Stanley, callable with 31 days notice, and a $55.0 million one-week repurchase agreement with Wells Fargo.
 
December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents:
 
 
 
 
 
 
 
Reverse repurchase agreements(1)
$
—

 
$
40.0

 
$
—

 
$
40.0

Short-term investments:
 
 
 
 
 
 
 
Certificates of deposit
4.5

 
—

 
—

 
4.5

Total assets measured and recorded at fair value
$
4.5

 
$
40.0

 
$
—

 
$
44.5

 
 
(1)
Reverse repurchase agreements include a $40.0 million repurchase agreement with Wells Fargo in overnight sweeps.
We have no other material assets or liabilities measured at fair value on a recurring basis.
Foreign Currency
Our functional currency is the U.S. dollar. Assets denominated in foreign currencies are remeasured into U.S. dollars at period-end exchange rates. Foreign currency based revenue and expenses transactions are measured at transaction date exchange rates. Foreign currency remeasurement gains and losses are recorded in other income (expense), net and were $(1.5) million and $(1.5) million for the three months ended September 30, 2016 and 2015, respectively, and $(3.1) million and $(2.9) million for the nine months ended September 30, 2016 and 2015, respectively.
The functional currency of certain of our foreign subsidiaries is their respective local currency. For these subsidiaries, we translate revenue and expense transactions at average exchange rates. We translate assets and liabilities at period-end exchange rates and include foreign currency translation gains and losses as a component of accumulated other comprehensive income. Such gains and losses were not material during any of the periods presented.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition from contracts with customers. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB approved a one year deferral of the effective date making the new standard effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB amended the principal-versus-agent implementation guidance set forth in the new standard. Among other things, this amendment clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. In April 2016, the FASB amended certain aspects of the new standard related to identifying performance obligations and licensing implementation. In May 2016, the FASB amended certain aspects of the new standard related to collectability assessment, sales taxes and other similar taxes collected from customers, noncash consideration, contract modification and completed contracts at transition. This amendment is intended to address implementation issues raised by stakeholders and provide additional practical expedients to reduce the cost and complexity of applying the new standard. We plan to adopt this new standard on January 1, 2018 and are currently evaluating the transition method we intend to utilize and its expected impact on our consolidated financial statements.
In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating the timing of our adoption and the expected impact of this new standard on our consolidated financial statements.
In March 2016, the FASB issued new guidance changing the accounting for certain aspects of share-based payments to employees. The guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis and allows for an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance requires recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption permitted. We expect to adopt this guidance on January 1, 2017 and are currently evaluating its expected impact on our consolidated financial statements.
In June 2016, the FASB issued new guidance for the accounting for credit losses on instruments that will require us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial instruments measured at amortized cost and also applies to some off-balance sheet credit exposures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the timing of our adoption and the expected impact of this new guidance on our consolidated financial statements.
In August 2016, the FASB issued new guidance clarifying the treatment of several cash flow categories. In addition, the new guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We expect to adopt this guidance during the fourth quarter of 2016 and are currently evaluating its expected impact on our consolidated financial statements.
In October 2016, the FASB issued new guidance that will require an entity to recognize the income tax consequences of intra-entity assets transfers, other than inventory, when the transfer occurs. This new guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the timing of our adoption and the expected impact of this new guidance on our consolidated financial statements.
Business Acquisitions
Business Acquisitions
Business Acquisitions
During the nine months ended September 30, 2016, we completed two acquisitions for cash of $61.1 million, including $3.1 million payable in future periods following the expiration of contractual holdback periods, and additional immaterial contingent earn-out payments subject to the achievement of certain revenue targets. The acquisitions are not material to our results of operations, and as a result, no proforma financial information is presented.
The aggregate purchase price was allocated to the assets acquired and liabilities assumed based upon our assessment of fair value as of the respective acquisition dates with $38.4 million attributed to an indefinite-lived domain portfolio intangible asset, $14.7 million to goodwill, which is deductible for income tax purposes, $7.6 million to other identified finite-lived intangible assets and $0.7 million of net liabilities assumed. We also recorded a $1.1 million reduction of our existing deferred revenue from prior transactions with one of the acquired businesses. Identified intangible assets, which were valued using either income- or cost-based approaches, include an indefinite-lived domain portfolio, customer-related intangible assets and developed technology. The acquired finite-lived intangible assets have a total weighted-average amortization period of 4.4 years.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The following table summarizes changes in our goodwill balance:
Balance at December 31, 2015
$
1,663.4

Goodwill related to acquisitions
14.7

Balance at September 30, 2016
$
1,678.1


Intangible assets, net are summarized as follows:
 
September 30, 2016
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
n/a

 
 n/a

 
$
445.0

Domain portfolio
99.6

 
n/a

 
$
(10.1
)
 
89.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
362.8

 
$
(234.3
)
 
 n/a

 
128.5

Developed technology
215.7

 
(177.8
)
 
 n/a

 
37.9

Trade names
11.6

 
(7.0
)
 
 n/a

 
4.6

Other
1.1

 
(1.1
)
 
 n/a

 
—

 
$
1,135.8

 
$
(420.2
)
 
$
(10.1
)
 
$
705.5

 
December 31, 2015
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
 n/a

 
 n/a

 
$
445.0

Domain portfolio
61.2

 
n/a

 
(3.7
)
 
57.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
361.2

 
$
(196.8
)
 
 n/a

 
164.4

Developed technology
210.1

 
(148.0
)
 
 n/a

 
62.1

Trade names
11.2

 
(5.2
)
 
 n/a

 
6.0

Other
1.1

 
(0.8
)
 
 n/a

 
0.3

 
$
1,089.8

 
$
(350.8
)
 
$
(3.7
)
 
$
735.3


Customer-related intangible assets, developed technology and trade names have weighted-average useful lives from the date of purchase of 99 months, 64 months and 57 months, respectively. Amortization expense was $25.7 million and $24.6 million for the three months ended September 30, 2016 and 2015, respectively. Amortization expense was $69.4 million and $71.4 million for the nine months ended September 30, 2016 and 2015, respectively. The weighted-average remaining amortization period for amortizable intangible assets was 43 months as of September 30, 2016.
Based on the balance of finite-lived intangible assets at September 30, 2016, expected future amortization expense is as follows:
Year Ending December 31:
 
2016 (remainder of)
$
20.4

2017
54.6

2018
46.4

2019
27.4

2020
21.5

Thereafter
0.7

 
$
171.0

Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity
Secondary Offering
In April 2016, we completed a secondary offering in which certain stockholders, including the Sponsors, YAM and certain of our executive officers, sold an aggregate of 18,975 shares of our Class A common stock at a public offering price of $30.25 per share. We received $6.3 million in proceeds from the exercise of stock options in connection with the offering, but did not receive any proceeds from the shares sold in the offering. The offering also included the exchange of 10,382 LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock by certain selling stockholders, which resulted in an $8.8 million increase in additional paid-in capital, with an offsetting reduction in non-controlling interests, and a material increase to the liability under the TRAs. See Note 11.
Equity-Based Compensation Plans
Equity-Based Compensation Plans
Equity-Based Compensation Plans
On March 31, 2015, we adopted the 2015 Equity Incentive Plan (the 2015 Plan) and reserved a total of 10,285 shares of Class A common stock for issuance pursuant to the 2015 Plan. The shares reserved for issuance under the 2015 Plan also included up to 28,133 shares rolled over from the Desert Newco, LLC 2011 Unit Incentive Plan (the 2011 Unit Incentive Plan) and from certain other option plans assumed in connection with acquisitions. On January 1, 2016, in accordance with the automatic increase provisions of the 2015 Plan, an additional 6,299 shares were reserved for issuance pursuant to the 2015 Plan. As of September 30, 2016, 12,575 shares were available for issuance as future awards under the 2015 Plan.
On March 31, 2015, we adopted the 2015 Employee Stock Purchase Plan (the ESPP) and reserved a total of 2,000 shares of Class A common stock for issuance pursuant to the ESPP. On January 1, 2016, in accordance with the automatic increase provisions of the ESPP, an additional 1,000 shares were reserved for issuance pursuant to the ESPP. As of September 30, 2016, 2,325 shares were available for issuance as future awards under the ESPP.
We grant options at exercise prices equal to the fair market value of our Class A common stock on the grant date. We grant both options and restricted stock units (RSUs) vesting solely upon the continued employment of the recipient as well as awards vesting upon the achievement of annual or cumulative financial-based targets coinciding with our fiscal year. We recognize the grant date fair value of equity-based awards as compensation expense over the required service period of each award, taking into account the probability of our achievement of associated performance targets.
The following table summarizes our option activity for the nine months ended September 30, 2016:
 
