GoDaddy (NYSE:GDDY) Q4 2025 Earnings call February 24, 2026 05:00 PM ET Company ParticipantsAman Bhutani - CEOChristie Masoner - VP of Investor RelationsMark McCaffrey - CFONaved Khan - Managing Director of Equity ResearchYgal Arounian - Managing DirectorNone - Video NarratorConference Call ParticipantsArjun Bhatia - Partner, Co-Head Tech Equity Research, and Software AnalystJames Michael - Research AnalystKen Wong - Managing Director and Senior AnalystMark Zgutowicz - Senior Research AnalystSang-Jin Byun - ...

Financial Data and Key Metrics Changes - The company reported total revenue growth of 7% year-over-year, reaching $1.3 billion in Q4 2025, at the high end of guidance [21] - Annual revenue for 2025 was approximately $5 billion, representing an 8% growth [23] - Normalized EBITDA margin expanded to 32%, reflecting a 150 basis points increase over the prior year [25] - Free cash flow grew 19% to $1.6 billion, with a conversion rate of greater than 1:1 from Normalized EBITDA [25] Business Line Data and Key Metrics Changes - Applications and Commerce segment revenue grew 13% to $498 million, with an EBITDA margin improvement of 40 basis points to 47% [21] - Core Platform segment revenue increased by 3% to $776 million, driven by an 8% growth in aftermarket domains [22] - Total bookings grew 5% to $1.3 billion, with Applications and Commerce bookings up 11% and Core Platform bookings up 1% [22] Market Data and Key Metrics Changes - International revenue grew 10% to $420 million in Q4 2025, contributing to an annual international revenue of $1.6 billion, up 11% [21][23] - The company captured nearly 2 billion customer signals daily, enhancing its data-driven approach [2] Company Strategy and Development Direction - The company is focusing on leveraging AI to enhance customer experiences and operational efficiencies, with Airo being a key component of this strategy [7][9] - Airo is evolving into an agentic operating system for small businesses, aiming to streamline operations and improve customer engagement [10][14] - The company is expanding its go-to-market strategy to attract high-intent customers, optimizing the customer acquisition funnel [38][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive advantages, including brand strength, domain leadership, and a robust data infrastructure [8][90] - The company anticipates that the new go-to-market strategy will lead to improved customer acquisition and retention, with a focus on high-value customers [31][82] - Management acknowledged the challenges posed by competitive dynamics but emphasized the company's adaptability and strategic positioning [104] Other Important Information - The company has made significant investments in AI, with the majority of new code now being AI-generated, enhancing development efficiency [93] - The new website builder, integrating AI features, is expected to launch soon, further enhancing the customer experience [17][70] Q&A Session Summary Question: Can you elaborate on the promotional offer with .com and its impact on bookings? - Management explained that the new go-to-market strategy aims to attract high-intent customers, and while it has impacted bookings, it is expected to improve over time as customer engagement increases [36][41] Question: How do you view the impact of AI costs on margins? - Management indicated a disciplined approach to AI costs, ensuring visibility and operational focus to maintain margins while investing in AI [42][45] Question: What are the expectations for active customer growth in 2026? - Management expressed optimism about attracting high-intent customers, which should positively impact active customer growth moving forward [81][82] Question: Can you clarify the impact of the new go-to-market strategy on bookings and revenue? - Management confirmed that while bookings may lag initially due to shorter contract terms, they expect bookings to strengthen throughout the year [56][60] Question: What advantages does the company have over newer entrants in the market? - Management highlighted the company's extensive data and established brand as key competitive advantages that facilitate the integration of AI into its offerings [90][91]

GoDaddy (NYSE:GDDY) Q4 2025 Earnings call February 24, 2026 05:00 PM ET Speaker14Nearly 2 billion customer signals captured every day. We have the experience, data, and infrastructure to lead the way with agentic open internet for small business. That's the advantage behind Airo, an advantage no one else can claim, and an agentic experience none can rival. Airo supports the entire customer journey. It starts by turning your idea into a website. Next, it grows your business, optimizing websites, improving ma ...

