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]

GoDaddy (GDDY) FY Conference Summary Company Overview - **Company**: GoDaddy (GDDY) - **Date of Conference**: May 13, 2025 - **Speaker**: Mark McCaffrey, CFO of GoDaddy Key Industry Insights - **Small Business Resilience**: Small and micro businesses remain optimistic about their future despite economic uncertainties, indicating a strong customer base for GoDaddy [4][5][6] - **E-commerce Trends**: The journey for entrepreneurs has diversified; customers now enter through various services like logo creation and website building, not just domain registration [13][14][15] Core Financial Metrics - **Revenue Growth**: GoDaddy is experiencing a revenue growth rate of 6% to 8% [8][60] - **Normalized EBITDA Margins**: Expanded by 900 basis points over five years [9] - **Free Cash Flow**: Targeting over $1.5 billion in free cash flow for the year, with a 20% CAGR projected through 2026 [64][78] Customer Strategy - **High Intent Customers**: Focus on acquiring high intent customers who spend over $500, increasing from 1.5 million to 1.8 million in 2023 [10][11] - **Retention Rates**: Retention improves significantly with the addition of products; 85% retention after the first product, increasing with subsequent products [45][62] Product and Technology Development - **Arrow Platform**: GoDaddy's AI-driven platform, Arrow, is designed to streamline the customer experience from domain registration to transaction [16][23][26] - **Conversations Tool**: An AI tool that enhances customer engagement for micro businesses, allowing them to respond to inquiries efficiently [30][34] Pricing and Bundling Strategy - **Cohort-Specific Bundles**: Transitioning from product-based to cohort-specific pricing strategies to enhance customer value and retention [42][43] - **Arrow Plus Pricing**: Launched at $5 per month, with ongoing experimentation to optimize pricing based on customer feedback [36][39] Competitive Landscape - **Market Position**: GoDaddy is the largest player in the domain space, with over 20% market share, and offers a comprehensive technology stack that few competitors can match [17][72] - **Focus on Micro Businesses**: The company targets micro businesses, emphasizing the value of a one-stop shop for their needs [73] Future Outlook - **M&A Opportunities**: Open to potential acquisitions that align with strategic goals and can be integrated into the existing technology stack [80][81] - **Long-term Growth**: The company aims for sustained growth through its current model, focusing on free cash flow and customer satisfaction [61][82] Additional Insights - **Employee Retention**: Consistent equity compensation strategy to attract and retain talent, maintaining a culture of innovation [76][77] - **Agility in Pricing**: Ability to adjust pricing strategies based on market conditions and customer feedback, ensuring competitiveness [52][58] This summary encapsulates the key points discussed during the GoDaddy FY Conference, highlighting the company's strategic focus, financial performance, and market positioning.

Summary of CDW FY Conference Call - May 13, 2025 Company Overview - **Company**: CDW (CDW) - **Industry**: Technology Solutions and Services Key Points and Arguments Macroeconomic Concerns - There is significant macroeconomic volatility and uncertainty, but technology remains essential for competitive advantage and employee attraction [2][3] - Customers are cautious due to policy uncertainty, yet there is pent-up demand for technology across various sectors [3][4] Demand and Growth Outlook - CDW anticipates muted growth in specific sectors like federal and education, but overall technology spending remains strong [4][11] - The commercial space has shown a steady return to growth over the last two quarters, although enterprise solutions have experienced some variability [9][10] Tariff Impact - CDW has leveraged tariff uncertainties to assist customers by providing pre-tariff pricing on client devices, particularly in the K-12 sector [6][7] - The company maintains strong relationships with customers, which helps navigate complexities arising from tariff changes [7][8] International Business Performance - CDW's international business has performed well despite geopolitical uncertainties, with a cautious outlook for the fiscal year [18] AI and Technology Investments - CDW is positioned as a full-stack organization, focusing on AI investments to enhance efficiency, personalization, and customer experience [19][20] - The company has established healthcare innovation labs to facilitate customer engagement and technology exploration [22][23] Client Device Market - Growth in client devices has