 
Number of
Shares of Class A Common Stock (#)
 
Weighted-
Average
Grant-
Date Fair
Value ($)
 
Weighted-
Average
Exercise
Price ($)
Outstanding at December 31, 2015
 
27,419

 
 
 
10.25

Granted
 
2,042

 
11.89

 
30.70

Exercised
 
(7,646
)
 
 
 
6.01

Forfeited
 
(1,448
)
 
 
 
17.04

Outstanding at September 30, 2016
 
20,367

 
 
 
13.41

Vested at September 30, 2016
 
9,961

 
 
 
8.54

The following table summarizes our RSU activity for the nine months ended September 30, 2016:
 
 
Number of
Shares of Class A Common Stock (#)
 
Weighted-
Average
Grant-
Date Fair
Value ($)
Outstanding at December 31, 2015
 
93

 
 
Granted
 
2,876

 
29.95

Vested
 
(207
)
 
 
Forfeited
 
(165
)
 
 
Outstanding at September 30, 2016
 
2,597

 
 

At September 30, 2016, total unrecognized compensation expense related to non-vested stock options and RSUs was $45.0 million and $49.8 million, respectively, with expected remaining weighted-average recognition periods of 2.1 years and 3.0 years, respectively. We currently believe the performance targets related to the vesting of performance awards will be achieved. If such targets are not achieved, or are subsequently determined to not be probable of being achieved, we will not recognize any compensation expense relating to performance awards, and will reverse any previously recognized expense.
In May 2016, we discovered our “Up-C” structure was not eligible to offer a "tax-qualified" plan and terminated the then-current ESPP offering period. We refunded all amounts withheld on behalf of employees, including $8.8 million included in accrued expenses and other current liabilities at March 31, 2016. In connection with the offering period termination, we granted fully-vested RSUs to employees who were participating in the ESPP prior to the termination date, resulting in $3.6 million of additional equity-based compensation expense during the three and nine months ended September 30, 2016. Other expenses related to this termination were not material. We started a "non-qualified" ESPP offering period in July 2016.
The fair value of each ESPP share is estimated on the first day of each offering period using the Black-Scholes option pricing model, and is recognized as compensation expense on a straight-line basis over the term in which it is outstanding. As of September 30, 2016, $3.4 million has been withheld on behalf of employees for future purchases under the ESPP, which is included in accrued expenses and other current liabilities. At September 30, 2016, total unrecognized compensation expense related to ESPP shares was $0.4 million, which will be recognized during the fourth quarter of 2016.
Deferred Revenue
Deferred Revenue
Deferred Revenue
Deferred revenue consists of the following:
 
September 30, 2016
 
December 31, 2015
Current:
 
 
 
Domains
$
535.6

 
$
497.2

Hosting and presence
370.2

 
330.8

Business applications
137.5

 
109.7

 
$
1,043.3

 
$
937.7

Noncurrent:
 
 
 
Domains
$
310.1

 
$
288.5

Hosting and presence
163.6

 
149.7

Business applications
54.7

 
40.3

 
$
528.4

 
$
478.5

Long-Term Debt
Long-Term Debt
Long-Term Debt
Long-term debt consists of the following:
 
September 30, 2016
 
December 31, 2015
Term Loan due May 13, 2021 (effective interest rate of 4.9% at September 30, 2016 and 5.1% at December 31, 2015)
$
1,075.3

 
$
1,083.5

Revolving Credit Loan due May 13, 2019
—

 
—

Total
1,075.3

 
1,083.5

Less: unamortized original issue discounts on long-term debt(1)
(32.1
)
 
(36.8
)
Less: unamortized debt issuance costs(1)
(2.4
)
 
(2.7
)
Less: current portion of long-term debt
(4.1
)
 
(4.2
)
 
$
1,036.7

 
$
1,039.8

 
 
(1)
Original issue discounts and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the effective interest method.
Term Loan and Revolving Credit Loan
Our amended and restated secured credit agreement (the Credit Facility) consists of a $1,100.0 million original balance term loan maturing on May 13, 2021 (the Term Loan) and an available $150.0 million revolving credit loan maturing on May 13, 2019 (the Revolving Credit Loan). Borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) LIBOR (not less than 1.0% for the Term Loan only) plus 3.25% per annum or (b) 2.25% per annum plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the Prime Rate or (iii) one-month LIBOR plus 1.0%.
At September 30, 2016, we had $150.0 million available for borrowing under the Revolving Credit Loan and were not in violation of any covenants of the Credit Facility.
The estimated fair value of the Term Loan was $1,082.7 million at September 30, 2016 based on observable market prices for this loan, which is traded in a less active market and is therefore classified as a Level 2 fair value measurement.
Future Debt Maturities
Aggregate principal payments, exclusive of any unamortized original issue discounts and debt issuance costs, due on long-term debt as of September 30, 2016 are as follows:
Year Ending December 31:
 
