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GoDaddy (GDDY)
NYSE:GDDY
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GoDaddy
(NYSE:GDDY)
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Rating:66Neutral
Price Target:
$93.00
▲(5.42% Upside)
Action:ReiteratedDate:02/27/26
The score is supported by strong cash generation and improving profitability, reinforced by positive 2026 margin and free-cash-flow guidance, plus a relatively low P/E. These strengths are tempered by a clearly bearish technical setup (price below key moving averages with weak momentum) and the need to monitor balance-sheet stability given historical leverage volatility despite the latest improvement.
Positive Factors
Strong free cash flow generation
GoDaddy's FCF scaled materially to ~$1.6B in 2025 with FCF-to-net-income near 0.9–1.0. Durable, high absolute cash generation supports reinvestment, buybacks and debt reduction, giving management flexibility to fund growth initiatives and withstand cyclical pressure over the medium term.
High and improving margins
Consistently high gross margins and rising net margins reflect a subscription-heavy, high‑mix services model with pricing power and scale. This structural margin profile supports durable profitability and cash conversion even as the business invests in product and AI initiatives over the next several quarters.
Applications & Commerce (A&C) momentum
A&C is a faster‑growing, higher‑margin segment that diversifies GoDaddy beyond core domain volumes. Strong ARR and attach metrics indicate sustainable upsell potential and a pathway to lift overall company growth and margins as A&C scale continues to outpace Core Platform.
Negative Factors
Historical balance-sheet volatility
Despite a sharp 2025 deleveraging step (debt down to $77M), GoDaddy's prior periods featured extreme leverage and thin/negative equity. That history raises execution risk: if cash generation weakens or buybacks continue, capital structure improvements may not prove durable without sustained FCF and conservative capital allocation.
Operating-profitability inconsistency
Large swings in reported operating margins signal volatility in underlying profitability drivers and complicate forecasting. If operating leverage is uneven or one‑off items recur, management's ability to sustainably convert revenue growth into predictable operating profit could be impaired over the medium term.
Structural revenue headwinds (.CO & aftermarket)
Loss of .CO registry revenue and ongoing aftermarket exclusions are structural reductions to addressable revenue that management must replace via GTM changes, A&C expansion and product monetization. These headwinds, combined with bookings lagging revenue, increase execution pressure on sustained top‑line growth.
GoDaddy (GDDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.76B
Dividend YieldN/A
Average Volume (3M)2.29M
Price to Earnings (P/E)14.1
Beta (1Y)0.82
Revenue Growth8.79%
EPS Growth-55.15%
CountryUS
Employees5,518
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.80
Shares Outstanding133,354,110
10 Day Avg. Volume3,261,705
30 Day Avg. Volume2,287,725
Financial Highlights & Ratios
PEG Ratio-4.24
Price to Book (P/B)78.11
Price to Sales (P/S)3.39
P/FCF Ratio10.66
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue3.06
Enterprise Value/Gross Profit4.97
Enterprise Value/Ebitda11.73
Forecast
1Y Price Target
$121.83Price Target Upside38.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)6.98
Revenue Forecast (FY)$5.24B
GoDaddy Business Overview & Revenue Model
Company DescriptionGoDaddy Inc. engages in the design and development of cloud-based technology products in the United States and internationally. The company provides domain name registration product that enables to engage customers at the initial stage of establishing a digital identity. It also offers shared Website hosting products that provide various applications and products, such as web analytics, Secure Sockets Layer certificates, and WordPress; Website hosting on virtual private servers and virtual dedicated servers products, which allows customers to select the server configuration suited for their applications, requirements, and growth; managed hosting products to set up, monitor, maintain, secure, and patch software and servers for customers; and security products, a suite of tools designed to help secure customers' online presence. In addition, the company provides presence products, such as Websites + Marketing, a do-it-yourself mobile-optimized online tool that enables customers to build websites and e-commerce enabled online stores; a range of marketing tools and services designed to help businesses acquire and engage customers, and create content, as well as search engine optimization that helps customers get their websites found on search sites; and social media management services. Further, it offers business application products, such as Microsoft Office 365, email accounts, email marketing, and Internet-based telephony services; online store capabilities that allows customers to transact business directly on their websites; GoDaddy Payments, a payment facilitator; and point-of-sale (POS) devices, as well as software for POS. The company serves small businesses, individuals, organizations, developers, designers, and domain investors. GoDaddy Inc. was incorporated in 2014 and is headquartered in Tempe, Arizona.
