GoDaddy (NYSE: GDDY) reported earning after the close and the stock is getting hit. Shares closed at $35.09 on the day, but in after hours the stock is down 3.4% to $34. The company did show a profit for the quarter.

GoDaddy Inc. was downgraded to neutral from buy at Monness, Crespi, Hardt ahead of its third-quarter earnings report Wednesday.

James Cakmak, the Monness, Crespi, Hardt analyst, said he was not making the downgrade for any structural issues, but rather the view that the shares may be constrained in the near-term.

Blake Irving commented:

“GoDaddy turned in another strong quarter, with results again exceeding the top-end of our guidance.  I’m particularly pleased with the advancements we’ve made in both new product introductions, and how we serve our global markets.  We’ve proven our ability to successfully scale the business, delivering compelling products and experiences that will continue to grow our business over the long term.”

Highlights

• Total revenue of $472.1 million, up 14.8% year over year, or 16.4% on a constant currency basis.
• Domains revenue of $236.6 million, up 10.0% year over year.
• Hosting and Presence revenue of $174.1 million, up 15.5% year over year.
• Business Applications revenue of $61.4 million, up 35.5% year over year.
• International revenue of $129.2 million, up 21.4% year over year, or 27.2% on a constant currency basis.
• Total bookings of $534.3 million, up 12.3% year over year, or 13.1% on a constant currency basis.
• Net income of $8.3 million, represented a positive swing versus a net loss of $5.2 million in the prior year.
• Net cash provided by operating activities of $99.7 million, up 26.7% year over year.
• Unlevered free cash flow of $95.6 million, up 19.9% year over year.
• Customers were 14.5 million at quarter end, up 7.2% year over year.
• Average revenue per user (ARPU) of $127, up 6.5% year over year.

Business Highlights

• Registered 1 millionth .UK domain in the United Kingdom. An estimated 25% of Britain’s most popular domains are now registered through GoDaddy.
• Launched Domain Connect Initiative, making it easier for customers to connect their domain names to their web service of choice, regardless of their domain name registrar.
• Acquired ManageWP to offer a single destination for best-in-class WordPress management and hosting.
• Launched WordPress Websites featuring an exclusive WordPress Quick Start Wizard that simplifies the website creation process helping our customers get started quickly.
• Launched Email Archiving and Email Encryption add-on services for Office 365 users making it easier for small business owners to transmit, store and protect valuable data, and simpler for those operating in regulated industries to remain compliant.
• Joined a growing consortium of U.S. companies to help promote best practices and share ideas to eliminate the gender pay gap.

Balance Sheet

At September 30, 2016, total cash, cash equivalents and short-term investments were $565.8 million, total debt was $1,075.3 million and net debt was $509.5 million.