2016 (remainder of)
$
2.8

2017
11.0

2018
11.0

2019
11.0

2020
11.0

Thereafter
1,028.5

 
$
1,075.3

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Litigation
From time-to-time, we are a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. The amounts currently accrued for such matters are not material. While the results of such normal course claims and legal proceedings cannot be predicted with certainty, management does not believe, based on current knowledge and the likely timing of resolution of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would be material to our consolidated financial statements. Regardless of the outcome, legal proceedings may have an adverse effect on us because of defense costs, diversion of management resources and other factors.
Indemnifications
In the normal course of business, we have made indemnities under which we may be required to make payments in relation to certain transactions, including to our directors and officers to the maximum extent permitted under applicable state laws and indemnifications related to certain lease agreements. In addition, certain advertiser and reseller partner agreements contain indemnification provisions, which are generally consistent with those prevalent in the industry. We have not incurred material obligations under indemnification provisions historically, and do not expect to incur material obligations in the future. Accordingly, we have not recorded any liabilities related to such indemnities as of September 30, 2016 and December 31, 2015.
We include service level commitments to our customers guaranteeing certain levels of uptime reliability and performance for our hosting and premium DNS products. These guarantees permit those customers to receive credits in the event we fail to meet those levels, with exceptions for certain service interruptions including but not limited to periodic maintenance. We have not incurred any material costs as a result of such commitments during any of the periods presented, and have not recorded any liabilities related to such obligations as of September 30, 2016 and December 31, 2015.
Indirect Taxes
We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject communications and commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the U.S. and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the businesses of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generate based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals.
As of September 30, 2016 and December 31, 2015, our accrual for estimated indirect tax liabilities was $5.1 million and $7.1 million, respectively, reflecting our best estimate of the probable liability based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations in each jurisdiction. Although we believe our indirect tax estimates and associated reserves are reasonable, the final determination of indirect tax audits and any related litigation could be different than the amounts established for indirect tax contingencies.
Income Taxes
Income Taxes
Income Taxes
We are required to file federal and applicable state corporate income tax returns and recognize income taxes on pre-tax income. Desert Newco has been and will continue to be treated as a partnership for U.S. income tax purposes. As such, Desert Newco is considered a pass-through entity and generally does not pay income taxes on its taxable income in most jurisdictions. Instead, Desert Newco's members, of which we are one, are liable for U.S. federal and state income taxes based on their taxable income. Desert Newco is liable for income taxes in certain foreign jurisdictions, in those states not recognizing its pass-through status and for certain subsidiaries not taxed as pass-through entities. We have acquired the outstanding stock of various entities taxed as corporations, which are now owned 100% by us or our subsidiaries and are treated as an independent consolidated group for federal income tax purposes. Where required or allowed, these subsidiaries also file as a consolidated group for state income tax purposes. We anticipate this structure to remain in existence for the foreseeable future.
Our effective tax rate differs from statutory rates primarily due to Desert Newco's pass-through structure for U.S. income tax purposes, while being treated as taxable in certain states and various foreign jurisdictions as well as for certain subsidiaries. In all foreign jurisdictions where we conduct business, except Canada, we are subject to income tax in both the U.S. and the foreign jurisdictions.
Based on our limited operating history and future projections of taxable income, we believe there is significant uncertainty as to when we will be able to utilize the net operating loss (NOL) and credit carryforwards and other tax attributes received through our IPO and related pre-IPO organizational transactions. Therefore, we have concluded it is more-likely-than-not these deferred tax assets will not be realized and have recorded a valuation allowance against these deferred tax assets. Net deferred tax assets associated with our subsidiaries taxed as corporations are considered by management to be more-likely-than-not of being realized; therefore, we have not recorded a valuation allowance against such deferred tax assets.
Based on our analysis of tax positions taken on income tax returns filed, we have determined a liability related to uncertain income tax positions is not required. Although we believe the amounts reflected in our tax returns substantially comply with applicable federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision or benefit for income taxes in the period in which a final determination is made.
Income (Loss) Per Share
Income (Loss) Per Share
Income (Loss) Per Share
Basic income (loss) per share is computed by dividing net income (loss) attributable to GoDaddy Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive shares, including outstanding options, RSUs, warrants and ESPP shares. In periods when we have a net loss, potentially issuable shares are excluded from the calculation of earnings per share as their inclusion would have an antidilutive effect.
For purposes of calculating loss per share for periods prior to the IPO, we treated the pre-IPO organizational transactions as a merger of entities under common control. Therefore, we have retrospectively reflected loss per share as though those transactions had occurred as of the earliest period presented. For all periods prior to the IPO, we allocated our historical net loss between the Class A stockholders and the non-controlling interest based on their respective share ownership. These calculations do not consider the 26,000 shares of Class A common stock sold in our IPO.
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 
 
 
 
 
 
 
Net income (loss)
$
8.3

 
$
(5.2
)
 
$
(21.1
)
 
$
(119.9
)
Less: net income (loss) attributable to non-controlling interests
3.5

 
(2.7
)
 
(6.5
)
 
(74.0
)
Net income (loss) attributable to GoDaddy Inc.
$
4.8

 
$
(2.5
)
 
$
(14.6
)
 
$
(45.9
)
Denominator:
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
83,733

 
64,999

 
77,170

 
56,153

Effect of dilutive securities
13,010

 
—

 
—

 
—

Weighted-average shares of Class A Common stock outstanding—diluted
96,743

 
64,999

 
77,170

 
56,153

Net income (loss) per share of Class A common stock—basic
$
0.06

 
$
(0.04
)
 
$
(0.19
)
 
$
(0.82
)
Net income (loss) per share of Class A common stock - diluted
$
0.05

 
$
(0.04
)
 
$
(0.19
)
 
$
(0.82
)

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such potentially dilutive shares would have been antidilutive:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Options, RSUs, warrants and ESPP shares
—

 
15,731

 
14,680

 
14,693


Shares of Class B common stock do not share in our earnings and are not participating securities. Accordingly, separate presentation of income (loss) per share of Class B common stock under the two-class method has not been presented. Each share of Class B common stock (together with a corresponding LLC Unit) is exchangeable for one share of Class A common stock. Total shares outstanding were as follows:
 
September 30, 2016
 
December 31, 2015
Class A common stock
86,413

 
67,083

Class B common stock
78,921

 
90,398

 
165,334

 
157,481

Geographic Information
Geographic Information
Geographic Information
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,
 
2016
 
2015
 
2016
 
2015
U.S.
$
342.9

 
$
304.7

 
$
999.8

 
$
877.7

International
129.2

 
106.4

 
362.2

 
304.2

 
$
472.1

 
$
411.1

 
$
1,362.0

 
$
1,181.9


No individual international country represented more than 10% of total revenue in any period presented. Substantially all of our assets are located in the U.S.
Related Party Transactions
Related Party Transactions
Payable to Related Parties Pursuant to the TRAs
As of December 31, 2015, our liability under the TRAs was $151.6 million, representing approximately 85% of the calculated tax savings based on the portion of the original basis adjustments (the OBAs) we anticipated being able to utilize in future years. During the nine months ended September 30, 2016, we increased this liability through 1) a $38.5 million reduction of additional paid-in capital resulting from the completion of the April 2016 secondary offering in which certain Desert Newco owners exchanged an aggregate of 10,382 LLC Units (together with the corresponding shares of Class B common stock) for an equivalent number of shares of our Class A common stock at a price of $30.25 per share and 2) a $14.4 million charge to our consolidated statement of operations, which was primarily due to: i) an increase in our ownership of Desert Newco, ii) the finalization of Desert Newco's 2015 taxable income allocated to us and iii) a change in forecasted 2016 taxable income. During the three months ended September 30, 2016, we also reduced this liability through a $5.0 million benefit to our consolidated statement of operations resulting from the correction of an immaterial error related to our accounting for this liability at June 30, 2016. As of September 30, 2016, the liability under the TRAs was $199.5 million.
The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact the liability under the TRAs. We have determined it is more-likely-than-not we will be unable to utilize all of our deferred tax assets subject to the TRAs; therefore, we have not recorded a liability under the TRAs related to the tax savings we may realize from the utilization of NOL carryforwards and the amortization related to basis adjustments under Code Section 754 created by exchanges of LLC Units, including those exchanged in the secondary offering. If utilization of these deferred tax assets becomes more-likely-than-not in the future, at such time, we will record liabilities under the TRAs of up to an additional $162.5 million as a result of basis adjustments under Code Section 754 and up to an additional $147.8 million related to the tax attributes received in the pre-IPO organizational transactions and also generated by post-IPO activity, which will be recorded through charges to our consolidated statement of operations. However, if these tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRAs.
Related Party Transactions
Tax Distributions to Desert Newco's Owners
Desert Newco is subject to an operating agreement containing numerous provisions related to allocations of income and loss, as well as timing and amounts of distributions to its owners. This agreement also includes a provision requiring cash distributions enabling its owners to pay their taxes on income passing through from Desert Newco. These tax distributions are computed based on an assumed income tax rate equal to the sum of (i) the maximum marginal federal income tax rate applicable to an individual and (ii) 7%. The assumed income tax rate currently totals 46.6%, which will increase to 50.4% in certain cases when the tax on net investment income is applicable.
In addition, under the tax rules, Desert Newco is required to allocate taxable income disproportionately to its unit holders. Because tax distributions are determined based on the holder of LLC Units who is allocated the largest amount of cumulative taxable income for the current year on a per unit basis, but are made pro rata based on ownership, Desert Newco is required to make tax distributions that, in the aggregate, will likely exceed the amount of taxes Desert Newco would have otherwise paid.
As of December 31, 2015, our accrual for tax distributions related to estimated taxable income allocations to Desert Newco's owners for 2015, excluding us, was $5.3 million. In March 2016, following the finalization of 2015 taxable income allocated to each Desert Newco owner, we paid $4.6 million of such distributions based on ownership as of the payment date as follows: $1.8 million to YAM, $1.0 million to Silver Lake, $1.0 million to KKR, $0.5 million to TCV and $0.3 million to other Desert Newco owners. The remaining accrual was reversed to additional paid-in capital.
As of March 31, 2016, we had accrued $5.8 million, with an offsetting reduction in additional paid-in capital, for tax distributions related to estimated taxable income allocations to Desert Newco's owners for the first quarter of 2016, excluding us. In April 2016, we paid $2.3 million to YAM, $1.3 million to Silver Lake, $1.2 million to KKR, $0.7 million to TCV and $0.3 million to other Desert Newco owners.
An accrual for tax distributions was not required as of September 30, 2016.

