NYSE:GDDY GoDaddy Q1 2025 Earnings Report $188.26 -1.62 (-0.85%) As of 05/20/2025 03:59 PM Eastern Earnings HistoryForecast GoDaddy EPS ResultsActual EPS$1.27Consensus EPS $1.35Beat/MissMissed by -$0.08One Year Ago EPS$2.76GoDaddy Revenue ResultsActual Revenue$1.19 billionExpected Revenue$1.19 billionBeat/MissBeat by +$5.17 millionYoY Revenue Growth+8.60%GoDaddy Announcement DetailsQuarterQ1 2025Date5/1/2025TimeAfter Market ClosesConference Call DateThursday, May 1, 2025Conference Call Time5:00PM ETUpcoming EarningsGoDaddy's Q2 2025 earnings is scheduled for Thursday, August 7, 2025, with a conference call scheduled on Thursday, July 31, 2025 at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by GoDaddy Q1 2025 Earnings Call TranscriptProvided by QuartrMay 1, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Christie MasonerVP of Investor Relations at GoDaddy00:00:00Welcome to GoDaddy's first quarter twenty twenty five earnings call. Thank you for joining us. I'm Kristi Masoner, VP of Investor Relations. And with me today are Aman Bhutani, Chief Executive Officer and Mark McCaffrey, Chief Financial Officer. Following prepared remarks, we'll open up the call for your questions. Christie MasonerVP of Investor Relations at GoDaddy00:00:17If you'd like to ask a question on today's call, please use the raise hand feature in the webinar to be added to the queue. On today's call, we'll be referencing both GAAP and non GAAP financial measures and other operating and business metrics. A discussion of why we use non GAAP financial measures and reconciliations of our non GAAP financial measures to their GAAP equivalents may be found in the presentation posted on our Investor Relations site at investors.covadidy.net or in today's earnings release on our Form eight ks furnished with the SEC. Growth rates represent year over year comparisons unless otherwise noted. The matters we'll be discussing today include forward looking statements such as those related to future financial results and our strategies or objectives with respect to future operations. Christie MasonerVP of Investor Relations at GoDaddy00:01:00These forward looking statements are subject to risks and uncertainties that are discussed in detail in our periodic SEC filings. Actual results may differ materially from those contained in forward looking statements. Any forward looking statements that we make on this call are based on assumptions as of today, 05/01/2025, And except to the extent required by law, we undertake no obligation to update these statements because of new information or future events. With that, I'm happy to introduce Aman. Aman BhutaniCEO at GoDaddy00:01:28Good afternoon and thank you all for joining us today. At GoDaddy, our mission is to empower entrepreneurs and make opportunity more inclusive for all. In an environment marked by global economic uncertainty with small businesses navigating more complexity, we continue to improve and expand the critical tools necessary for them to run their businesses backed by care that helps make them successful. The inherent value of our products, disciplined innovation and execution of our strategy is the backbone of our business and our strong Q1 results. In Q1, we drove 8% bookings growth and we expanded normalized EBITDA margin to 31%, propelling free cash flow to 26% growth supporting our North Star of maximizing free cash flow over the long term. Aman BhutaniCEO at GoDaddy00:02:21These results and the durability of our model reinforce our confidence in our full year guide and Investor Day targets. Our strategy is steadfastly focused on attracting high intent customers, creating customer value and transforming that value into long term shareholder value. The energy within the company is palpable with the continued acceleration and velocity of execution as we drive towards these goals. As always, I will touch on our key initiatives starting with pricing and bundling. Focused on our present solutions and going across segments, this 2025 initiative delivered ahead of our expectations in Q1. Aman BhutaniCEO at GoDaddy00:03:03Pricing and bundling is a multiyear initiative and we continue to do further testing with customer cohorts that span across our ANC and core platform segments and we are encouraged by the results so far. Our enhanced platform capabilities quickly integrate third party products into our bundles resulting in expanded test options for this initiative. As we had shared, we have continued to shift from the product lens to the customer cohort lens for pricing and bundling maintaining the dual goal of growing bookings and minimizing churn. Our seamless experience initiative continued to deliver improved customer conversion, product engagement and renewals. This initiative is powered by our most sophisticated experimentation pipeline and is focused on removing friction and creating an intuitive experience, saving customers time better spent on growing their businesses. Aman BhutaniCEO at GoDaddy00:03:58The results of our efforts across many experiences and products are found in the increase in average order size and improvement in renewal rate driving customer retention and lifetime value on the GoDaddy platform. Commerce growth remains strong this quarter and annualized gross payments volume increased at a healthy pace with the primary driver continuing to be conversion within our existing base of customers. Our recently launched high margin offerings such as GoDaddy Capital, our merchant cash advance program and same day payouts while still small are gaining traction. These valuable additions priced competitively are important to our customers and strengthen our one stop shop commerce offering. Last but certainly not least, GoDaddy Aero continues to permeate across our products and customer experiences and Aero's demonstrated results are showing up as better attach term length and renewals. Aman BhutaniCEO at GoDaddy00:04:55Data from the thirteen month Arrow customer cohorts shows that we are driving changes in customer behavior with Arrow resulting in more customers purchasing second and third products. Websites plus marketing continues to be the biggest beneficiary and Aero customers are getting better results from their websites too leading to a fantastic win win. While the Aero experience is driving financial results and Aero plus our directly monetized experience is progressing with new improvements, our focus continues to be to engage customers across the broader set of capabilities that Arrow provides. This builds on