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 - GoDaddy (GDDY) is set to report its second-quarter 2025 results on August 7, with expected revenues between $1.195 billion and $1.215 billion, indicating a 7% growth at the midpoint compared to the same quarter last year [1] - The Zacks Consensus Estimate for second-quarter revenues is $1.20 billion, suggesting a 7.1% year-over-year increase [1] - The consensus estimate for earnings is $1.34 per share, reflecting a growth of 21.8% from the previous year's reported figure [2] Revenue Growth Expectations - For Q2 2025, GDDY anticipates Applications & Commerce (A&C) revenue growth in the mid-teens, with A&C revenues estimated at $466 million, representing a 14.8% year-over-year rise [4] - Core platform revenues are expected to grow by 2.6%, with a consensus estimate of $738 million [4] - Bookings are projected at $1.34 billion, indicating a 6.4% increase from the previous year [5] Customer Metrics - GoDaddy's customer count is expected to remain steady at 20.5 million at the end of Q1 2025, with a forecasted increase to 20.67 million for the upcoming quarter [6] - Growth in average order size is anticipated to contribute positively to overall bookings [8] Earnings Performance History - GoDaddy has beaten the Zacks Consensus Estimate in two of the last four quarters, with an average negative earnings surprise of 0.07% [3] Earnings ESP and Zacks Rank - Currently, GoDaddy has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), indicating that the odds of an earnings beat are not favorable [7]

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]

Financial Data and Key Metrics Changes - In Q1 2025, GoDaddy achieved 8% bookings growth and expanded normalized EBITDA margin to 31%, resulting in a 26% increase in free cash flow [4][13][15] - Total revenue grew 8% year-over-year to $1.2 billion, with annual recurring revenue increasing by 7% to $4.1 billion [13][14] - Free cash flow reached $411 million, reflecting a 26% growth [16][18] Business Line Data and Key Metrics Changes - The ANC segment saw a revenue growth of 17% to $446 million, with bookings increasing by 14% [13][14] - The core platform segment delivered a revenue growth of 3% to $748 million, with bookings growing by 5% [14][15] - Average order size increased, and ARPU grew by 9% to $225 on a trailing twelve-month basis [16][114] Market Data and Key Metrics Changes - International revenue grew by 10%, exceeding prior expectations due to strong aftermarket sales [13][14] - Customer retention rates improved, with retention above 85% for customers on the GoDaddy platform [16] Company Strategy and Development Direction - GoDaddy's strategy focuses on attracting high-intent customers, creating customer value, and transforming that value into long-term shareholder value [5][10] - The company is committed to a disciplined capital allocation framework, including a new share repurchase authorization of up to $3 billion through 2027 [18][20] - The company aims to achieve $4.5 billion in cumulative free cash flow generation by 2026, with annual revenue growth of 6% to 8% [21] Management's Comments on Operating Environment and Future Outlook - Management noted some pressure in small business sentiment but emphasized the resilience of their customer base [27][30] - The company reaffirmed its full-year 2025 guidance, expecting total revenue growth of 7% at the midpoint [19][20] - Management expressed confidence in the durability of their business model and the importance of their products to micro businesses [80][82] Other Important Information - GoDaddy's Aero initiative is showing positive results, with improvements in customer behavior and engagement [9][10] - The company is leveraging generative AI to enhance customer experiences and automate tasks [10][58] Q&A Session Summary Question: Insights on macroeconomic changes and small business sentiment - Management observed some pressure in customer sentiment but noted that customers remain resilient and optimistic about their own business performance [27][30] Question: Early signs from the Arrow Plus SKU - Management indicated that Arrow continues to perform well, with improvements in order size and customer engagement [33][34] Question: Customer count expectations and impact of marketing campaigns - Management confirmed stability in customer count and noted that the Super Bowl ad campaign has increased awareness of GoDaddy's offerings [45][47] Question: Drivers of gross margin expansion - Management attributed gross margin expansion to favorable product mix and operational efficiencies [66][68] Question: Differentiation between Arrow and Arrow Plus - Arrow provides basic functionality for free, while Arrow Plus offers a higher-end SKU for engaged customers [72][73] Question: Update on Gabby and AI initiatives - Gabby is evolving to take on more tasks, with potential for future external use [115] Question: Addressable opportunity in the agency space - Management acknowledged that the agency space is still early for GoDaddy but sees it as a long-term opportunity [126][127]