Sponsors
Amounts paid to affiliates of KKR related to their participation as lenders under our Credit Facility were as follows:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Principal
$
—

 
$
0.1

 
$
0.1

 
$
5.2

Interest and other fees
0.1

 
0.3

 
0.7

 
1.1


As of September 30, 2016 and December 31, 2015, affiliates of KKR held $0 and $28.8 million, respectively, of the outstanding principal balance of the Term Loan as participating lenders.
On December 16, 2011, we entered into a transaction and monitoring fee agreement with affiliates of certain of the Sponsors pursuant to which those entities provided management and advisory services. In April 2015, we made a final aggregate payment of $26.7 million upon the termination of this agreement following the completion of the IPO, which was charged to general and administrative expenses. Following this payment, we have no further obligations under this agreement.
Bob Parsons and YAM
On December 16, 2011, we entered into an executive chairman services agreement with Bob Parsons pursuant to which we were obligated to provide customary benefits and to reimburse up to $0.5 million of business expenses annually. In April 2015, we paid $3.0 million upon the termination of this agreement following the completion of the IPO, which was charged to general and administrative expenses. Following this payment, we have no further obligations under this agreement.
During the three and nine months ended September 30, 2015, we paid $0 and $9.2 million, respectively, of interest to YAM under a senior note, which was repaid in April 2015. We also paid a $13.5 million prepayment premium to YAM in connection with the repayment. Following this payment, the senior note was canceled.
Other
In the ordinary course of business, we purchase and lease computer equipment, technology licensing and software maintenance and support from affiliates of Dell Inc. (Dell) of which Silver Lake and its affiliates have a significant ownership interest. During the three months ended September 30, 2016 and 2015, we paid $3.0 million and $4.3 million, respectively, to Dell. During the nine months ended September 30, 2016 and 2015, we paid $11.3 million and $13.3 million, respectively, to Dell.
Summary of Significant Accounting Policies (Policies)
Basis of Presentation 
Basis of Presentation
Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP), and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
We had no material components of other comprehensive income (loss) during any of the periods presented. As such, a consolidated statement of comprehensive income (loss) is not presented.
Our interim condensed consolidated financial statements are unaudited. These financial statements have been prepared in accordance with GAAP, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the interim periods presented. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2016.
Prior Period Reclassifications 
Prior Period Reclassifications
Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation.
Use of Estimates 
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. Our more significant estimates include:
•
the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements;
•
the fair value of assets acquired and liabilities assumed in business acquisitions;
•
the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;
•
the estimated reserve for refunds;
•
the estimated useful lives of intangible and depreciable assets;
•
the grant date fair value of equity-based awards;
•
the recognition, measurement and valuation of current and deferred income taxes;
•
the recognition and measurement of amounts payable under tax receivable agreements;
•
the recognition and measurement of amounts payable as tax distributions to Desert Newco's owners; and
•
the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities.
We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates.
Segments 
Segments and Reporting Units
Our chief operating decision maker function is comprised of our Chief Executive Officer and Chief Operating Officer who collectively review financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance for the entire company. Accordingly, we have a single operating segment and reporting unit.
Derivative Financial Instruments 
Derivative Financial Instruments
We enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in currencies other than the United States (U.S.) dollar. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. We do not hold or issue derivative instruments for speculative or trading purposes. At September 30, 2016, the total notional amount of outstanding contracts was $26.1 million, all having remaining maturities of 3 months or less.
We reflect unrealized gains or losses on the effective portion of a cash flow hedge as a component of accumulated other comprehensive income. Gains and losses, once realized, are recorded as a component of accumulated other comprehensive income and are amortized to revenue over the same period in which the underlying hedged amounts are recognized. Any ineffective portion of gains or losses are recorded as other income (expense), net and were immaterial during all periods presented. Each period, we evaluate the effectiveness of each of our hedges.
Fair Value Measurements 
Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows:
Level 1—Observable inputs such as quoted prices for identical assets or liabilities in active markets;
Level 2—Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and
Level 3—Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard on revenue recognition from contracts with customers. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB approved a one year deferral of the effective date making the new standard effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. In March 2016, the FASB amended the principal-versus-agent implementation guidance set forth in the new standard. Among other things, this amendment clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. In April 2016, the FASB amended certain aspects of the new standard related to identifying performance obligations and licensing implementation. In May 2016, the FASB amended certain aspects of the new standard related to collectability assessment, sales taxes and other similar taxes collected from customers, noncash consideration, contract modification and completed contracts at transition. This amendment is intended to address implementation issues raised by stakeholders and provide additional practical expedients to reduce the cost and complexity of applying the new standard. We plan to adopt this new standard on January 1, 2018 and are currently evaluating the transition method we intend to utilize and its expected impact on our consolidated financial statements.
In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating the timing of our adoption and the expected impact of this new standard on our consolidated financial statements.
In March 2016, the FASB issued new guidance changing the accounting for certain aspects of share-based payments to employees. The guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis and allows for an employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance requires recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption permitted. We expect to adopt this guidance on January 1, 2017 and are currently evaluating its expected impact on our consolidated financial statements.
In June 2016, the FASB issued new guidance for the accounting for credit losses on instruments that will require us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial instruments measured at amortized cost and also applies to some off-balance sheet credit exposures. The guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the timing of our adoption and the expected impact of this new guidance on our consolidated financial statements.
In August 2016, the FASB issued new guidance clarifying the treatment of several cash flow categories. In addition, the new guidance clarifies that when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated, classification will depend on the predominant source or use. This new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. We expect to adopt this guidance during the fourth quarter of 2016 and are currently evaluating its expected impact on our consolidated financial statements.
In October 2016, the FASB issued new guidance that will require an entity to recognize the income tax consequences of intra-entity assets transfers, other than inventory, when the transfer occurs. This new guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the timing of our adoption and the expected impact of this new guidance on our consolidated financial statements.
Summary of Significant Accounting Policies (Tables)
Fair Value, Assets Measured on Recurring Basis
We classify these assets within Level 1 or Level 2 because we use either quoted market prices or alternative pricing sources utilizing market observable inputs to determine their fair value, as follows:
 
September 30, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents:
 
 
 
 
 
 
 
Reverse repurchase agreements(1)
$
—

 
$
135.0

 
$
—

 
$
135.0

Commercial paper
—

 
50.0

 
—

 
50.0

Short-term investments:
 
 
 
 
 
 

Certificates of deposit and time deposits
9.6

 
—

 
—

 
9.6

Total assets measured and recorded at fair value
$
9.6

 
$
185.0

 
$
—

 
$
194.6

 
 
(1)
Reverse repurchase agreements include an $80.0 million repurchase agreement with Morgan Stanley, callable with 31 days notice, and a $55.0 million one-week repurchase agreement with Wells Fargo.
 