been broad-based, with education seeing more pre-buying activity compared to enterprise [28][29] Cloud Strategy - CDW is focused on scaling its cloud business, emphasizing professional and managed services to drive customer engagement [32][33] - The company views cloud and security as high-growth areas for future acquisitions [35][36] Financial Performance - Gross margins have expanded significantly over the past six years but are plateauing due to shifts in product mix [50][51] - Operating expenses have been consistently expanded to support growth initiatives, with a focus on balancing customer service and cost leverage [53][54] Government and Education Sector Exposure - The federal government sector has shown a modest decline, while state and local government business has grown modestly [59][60] - The K-12 education sector may experience muted spending due to economic pressures [61] Pricing and Demand Elasticity - Price increases due to tariffs have been largely accepted by customers, with spending continuing despite economic uncertainties [62] - CDW operates as a cost-plus provider, successfully passing on price increases while maintaining gross profit neutrality [63] Additional Important Insights - CDW's strategy emphasizes a full lifecycle approach, integrating consultancy and managed services with product sourcing to enhance customer experience [38][40] - The company is actively refining its go-to-market strategy to capture opportunities across various customer segments [46] - CDW's ability to adapt its pricing and bundling strategies based on customer behavior is a key focus for future growth [107][108]

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 acceptance [2] - GoDaddy Airo®, an AI-powered experience, facilitates faster business growth by helping users get online quickly, drive traffic, and increase sales [2] Upcoming Events - GoDaddy's Chief Financial Officer, Mark McCaffrey, will present at the 53rd Annual J.P. Morgan Global Technology, Media and Communications Conference on May 13, 2025, at 10:10 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 (GDDY) reported Q1 2025 earnings of $1.27 per share, missing estimates by 5.93% but showing a 17.6% year-over-year increase [1] - Total revenues reached $1.2 billion, exceeding estimates by 0.6% and increasing 7.7% year-over-year [1] - The total customer count decreased by 2.4% year-over-year, totaling 20,484 customers [1] Revenue Breakdown - Applications and Commerce (A&C) generated $446.4 million, contributing 37.4% to total revenues, with a year-over-year increase of 16.5% [2] - The Core Platform, which includes domains, hosting, and security, increased 3.1% year-over-year to $747.9 million, contributing 62.6% to total revenues [2] - International revenues reached $388.8 million, up 10.2% year-over-year [3] Financial Metrics - Total bookings were $1.4 billion, reflecting a 7.9% year-over-year increase [3] - Average revenues per user (ARPU) were $225, up 9.2% year-over-year [3] - Annualized recurring revenues (ARR) totaled $4.05 billion, increasing 7.5% year-over-year [3] Operating Performance - Normalized EBITDA was $364.4 million, up 16.4% year-over-year, with a margin expansion of 230 basis points [5] - Operating income increased by 40.6% year-over-year to $247.3 million, with an operating margin of 20.7% [6] - Operating expenses rose 3.3% year-over-year to $473.6 million, but as a percentage of revenues, they contracted to 39.7% [5] Cash Flow and Balance Sheet - As of March 31, 2025, cash and cash equivalents were $719.4 million, down from $1.1 billion at the end of 2024 [7] - Total debt stood at $3.8 billion, with net debt at $3.1 billion [7] - Free cash flow for Q1 was $411.3 million, up 25.6% year-over-year [7] Future Guidance - For Q2 2025, GoDaddy expects revenues between $1.195 billion and $1.215 billion, indicating a year-over-year growth of 7% at the mid-point [8] - The company anticipates normalized EBITDA margin of 31% for Q2 [9] - For the full year 2025, GoDaddy reaffirms revenue guidance of $4.86 billion to $4.94 billion, with expected growth of 7% at the mid-point [10]

