GoDaddy(US:GDDY)2025-05-01 21:00Financial 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]