December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents:
 
 
 
 
 
 
 
Reverse repurchase agreements(1)
$
—

 
$
40.0

 
$
—

 
$
40.0

Short-term investments:
 
 
 
 
 
 
 
Certificates of deposit
4.5

 
—

 
—

 
4.5

Total assets measured and recorded at fair value
$
4.5

 
$
40.0

 
$
—

 
$
44.5

 
 
(1)
Reverse repurchase agreements include a $40.0 million repurchase agreement with Wells Fargo in overnight sweeps.
Goodwill and Intangible Assets (Tables)
Schedule of Goodwill 
The following table summarizes changes in our goodwill balance:
Balance at December 31, 2015
$
1,663.4

Goodwill related to acquisitions
14.7

Balance at September 30, 2016
$
1,678.1

Schedule of Indefinite-Lived Intangible Assets 
Intangible assets, net are summarized as follows:
 
September 30, 2016
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
n/a

 
 n/a

 
$
445.0

Domain portfolio
99.6

 
n/a

 
$
(10.1
)
 
89.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
362.8

 
$
(234.3
)
 
 n/a

 
128.5

Developed technology
215.7

 
(177.8
)
 
 n/a

 
37.9

Trade names
11.6

 
(7.0
)
 
 n/a

 
4.6

Other
1.1

 
(1.1
)
 
 n/a

 
—

 
$
1,135.8

 
$
(420.2
)
 
$
(10.1
)
 
$
705.5

 
December 31, 2015
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
 n/a

 
 n/a

 
$
445.0

Domain portfolio
61.2

 
n/a

 
(3.7
)
 
57.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
361.2

 
$
(196.8
)
 
 n/a

 
164.4

Developed technology
210.1

 
(148.0
)
 
 n/a

 
62.1

Trade names
11.2

 
(5.2
)
 
 n/a

 
6.0

Other
1.1

 
(0.8
)
 
 n/a

 
0.3

 
$
1,089.8

 
$
(350.8
)
 
$
(3.7
)
 
$
735.3

Schedule of Finite-Lived Intangible Assets 
Intangible assets, net are summarized as follows:
 
September 30, 2016
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
n/a

 
 n/a

 
$
445.0

Domain portfolio
99.6

 
n/a

 
$
(10.1
)
 
89.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
362.8

 
$
(234.3
)
 
 n/a

 
128.5

Developed technology
215.7

 
(177.8
)
 
 n/a

 
37.9

Trade names
11.6

 
(7.0
)
 
 n/a

 
4.6

Other
1.1

 
(1.1
)
 
 n/a

 
—

 
$
1,135.8

 
$
(420.2
)
 
$
(10.1
)
 
$
705.5

 
December 31, 2015
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Domains Sold
 
Net Carrying
Amount
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
Trade names and branding
$
445.0

 
 n/a

 
 n/a

 
$
445.0

Domain portfolio
61.2

 
n/a

 
(3.7
)
 
57.5

Finite-lived intangible assets:
 
 
 
 
 
 
 
Customer-related
361.2

 
$
(196.8
)
 
 n/a

 
164.4

Developed technology
210.1

 
(148.0
)
 
 n/a

 
62.1

Trade names
11.2

 
(5.2
)
 
 n/a

 
6.0

Other
1.1

 
(0.8
)
 
 n/a

 
0.3

 
$
1,089.8

 
$
(350.8
)
 
$
(3.7
)
 
$
735.3

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
Based on the balance of finite-lived intangible assets at September 30, 2016, expected future amortization expense is as follows:
Year Ending December 31:
 
2016 (remainder of)
$
20.4

2017
54.6

2018
46.4

2019
27.4

2020
21.5

Thereafter
0.7

 
$
171.0

Equity-Based Compensation Plans (Tables)
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award
The following table summarizes our option activity for the nine months ended September 30, 2016:
 
 
Number of
Shares of Class A Common Stock (#)
 
Weighted-
Average
Grant-
Date Fair
Value ($)
 
Weighted-
Average
Exercise
Price ($)
Outstanding at December 31, 2015
 
27,419

 
 
 
10.25

Granted
 
2,042

 
11.89

 
30.70

Exercised
 
(7,646
)
 
 
 
6.01

Forfeited
 
(1,448
)
 
 
 
17.04

Outstanding at September 30, 2016
 
20,367

 
 
 
13.41

Vested at September 30, 2016
 
9,961

 
 
 
8.54

The following table summarizes our RSU activity for the nine months ended September 30, 2016:
 
 
Number of
Shares of Class A Common Stock (#)
 
Weighted-
Average
Grant-
Date Fair
Value ($)
Outstanding at December 31, 2015
 
93

 
 
Granted
 
2,876

 
29.95

Vested
 
(207
)
 
 
Forfeited
 
(165
)
 
 
Outstanding at September 30, 2016
 
2,597

 
 
Deferred Revenue (Tables)
Deferred Revenue, by Arrangement
Deferred revenue consists of the following:
 
September 30, 2016
 
December 31, 2015
Current:
 
 
 
Domains
$
535.6

 
$
497.2

Hosting and presence
370.2

 
330.8

Business applications
137.5

 
109.7

 
$
1,043.3

 
$
937.7

Noncurrent:
 
 
 
Domains
$
310.1

 
$
288.5

Hosting and presence
163.6

 
149.7

Business applications
54.7

 
40.3

 
$
528.4

 
$
478.5

Long-Term Debt (Tables)
Schedule of Long-term Debt Instruments 
Long-term debt consists of the following:
 
September 30, 2016
 
December 31, 2015
Term Loan due May 13, 2021 (effective interest rate of 4.9% at September 30, 2016 and 5.1% at December 31, 2015)
$
1,075.3

 
$
1,083.5

Revolving Credit Loan due May 13, 2019
—

 
—

Total
1,075.3

 
1,083.5

Less: unamortized original issue discounts on long-term debt(1)
(32.1
)
 
(36.8
)
Less: unamortized debt issuance costs(1)
(2.4
)
 
(2.7
)
Less: current portion of long-term debt
(4.1
)
 
(4.2
)
 
$
1,036.7

 
$
1,039.8

 
 
(1)
Original issue discounts and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the effective interest method.
Schedule of Maturities of Long-term Debt 
Aggregate principal payments, exclusive of any unamortized original issue discounts and debt issuance costs, due on long-term debt as of September 30, 2016 are as follows:
Year Ending December 31:
 
2016 (remainder of)
$
2.8

2017
11.0

2018
11.0

2019
11.0

2020
11.0

Thereafter
1,028.5

 
$
1,075.3

Income (Loss) Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 
 
 
 
 
 
 
Net income (loss)
$
8.3

 
$
(5.2
)
 
$
(21.1
)
 
$
(119.9
)
Less: net income (loss) attributable to non-controlling interests
3.5

 
(2.7
)
 
(6.5
)
 
(74.0
)
Net income (loss) attributable to GoDaddy Inc.
$
4.8

 
$
(2.5
)
 
$
(14.6
)
 
$
(45.9
)
Denominator:
 
 
 
 
 
 
 
Weighted-average shares of Class A common stock outstanding—basic
83,733

 
64,999

 
77,170

 
56,153

Effect of dilutive securities
13,010

 
—

 
—

 
—

Weighted-average shares of Class A Common stock outstanding—diluted
96,743

 
64,999

 
77,170

 
56,153

Net income (loss) per share of Class A common stock—basic
$
0.06

 
$
(0.04
)
 
$
(0.19
)
 
$
(0.82
)
Net income (loss) per share of Class A common stock - diluted
$
0.05

 
$
(0.04
)
 
$
(0.19
)
 
$
(0.82
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such potentially dilutive shares would have been antidilutive:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Options, RSUs, warrants and ESPP shares
—

 
15,731

 
14,680

 
14,693

Schedule of Stock by Class 
Total shares outstanding were as follows:
 
September 30, 2016
 
December 31, 2015
Class A common stock
86,413

 
67,083

Class B common stock
78,921

 
90,398

 
165,334

 
157,481

Geographic Information (Tables)
Revenue from External Customers by Geographic Areas
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,
 