Core Insights - GoDaddy reported revenue of $1.19 billion for the quarter ended March 2025, reflecting a year-over-year increase of 7.7% and a surprise of +0.60% over the Zacks Consensus Estimate [1] - The company's EPS for the quarter was $1.27, compared to $1.08 in the same quarter last year, although it fell short of the consensus estimate of $1.35 by -5.93% [1] Financial Performance Metrics - Total bookings reached $1.42 billion, exceeding the seven-analyst average estimate of $1.40 billion [4] - The total number of customers at the end of the period was 20.48 million, slightly below the five-analyst average estimate of 20.74 million [4] - Revenue from Applications & Commerce was $446.40 million, surpassing the average estimate of $441.26 million and representing a year-over-year increase of +16.5% [4] - Revenue from the Core Platform was $747.90 million, slightly above the average estimate of $745.99 million, with a year-over-year change of +3.1% [4] - Segment EBITDA for the Core Platform was $235.30 million, compared to the average estimate of $233.35 million [4] - Segment EBITDA for Applications & Commerce was $196.90 million, exceeding the average estimate of $185.34 million [4] Stock Performance - GoDaddy's shares have returned +4.3% over the past month, contrasting with a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents GoDaddy Inc.'s unaudited consolidated financial statements for Q1 2025, highlighting a 7.7% revenue increase, a net income decrease due to a prior-year tax benefit, and significant share repurchases [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$7.84 billion** as of March 31, 2025, primarily due to reduced cash from share repurchases, leading to a significant decrease in stockholders' equity Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 (In millions) | December 31, 2024 (In millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $719.4 | $1,089.0 | | Total current assets | $1,553.6 | $1,951.8 | | Goodwill | $3,559.3 | $3,518.9 | | Total assets | $7,838.8 | $8,235.4 | | **Liabilities & Equity** | | | | Deferred revenue (current) | $2,341.6 | $2,222.3 | | Long-term debt, net | $3,775.7 | $3,779.1 | | Total liabilities | $7,639.1 | $7,543.3 | | Total stockholders' equity | $199.7 | $692.1 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 total revenue increased **7.7%** to **$1.19 billion**, while net income decreased **45.3%** to **$219.5 million** due to a prior-year tax benefit Q1 2025 vs. Q1 2024 Statement of Operations (unaudited) | Metric | Q1 2025 (In millions) | Q1 2024 (In millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,194.3 | $1,108.5 | +7.7% | | Operating Income | $247.3 | $175.9 | +40.6% | | Net Income | $219.5 | $401.5 | -45.3% | | Diluted EPS | $1.51 | $2.76 | -45.3% | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased **36.2%** to **$404.7 million**, but significant share repurchases led to a **$369.6 million** net decrease in cash Q1 2025 vs. Q1 2024 Cash Flows (unaudited) | Activity | Q1 2025 (In millions) | Q1 2024 (In millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $404.7 | $297.2 | | Net cash provided by (used in) investing activities | ($3.6) | $43.7 | | Net cash used in financing activities | ($772.2) | ($135.0) | | Net increase (decrease) in cash | ($369.6) | $205.2 | - The significant increase in cash used for financing was primarily due to **$767.4 million** in upfront payments for two accelerated share repurchase (ASR) agreements[32](index=32&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment performance, including **16.5%** A&C revenue growth, and a **$4.0 billion** share repurchase program with **$767.4 million** used in Q1 2025, plus a new **$3.0 billion** authorization - The company reports results through two segments: Applications and Commerce (A&C) and Core Platform (Core)[42](index=42&type=chunk)[106](index=106&type=chunk) - During Q1 2025, the company entered into two accelerated share repurchase (ASR) agreements, making upfront payments of **$767.4 million**. In April 2025, the board approved an additional **$3.0 billion** for share repurchases through 2027[60](index=60&type=chunk)[117](index=117&type=chunk) Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue (In millions) | Q1 2024 Revenue (In millions) | | :--- | :--- | :--- | | Applications and Commerce (A&C) | $446.4 | $383.1 | | Core Platform | $747.9 | $725.4 | - In Q1 2025, the company recognized a **$34.6 million** income tax benefit from a favorable tax court ruling on an uncertain tax position in a foreign jurisdiction[98](index=98&type=chunk)[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, noting a **7.7%** revenue increase to **$1.19 billion** and **7.9%** bookings growth, driven by strong A&C segment performance and significant share repurchases Q1 2025 Financial Highlights | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $1,194.3 million | +7.7% | | Total Bookings | $1,417.0 million | +7.9% | | Operating Income | $247.3 million | +40.6% | | Net Income | $219.5 million | -45.3% | | Normalized EBITDA | $364.4 million | +16.4% | | Net cash from operating activities | $404.7 million | +36.2% | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 total revenue grew **7.7%** to **$1.19 billion**, with A&C revenue up **16.5%** and total bookings up **7.9%**, while operating income increased **40.6%** due to lower restructuring charges Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 (In millions) | Q1 2024 (In millions) | Change (%) | | :--- | :--- | :--- | :--- | | Applications and commerce | $446.4 | $383.1 | +16.5% | | Core platform | $747.9 | $725.4 | +3.1% | | **Total revenue** | **$1,194.3** | **$1,108.5** | **+7.7%** | - Total bookings increased by **7.9%** to **$1.42 billion**, driven by strength in domains, aftermarket, and continued adoption of A&C products[137](index=137&type=chunk) - Marketing and advertising expenses increased by **14.4%** (**$12.6 million**) due to discretionary spending in support of strategic initiatives, including the GoDaddy Airo experience[143](index=143&type=chunk) Segment EBITDA (Q1 2025 vs Q1 2024) | Segment | Q1 2025 EBITDA (In millions) | Q1 2024 EBITDA (In millions) | Change (%) | | :--- | :--- | :--- | :--- | | Applications and Commerce | $196.9 | $161.9 | +21.6% | | Core Platform | $235.3 | $216.7 | +8.6% | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Principal liquidity sources are operations and debt, with **$404.7 million** net cash from operations, while **$767.4 million** was used for ASRs, and a new **$3.0 billion** share repurchase program was authorized Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity | Q1 2025 (In millions) | Q1 2024 (In millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $404.7 | $297.2 | | Net cash provided by (used in) investing activities | ($3.6) | $43.7 | | Net cash used in financing activities | ($772.2) | ($135.0) | - In Q1 2025, the company used **$767.4 million** for accelerated share repurchases (ASRs). Upon completion of the ASRs in April 2025, the previous **$4.0 billion** authorization was exhausted[172](index=172&type=chunk) - In April 2025, the board of directors approved a new share repurchase program authorizing up to an additional **$3.0 billion** of its Class A common stock through the end of 2027[173](index=173&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages foreign currency and interest rate market risks using derivatives, noting that Q1 2025 revenue and bookings growth would have been **30** and **80** basis points higher, respectively, on a constant currency basis - The company uses derivative instruments (foreign exchange forward contracts, cross-currency swaps, interest rate swaps) to hedge against foreign currency and interest rate risks[177](index=177&type=chunk)[179](index=179&type=chunk)[185](index=185&type=chunk) - A portion of the variable-rate debt is converted to fixed rates using interest rate swaps, with notional amounts of **$1,219.4 million** tied to 2029 Term Loans and **$714.4 million** to 2027 Term Loans as of March 31, 2025[188](index=188&type=chunk)[189](index=189&type=chunk) - On a constant currency basis, Q1 2025 total revenue growth would have been **30 basis points** higher, and total bookings growth would have been **80 basis points** higher[180](index=180&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures are effective at a reasonable assurance level[192](index=192&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[193](index=193&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings have occurred since those described in the 2024 Form 10-K - There have been no material changes to the legal proceedings previously disclosed in the 2024 Form 10-K[196](index=196&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section details significant strategic, operational, financial, and legal/regulatory risks, including intense competition, cybersecurity threats, AI technology adoption, and substantial debt, which could adversely affect the company [Strategic Risks](index=45&type=section&id=Strategic%20Risks) Strategic risks encompass intense competition, challenges in customer acquisition and product development, risks from new technologies like AI, international growth complexities, and potential acquisition failures - The company faces significant competition, which is expected to intensify, and may not be able to maintain its market position against competitors with greater resources or disruptive pricing[214](index=214&type=chunk)[216](index=216&type=chunk) - The use of new and evolving technologies like AI presents risks of reputational harm, liability, intellectual property infringement, and increased regulatory scrutiny from evolving legal frameworks like the E.U. AI Act[205](index=205&type=chunk)[207](index=207&type=chunk) - Future growth depends on increasing international revenue, which exposes the company to various risks including geopolitical instability, regulatory compliance, and