Core Insights - GoDaddy's Smart Terminal Pro aims to enhance the efficiency of small retail businesses by providing advanced point-of-sale (POS) solutions that integrate AI-driven catalog creation and real-time inventory synchronization [1][3]. Group 1: Product Features - Smart Terminal Pro is designed for busy retail environments, offering a 10.1-inch landscape screen that displays 50% more items compared to other GoDaddy POS devices [6]. - The device allows for seamless inventory synchronization between physical and online stores, addressing the common issue of discrepancies in stock availability [1][3]. - Built-in AI capabilities enable businesses to easily add, organize, and update their product listings, including bulk importing entire catalogs [6]. Group 2: Target Market - GoDaddy's Smart Terminal lineup caters to various types of small businesses, providing customizable POS solutions that can be tailored to specific needs [3]. - The product range includes options like the portable Smart Terminal Flex and the dual-screen Smart Terminal Duo, allowing businesses to choose devices that best fit their operational style [3]. Group 3: Company Overview - GoDaddy supports millions of entrepreneurs globally by offering tools to help them start, grow, and scale their businesses, including website creation, logo design, and payment processing [4]. - The company emphasizes the use of AI through its GoDaddy Airo® platform, which simplifies the process of getting businesses online and driving sales [4].

Core Viewpoint - GoDaddy reported solid earnings but experienced a significant stock decline due to modest guidance and a lack of impressive surprises in performance [1][4]. Financial Performance - GoDaddy's second-quarter sales increased by 8% year over year, reaching $1.21 billion [3]. - Earnings per diluted share rose from $1.01 to $1.41, slightly exceeding analyst expectations of $1.38 [3]. - The company provided third-quarter and full-year revenue guidance that aligned closely with analyst forecasts [3]. Market Reaction - Despite the earnings beat, GoDaddy's stock fell by as much as 11.5% following the report, indicating that the slight earnings surprise was not sufficient to impress investors [1][4]. - The stock had previously outperformed the broader market over the last three years, but the recent mild outperformance did not meet investor expectations [4]. Investment Opportunities - The decline in stock price may present a buying opportunity for growth investors, as GoDaddy's revenue is increasing and margins are expanding [5]. - The company has committed to $906 million in share buybacks in the first half of 2025, reflecting confidence in its business prospects [5].

Core Insights - GoDaddy (GDDY) reported Q2 2025 earnings of $1.41 per share, exceeding the Zacks Consensus Estimate by 5.22% and reflecting a 28.2% year-over-year increase [1][6] - The company generated revenues of $1.22 billion, surpassing the Zacks Consensus Estimate by 1.13%, with an 8% year-over-year growth [1][6] - Total customers decreased by 2.2% year-over-year to 20,409, while average revenues per user (ARPU) increased by 9.5% to $230 [2] Revenue Breakdown - Applications and Commerce (A&C) revenue reached $463.9 million, contributing 38.1% to total revenues, and grew by 14% year-over-year [3] - The Core Platform revenue was $753.7 million, accounting for 61.9% of total revenues, with a 4.8% year-over-year increase [3] - Total bookings amounted to $1.3 billion, reflecting a 7% year-over-year growth [3] Operating Performance - The normalized EBITDA margin expanded by 190 basis points year-over-year, with A&C EBITDA margin increasing by 90 bps and Core Platform EBITDA margin by 220 bps [4] - Total cost and operating expenses as a percentage of revenues decreased by 340 bps year-over-year to 41.8% [4] - The operating margin for Q2 2025 expanded by 340 bps year-over-year to 21.9% [4] Financial Position - As of June 30, 2025, GoDaddy had cash and cash equivalents of $1.1 billion, up from $719.4 million as of March 31 [5] - The total debt stood at $3.8 billion, with net debt at $2.8 billion [5] - Free cash flow for Q2 was $391.5 million, slightly down from $411.3 million in the previous quarter [5] Future Guidance - GoDaddy raised its 2025 revenue outlook to $4.89-$4.94 billion, indicating a year-over-year growth of 7% at the mid-point [9][10] - For Q3 2025, the company expects revenues of $1.22-$1.24 billion, suggesting a year-over-year growth of 7% at the mid-point [7][8] - The normalized EBITDA margin for 2025 is expected to expand by more than 100 basis points, with continued sequential expansion each quarter [9]