2016
 
2015
 
2016
 
2015
U.S.
$
342.9

 
$
304.7

 
$
999.8

 
$
877.7

International
129.2

 
106.4

 
362.2

 
304.2

 
$
472.1

 
$
411.1

 
$
1,362.0

 
$
1,181.9

Related Party Transactions (Tables)
Schedule of Related Party Transactions
Amounts paid to affiliates of KKR related to their participation as lenders under our Credit Facility were as follows:
 
Three Months Ended   September 30,
 
Nine Months Ended   September 30,
 
2016
 
2015
 
2016
 
2015
Principal
$
—

 
$
0.1

 
$
0.1

 
$
5.2

Interest and other fees
0.1

 
0.3

 
0.7

 
1.1

Organization and Background (Details)
9 Months Ended 1 Months Ended 0 Months Ended
Sep. 30, 2016
segment
Apr. 30, 2016
Conversion of LLC Units to Class A Common Stock
Sep. 30, 2016
Desert Newco, LLC
Class of Stock [Line Items]
 
 
 
Conversion of LLC units to common stock (in shares)
 
10,382,000 
 
LLC units held (as a percent)
 
 
52.00% 
Number of reporting units
1 
 
 
Number of operating segments
1 
 
 
Summary of Significant Accounting Policies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Other Income (Expense)
 
 
 
 
Derivative [Line Items]
 
 
 
 
Foreign currency remeasurement gain (loss)
$ (1.5)
$ (1.5)
$ (3.1)
$ (2.9)
Cash Flow Hedging |
Designated as Hedging Instrument |
Foreign Exchange Forward Contract
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative notional amount
$ 26.1 
 
$ 26.1 
 
Derivative remaining maturity
 
 
3 months 
 
Summary of Significant Accounting Policies Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Morgan Stanley
Sep. 30, 2016
Wells Fargo
Dec. 31, 2015
Wells Fargo
Sep. 30, 2016
Fair Value, Measurements, Recurring [Member]
Dec. 31, 2015
Fair Value, Measurements, Recurring [Member]
Sep. 30, 2016
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Dec. 31, 2015
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Sep. 30, 2016
Fair Value, Measurements, Recurring [Member]
Level 2
Dec. 31, 2015
Fair Value, Measurements, Recurring [Member]
Level 2
Sep. 30, 2016
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Dec. 31, 2015
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Sep. 30, 2016
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Dec. 31, 2015
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Sep. 30, 2016
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Dec. 31, 2015
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Sep. 30, 2016
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Level 2
Dec. 31, 2015
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Level 2
Sep. 30, 2016
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Dec. 31, 2015
Repurchase Agreements [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Sep. 30, 2016
Commercial Paper [Member]
Fair Value, Measurements, Recurring [Member]
Sep. 30, 2016
Commercial Paper [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Sep. 30, 2016
Commercial Paper [Member]
Fair Value, Measurements, Recurring [Member]
Level 2
Sep. 30, 2016
Commercial Paper [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Sep. 30, 2016
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Dec. 31, 2015
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Sep. 30, 2016
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Dec. 31, 2015
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 1 [Member]
Sep. 30, 2016
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Level 2
Dec. 31, 2015
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Level 2
Sep. 30, 2016
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Dec. 31, 2015
Bank Time Deposits [Member]
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents, fair value
 
 
 
 
 
 
 
 
 
 
 
$ 135.0 
$ 40.0 
$ 0 
$ 0 
$ 135.0 
$ 40.0 
$ 0 
$ 0 
$ 50.0 
$ 0 
$ 50.0 
$ 0 
 
 
 
 
 
 
 
 
Short-term investments, fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.6 
4.5 
9.6 
4.5 
0 
0 
0 
0 
Assets, fair value
 
 
 
194.6 
44.5 
9.6 
4.5 
185.0 
40.0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreement amount
$ 80.0 
$ 55.0 
$ 40.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repurchase agreement callable notice period
31 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Sep. 30, 2016
Series of Individually Immaterial Business Acquisitions
Business
Sep. 30, 2016
Series of Individually Immaterial Business Acquisitions
Domain Portfolio
Business Acquisition [Line Items]
 
 
 
 
Number of businesses acquired
 
 
2 
 
Aggregate consideration transferred
 
 
$ 61.1 
 
Consideration payable
 
 
3.1 
 
Identified indefinite-lived intangible assets acquired
 
 
 
38.4 
Goodwill
1,678.1 
1,663.4 
14.7 
 
Other identified intangible assets acquired
 
 
7.6 
 
Net liabilities assumed
 
 
(0.7)
 
Write-off of deferred revenue from prior transaction with acquired business
 
 
$ 1.1 
 
Weighted average useful life
 
 
4 years 4 months 24 days 
 
Goodwill and Intangible Assets - Goodwill (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Goodwill [Roll Forward]
 
Balance at December 31, 2015
$ 1,663.4 
Goodwill related to acquisitions
14.7 
Balance at September 30, 2016
$ 1,678.1 
Goodwill and Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-lived intangible assets, accumulated amortization
$ (420.2)
$ (350.8)
Finite-lived intangible assets, net
171.0 
 
Indefinite-lived Intangible Assets [Line Items]
 
 
Domains sold
(10.1)
(3.7)
Intangible assets, gross (excluding goodwill)
1,135.8 
1,089.8 
Intangible asset, net (excluding goodwill)
705.5 
735.3 
Trade names and branding
 
 
Indefinite-lived Intangible Assets [Line Items]
 
 
Indefinite-lived intangible assets (excluding goodwill)
445.0 
445.0 
Domain Portfolio
 
 
Indefinite-lived Intangible Assets [Line Items]
 
 
Indefinite-lived intangible assets (excluding goodwill), gross
99.6 
61.2 
Domains sold
(10.1)
(3.7)
Indefinite-lived intangible assets (excluding goodwill)
89.5 
57.5 
Customer-related
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-lived intangible assets, gross
362.8 
361.2 
Finite-lived intangible assets, accumulated amortization
(234.3)
(196.8)
Finite-lived intangible assets, net
128.5 
164.4 
Developed technology
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-lived intangible assets, gross
215.7 
210.1 
Finite-lived intangible assets, accumulated amortization
(177.8)
(148.0)
Finite-lived intangible assets, net
37.9 
62.1 
Trade names
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-lived intangible assets, gross
11.6 
11.2 
Finite-lived intangible assets, accumulated amortization
(7.0)
(5.2)
Finite-lived intangible assets, net
4.6 
6.0 
Other
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-lived intangible assets, gross
1.1 
1.1 
Finite-lived intangible assets, accumulated amortization
(1.1)
(0.8)
Finite-lived intangible assets, net
$ 0 
$ 0.3 
Goodwill and Intangible Assets - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Amortization expense
$ 25.7 
$ 24.6 
$ 69.4 
$ 71.4 
Weighted Average
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Weighted average remaining amortization period
 
 
43 months 
 
Customer-related |
Weighted Average
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Useful life
 
 
99 months 
 
Developed technology |
Weighted Average
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Useful life
 
 
64 months 
 
Trade names |
Weighted Average
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Useful life
 
 
57 months 
 
Goodwill and Intangible Assets - Future Amortization of Finite Lived Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
 
2016 (remainder of)
$ 20.4 
2017
54.6 
2018
46.4 
2019
27.4 
2020
21.5 
Thereafter
0.7 
Finite-lived intangible assets, net
$ 171.0 
Stockholders' Equity (Details) (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended 1 Months Ended
Sep. 30, 2016
Additional Paid-in Capital
Apr. 30, 2016
Conversion of LLC Units to Class A Common Stock
Apr. 30, 2016
Conversion of LLC Units to Class A Common Stock
Additional Paid-in Capital
Apr. 30, 2016
Class A Common Stock
Secondary Offering
Class of Stock [Line Items]
 
 
 
 
Shares issued
 
 
 
18,975,000 
Share price (in USD per share)
 
