[Executive Summary](index=1&type=section&id=Executive%20Summary) GoDaddy reported strong Q2 2025 results, highlighting profitable growth and robust cash generation, with leadership emphasizing innovation through agentic AI and focus on high-intent customers - CEO Aman Bhutani highlighted the acceleration of innovation, energized by the transformative potential of agentic AI, to deliver sustained profitable growth[3](index=3&type=chunk) - CFO Mark McCaffrey emphasized the durability of the business model and the focus on high-intent customers with greater lifetime value to maximize free cash flow[3](index=3&type=chunk) [Q2 2025 Financial & Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20%26%20Operational%20Highlights) The company delivered strong growth in Q2 2025, with total revenue up 8% YoY to $1.2 billion and free cash flow increasing 21% to $391.5 million, driven by the Applications and Commerce segment, while Average Revenue Per User (ARPU) grew by 9.5% to $230 despite a slight decrease in total customers Q2 2025 Key Metrics (YoY) | Metric | Q2 2025 Value | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $1.2 billion | 8% | | Total Bookings | $1.3 billion | 7% | | Applications & Commerce Revenue | $463.9 million | 14% | | Core Platform Revenue | $753.7 million | 5% | | Operating Income | $266.3 million | 28% | | Net Income | $199.9 million | 37% | | Normalized EBITDA (NEBITDA) | $381.7 million | 15% | | Free Cash Flow | $391.5 million | 21% | Q2 2025 Operating Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Customers (end of period) | 20,409 thousand | 20,866 thousand | (2.2)% | | Average Revenue Per User (ARPU) | $230 | $210 | 9.5% | | Annualized Recurring Revenue (ARR) | $4,181.0 million | $3,853.4 million | 8.5% | [Capital Management](index=2&type=section&id=Capital%20Management) GoDaddy actively returned capital to shareholders, repurchasing 5.2 million shares for $906.0 million year-to-date through August 6, 2025, holding $1.1 billion in cash and cash equivalents against $3.8 billion in total debt, resulting in a net debt position of $2.8 billion Share Repurchases (YTD through Aug 6, 2025) | Metric | Value | | :--- | :--- | | Shares Repurchased | 5.2 million | | Aggregate Purchase Price | $906.0 million | | Average Price Per Share | $174.42 | Balance Sheet Summary (as of June 30, 2025) | Item | Amount | | :--- | :--- | | Total Cash and Cash Equivalents | $1.1 billion | | Total Debt | $3.8 billion | | Net Debt | $2.8 billion | [Business Outlook (Guidance)](index=2&type=section&id=Business%20Outlook%20%28Guidance%29) GoDaddy provided positive guidance, expecting Q3 revenue between $1.22 billion and $1.24 billion (7% YoY growth at midpoint), raising its full-year 2025 revenue forecast to a range of $4.89 billion to $4.94 billion and its free cash flow target to approximately $1.6 billion, with a minor headwind anticipated in Q4 from the .CO domain registry service transition Q3 2025 Guidance | Metric | Guidance Range | YoY Growth (Midpoint) | | :--- | :--- | :--- | | Total Revenue | $1.22B - $1.24B | 7% | | NEBITDA Margin | Approx. 32% | N/A | Full Year 2025 Raised Guidance | Metric | Guidance Range | YoY Growth (Midpoint) | | :--- | :--- | :--- | | Total Revenue | $4.89B - $4.94B | 7% | | Free Cash Flow | Approx. $1.6B | N/A | | NEBITDA Margin Expansion | Approx. 100 bps | N/A | - The company will no longer operate as the registry for the .CO top-level domain starting in Q4 2025, which is expected to create an approximate 50 basis point headwind to bookings and revenue[12](index=12&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the detailed unaudited GAAP financial statements for the three and six months ended June 30, 2025, including the Statements of Operations, Balance Sheets, and Statements of Cash Flows [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue grew to $1.22 billion from $1.12 billion in Q2 2024, driving operating income up 28% to $266.3 million and net income up 37% to $199.9 million, with diluted EPS for the quarter at $1.41 Q2 Statement of Operations Summary (in millions) | Line Item | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,217.6 | $1,124.5 | +8.3% | | Operating Income | $266.3 | $208.2 | +27.9% | | Net Income | $199.9 | $146.3 | +36.6% | | Diluted EPS | $1.41 | $1.01 | +39.6% | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $8.27 