[Note About Forward-Looking Statements](index=3&type=section&id=Note%20About%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to substantial risks and uncertainties, including those related to sales growth, technology development, competition, and operational challenges - This report contains forward-looking statements that involve substantial risks and uncertainties. These statements concern the company's expectations, strategy, plans, and intentions[9](index=9&type=chunk) - Key areas of uncertainty and risk identified include the ability to increase sales, develop and deploy new technologies like AI, manage a strong brand, handle service interruptions and security incidents, compete effectively, grow internationally, and manage indebtedness[9](index=9&type=chunk)[14](index=14&type=chunk) - The company states it operates in a very competitive and rapidly-changing environment, and it is not possible to predict all risks. Investors are cautioned not to place undue reliance on these forward-looking statements[11](index=11&type=chunk)[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited consolidated financial statements, management's discussion and analysis, and disclosures on market risk and controls [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended June 30, 2025, including Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, Cash Flows, and detailed Notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This subsection provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 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 (current) | $2,399.7 | $2,222.3 | | Long-term debt, net | $3,772.4 | $3,779.1 | | Total stockholders' equity | $404.4 | $692.1 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This subsection details the company's financial performance over specific periods, presenting revenues, expenses, and net income for Q2 and the six months ended June 30 Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | 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% | Six Months 2025 vs 2024 Performance (in millions) | Metric | Six Months 2025 | Six Months 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $2,411.9 | $2,233.0 | +8.0% | | Operating Income | $513.6 | $384.1 | +33.7% | | Net Income | $419.4 | $547.8 | -23.4% | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This subsection outlines the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30 Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow 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) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results, including revenue disaggregation, goodwill, share repurchases, debt structure, and segment performance Revenue by Major Product Type (in millions) | Product Type | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | A&C | $463.9 | $405.6 | | Core: domains | $566.2 | $529.2 | | Core: other | $187.5 | $189.7 | Revenue by Geography (in millions) | Geography | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | U.S. | $821.7 | $767.4 | | International | $395.9 | $357.1 | - In April 2025, the Board approved a new share repurchase program of up to **$3.0 billion** through the end of 2027. This followed the completion of a prior **$4.0 billion** authorization. As of June 30, 2025, **$2.973 billion** remained available under the new authorization[62](index=62&type=chunk) Segment Performance for Q2 (in millions) | Segment | Revenue (2025) | Revenue (2024) | Segment EBITDA (2025) | Segment EBITDA (2024) | | :--- | :--- | :--- | :--- | :--- | | A&C | $463.9 | $405.6 | $205.8 | $176.6 | | Core | $753.7 | $718.9 | $246.1 | $219.5 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an analysis of the company's financial performance for Q2 2025, highlighting an 8.3% increase in total revenue and a 27.9% increase in operating income, covering segment results, non-GAAP measures, bookings, and liquidity [Consolidated Second Quarter Financial Highlights](index=28&type=section&id=Consolidated%20Second%20Quarter%20Financial%20Highlights) This subsection summarizes the company's key financial achievements for the second quarter of 2025, including significant increases in revenue, operating income, and net income - Key financial highlights for Q2 2025 compared to Q2 2024 include: - Total revenue increased **8.3%** to **$1,217.6 million** - Total bookings increased **6.6%** to **$1,345.3 million** - Operating income increased **27.9%** to **$266.3 million** - Net income increased **36.6%** to **$199.9 million** - Normalized EBITDA increased **15.1%** to **$381.7 million**[114](index=114&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This subsection provides a detailed breakdown of the company's revenue and expense performance, analyzing segment contributions and cost drivers for the reporting period Revenue by Segment - Q2 2025 vs Q2 2024 (in millions) | Segment | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Applications and commerce | $463.9 | $405.6 | $58.3 | 14.4% | | Core platform | $753.7 | $718.9 | $34.8 | 4.8% | | **Total revenue** | **$1,217.6** | **$1,124.5** | **$93.1** | **8.3%** | - A&C revenue growth was driven by continued customer adoption of subscription-based products. Core revenue growth was primarily due to increases in domain registration, add-on revenues, and aftermarket revenue[128](index=128&type=chunk)[130](index=130&type=chunk) - Cost of revenue increased by **8.3%** in Q2 2025, in line with revenue growth. Technology and development expenses increased by **4.1%** due