Core Insights - GoDaddy has launched the ANS Marketplace, showcasing ANS-verified AI agents to enhance trust and security in the AI ecosystem [1][3] - The ANS system is designed to provide a cryptographically verifiable identity for AI agents, ensuring they can be discovered and governed effectively [2][9] Group 1: ANS Marketplace Overview - The ANS Marketplace allows entrepreneurs and developers to discover and interact with verified AI agents, demonstrating their practical applications for small businesses [1][3] - The marketplace features a curated selection of AI agents, including 20 agents derived from WooCommerce stores, which help answer customer inquiries and support shopping experiences [5][6] Group 2: Trust and Verification - GoDaddy has introduced ANS-verified badges to help users easily identify trusted agents, distinguishing them from unverified or potentially harmful ones [7] - The ANS system ensures that each agent's identity can be cryptographically checked, and their status and policies can be inspected before any data exchange occurs [9] Group 3: Practical Applications of AI Agents - The marketplace includes various AI agents such as Brand Advisor, Home Page Advisor, and Social Media Post Generator, each designed to assist businesses in different aspects of their operations [8]

Summary of GoDaddy Conference Call Company Overview - **Company**: GoDaddy - **Industry**: Technology, specifically focused on web services and domain registration Key Points and Arguments AI Product Initiatives - GoDaddy has launched **Airo.AI**, a new platform currently in beta, aimed at enhancing customer engagement through AI-driven tools [3][4] - The platform features **agentic agents** designed to assist various customer types, from sole entrepreneurs to professionals, in achieving their business goals quickly and efficiently [5][6] - Early engagement metrics indicate that customers are naturally gravitating towards Airo.AI without any traffic-driving efforts from GoDaddy [3][4] Customer-Centric Approach - The focus remains on understanding the **Jobs to be Done** by customers, ensuring that the tools provided meet their specific needs [10][19] - GoDaddy emphasizes a **frictionless experience** for micro and small businesses, allowing them to manage their operations without needing technical expertise [13][18] - The company aims to guide customers through their journey by suggesting the **next best actions** based on their specific business needs [19][20] Monetization Strategy - GoDaddy has been in the AI market for two years, with expectations that Airo.AI will enhance average order sizes and customer retention [20][21] - The company is exploring both **indirect and direct monetization** strategies, including potential paywalls for premium services [23][24] - Historical data suggests that customers spending over $500 have high retention rates, indicating a successful monetization path [34] Agent Name Service (ANS) - GoDaddy is developing **Agent Name Service (ANS)**, which aims to create a secure environment for agents to perform tasks on behalf of users, evolving from the traditional DNS infrastructure [24][26] - ANS will allow users to register agents that can perform tasks securely, ensuring that the information exchanged is trustworthy [26][28] Customer Trends and Market Outlook - Recent surveys indicate that micro and small businesses are optimistic about their revenue prospects, which bodes well for GoDaddy's product offerings [35][36] - The company has seen a return to positive customer growth, attributed to effective funnel strategies and the rollout of AI-assisted onboarding [32][34] Competitive Landscape - GoDaddy positions itself as a **one-stop shop** for web services, focusing on meeting the specific needs of its customer base rather than reacting to competitors [40][41] - The company believes that its long-standing experience and understanding of customer needs will continue to drive its success [41][42] Pricing and Bundling Strategy - GoDaddy's average customer spends between **$1,000 and $2,000** online, with an average revenue per user (ARPU) of **$230**, indicating room for pricing adjustments [43] - The company employs a **value-based pricing** strategy, aiming to balance customer retention and product attachment to drive growth [44] Cost Management and Efficiency - GoDaddy focuses on expanding **Normalized EBITDA** and converting it to free cash flow, maintaining a strong balance sheet while investing in innovation [46][47] - The company leverages its historical data and technology stack to maintain a cost advantage over competitors [48] Capital Allocation - GoDaddy continues to prioritize share buybacks as a method to return value to shareholders while evaluating potential M&A opportunities that align with its strategic goals [50][51] Additional Important Insights - GoDaddy's customer base primarily consists of microbusinesses and sole entrepreneurs, who value the company's support and care organization [37][38] - The company is committed to using its internal resources and engineering talent to innovate and meet customer needs without relying heavily on external acquisitions [51]

