The company points to growth challenges in the second half of the year.

Shares of GoDaddy (NYSE: GDDY) fell over 10% this morning after the company announced earnings yesterday after the market closed.

The company is cautioning on expectations for the second half of the year.

In prepared comments, GoDaddy CEO Aman Bhutani noted:

Following a strong first half, we want to acknowledge the evolving impact of the pandemic, COVID variants and access to the vaccines and we want to be prudent with our guidance for the second half of the year.

The company expects bookings growth to be a couple of points behind revenue growth in the second half of the year. This is problematic because bookings foretell future revenue, which is recognized over time after the sale is booked.

GoDaddy also expects revenue growth in its domains business to slow, especially in Q4. It expects to exit the year in low double-digit growth in domains, compared to 18.2% in Q2.

Bhutani noted there are tougher comparisons on the second half of last year, as the company will lap the impact of the List for Sale tool and other domain improvements introduced in Q4 of last year. Bhutani reminded investors that aftermarket revenue is non-subscription. This is something I don’t think a lot of investors think about; the aftermarket now accounts for 10% of GoDaddy’s revenue, but it starts over at zero every quarter.

The picture for Websites + Marketing isn’t great as the company laps strong quarters a year ago. It also expects continuing declines in social.

On yesterday’s investor conference call, several analysts asked about Verisign’s price hike for .com. Bhutani noted that the company has segmented pricing for different types of customers. While he didn’t answer the question head-on, GoDaddy told bulk customers this week that .com prices will increase commensurate with Verisign’s 7% increase. The company has much more margin baked in for typical customers, so I wouldn’t be surprised if it eats the cost increase on that side of the business.

While the company might be conservative with its guidance, it is preparing investors for challenges ahead.

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