currency fluctuations[219](index=219&type=chunk)[220](index=220&type=chunk) - Acquisitions and strategic transactions could divert management attention, disrupt business, and may not yield expected benefits[228](index=228&type=chunk) [Operational Risks](index=53&type=section&id=Operational%20Risks) Operational risks include reliance on technology infrastructure and third-party services like AWS, cybersecurity threats, fraudulent activity, and the importance of effective marketing and high-quality customer care - The company is exposed to system failures and capacity constraints, and relies heavily on third-party cloud services like AWS, where disruptions could adversely affect business[233](index=233&type=chunk)[239](index=239&type=chunk) - Actual or perceived cybersecurity incidents could impair business operations, lead to substantial costs, and cause reputational harm[241](index=241&type=chunk) - The business is exposed to risks from credit card fraud and chargebacks, and must comply with PCI data security standards[255](index=255&type=chunk)[256](index=256&type=chunk) - Failure to provide high-quality customer care, a portion of which is handled by third parties, could harm the brand and operating results[248](index=248&type=chunk)[250](index=250&type=chunk) [Financial Risks](index=60&type=section&id=Financial%20Risks) Financial risks include fluctuating quarterly results, significant indebtedness impacting operational flexibility, delayed revenue recognition from subscription terms, and potential adverse tax law changes or examination outcomes - Quarterly and annual operating results may fluctuate due to various factors, including competition, marketing timing, and macroeconomic conditions, making future results difficult to predict[264](index=264&type=chunk)[265](index=265&type=chunk) - The company's substantial level of indebtedness could require a significant portion of cash flow for debt service, limiting operational flexibility and increasing vulnerability to economic downturns[274](index=274&type=chunk)[277](index=277&type=chunk) - Revenue is recognized ratably over subscription terms, so changes in sales are not immediately reflected in operating results, which can mask deteriorating sales activity[270](index=270&type=chunk) [Legal and Regulatory Risks](index=68&type=section&id=Legal%20and%20Regulatory%20Risks) Legal and regulatory risks involve potential instability from ICANN policies, compliance with evolving international data privacy and cybersecurity laws, liability from customer activities, intellectual property disputes, and adherence to export controls - The business is subject to laws and policies from ICANN, and changes could cause instability in the domain name industry and disrupt business[283](index=283&type=chunk) - The company must comply with numerous local and international laws regarding data privacy and security, such as GDPR and the California Consumer Privacy Act, with non-compliance leading to potential litigation and fines[293](index=293&type=chunk)[294](index=294&type=chunk) - Activities of customers, such as posting illegal or offensive content, could damage the company's reputation and lead to liability, despite safe harbor provisions like the CDA and DMCA[300](index=300&type=chunk)[301](index=301&type=chunk) - The GoDaddy Payments business is subject to extensive regulation, including rules from payment card networks and laws governing money transmission, which could result in fines or restrictions if violated[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=85&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during Q1 2025 outside of the Accelerated Share Repurchase (ASR) agreements detailed in the financial notes - No shares were repurchased during the three months ended March 31, 2025, other than through the Accelerated Share Repurchase (ASR) agreements detailed in the financial notes[360](index=360&type=chunk) [Other Information](index=85&type=section&id=Item%205.%20Other%20Information) CEO Aman Bhutani and Chief Strategy and Legal Officer Jared Sine adopted Rule 10b5-1 trading plans in March 2025 for share sales scheduled between mid-2025 and mid-2026 - CEO Aman Bhutani adopted a 10b5-1 trading plan in March 2025 for the sale of **72,000 shares** of Class A common stock between July 2025 and July 2026[363](index=363&type=chunk) - Chief Strategy and Legal Officer Jared Sine adopted a 10b5-1 trading plan in March 2025 for the sale of **11,450 shares** of Class A common stock between June 2025 and June 2026[364](index=364&type=chunk) [Exhibits](index=86&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - Lists the required CEO and CFO certifications and XBRL data files submitted with the report[365](index=365&type=chunk) [Signatures](index=87&type=section&id=Signatures) The report was signed by Mark McCaffrey, Chief Financial Officer, on May 1, 2025 - The report was signed by Mark McCaffrey, Chief Financial Officer, on May 1, 2025[370](index=370&type=chunk)

