GoDaddy Inc. ((GDDY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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GoDaddy’s recent earnings call showcased a robust quarter, characterized by notable growth in Applications and Commerce (A&C) bookings and free cash flow, alongside successful AI-driven innovations. While the company faced challenges such as the .co registry transition and customer count pressures, the overall business outlook remains optimistic with raised guidance and strategic advancements.
Strong A&C Bookings Growth
GoDaddy reported a significant 12% growth in Applications and Commerce (A&C) bookings, despite facing the toughest comparison for the year. This growth was accompanied by an expansion in normalized EBITDA margin by nearly 200 basis points, highlighting the company’s strong operational performance.
Free Cash Flow Guidance Raised
The company has raised its full-year 2025 free cash flow guidance to approximately $1.6 billion, marking a 21% growth in free cash flow. This increase underscores GoDaddy’s confidence in its financial health and future cash generation capabilities.
AI-Powered Innovations
GoDaddy introduced Agentic AI, which includes features like Ask Airo, designed to enhance customer experience and improve operational efficiency. This innovation reflects the company’s commitment to leveraging AI to drive business growth and customer satisfaction.
Record A&C Revenue
A&C revenue saw a 14% increase, contributing to an expansion in normalized EBITDA margins to 31% and a growth in free cash flow to $392 million. This record revenue performance underscores the strength of GoDaddy’s A&C segment.
Positive Customer Cohort Growth
The company reported meaningful growth in customer cohorts spending over $500 annually, with a near-perfect retention rate. This contributed to an average revenue per user (ARPU) growth of 10% to $230, indicating strong customer loyalty and spending.
Dotco Registry Transition
GoDaddy announced it will no longer operate as the registry service provider for the .co top-level domain, which is expected to create an approximate 50 basis point headwind to bookings and revenue. This strategic decision reflects the company’s focus on optimizing its business operations.
Customer Count Pressures
The company is experiencing residual pressure from migrations affecting customer count, although it anticipates growth to resume later in the year. This temporary challenge is being addressed as part of GoDaddy’s strategic planning.
Forward-Looking Guidance
During the earnings call, GoDaddy provided strong forward-looking guidance, emphasizing its strategic initiatives and financial performance. The company projected revenue growth of 8% to $1.2 billion for the quarter, with annual recurring revenue increasing by 9% to $4.2 billion. For the full year, GoDaddy updated its revenue outlook to between $4.89 billion and $4.94 billion, with expected FX-neutral bookings growth aligned with revenue growth.
In conclusion, GoDaddy’s earnings call reflected a positive sentiment, driven by strong financial performance and strategic advancements. Despite some challenges, the company’s raised guidance and innovative initiatives position it well for future growth. Investors and market watchers can look forward to GoDaddy’s continued progress in the coming quarters.