How the Company Makes MoneyGoDaddy generates revenue primarily through its domain registration services, web hosting subscriptions, and additional products such as website builders and online marketing tools. The company's revenue model includes both one-time transaction fees for domain registrations and recurring subscription fees for hosting and premium services. Key revenue streams include domain name registrations, which account for a significant portion of its income, as well as hosting services that provide users with the infrastructure to run their websites. Additionally, GoDaddy offers value-added services like email hosting, SSL certificates, and e-commerce solutions, which contribute to its diversified revenue base. The company has also formed strategic partnerships with various technology providers to enhance its service offerings and reach, further driving its earnings potential.
GoDaddy Key Performance Indicators (KPIs)
Any
Customer Count
Measures the total number of customers, providing insight into GoDaddy’s market reach and growth in user base.
Measures the total number of customers, providing insight into GoDaddy’s market reach and growth in user base.
Data provided by:
The Fly
The FlyGoDaddy Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a largely positive picture: healthy revenue and ARR growth, strong margin expansion, robust free cash flow generation, significant AI-driven operational progress, and strategic product initiatives (Airo.ai and ANS) with early validation. Near-term headwinds include promotional-induced term-mix shifts that reduced up-front bookings and near-term revenue, the expiration of the .CO registry contract and exclusion of some aftermarket revenue, some deceleration in bookings vs. revenue early in 2026, and early-stage monetization for Airo.ai. Management expects these headwinds to be temporary or manageable and provided guidance that assumes modest impacts while maintaining margin and free cash flow targets.Q4-2025 Updates
Positive Updates
Revenue Growth and Strong Q4 Execution
Total revenue grew 7% year-over-year in Q4 to $1.3 billion, coming in at the high end of guidance. Full-year revenue was approximately $5.0 billion, up 8% year-over-year.
Normalized EBITDA and Margin Expansion
Full-year normalized EBITDA grew 14% to $1.6 billion with a margin of 32% (150 basis points expansion year-over-year). Q4 normalized EBITDA grew 12% to $431 million with a margin of 34% (up 160 basis points and above guidance).
Robust Free Cash Flow and Shareholder Returns
Free cash flow grew 19% year-over-year to $1.6 billion for the full year, with conversion of normalized EBITDA to free cash flow greater than 1:1. In 2025 GoDaddy deployed 100% of free cash flow, repurchasing 10.2 million shares for $1.6 billion (reducing fully diluted shares ~33% since 2021).
Applications & Commerce (A&C) Momentum
A&C revenue grew 14% for the year and 13% in Q4 to $498 million; A&C ARR grew 12% and segment EBITDA margin improved 40 basis points to 47%. A&C bookings grew 11% in Q4.
Core Platform Resilience
Core Platform revenue grew 5% for the year and 3% in Q4 to $776 million, driven by aftermarket (+8%) and primary domains (+5%). Core Platform segment EBITDA margin expanded 70 basis points to 35% in Q4.
Domain Funnel and ARR Growth
ARR increased 7% year-over-year to $4.3 billion. Domains remain a durable acquisition funnel and aftermarket strength contributed meaningfully to growth.
AI and Product Innovation (Airo.ai & ANS)
Airo.ai launched in beta with 25 agents live and early monetization; Airo cohorts have cumulative annual spend growing in the high teens and nearly 30% faster velocity to second product attach versus non-Airo cohorts. Agent Name Service (ANS) announced integration with MuleSoft, validating enterprise interest in domain-anchored agent identity.
Operational Leverage Driven by AI
Company reports majority of new code is AI-generated, internal AI agents handling sales calls and back-office tasks, and AI-driven efficiencies as a material driver of margin expansion and productivity.
