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

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]