billion, a slight increase from year-end 2024, with key assets including $1.09 billion in cash and $3.64 billion in goodwill, while total liabilities stood at $7.87 billion, primarily composed of $3.34 billion in deferred revenue and $3.79 billion in long-term debt Balance Sheet Summary (in millions) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,086.7 | $1,089.0 | | Goodwill | $3,644.0 | $3,518.9 | | Total Assets | $8,273.9 | $8,235.4 | | **Liabilities & Equity** | | | | Deferred Revenue (Total) | $3,337.5 | $3,105.5 | | Long-term Debt (Total) | $3,788.1 | $3,795.0 | | Total Stockholders' Equity | $404.4 | $692.1 | | Total Liabilities & Equity | $8,273.9 | $8,235.4 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities was $784.6 million, a 32.5% increase from the prior year, driven by higher net income and changes in operating assets and liabilities, with the company using $792.5 million for share repurchases, resulting in a net cash usage of $781.7 million in financing activities Six Months Ended June 30 Cash Flow Summary (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $784.6 | $592.0 | | Net cash provided by (used in) investing activities | $(10.0) | $40.9 | | Net cash used in financing activities | $(781.7) | $(646.2) | | Net (decrease) in cash and cash equivalents | $(2.3) | $(13.9) | [Non-GAAP Financial Measures & Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines the non-GAAP and other operating metrics GoDaddy uses to evaluate its business, such as NEBITDA and Free Cash Flow, and provides detailed tables reconciling these non-GAAP measures to their most directly comparable GAAP figures [Definitions of Key Metrics](index=5&type=section&id=Definitions%20of%20Key%20Metrics) Provides definitions for key operational and non-GAAP metrics used by management, including Total Bookings, Constant Currency, Normalized EBITDA (NEBITDA), Free Cash Flow, Net Debt, Annualized Recurring Revenue (ARR), Average Revenue Per User (ARPU), and Total Customers - **Total Bookings:** Total value of customer contracts entered into during the period, excluding refunds[22](index=22&type=chunk) - **NEBITDA:** Net income excluding interest, taxes, depreciation, amortization, equity-based compensation, and other specific items[24](index=24&type=chunk) - **Free Cash Flow:** A liquidity measure calculated as net cash from operating activities adjusted for capital expenditures and certain restructuring/acquisition costs[26](index=26&type=chunk) - **ARPU:** Total revenue over the preceding 12 months divided by the average number of total customers[30](index=30&type=chunk) [Reconciliation Tables](index=10&type=section&id=Reconciliation%20Tables) Presents the numerical reconciliations for key non-GAAP measures, where for Q2 2025, Net Income of $199.9 million was reconciled to NEBITDA of $381.7 million, and Net cash from operating activities of $379.9 million was reconciled to Free Cash Flow of $391.5 million Reconciliation of Net Income to NEBITDA (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net income | $199.9 | | Depreciation and amortization | $30.6 | | Equity-based compensation expense | $81.0 | | Interest expense, net | $29.5 | | Restructuring and other | $1.5 | | Provision for income taxes | $39.2 | | **NEBITDA** | **$381.7** | Reconciliation to Free Cash Flow (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $379.9 | | Capital expenditures | $(4.1) | | Cash paid for acquisition-related costs | $9.3 | | Cash paid for restructuring and other charges | $6.4 | | **Free cash flow** | **$391.5** | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains the company's safe harbor statement, cautioning that forward-looking statements regarding business outlook, product launches, and financial results are subject to various risks and uncertainties, including market evolution, competition, and macroeconomic conditions - Statements regarding business outlook, launches of new products (including AI-based solutions), customer growth, and future financial results are considered forward-looking[18](index=18&type=chunk) - Key risks that could cause actual results to differ materially include the evolving market, competition, cybersecurity threats, macroeconomic conditions, geopolitical tensions, and the ability to innovate with new technologies like AI[18](index=18&type=chunk)