Strong Balance Sheet and Liquidity
Exited year with $1.1 billion cash and total liquidity of $2.1 billion. Net debt $2.7 billion resulting in net leverage of 1.6x (trailing 12 months), within target range.
2026 Guidance Indicates Continued Strength
Full-year 2026 revenue outlook of $5.195B–$5.275B (~6% growth at midpoint); normalized EBITDA margin expected to exceed ~33%; free cash flow guidance of ~ $1.8 billion and continued >1:1 conversion.
Negative Updates
Near-Term Booking and Revenue Headwind from .com Promotional Offer
A streamlined purchase experience and promotional 1-year .com pricing drove higher-than-expected demand and a shift toward shorter term (1-year) contracts, reducing up-front bookings and near-term revenue due to mix and discount allocation effects.
Impact from .CO Registry Expiration and Excluded Aftermarket Transactions
Company expects just over 200 basis points of cumulative revenue impact in guidance from .CO contract expiration and the continued exclusion of high-value aftermarket transactions; .CO and aftermarket represent ~2/3 of that impact.
Bookings Growth Lagging Revenue in Early 2026
Bookings are expected to trail revenue growth in Q1 2026 by a few points due to the go-to-market evolution, .CO termination, and tough aftermarket compares; Q4 bookings grew 5% versus revenue growth of 7%.
Softness in Non-Core Hosting
Core Platform growth was partially offset by softness in non-core GoDaddy hosting, noted as a headwind within the segment.
A&C Bookings Deceleration and Discount Allocation Effects
A&C bookings showed a slight deceleration in Q4 partly because the domain discount must be allocated across attached products, which reduced initial order sizes and bookings for A&C in the near term.
Airo.ai Monetization and Scale Still Early
Airo.ai monetization is currently small relative to overall business; management is ramping traffic and waiting for scale and product-market-fit before including material contribution in guidance (monetization is upside if adoption accelerates).
Rising AI Costs (Managed but Present)
Management noted increased AI-related costs (investment and product compute) though they assert visibility and controls; AI costs will slightly offset some operational efficiencies but are expected to be manageable within margin guidance.
Active Customers Trending Down Year-over-Year
Active customers showed modest sequential growth but remain down year-over-year; management expects the new go-to-market to help acquisition but year-over-year inflection timing is uncertain.
Company Guidance
GoDaddy guided full‑year 2026 revenue of $5.195–$5.275 billion (≈6% growth at the midpoint), with Applications & Commerce (A&C) revenue expected to grow in the low double‑digits and Core Platform in the low single‑digits; Q1 revenue is forecast at $1.25–$1.27 billion (~6% at the midpoint). Management said bookings growth will trail revenue by a few points in Q1 but should be roughly in parity with revenue for the full year, with total bookings dollars remaining ahead of revenues; the full‑year outlook reflects just over 200 basis points of cumulative headwind from the .CO registry expiration, aftermarket exclusions and the go‑to‑market evolution (~2/3 from .CO and aftermarket, ~1/3 from the GTM change). They expect normalized EBITDA margin to exceed their Investor Day target of ~33% (Q1 normalized EBITDA margin ~32%, roughly +150 bps year‑over‑year) while absorbing modestly higher AI costs, and project free cash flow of approximately $1.8 billion with normalized EBITDA‑to‑FCF conversion greater than 1:1, remaining on track to exceed their North Star CAGR of 20%.GoDaddy Financial Statement Overview
Summary
Strong and improving profitability profile with consistently high gross margins (~63–65%) and net margins improving to ~18–21% in 2024–2025, plus very strong cash generation (2025 annual OCF ~$1.60B and FCF ~$1.58B). The main offset is balance-sheet volatility historically (thin/negative equity and very high leverage in prior years), despite a notable 2025 deleveraging step-change that still needs to prove durable; some inconsistency in the latest operating-margin data also adds caution.Income Statement