Core Insights - GoDaddy has launched the Agent Name Service (ANS) API, enabling developers to build and test integrations for AI agents, enhancing trust in the agentic ecosystem [1][7] - The ANS aims to provide a reliable identity naming system for AI agents, combining human-readable names with cryptographically verifiable identities [1][7] - The initiative is designed to facilitate interoperability across various protocols while ensuring operational rigor in agent lifecycle management [7] Group 1: ANS API Launch - The ANS API is now live, allowing developers to generate keys and explore endpoints for agent registration and discovery [7] - GoDaddy has also launched the ANS Standards site, which includes the latest open API specifications and implementation guidance [1][7] Group 2: Trust and Interoperability - ANS is positioned as a backbone of trust for the agent economy on the open web, leveraging GoDaddy's extensive experience in domain names and certificate infrastructure [1][7] - The system incorporates a protocol-agnostic adapter layer to ensure compatibility with emerging standards while using familiar PKI/X.509 for identity verification [7] Group 3: Operational Features - ANS provides lifecycle controls for agent registration, renewal, and revocation, essential for production deployments [7] - The service includes enrollment of agent certificates and status checks to enable cryptographic verification before data exchange [7]

Financial Data and Key Metrics Changes - GoDaddy achieved a total revenue growth of 10% year-over-year, reaching $1.3 billion, surpassing the high end of the guided range [17][18] - ANC (Annualized Net Customer) bookings grew by 14%, contributing to a total bookings increase of 9% to $1.4 billion [18][19] - Free cash flow increased by 21% to $440 million, reflecting strong operational performance [16][18] - The normalized EBITDA margin was maintained at 32%, with normalized EBITDA growing 11% to $409 million [18][21] Business Line Data and Key Metrics Changes - The high-margin ANC segment saw a revenue increase of 14% to $481 million, driven by solid adoption of subscription solutions [18] - The core platform segment delivered an 8% revenue growth to $784 million, supported by a 28% growth in aftermarket and a 7% growth in primary domains [18] - The $500+ customer cohort now represents approximately 10% of the customer base, contributing to a 10% increase in ARPU (Average Revenue Per User) to $237 [16][17] Market Data and Key Metrics Changes - International revenue grew by 14%, primarily driven by strength in both primary and secondary domain markets [17] - Retention rates remained stable at 85%, with total customers increasing sequentially to 20.4 million [17][18] Company Strategy and Development Direction - GoDaddy is focusing on the evolution of its Aero platform from generative AI to agentic AI, launching new agents to assist customers in various tasks [4][5] - The company is committed to creating an agentic open internet, enhancing customer experiences through AI-powered agents [4][10] - Strategic initiatives include pricing and bundling to provide greater value and choice to customers, and a seamless experience to improve conversion and renewal rates [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of micro-business owners and their continued engagement with GoDaddy's services [81][82] - The company raised its full-year 2025 revenue guidance to approximately $4.93 to $4.95 billion, reflecting ongoing strength across the business [19][21] - Management highlighted the importance of AI in driving operational efficiencies and enhancing customer engagement [61][63] Other Important Information - GoDaddy has repurchased 9 million shares for a total of $1.4 billion year-to-date, demonstrating a commitment to shareholder returns [16] - The company is on track to exceed its investor day North Star commitment of a 20% CAGR (Compound Annual Growth Rate) [16] Q&A Session Summary Question: Impact of AI and agentic services on domains and websites - Management believes that AI and agentic AI will automate customer journeys, leading to an increase in the creation of websites and demand for domains [24][26] Question: Customer base growth and metrics - The total customer account showed slight sequential growth, with a focus on high-intent customers driving ARPU growth [30] Question: Rollout of Aero.ai and its integration - Aero.ai is built on the GoDaddy software platform, providing a seamless experience for existing customers and linking to the GoDaddy ecosystem [34][35] Question: Drivers of strengthening customer cohort dynamics - The high-intent customer cohort is attaching to more products at a higher rate, contributing to bookings and revenue growth [37][38] Question: AI investments and profitability - Investments in AI are being offset by efficiencies gained from internal use cases, with a focus on maintaining operational discipline [61][63] Question: Aftermarket performance - The company experienced strong performance in the aftermarket, particularly in high-value transactions [46] Question: International growth specifics - No specific markets were highlighted, but international growth mirrored domestic performance [79]