Core Viewpoint - GoDaddy reported quarterly earnings of $1.27 per share, missing the Zacks Consensus Estimate of $1.35 per share, but showing an increase from $1.08 per share a year ago, indicating a -5.93% earnings surprise [1] Financial Performance - GoDaddy's revenues for the quarter ended March 2025 were $1.19 billion, surpassing the Zacks Consensus Estimate by 0.60%, and up from $1.11 billion year-over-year [2] - The company has exceeded consensus revenue estimates four times over the last four quarters [2] Stock Performance - GoDaddy shares have declined approximately 4.6% since the beginning of the year, compared to a -5.3% decline in the S&P 500 [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.49 on revenues of $1.2 billion, and for the current fiscal year, it is $6.35 on revenues of $4.89 billion [7] - The estimate revisions trend for GoDaddy is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Internet - Delivery Services industry, to which GoDaddy belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact GoDaddy's stock performance [5]

Financial Data and Key Metrics Changes - In Q1 2025, the company achieved 8% bookings growth and expanded normalized EBITDA margin to 31%, resulting in a 26% increase in free cash flow [5][14][17] - Total revenue grew 8% year-over-year to $1.2 billion, with annual recurring revenue increasing by 7% to $4.1 billion [14][15] - Free cash flow reached $411 million, reflecting a 26% growth [17][19] Business Line Data and Key Metrics Changes - The ANC segment saw a revenue growth of 17% to $446 million, with bookings increasing by 14% [14][15] - The core platform segment delivered a revenue growth of 3% to $748 million, with bookings growing by 5% [15][16] - The average revenue per user (ARPU) grew by 9% to $225 on a trailing twelve-month basis [17][110] Market Data and Key Metrics Changes - International revenue grew by 10%, exceeding prior expectations due to strong aftermarket sales [15] - Customer retention rates improved to above 85% for customers on the GoDaddy platform [17] Company Strategy and Development Direction - The company is focused on attracting high-intent customers and creating long-term shareholder value through disciplined innovation and execution of its strategy [5][6] - Pricing and bundling initiatives are being tested across customer cohorts, with positive results encouraging further development [8][59] - The company aims to maximize free cash flow over the long term and has reaffirmed its full-year guidance for 2025 [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted some pressure in customer sentiment but emphasized resilience among small businesses [26][30] - The company remains confident in its full-year guidance and Investor Day targets, citing strong customer performance and the value of its products [14][20] - The management highlighted the importance of their tools in helping customers navigate a complex economic landscape [13][81] Other Important Information - The company completed its $4 billion share repurchase authorization, reducing fully diluted shares outstanding by over 25% since the program's inception [19] - The company is targeting a net leverage ratio of under three times moving forward [19] Q&A Session Summary Question: Can you provide insights on macro changes and small business sentiment? - Management acknowledged some pressure in customer sentiment but noted that customers remain generally positive about their business performance [26][30] Question: What are the early signs from the Arrow Plus SKU? - Management reported early positive engagement with Arrow Plus, although it is still in the testing phase [32][33] Question: Can you quantify average order size changes? - Management indicated that average order size is increasing, with strong attachment rates for additional products [38][39] Question: What is the outlook for customer growth? - Management stated that customer growth is not the primary focus, but they expect to return to positive customer growth later in the year [64][65] Question: What is driving gross margin expansion? - Management attributed gross margin expansion to favorable product mix rather than specific cost savings [66] Question: How is the agency announcement impacting the addressable opportunity? - Management noted that it is still early in the agency space, but they are optimistic about the potential for their products [120]