Core Viewpoint - GoDaddy Inc. reported its financial results for the second quarter of 2025, highlighting its ongoing commitment to supporting entrepreneurs globally through its services and AI-powered tools [1]. Company Overview - GoDaddy assists millions of entrepreneurs worldwide in starting, growing, and scaling their businesses by providing services such as website creation, logo design, product sales, and payment processing [3]. - The company offers GoDaddy Airo®, an AI-powered experience designed to expedite the process of getting small businesses online, driving traffic, and boosting sales [3]. - GoDaddy provides 24/7 expert guidance to assist users in utilizing its services effectively [3].

Core Insights - GoDaddy (GDDY) is set to report its second-quarter 2025 results on August 7, with expected revenues between $1.195 billion and $1.215 billion, indicating a 7% growth at the midpoint compared to the same quarter last year [1] - The Zacks Consensus Estimate for second-quarter revenues is $1.20 billion, suggesting a 7.1% year-over-year increase [1] - The consensus estimate for earnings is $1.34 per share, reflecting a growth of 21.8% from the previous year's reported figure [2] Revenue Growth Expectations - For Q2 2025, GDDY anticipates Applications & Commerce (A&C) revenue growth in the mid-teens, with A&C revenues estimated at $466 million, representing a 14.8% year-over-year rise [4] - Core platform revenues are expected to grow by 2.6%, with a consensus estimate of $738 million [4] - Bookings are projected at $1.34 billion, indicating a 6.4% increase from the previous year [5] Customer Metrics - GoDaddy's customer count is expected to remain steady at 20.5 million at the end of Q1 2025, with a forecasted increase to 20.67 million for the upcoming quarter [6] - Growth in average order size is anticipated to contribute positively to overall bookings [8] Earnings Performance History - GoDaddy has beaten the Zacks Consensus Estimate in two of the last four quarters, with an average negative earnings surprise of 0.07% [3] Earnings ESP and Zacks Rank - Currently, GoDaddy has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating that the odds of an earnings beat are not favorable [7]

Core Insights - Nearly half of U.S. shoppers believe customer service is deteriorating, with only 20% reporting improvements and 42% noting a decline [2][4] - Younger generations, specifically Gen Z and Millennials, are more optimistic about customer service compared to older generations [3][4] Consumer Sentiment - Among Gen X and Boomers, only 12% feel customer service has improved, while 46% think it has worsened [2] - In contrast, 29% of Gen Z and 31% of Millennials perceive an improvement in customer service [3] Expectations and Trust - 68% of consumers expect small businesses to match the digital security and professionalism of larger companies [4] - Younger consumers have higher expectations for speed, flexibility, and friendliness in service [3][4] Customer Service Preferences - 44% of consumers still prefer phone support, but Gen Z and Millennials favor live chat, text, or social media [7] - 86% of respondents prefer interacting with a real human over a chatbot [7] Frustrations with Service - 66% of consumers cite rude treatment as a primary complaint, while 55% mention a lack of empathy [7] - Nearly half (47%) express frustration over the absence of customer service options [7] Generational Attitudes - Younger generations are less forgiving; 24% of Gen Z would not give a business a second chance after a mistake, compared to 18% of Gen X and Boomers [7] Opportunities for Small Businesses - Small businesses can leverage AI tools like GoDaddy Conversations to enhance customer interactions and build trust [5][6] - The ability to respond instantly and personalize interactions is crucial for maintaining customer relationships [6]

