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, drive traffic, and increase sales [2] Upcoming Events - GoDaddy's Chief Financial Officer Mark McCaffrey will present at Citi's 2025 Global TMT Conference in New York City on September 3, 2025, at 8:50 a.m. ET [1] - A live audio webcast and post-presentation audio replay will be accessible on GoDaddy's investor relations website [1]

Core Insights - GoDaddy has launched GoDaddy Capital, a merchant cash advance program that provides up to $1 million to small and medium-sized businesses within 24 hours, allowing them to repay through a fixed percentage of daily sales [1][2]. Group 1: GoDaddy Capital Overview - GoDaddy Capital is designed to simplify access to capital for small businesses, addressing the challenges posed by traditional banking processes that often involve extensive paperwork and rigid terms [2]. - The program is integrated into the GoDaddy dashboard, enabling businesses to manage payments, cash flow, and working capital from a single platform [2][8]. Group 2: Market Need and Business Impact - A survey indicated that 51% of small businesses operate with limited cash flow, which they view as their primary financial barrier to growth [6]. - Approximately 21% of small business owners identified access to capital as a top challenge when starting their business, highlighting a consistent trend over the past five years [6]. - Nearly 31% of respondents listed access to funding as a major hurdle to scaling their business, underscoring the demand for flexible financing solutions [6]. Group 3: GoDaddy Capital Functionality - The application process for GoDaddy Capital is streamlined, requiring no paperwork and having no impact on the business's credit score [7]. - Businesses can choose from customized funding offers ranging from $500 to $1 million based on their monthly sales [7]. - Once approved, funding can be received in as little as 24 hours, with repayments tied to a fixed percentage of sales, allowing for flexibility during varying business cycles [7][8]. Group 4: Customer Experience - Small business owner Michael Wood has utilized GoDaddy Capital multiple times, receiving over $100,000 to support his business growth, citing convenience and quick funding as key benefits [4]. - The program enables businesses to invest in inventory, upgrade equipment, and expand market reach, thereby driving operational success and long-term growth [8].

Core Insights - The majority of U.S. small and microbusinesses are insulated from international supply chain disruptions, with 69% reporting no exposure and 45% sourcing over half of their materials locally [1] - Small business owners exhibit optimism and resilience despite economic uncertainty, with many maintaining realistic revenue expectations [2][6] - A correlation exists between small business growth and household income, with a 1% increase in small businesses linked to a 6% rise in median household income [3] Group 1: Business Environment - 65% of small businesses primarily serve local or state customers, providing a buffer against global trade challenges [1] - 72% of respondents expect their revenues to increase or remain stable in the next six months, while 45% believe the broader U.S. economy will hold steady or improve [9] Group 2: Growth and Employment - Each new small business owner creates an estimated eight direct or indirect local jobs, highlighting their role in community strength [3] - 42% of small business owners plan for moderate growth into small or mid-sized businesses, while only 9% aim for high-level expansion [10] Group 3: Technology and Adaptation - Technology, including reliable internet and AI advancements, is crucial for small businesses to enhance their operations and customer engagement [4][5] - AI tools are helping small businesses automate tasks and adapt quickly to challenges, contributing to their resilience [5] Group 4: Income and Earnings - Two-thirds (65%) of small business owners who rely on their venture as their primary income source are also household breadwinners, contributing significantly to their households [10] - Over 40% of surveyed small business owners earn more than $60,000 annually, with more than 20% earning over $120,000 [10]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, helping investors identify stocks with high potential for market outperformance [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A being the highest score indicating better chances of outperforming the market [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Concentrates on a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks experiencing upward or downward trends, utilizing metrics like one-week price changes and monthly earnings estimate changes [5] VGM Score - Combines all three Style Scores to provide a comprehensive rating, highlighting stocks with attractive value, strong growth forecasts, and promising momentum [6] Zacks Rank Integration - The Zacks Rank leverages earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [8] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while 3 (Hold) ranked stocks should also have A or B Scores for potential upside [9][10] Company Spotlight: GoDaddy (GDDY) - GoDaddy serves 21 million customers and is currently rated 3 (Hold) with a VGM Score of B, making it a potential growth investment [11] - The company is forecasted to achieve year-over-year earnings growth of 24.1% for the current fiscal year, supported by upward revisions in earnings estimates [12]

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]