GoDaddy(US:GDDY)2025-08-07 22:02Financial Data and Key Metrics Changes - Total revenue grew 8% to $1,200,000,000, surpassing the high end of the guided range [17] - Annual recurring revenue increased by 9% to $4,200,000,000 [17] - Free cash flow grew 21% to $392,000,000, reinforcing the strength of customer cohorts [20] - Normalized EBITDA margin expanded nearly 200 basis points to 31% [16][19] Business Line Data and Key Metrics Changes - Applications and Commerce (A&C) revenue grew 14% to $464,000,000, now accounting for 38% of total revenue, an all-time high [17][18] - Core platform segment revenue increased by 5% to $754,000,000, driven by growth in primary domains and bundling initiatives [18] - A&C bookings grew 12%, while core platform bookings increased by 3% [19] Market Data and Key Metrics Changes - International revenue grew 11%, indicating strong performance in global markets [17] - The company surpassed $3,000,000,000 in annualized gross payments volume, signaling effective strategy execution [12] Company Strategy and Development Direction - The company is focused on maximizing free cash flow and attracting high-intent customers who generate high lifetime value [6][20] - AI initiatives, particularly the introduction of Ask Arrow, are expected to enhance customer experience and operational efficiency [7][9] - The company is actively testing and scaling new offerings, including pricing and bundling strategies, to drive growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small businesses and their optimism despite increased complexity in the market [5] - The company anticipates easier comparisons for A&C growth in the second half of the year [30] - Management raised full-year free cash flow guidance to approximately $1,600,000,000, reflecting strong performance [23] Other Important Information - The company will no longer operate as the registry service provider for the .co top-level domain starting in Q4, which is expected to create a 50 basis point headwind to bookings and revenue [24][25] - The balance sheet remains strong, with $1,100,000,000 in cash and total liquidity of $2,100,000,000 [22] Q&A Session Summary Question: How should we think about the A&C growth and its continuation through 2025? - Management indicated no trough in A&C growth and expressed confidence in its momentum, expecting it to grow to about 40% of total business [30][31] Question: What are the latest trends in customer cohorts experiencing Arrow? - Management reported higher conversion rates and average order sizes among customers using Arrow, with near-perfect retention [36][39] Question: How does the company view the impact of AI on the website ecosystem? - Management is optimistic about AI's potential to simplify customer interactions and enhance product offerings, positioning GoDaddy favorably in the market [44][76] Question: Can you elaborate on the sustainability of the Rate Saver promo? - Management clarified that Rate Saver is a product feature rather than a promotional offer, expecting its adoption to grow among new cohorts [125]