Company Announcement - GoDaddy Inc. will release its financial results for the second quarter of 2025 on August 7, 2025, after the U.S. stock market closes [1] - Following the news release, GoDaddy management will host a live webcast at 5:00 p.m. Eastern Time, available on GoDaddy's Investor Relations website [1] - A recording of the webcast will be available on GoDaddy's Investor Relations website after its completion [2] Company Overview - GoDaddy assists millions of entrepreneurs globally in starting, growing, and scaling their businesses [3] - The company offers services such as naming ideas, building websites and logos, selling products and services, and accepting payments [3] - GoDaddy Airo®, an AI-powered experience, helps small businesses get online quickly, drive traffic, and boost sales [3] - Expert guides are available 24/7 to provide assistance to users [3]

Core Insights - The GoDaddy Consumer Pulse survey reveals a paradox where younger consumers (Gen Z and Millennials) show less concern for online security yet have low tolerance for businesses that fail to protect their data [1][3] Consumer Expectations - 68% of consumers expect small businesses to maintain the same level of digital security as large corporations or better [2][4] - 53% of consumers would remain loyal to a business that takes immediate steps to fix a breach and offers proactive protection like credit card monitoring [17] Generational Differences - 42% of Gen Z and 40% of Millennials would not change their passwords or credit card information after a data breach, compared to 72% of Gen X and Boomers who would take immediate action [3] - More than half of Gen Z (53%) and 42% of Millennials have severed ties with a business due to a security incident, significantly higher than the 37% of Gen X and Boomers [8] Consumer Behavior and Security Practices - 61% of consumers repeat passwords across accounts, with this habit being more common among Gen Z and Millennials [6] - 69% of consumers do not check for a secure padlock icon before making online purchases [6] Perception of Cybersecurity - 65% of all consumers are more concerned about online security than five years ago, but a small subset of younger consumers report being less concerned [11] - 67% of consumers believe their personal information is already on the dark web [11] Business Implications - Businesses that respond to breaches with transparency and support are more likely to retain customer loyalty [12] - Simple changes, such as ensuring a fast-loading website and using a professional email address, can improve consumer perception [13] GoDaddy's Offerings - GoDaddy provides a suite of security solutions, including Website Security firewall bundles and SSL certificates, to help businesses meet rising consumer expectations [14]

GoDaddy (GDDY) 2025 Conference Summary Company Overview - **Company**: GoDaddy (GDDY) - **Event**: 2025 Conference - **Date**: May 29, 2025 Key Points Industry and Market Position - GoDaddy is positioning itself as a one-stop shop for entrepreneurs, moving beyond its traditional domain registration business to serve micro businesses and entrepreneurs more comprehensively [5][10][32] - The company has been in operation for 28 years and has observed resilience and optimism among its customer base, which includes small business owners and sole entrepreneurs [10][12] Marketing and Branding - GoDaddy's marketing team successfully engaged actor Walton Goggins for a promotional campaign, which has helped connect with a new audience [2][3][5] - The campaign was launched during the Super Bowl, coinciding with the season finale of "White Lotus," enhancing visibility and engagement [6][10] Customer Engagement and Product Offering - The average order size at initiation is increasing, indicating that customers are engaging with more products faster than before [11][12] - GoDaddy's Arrow platform, an AI-generated software, is designed to streamline the process for customers, allowing them to launch websites and manage social media responses efficiently [27][30][41] - The company has seen a 20% increase in customers spending over $500, with an average revenue per user (ARPU) of $225 [26][34] Financial Performance - GoDaddy has achieved a normalized EBITDA margin expansion of 900 basis points over five years and has been actively buying back shares [34][36] - The company reported a consistent retention rate above 85%, with higher retention rates observed when customers engage with multiple products [23][24][26] Innovation and Future Outlook - GoDaddy emphasizes the importance of innovation and understanding customer needs, which has led to the development of new tools like Arrow and Conversations [45][41] - The company is focused on maintaining a strong balance sheet while continuing to invest in innovation and customer service [36][48] - The applications and commerce segment is expected to grow from 30% to 40% of the business, contributing to higher profitability [53][56] Challenges and Considerations - Despite positive growth, there are concerns about macroeconomic factors and tariff uncertainties, although GoDaddy has not seen significant negative impacts on its business [9][17] - The company acknowledges the need for continuous improvement in margins and operational efficiency [49][52] Conclusion - GoDaddy is on a transformative journey to redefine its brand and expand its service offerings to better meet the needs of small businesses and entrepreneurs, while maintaining a focus on innovation and customer engagement [5][36][45]