to higher personnel costs from continued investment in product development[135](index=135&type=chunk)[137](index=137&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This subsection discusses the company's ability to meet its short-term and long-term financial obligations, focusing on cash flow from operations, debt, and capital allocation strategies - The company's principal sources of liquidity are cash flow from operations and long-term debt. Management believes existing cash and cash generated from operations will be sufficient to meet operating needs for at least the next 12 months[157](index=157&type=chunk)[159](index=159&type=chunk) - Net cash from operating activities increased by **$192.6 million** for the six months ended June 30, 2025, compared to the same period in 2024, driven by growth in total bookings and lower restructuring payments[162](index=162&type=chunk) - Net cash used in financing activities increased by **$135.5 million**, primarily due to a **$143.3 million** increase in share repurchases during the first six months of 2025 compared to 2024[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily from fluctuations in foreign currency exchange rates and variable interest rates, and its use of derivative financial instruments to mitigate these risks - The company's most significant foreign currency exposures are to the British pound, Canadian dollar, and Euro. It uses foreign exchange forward contracts and cross-currency swaps to manage this risk[181](index=181&type=chunk)[183](index=183&type=chunk) - GoDaddy is exposed to interest rate risk from its variable-rate debt. It manages this exposure through the use of interest rate swaps to effectively convert portions of this debt to fixed rates[186](index=186&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation, the CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level[193](index=193&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[194](index=194&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional disclosures beyond financial statements, covering legal proceedings, risk factors, equity sales, and other pertinent information [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes from the legal proceedings that were described in its 2024 Form 10-K - There have been no material changes from the legal proceedings described in the company's 2024 Form 10-K[197](index=197&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines the significant risks and uncertainties facing the company, including strategic challenges, operational risks, financial risks, and legal/regulatory risks [Strategic Risks](index=44&type=section&id=Strategic%20Risks) This subsection addresses risks related to the company's long-term growth, market positioning, and ability to adapt to technological advancements and competitive pressures - The company's success depends on its ability to increase sales to new and existing customers, but growth rates have slowed. Failure to attract new customers or a reduction in renewals could harm operating results[200](index=200&type=chunk)[201](index=201&type=chunk) - The use of new and evolving technologies like AI involves significant risks, including potential intellectual property infringement, privacy concerns, regulatory scrutiny, and reputational harm if the technology produces inaccurate or biased content[206](index=206&type=chunk)[210](index=210&type=chunk) - The market is highly competitive, with rivals ranging from niche point-solution providers to large companies with greater resources. Increased competition could lead to lower sales, price reductions, and loss of market share[215](index=215&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) [Operational Risks](index=50&type=section&id=Operational%20Risks) This subsection covers risks associated with the company's day-to-day operations, including system reliability, cybersecurity, and the quality of customer service - The company is exposed to system failures and capacity constraints and relies heavily on third-party cloud providers like Amazon Web Services (AWS). Any disruption of AWS services could adversely affect business operations[232](index=232&type=chunk)[239](index=239&type=chunk) - Cybersecurity incidents, including those from external threat actors or internal threats, could impair the ability to conduct business, lead to significant costs, cause reputational harm, and result in liability[241](index=241&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - The company's ability to increase sales is highly dependent on providing high-quality customer care through its GoDaddy Guides. A failure to maintain this level of service could harm the business and brand[249](index=249&type=chunk) [Legal and Regulatory Risks](index=64&type=section&id=Legal%20and%20Regulatory%20Risks) This subsection addresses potential legal and compliance challenges, including those related to domain name governance, data privacy regulations, and liability for user-generated content - The company's domain name registration business is subject to policies and