Financial Data and Key Metrics Changes - GoDaddy achieved annual bookings growth of over 9% and expanded normalized EBITDA margin to 31% for the full year [4][19] - Free cash flow increased by 25% for the year, reaching $1.4 billion [4][29] - Total revenue for Q4 grew to $1.2 billion, exceeding guidance, with annual revenue of $4.6 billion representing 8% growth [22][26] - Normalized EBITDA grew 23% to $1.4 billion, with a margin expansion of nearly 400 basis points [27][28] Business Line Data and Key Metrics Changes - Applications and commerce segment revenue grew 17% to $441 million, driven by strong performance in website plus marketing and managed WordPress [22][23] - Core platform segment revenue grew 4% to $751 million, with bookings also increasing by 4% [23][24] - The annualized gross payment volume for commerce grew 55% to $2.6 billion [10] Market Data and Key Metrics Changes - The company expects revenue growth in the US to outpace international growth by approximately 200 basis points, primarily due to currency headwinds [36] - The percentage of customers purchasing two or more products has trended upwards, with over 50% of total customers subscribing to multiple products [32] Company Strategy and Development Direction - GoDaddy's strategy focuses on creating customer value and transforming it into shareholder value through better conversion, attach, and retention [3][20] - The company is targeting significant contributions to growth from pricing and bundling initiatives in 2025, particularly in presence products and specific customer populations [7][48] - GoDaddy Aero is viewed as a key driver of future growth and customer lifetime value, with plans for further enhancements and monetization [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to customer growth in 2025, driven by high-value customer acquisition and improved engagement metrics [32][56] - The company anticipates modest financial benefits from Aero in the near term, with a focus on long-term growth [38] - Management highlighted the importance of maintaining operational discipline while pursuing innovation and customer engagement [40][41] Other Important Information - GoDaddy exited the year with $1.1 billion in cash and total liquidity of $2.1 billion, with net debt at $2.8 billion [33] - The company plans to maintain a disciplined approach to capital allocation, including covering dilution from share-based compensation through buybacks [44][45] Q&A Session Summary Question: Can you elaborate on the pricing and bundling strategy for presence products? - Management discussed the focus on customer cohorts rather than a product-centric approach, aiming to enhance value-based offers [52][53] Question: What are the drivers for returning to customer growth in 2025? - Management emphasized the importance of attracting high-value customers and noted positive signs in customer engagement and attachment rates [56][58] Question: Are there any one-off headwinds impacting revenue growth? - Management acknowledged small impacts from foreign exchange and noted that bookings are expected to outpace revenue growth [66][68] Question: How is the monetization phase for Aero progressing? - Management indicated that Aero is entering the monetization phase earlier than planned, with positive metrics in customer engagement and retention [78][80] Question: What is the outlook for GPV growth? - Management expressed optimism about continued GPV growth, highlighting that a small percentage of the customer base has been penetrated so far [85][86] Question: Can you provide insights on the renewal rate improvements for Aero cohorts? - Management noted that Aero customers are experiencing higher engagement and retention rates due to the value-added services provided [112][113]

Financial Data and Key Metrics Changes - GoDaddy achieved a top line bookings growth of over 9% and expanded normalized EBITDA margin to 31% for the full year [6][14] - The company reported a 25% increase in free cash flow for the year, reaching $1,400,000,000 [14][19] - Annual revenue grew 8% to $4,600,000,000, with normalized EBITDA increasing 23% to $1,400,000,000, representing a 31% margin [18][19] Business Line Data and Key Metrics Changes - Applications and Commerce (A&C) segment revenue grew 17% to $1,700,000,000, with bookings also increasing by 17% [16][18] - Core platform segment revenue grew 4% to $2,900,000,000, with bookings rising 4% [16][18] - A&C segment EBITDA margin improved to 47%, while core platform segment EBITDA margin expanded to 34% [16] Market Data and Key Metrics Changes - Annualized gross payment volume (GPV) increased 55% to $2,600,000,000, indicating strong growth in the commerce initiative [9][18] - The company reported a customer base of 20,500,000, reflecting a strategic focus on high-value customers [19][20] Company Strategy and Development Direction - GoDaddy's strategy focuses on creating customer value and transforming it into shareholder value through better conversion, attach, and retention [5][14] - The company is targeting significant contributions to growth from pricing and bundling initiatives in 2025, particularly in presence products and specific customer populations within the hosting business [7][10] - GoDaddy Aero is viewed as a key driver of future growth, with plans to expand its capabilities and customer engagement [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to customer growth in 2025, driven by enhanced value propositions and strategic focus on high lifetime value customers [19][24] - The company anticipates total revenue growth of 7% for 2025, with A&C revenue growth in the mid-teens and core platform growth in low single digits [23][24] - Management highlighted the importance of maintaining operational discipline and pursuing opportunities for further leverage through technology and AI [25][26] Other Important Information - GoDaddy exited the year with $1,100,000,000 in cash and total liquidity of $2,100,000,000, with net debt at $2,800,000,000 [22] - The company plans to maintain a disciplined capital allocation approach, focusing on shareholder returns and evaluating all opportunities [26] Q&A Session Summary Question: Can you elaborate on the pricing and bundling strategy for 2025? - Management indicated excitement about the pricing and bundling program, which exceeded expectations in 2024, and plans to focus on presence products and customer cohorts in 2025 [33][35] Question: What are the drivers for returning to customer growth in 2025? - Management emphasized the focus on high-quality customers and the positive signs in the sales funnel, indicating a strategy that prioritizes high-value customers over sheer volume [39][40] Question: Any headwinds affecting revenue growth expectations for 2025? - Management acknowledged potential impacts from foreign exchange and the transactional business, which could affect revenue recognition timing [46][91] Question: What is the expected contribution from the ARROW initiative? - Management expects modest impacts from the ARROW launch in 2025, with a focus on attracting higher-value customers and enhancing their initial experience with GoDaddy [48][50] Question: Can you provide insights on the renewal rates for the Aero cohorts? - Management noted improvements in renewal rates for customers engaged with Aero, attributing this to the added value and multiple product interactions available through the Aero experience [77][78]