Revenue has expanded steadily from $3.3B (2020) to $5.0B (2025 annual), with acceleration in the latest period (2025 annual revenue growth of 166.9%). Profitability is generally solid: gross margin has been consistently strong (~63–65%) and net margin improved from a loss in 2020 (-14.9%) to healthy profitability in 2024–2025 (~17.7–20.5%). Key watch-outs: operating profitability looks volatile—EBITDA margin dropped notably in 2025 (10.0%) versus 2024 (23.2%), and reported EBIT margin for 2025 is inconsistent (shown as 0.0 despite positive EBIT), which reduces confidence in the latest operating-margin read-through.76
Positive
Balance Sheet
Leverage has been a historical overhang: debt-to-equity was extremely high in 2021–2024 (e.g., 63.3x in 2023 and 5.6x in 2024), and equity has been thin/volatile (negative in 2020 and 2022). The latest year shows a dramatic improvement, with total debt down to $77M in 2025 annual from ~$3.9–$4.1B in prior years and debt-to-equity improving to 0.36x—materially de-risking the capital structure if sustained. However, given the sharp step-change and the history of low/negative equity, balance-sheet stability remains a key area to monitor.58
Neutral
Cash Flow
Cash generation is a clear strength. Operating cash flow rose from $765M (2020) to $1.60B (2025 annual), and free cash flow increased from $683M to $1.58B over the same span, with strong 2025 annual free-cash-flow growth (244.5%). Free cash flow closely tracks reported earnings across most years (free cash flow to net income ~0.93–0.99 in 2022–2025), supporting earnings quality. A softer point is that the provided operating cash flow coverage ratio remains below 1.0 across periods, suggesting cash flow relative to the referenced obligation base is not exceptionally high despite strong absolute cash generation.83
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.95B | 4.57B | 4.25B | 4.09B | 3.82B |
| Gross Profit | 3.05B | 2.92B | 2.68B | 2.61B | 2.44B |
| EBITDA | 1.29B | 1.06B | 754.10M | 697.40M | 579.20M |
| Net Income | 875.00M | 936.90M | 1.37B | 352.20M | 242.30M |
Balance Sheet | |||||
| Total Assets | 8.03B | 8.24B | 7.56B | 6.97B | 7.42B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 1.09B | 498.80M | 774.00M | 1.26B |
| Total Debt | 3.90B | 3.89B | 3.94B | 3.98B | 4.06B |
| Total Liabilities | 7.82B | 7.54B | 7.50B | 7.30B | 7.33B |
| Stockholders Equity | 215.10M | 692.10M | 62.20M | -331.80M | 81.70M |
Cash Flow | |||||
| Free Cash Flow | 1.58B | 1.26B | 970.20M | 919.60M | 576.10M |
| Operating Cash Flow | 1.60B | 1.29B | 1.05B | 979.70M | 829.30M |
| Investing Cash Flow | -25.10M | 21.50M | -102.40M | -132.00M | -635.60M |
| Financing Cash Flow | -1.59B | -677.40M | -1.26B | -1.33B | 298.10M |
GoDaddy Technical Analysis
Negative
88.22
Price Trends
105.32
Negative
117.46
Negative
139.66
Negative
Market Momentum
-5.26
Negative
41.48
Neutral
70.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDDY, the sentiment is Negative. The current price of 88.22 is below the 20-day moving average (MA) of 91.37, below the 50-day MA of 105.32, and below the 200-day MA of 139.66, indicating a bearish trend. The MACD of -5.26 indicates Negative momentum. The RSI at 41.48 is Neutral, neither overbought nor oversold. The STOCH value of 70.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDDY.
GoDaddy Risk Analysis
GoDaddy disclosed 60 risk factors in its most recent earnings report. GoDaddy reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
GoDaddy Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $15.71B | 23.01 | 20.84% | ― | 9.66% | 23.87% | |
66 Neutral | $23.89B | -347.88 | -3.56% | ― | 23.24% | -8.83% | |
66 Neutral | $11.76B | 14.14 | 192.90% | ― | 8.79% | -55.15% | |
66 Neutral | $5.42B | 18.57 | 22.33% | ― | -1.15% | -2.52% | |
63 Neutral | $3.98B | 31.44 | ― | ― | 13.22% | 48.20% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $5.82B | 13.44 | ― | ― | -0.44% | 2.47% |
* Technology Sector Average
GDDY
GoDaddy
88.22
-88.20
-49.99%
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Zscaler
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DBX
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.