Company Overview - GoDaddy Inc. assists millions of entrepreneurs worldwide in starting, growing, and scaling their businesses [2] - The company provides services such as domain naming, website building, logo creation, product sales, and payment processing [2] - GoDaddy Airo®, an AI-powered experience, facilitates faster business growth by helping users establish an online presence quickly and drive traffic to boost sales [2] Upcoming Event - GoDaddy's Chief Financial Officer, Mark McCaffrey, will present at the Jefferies 2025 Software & Internet Conference on May 29, 2025, at 11:00 a.m. ET / 8:00 a.m. PT [1] - A live audio webcast and post-presentation audio replay will be accessible on GoDaddy's investor relations website [1]

Core Insights - GoDaddy's analysis reveals the Most Entrepreneurial Cities of 2025, highlighting both small and large cities as key drivers of innovation in the U.S. [1][2][6] Summary by Category Entrepreneurial Rankings - The ranking is based on the number of new ventures created in the previous calendar year, showcasing cities that have emerged as entrepreneurial hotspots [2][3]. - The top 10 cities include San Francisco, Los Angeles, Denver, Oklahoma City, Frankfort, Ontario, Wilmington (DE), Wilmington (NC), Katy, and Alameda [4]. City Highlights - San Francisco leads with 173,054 new businesses, reflecting its strong tech culture and access to venture capital [4][7]. - Smaller suburban cities like Frankfort, Ontario, Katy, and Alameda have emerged as significant entrepreneurial centers, challenging traditional urban business hubs [7]. - Wilmington is noted for having two cities in the top 10, indicating a growing trend for small businesses in areas with the same name [7]. California's Role - California is identified as a new epicenter for small businesses, with four cities in the top 10, despite its high cost of living [7]. Research Methodology - The GoDaddy Small Business Research Lab analyzes over 20 million online businesses, focusing on microbusinesses that employ fewer than ten people [8].

Group 1 - Morgan Stanley's report highlights the mixed performance of GoDaddy, the improvement in Wix.com, and the continued deterioration of LegalZoom's data in April's internet traffic trends [1][2] - GoDaddy acknowledges pressure on its customer base related to economic outlook but emphasizes stable channel trends and historical resilience during macroeconomic headwinds [2] - LegalZoom faces increased pressure on new business formation, with management now expecting a decline in new business formation for fiscal year 2025, despite noting that dissolution rates have not increased [2] Group 2 - April traffic trends indicate that GoDaddy's homepage traffic accelerated while login page traffic declined, reflecting a mixed trend [3] - Wix.com shows an upward trend despite high baseline comparisons, building confidence in the demand for its portfolio ahead of its Q1 earnings report [3] - LegalZoom's month-over-month comparative trend has further deteriorated, although the baseline comparison remains relatively lenient [3] Group 3 - Morgan Stanley maintains a cautious outlook on the potential for downward adjustments in booking guidance for fiscal year 2025, which could negate acceleration expectations for the second half of the year [2] - The strong performance of the tech portfolio and the acceleration of future innovations create a compelling narrative for investors, despite the ongoing search for sustained improvement in network traffic [2] - Recruitment trends across the three companies remain weak, with hiring levels hovering near historical lows, below pre-pandemic trends [2]