accreditation by ICANN. Changes in ICANN's structure, policies, or authority could create instability and disrupt business[282](index=282&type=chunk)[283](index=283&type=chunk) - The company is subject to a variety of evolving international and U.S. laws related to data processing and privacy, such as GDPR and CCPA. Failure to comply could result in litigation, government enforcement, and reputational harm[291](index=291&type=chunk)[292](index=292&type=chunk) - Activities of customers, such as posting illegal or offensive content, could damage the company's reputation and lead to liability, despite terms of service and limited legal protections like the CDA and DMCA[298](index=298&type=chunk)[299](index=299&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity for the three months ended June 30, 2025, with a total of 4.51 million shares repurchased during the period Share Repurchases for Q2 2025 | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30 | 4,359 | $176.02 | | May 1 - May 31 | 41 | $181.69 | | June 1 - June 30 | 110 | $178.01 | | **Total** | **4,510** | **N/A** | [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) Discloses that on June 10, 2025, Chief Operating Officer Roger Chen adopted a 10b5-1 trading plan for the sale of up to 18,000 shares of Class A common stock - On June 10, 2025, Roger Chen, Chief Operating Officer, adopted a 10b5-1 trading plan for the sale of an aggregate of **18,000 shares** of the company's Class A common stock between October 15, 2025, and October 15, 2026[362](index=362&type=chunk) [Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - The report includes several exhibits, such as corporate governance documents (Exhibit 3.1, 3.2), CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1), and Inline XBRL documents[363](index=363&type=chunk)

Company Performance - GoDaddy reported quarterly earnings of $1.41 per share, exceeding the Zacks Consensus Estimate of $1.34 per share, and up from $1.1 per share a year ago, representing an earnings surprise of +5.22% [1] - The company posted revenues of $1.22 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.12%, and an increase from $1.12 billion year-over-year [2] - Over the last four quarters, GoDaddy has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - GoDaddy shares have declined approximately 21.6% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3] - The current Zacks Rank for GoDaddy is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.47 on revenues of $1.23 billion, and for the current fiscal year, it is $5.92 on revenues of $4.9 billion [7] - The outlook for the Internet - Delivery Services industry, to which GoDaddy belongs, is currently in the top 12% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

Financial Data and Key Metrics Changes - Total revenue grew 8% to $1,200,000,000, surpassing the high end of the guided range [17] - Annual recurring revenue increased by 9% to $4,200,000,000 [17] - Free cash flow grew 21% to $392,000,000, reinforcing the strength of customer cohorts [20] - Normalized EBITDA margin expanded nearly 200 basis points to 31% [16][19] Business Line Data and Key Metrics Changes - Applications and Commerce (A&C) revenue grew 14% to $464,000,000, now accounting for 38% of total revenue, an all-time high [17][18] - Core platform segment revenue increased by 5% to $754,000,000, driven by growth in primary domains and bundling initiatives [18] - A&C bookings grew 12%, while core platform bookings increased by 3% [19] Market Data and Key Metrics Changes - International revenue grew 11%, indicating strong performance in global markets [17] - The company surpassed $3,000,000,000 in annualized gross payments volume, signaling effective strategy execution [12] Company Strategy and Development Direction - The company is focused on maximizing free cash flow and attracting high-intent customers who generate high lifetime value [6][20] - AI initiatives, particularly the introduction of Ask Arrow, are expected to enhance customer experience and operational efficiency [7][9] - The company is actively testing and scaling new offerings, including pricing and bundling strategies, to drive growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small businesses and their optimism despite increased complexity in the market [5] - The company anticipates easier comparisons for A&C growth in the second half of the year [30] - Management raised full-year free cash flow guidance to approximately $1,600,000,000, reflecting strong performance [23] Other Important Information - The company will no longer operate as the registry service provider for the .co top-level domain starting in Q4, which is expected to create a 50 basis point headwind to bookings and revenue [24][25] - The balance sheet remains strong, with $1,100,000,000 in cash and total liquidity of $2,100,000,000 [22] Q&A Session Summary Question: How should we think about the A&C growth and its continuation through 2025? - Management indicated no trough in A&C growth and expressed confidence in its momentum, expecting it to grow to about 40% of total business [30][31] Question: What are the latest trends in customer cohorts experiencing Arrow? - Management reported higher conversion rates and average order sizes among customers using Arrow, with near-perfect retention [36][39] Question: How does the company view the impact of AI on the website ecosystem? - Management is optimistic about AI's potential to simplify customer interactions and enhance product offerings, positioning GoDaddy favorably in the market [44][76] Question: Can you elaborate on the sustainability of the Rate Saver promo? - Management clarified that Rate Saver is a product feature rather than a promotional offer, expecting its adoption to grow among new cohorts [125]

