GoDaddy Inc. Q1 FY2025 earnings call

• Pricing and bundling initiative delivered ahead of expectations in Q1, with further testing across customer cohorts in A&C and core platform segments.
• Seamless experience initiative improved customer conversion, product engagement, and renewals, driving higher average order size and renewal rate.
• Commerce growth remains strong with annualized gross payments volume increasing, and new high margin offerings like GoDaddy Capital gaining traction.
• GoDaddy Airo permeates across products, driving better attach, term length, and renewals, with data showing customers purchasing more products, especially in websites plus marketing.

In Q1, the A&C segment drove 17% revenue growth to $446 million, with segment EBITDA margin expanding nearly 200 basis points to 44%. The core platform segment delivered 3% revenue growth to $748 million, with core platform bookings growing 5% and segment EBITDA margin expanding by over 50 basis points to 31%. Total revenue was $1.2 billion, growing 8% on reported and constant currency basis. Normalized EBITDA grew 16% to $364 million, with an expanded margin of 31%. Bookings were $1.4 billion, up 8% on reported basis. Free cash flow grew 26% to $411 million.

• Reaffirming full-year 2025 total revenue range of $4.86 billion to $4.94 billion, representing 7% growth at midpoint.
• Q2 total revenue target of $1.195 billion to $1.215 billion, with 7% growth at midpoint; A&C revenue growth expected in mid-teens, core platform growth in low single-digits.
• Projecting normalized EBITDA margin of about 31% in Q2 and reaffirming full-year normalized EBITDA margin expansion target of 100 basis points.
• Reaffirming full-year free cash flow target of at least $1.5 billion, representing over 11% growth.
• Board approved 2025 repurchase authorization of up to $3 billion through 2027.

• Macro-economic uncertainties, though GoDaddy's direct exposure to tariffs is not material; monitoring customer sentiment and market conditions closely.

Q: On macro changes and customer sentiment, any signals and how it could impact guidance?

A: Aman noted some pressure in customer sentiment but customers remain resilient; Mark added customer base leans towards services and is optimistic.

Q: Early signs on Airo Plus pricing and target customers?

A: Airo Plus is early in testing, offering expanded offering at competitive price, targeting customers engaged with Airo.

Q: Average order size and Airo impact?

A: Similar to Q4, seeing increases in average order size, Airo driving attach and conversion, more customers purchasing second product.

Q: Customer count and Super Bowl ad impact?

A: Customer base stable, focusing on higher intent customers; Super Bowl campaign is going well for awareness.

Q: Airo with Agentic AI and pricing bundling success?

A: Agentic AI to provide personalized experience for customers; pricing and bundling delivering ahead of expectations with broad testing across customer cohorts.

Q: Customer growth and margin expansion?

A: Strategy on higher intent customers, lapping divestiture actions for customer growth; margin expansion due to favorable product mix.

Q: Airo vs Airo Plus and GPV in post-tariff world?

A: Airo provides basic functionality, Airo Plus is higher end SKU; GPV shows conversion of existing customer base remains healthy.

Q: Pricing bundling mix in 2024-2025 and Airo examples?

A: Bundling and pricing intertwined for lifetime value; Airo's conversations product sees good engagement.

Q: ARPU growth drivers and GABi?

A: ARPU growth from higher intent customers pushing average order size; GABi is internal AI tool, no immediate plan to make external.

Q: GoDaddy agency announcement and bundling efforts?

A: Agency space early for GoDaddy, bundling focus on presence products including hosting and websites with marketing.

Q: Upmarket opportunity and commerce business skew?

A: Commerce offering growing, skewing towards services customers; no direct impact from Office 365 price increases on GoDaddy's guide.

Q: Gross margin and digital marketing suite?

A: Gross margin within expected parameters; digital marketing suite is small, with bundling opportunities under testing.