$ 30.25 
 
$ 30.25 
Proceeds from stock options exercised
 
 
 
$ 6.3 
Conversion of LLC units to common stock (in shares)
 
10,382,000 
 
 
Effect of exchanges of LLC Units
$ 13.3 
 
$ 8.8 
 
Equity-Based Compensation Plans (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
9 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2016
Employee Stock Option
Sep. 30, 2016
Restricted Stock Units (RSUs)
Sep. 30, 2016
Restricted Stock Units (RSUs)
Sep. 30, 2016
2015 Equity Incentive Plan
Class A Common Stock
Stock Compensation Plan
Jan. 1, 2016
2015 Equity Incentive Plan
Class A Common Stock
Stock Compensation Plan
Mar. 31, 2015
2015 Equity Incentive Plan
Class A Common Stock
Stock Compensation Plan
Mar. 31, 2015
2011 Unit Incentive Plan and Other Unidentified Plan
Class A Common Stock
Stock Compensation Plan
Mar. 31, 2016
2015 Employee Stock Purchase Plan
Employee Stock
Accrued Expenses and Other Current Liabilities
Sep. 30, 2016
2015 Employee Stock Purchase Plan
Class A Common Stock
Employee Stock
Jan. 1, 2016
2015 Employee Stock Purchase Plan
Class A Common Stock
Employee Stock
Mar. 31, 2015
2015 Employee Stock Purchase Plan
Class A Common Stock
Employee Stock
Sep. 30, 2016
2016 Employee Stock Purchase Plan
Employee Stock
Sep. 30, 2016
2016 Employee Stock Purchase Plan
Employee Stock
Accrued Expenses and Other Current Liabilities
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares reserved for future issuance
 
 
 
 
 
10,285 
 
 
 
 
2,000 
 
 
Shares reserved for issuance
 
 
 
12,575 
 
 
28,133 
 
2,325 
 
 
 
 
Additional shares reserved for future issuance
 
 
 
 
6,299 
 
 
 
 
1,000 
 
 
 
Unrecognized compensation costs
$ 45.0 
$ 49.8 
$ 49.8 
 
 
 
 
 
 
 
 
$ 0.4 
 
Weighted average recognition period
2 years 29 days 
 
2 years 11 months 26 days 
 
 
 
 
 
 
 
 
 
 
Funds withheld on behalf of employees
 
 
 
 
 
 
 
8.8 
 
 
 
 
3.4 
Equity-based compensation expense
 
$ 3.6 
$ 3.6 
 
 
 
 
 
 
 
 
 
 
Equity-Based Compensation Plans Equity-based Award Activity (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Employee Stock Option
 
Number of Shares of Class A Common Stock ()
 
Outstanding at beginning of period (in shares)
27,419 
Granted (in shares)
2,042 
Exercised (in shares)
(7,646)
Forfeited (in shares)
(1,448)
Outstanding at end of period (in shares)
20,367 
Vested at end of period (in shares)
9,961 
Weighted- Average Exercise Price ($)
 
Outstanding weighted average exercise price (in dollars per share)
$ 10.25 
Granted (in dollars per share)
$ 30.70 
Exercised (in dollars per share)
$ 6.01 
Forfeited (in dollars per share)
$ 17.04 
Outstanding weighted average exercise price (in dollars per share)
$ 13.41 
Vested at end of period (in dollars per share)
$ 8.54 
Weighted-average grant date fair value of options granted (in dollars per share)
$ 11.89 
Restricted Stock Units (RSUs)
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Outstanding at beginning of period (in shares)
93 
Granted (in shares)
2,876 
Vested (in shares)
(207)
Forfeited (in shares)
(165)
Outstanding at end of period (in shares)
2,597 
Weighted-average grant date fair value of RSUs granted (in dollar per share)
$ 29.95 
Deferred Revenue (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Deferred Revenue Arrangement [Line Items]
 
 
Deferred revenue, current
$ 1,043.3 
$ 937.7 
Deferred revenue, noncurrent
528.4 
478.5 
Domains
 
 
Deferred Revenue Arrangement [Line Items]
 
 
Deferred revenue, current
535.6 
497.2 
Deferred revenue, noncurrent
310.1 
288.5 
Hosting and presence
 
 
Deferred Revenue Arrangement [Line Items]
 
 
Deferred revenue, current
370.2 
330.8 
Deferred revenue, noncurrent
163.6 
149.7 
Business applications
 
 
Deferred Revenue Arrangement [Line Items]
 
 
Deferred revenue, current
137.5 
109.7 
Deferred revenue, noncurrent
$ 54.7 
$ 40.3 
Long-Term Debt - Schedule of Long Term Debt (Details) (USD $)
Sep. 30, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Long-term Debt
$ 1,075,300,000 
$ 1,083,500,000 
Less unamortized original issue discounts on long-term debt
(32,100,000)
(36,800,000)
Less unamortized debt issuance costs
(2,400,000)
(2,700,000)
Less current portion of long-term debt
(4,100,000)
(4,200,000)
Long-term debt, net of current portion
1,036,700,000 
1,039,800,000 
Term Loan |
Term Loan Due May 2021
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
1,075,300,000 
1,083,500,000 
Effective interest rate
4.90% 
5.10% 
Line of Credit |
Revolving Credit Loan Due May 2019 |
Revolving Credit Facility
 
 
Debt Instrument [Line Items]
 
 
Long-term Debt
$ 0 
$ 0 
Long-Term Debt (Details) (USD $)
9 Months Ended
Sep. 30, 2016
Credit Facility |
Option 2 |
Minimum
 
Debt Instrument [Line Items]
 
Base rate
2.25% 
Credit Facility |
London Interbank Offered Rate (LIBOR) |
Option 1
 
Debt Instrument [Line Items]
 
Basis spread on variable rate
3.25% 
Credit Facility |
London Interbank Offered Rate (LIBOR) |
Option 1 |
Minimum
 
Debt Instrument [Line Items]
 
Base rate
1.00% 
Credit Facility |
London Interbank Offered Rate (LIBOR) |
Option 2
 
Debt Instrument [Line Items]
 
Basis spread on variable rate
1.00% 
Credit Facility |
Federal Funds Rate |
Option 2
 
Debt Instrument [Line Items]
 
Basis spread on variable rate
0.50% 
Term Loan |
Term Loan Due May 2021
 
Debt Instrument [Line Items]
 
Long-term Debt
$ 1,100,000,000.0 
Term Loan |
Term Loan Due May 2021 |
Level 2
 
Debt Instrument [Line Items]
 
Debt, fair value
1,082,700,000 
Line of Credit |
Revolving Credit Loan Due May 2019 |
Revolving Credit Facility
 
Debt Instrument [Line Items]
 
Maximum borrowing capacity
150,000,000.0 
Available borrowing capacity
$ 150,000,000 
Long-Term Debt - Schedule of Debt Maturities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Debt Disclosure [Abstract]
 
 
2016 (remainder of)
$ 2.8 
 
2017
11.0 
 
2018
11.0 
 
2019
11.0 
 
2020
11.0 
 
Thereafter
1,028.5 
 
Long-term Debt
$ 1,075.3 
$ 1,083.5 
Commitments and Contingencies (Details) (Indirect Taxation, USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Indirect Taxation
 
 
Loss Contingencies [Line Items]
 
 
Estimated tax liability
$ 5.1 
$ 7.1 
Income (Loss) Per Share (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Class B Common Stock
Apr. 7, 2015
Common Stock
Class A Common Stock
Sep. 30, 2015
Pro Forma
Sep. 30, 2016
Pro Forma
Sep. 30, 2015
Pro Forma
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
Shares issued during IPO
 
 
 
 
 
26,000,000 
 
 
 
Net income (loss)
$ 8.3 
$ (5.2)
$ (21.1)
$ (119.9)
 