Financial Data and Key Metrics Changes - GoDaddy reported total revenue growth of 8% to $1.2 billion, surpassing the high end of guidance [15][16] - Annual recurring revenue grew 9% to $4.2 billion, with international revenue increasing by 11% [16] - Free cash flow increased by 21% to $392 million, reflecting strong customer cohort performance [20][23] - Normalized EBITDA margin expanded nearly 200 basis points to 31% [15][19] Business Line Data and Key Metrics Changes - The Applications and Commerce (A&C) segment saw revenue growth of 14% to $464 million, now accounting for 38% of total revenue, an all-time high [17][18] - Core platform segment revenue grew 5% to $754 million, driven by primary domains and bundling initiatives [18] - A&C bookings grew 12%, while core platform bookings increased by 3% [19] Market Data and Key Metrics Changes - GoDaddy's commerce initiative reached over $3 billion in annualized gross payments volume, indicating strong customer conversion [12] - The company reported that cohorts spending over $500 annually have shown near-perfect retention and increased average order size [20][21] Company Strategy and Development Direction - GoDaddy is focused on enhancing AI capabilities, particularly through the Ask Arrow initiative, which aims to provide a seamless customer experience [6][7] - The company is actively executing pricing and bundling strategies, with promising early results from new partnerships [10][11] - GoDaddy is committed to maximizing free cash flow and has raised its full-year guidance to approximately $1.6 billion [5][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small businesses and the ongoing demand for GoDaddy's services [4] - The company anticipates easier comparisons for A&C growth in the second half of the year [32] - Management highlighted the importance of AI in transforming customer interactions and internal operations [44][45] Other Important Information - GoDaddy will no longer operate as the registry service provider for the .co top-level domain starting in Q4, which is expected to impact bookings and revenue by approximately 50 basis points [24][25] - The company exited the quarter with $1.1 billion in cash and total liquidity of $2.1 billion, with net debt at $2.8 billion [22] Q&A Session Summary Question: Insights on A&C growth and Arrow strategy - Management confirmed no trough in A&C growth and expressed excitement about its momentum, expecting it to grow to about 40% of total business [31][32] - The latest cohorts experiencing Arrow are converting at higher rates and driving average order size [35][36] Question: Impact of Agentic AI on customer experience - Management emphasized the transformative potential of Agentic AI in simplifying customer interactions and enhancing product offerings [44][45] Question: Updates on customer count and growth expectations - Management expects a return to customer growth later this year, driven by high-intent customers spending over $500 [68][70] Question: Sustainability of the Rate Saver product - The Rate Saver is a product feature that helps merchants reduce costs, with strong adoption expected among new cohorts [121][123] Question: Arrow's exposure at the top of the funnel - Nearly all new customers are starting to see Arrow, indicating strong integration into the customer journey [124]

Financial Performance - Total revenue reached $1.2 billion, an 8% increase year-over-year[4] - Total bookings amounted to $1.3 billion, also up by 7% year-over-year[4] - Applications and Commerce (A&C) revenue experienced a 14% growth, reaching $463.9 million[4] - Core Platform (Core) revenue increased by 5% year-over-year, totaling $753.7 million[4] - Operating income rose by 28% to $266.3 million, representing a 22% margin[4] - Net income increased by 37% to $199.9 million[4] - Free cash flow increased by 21% year-over-year, reaching $391.5 million[4] Future Outlook - GoDaddy expects Q3 2025 total revenue to be in the range of $1.22 billion to $1.24 billion, representing 7% year-over-year growth at the midpoint[9] - The company raised its full-year 2025 revenue expectations to a range of $4.89 billion to $4.94 billion, representing 7% year-over-year growth at the midpoint[9] - GoDaddy raised its free cash flow target to approximately $1.6 billion for the full year 2025[12]

[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].