 
$ (5.2)
$ (21.1)
$ (119.9)
Less: net income (loss) attributable to non-controlling interests
3.5 
(2.7)
(6.5)
(44.2)
 
 
(2.7)
(6.5)
(74.0)
Net income (loss)
$ 4.8 
$ (2.5)
$ (14.6)
$ (75.7)
 
 
$ (2.5)
$ (14.6)
$ (45.9)
Weighted-average shares of Class A common stock outstanding—basic (in shares)
83,733,000 1
64,999,000 1
77,170,000 1
56,153,000 1
 
 
64,999,000 
77,170,000 
56,153,000 
Effect of dilutive securities (in shares)
13,010,000 
 
 
 
 
 
0 
0 
0 
Weighted-average shares of Class A Common stock outstanding—diluted (in shares)
96,743,000 1
64,999,000 1
77,170,000 1
56,153,000 1
 
 
64,999,000 
77,170,000 
56,153,000 
Net income (loss) per share of Class A common stock - basic (in USD per share)
$ 0.06 1
$ (0.04)1
$ (0.19)1
$ (0.82)1
 
 
$ (0.04)
$ (0.19)
$ (0.82)
Net income (loss) per share of Class A common stock - diluted (in USD per share)
$ 0.05 1
$ (0.04)1
$ (0.19)1
$ (0.82)1
 
 
$ (0.04)
$ (0.19)
$ (0.82)
Conversion feature of Class B common stock, number of Class A common shares
 
 
 
 
1 
 
 
 
 
Income (Loss) Per Share Weighted Average Shares Excluded (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Earnings Per Share [Abstract]
 
 
 
 
Antidilutive securities excluded from diluted loss per unit calculation (in shares)
0 
15,731 
14,680 
14,693 
Income (Loss) Per Share Schedule of Shares Outstanding (Details)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Class of Stock [Line Items]
 
 
Common stock outstanding (in shares)
165,334 
157,481 
Class A Common Stock
 
 
Class of Stock [Line Items]
 
 
Common stock outstanding (in shares)
86,413 
67,083 
Class B Common Stock
 
 
Class of Stock [Line Items]
 
 
Common stock outstanding (in shares)
78,921 
90,398 
Geographic Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenue
$ 472.1 
$ 411.1 
$ 1,362.0 
$ 1,181.9 
U.S.
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenue
342.9 
304.7 
999.8 
877.7 
International
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
Revenue
$ 129.2 
$ 106.4 
$ 362.2 
$ 304.2 
Related Party Transactions - Tax Distributions to Desert Newco's Owners (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended
Sep. 30, 2016
Mar. 31, 2016
Desert Newco, LLC
Sep. 30, 2016
Desert Newco, LLC
Mar. 31, 2016
Reorganization Parties and Continuing LLC Owners
Investor
Tax Receivable Agreement
Dec. 31, 2015
Reorganization Parties and Continuing LLC Owners
Investor
Tax Receivable Agreement
Apr. 30, 2016
YAM Special Holdings, Inc
Desert Newco, LLC
Mar. 31, 2016
YAM Special Holdings, Inc
Desert Newco, LLC
Apr. 30, 2016
Silver Lake Partners
Desert Newco, LLC
Mar. 31, 2016
Silver Lake Partners
Desert Newco, LLC
Apr. 30, 2016
Kohlberg Kravis Roberts & Co LP
Desert Newco, LLC
Mar. 31, 2016
Kohlberg Kravis Roberts & Co LP
Desert Newco, LLC
Apr. 30, 2016
Technology Crossover Venture
Desert Newco, LLC
Mar. 31, 2016
Technology Crossover Venture
Desert Newco, LLC
Apr. 30, 2016
Other Desert Newco Owners
Desert Newco, LLC
Mar. 31, 2016
Other Desert Newco Owners
Desert Newco, LLC
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumed blended state income tax rate
 
 
7.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Assumed income tax rate
 
 
46.60% 
 
 
 
 
 
 
 
 
 
 
 
 
Assumed income tax rate including tax on net investment income
 
 
50.40% 
 
 
 
 
 
 
 
 
 
 
 
 
Payable to related parties pursuant to tax receivable agreements
 
 
 
$ 5.8 
$ 5.3 
 
 
 
 
 
 
 
 
 
 
Distributions paid
$ 5.0 
$ 4.6 
 
 
 
$ 2.3 
$ 1.8 
$ 1.3 
$ 1.0 
$ 1.2 
$ 1.0 
$ 0.7 
$ 0.5 
$ 0.3 
$ 0.3 
Related Party Transactions (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Sep. 30, 2016
Term Loan Due May 2021
Term Loan
Dec. 31, 2015
Term Loan Due May 2021
Term Loan
Sep. 30, 2016
Affiliates of KKR
Credit Facility
Affiliated Entity
Loans Held by Related Parties
Sep. 30, 2015
Affiliates of KKR
Credit Facility
Affiliated Entity
Loans Held by Related Parties
Sep. 30, 2016
Affiliates of KKR
Credit Facility
Affiliated Entity
Loans Held by Related Parties
Sep. 30, 2015
Affiliates of KKR
Credit Facility
Affiliated Entity
Loans Held by Related Parties
Sep. 30, 2016
Affiliates of KKR
Term Loan Due May 2021
Affiliated Entity
Loans Held by Related Parties
Term Loan
Dec. 31, 2015
Affiliates of KKR
Term Loan Due May 2021
Affiliated Entity
Loans Held by Related Parties
Term Loan
Apr. 30, 2015
Sponsors
Affiliated Entity
Termination Payment for Transaction and Fee Monitoring Agreement
General and administrative
Dec. 16, 2011
YAM Special Holdings, Inc
Affiliated Entity
Expense Reimbursement With Related Parties
Maximum
Apr. 30, 2015
YAM Special Holdings, Inc
Affiliated Entity
Special Termination Benefits
Apr. 30, 2015
YAM Special Holdings, Inc
Note Payable Due December 2019
Affiliated Entity
Loans Held by Related Parties
Senior Notes
Sep. 30, 2015
YAM Special Holdings, Inc
Note Payable Due December 2019
Affiliated Entity
Loans Held by Related Parties
Senior Notes
Sep. 30, 2015
YAM Special Holdings, Inc
Note Payable Due December 2019
Affiliated Entity
Loans Held by Related Parties
Senior Notes
Sep. 30, 2016
Dell Inc
Affiliated Entity
Purchase and Lease of Computer Equipment, Technology Licensing, Maintenance and Support
Sep. 30, 2015
Dell Inc
Affiliated Entity
Purchase and Lease of Computer Equipment, Technology Licensing, Maintenance and Support
Sep. 30, 2016
Dell Inc
Affiliated Entity
Purchase and Lease of Computer Equipment, Technology Licensing, Maintenance and Support
Sep. 30, 2015
Dell Inc
Affiliated Entity
Purchase and Lease of Computer Equipment, Technology Licensing, Maintenance and Support
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayments of principal
 
 
 
 
 
 
 
$ 0 
$ 100,000 
$ 100,000 
$ 5,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and other fees
 
 
 
 
 
 
 
100,000 
300,000 
700,000 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
1,075,300,000 
 
1,075,300,000 
 
1,083,500,000 
1,075,300,000 
1,083,500,000 
 
 
 
 
0 
28,800,000 
 
 
 
 
 
 
 
 
 
 
Related party expenses
(1,300,000)
600,000 
9,400,000 
600,000 
 
 
 
 
 
 
 
 
 
26,700,000 
 
3,000,000 
 
 
 
 
 
 
 
Annual expense reimbursement, up to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
 
Interest on long-term debt
 
 
35,000,000 
47,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
9,200,000 
 
 
 
 
Prepayment penalty
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,500,000 
 
 
 
 
 
 
Purchases from related party
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3,000,000 
$ 4,300,000 
$ 11,300,000 
$ 13,300,000