the success we are already seeing with Arrow and represents a large long term opportunity for our customers and for GoDaddy. And we are still at an early stage. Aman BhutaniCEO at GoDaddy00:05:45Arrow has already shown its powers to automate and use generative AI to provide magical experiences for customers. And with AgenTik AI, we expect to take this even further. Agents powered by our personalized AI platform will take recommendations to our customers to the next level, doing the work for them across multiple jobs to be done. In closing, I want to underscore that GoDaddy has built a durable business, one that has consistently performed across economic cycles and technological shifts. We are driving results and remain focused on what we can control, accelerating the pace of innovation in a disciplined manner. Aman BhutaniCEO at GoDaddy00:06:24The result of our model is profitable growth and the maturity of our operations allows us to deliver results in the current period as we set up the next positioning the business for long term success. With that, here's Mark. Mark McCaffreyCFO at GoDaddy00:06:39Thanks, Aman. I want to take a moment to acknowledge that the broader macroeconomic environment including tariffs is top of mind. To be clear, for GoDaddy, our direct exposure to tariffs is not material. For our customers, their grit and determination alongside our integrated one stop shop solutions delivering unmatched value remains mission critical to their needs, especially as they navigate a complex landscape. Our tools empower them to compete efficiently and effectively. Mark McCaffreyCFO at GoDaddy00:07:11Our durable model and our customers' resilience gives us confidence in our full year 2025 guidance and our investor day targets including our North Star. In q one, we delivered ANC revenue growth of 17%, expanded normalized EBITDA margins over 200 basis points, and grew free cash flow to $411,000,000. We also have fully utilized the remaining portion of our $20.22 $4,000,000,000 authorization to retire over 25% of our fully diluted shares outstanding since inception of the program. Total revenue was at the top end of our guided range growing 8% on a reported and constant currency basis to $1,200,000,000. Annual recurring revenue grew 7% to $4,100,000,000. Mark McCaffreyCFO at GoDaddy00:08:04International revenue grew 10%, surpassing our prior expectations on strong aftermarket sales in international regions. For our high margin a and c segment, we drove 17% growth in revenue to $446,000,000 and 14% growth in bookings on the ongoing strong adoption of our subscription solutions. Segment EBITDA margin expanded nearly 200 basis points to 44%. Our core platform segment delivered revenue growth of 3% to $748,000,000. Core platforms performance this quarter reflected strength in primary domains, up on pricing and units, as well as strength in aftermarket. Mark McCaffreyCFO at GoDaddy00:08:51Core platform bookings grew 5% and segment EBITDA margin expanded by over a 50 basis points to 31%. Moving to profitability, normalized EBITDA grew 16% to $364,000,000 delivering an expanded margin of 31%, up over 200 basis points and exceeding our guide for the quarter. The expansion was driven by favorable product mix and sustained operational discipline from infrastructure simplification and global talent recruitment, alongside increased marketing for our innovative Arrow experience. On bookings, we delivered $1,400,000,000 representing 8% growth on a reported basis and 9% growth on a constant currency basis. As a reminder, bookings primarily represents the cash collected during the period. Mark McCaffreyCFO at GoDaddy00:09:42Free cash flow grew an impressive 26% to $411,000,000. Our efforts are delivering the results we set out to achieve, bringing in higher lifetime value customers who will drive stronger, more profitable growth over time. Our stronger, more resilient cohorts are already translating into improvements with retention above 85% for customers on our GoDaddy platform. We are driving a higher average order size, and our ARPU grew 9% to $225 on a trailing twelve month basis, demonstrating the sustainability of our ongoing efforts. Since year end, our customer count has remained stable at 20,500,000 as we lap the impact of the last divestiture. Mark McCaffreyCFO at GoDaddy00:10:33And looking ahead, we anticipate returning to customer growth later this year. We remain confident that our strategic focus here centered on growing higher lifetime value customers will drive compounding growth in free cash flow over the long term. Turning to the balance sheet. We exited the quarter with $719,000,000 in cash and total liquidity of $1,700,000,000 as we utilized the remaining $767,000,000 under the 2022 share repurchase authorization. Net debt was $3,100,000,000 representing a net leverage of 1.9 times on a trailing twelve month basis. Mark McCaffreyCFO at GoDaddy00:11:13Our goal over the coming quarters is to continue to strengthen our already strong balance sheet, and we are reducing our target net leverage ratio from the previous guidance of two to four times to under three times moving forward, aligned to how we've been operating. In April, we completed our $4,000,000,000.20 22 repurchase authorization program, repurchasing a cumulative 43,700,000.0 shares at an average price of $91, representing a gross share reduction of over 25% in our fully diluted shares outstanding since the inception of the program. Our commitment to a disciplined capital allocation framework is unchanged, and share buybacks remain a key mechanism to return value to our shareholders. With that, I am pleased to announce that our board has approved the 2025 repurchase authorization of up to $3,000,000,000 through 2027. This new authorization reflects our enduring confidence in the strength of our underlying business, the durability of our cash flows, and our belief that investing in our shares currently represents an attractive return opportunity for our capital. Mark McCaffreyCFO at GoDaddy00:12:27Shifting to our outlook, given the strong start to our year and the durability of our model, we are reaffirming our full year 2025 outlook provided in February and expect total revenue to be within a range of 4.86 to $4,940,000,000 representing growth of 7% at the midpoint of the range. For q two, we are targeting total revenue of 1.195 to $1,215,000,000 representing 7% growth at the midpoint of the range. Within that, we expect ANC revenue growth of mid teens and core platform growth of low single digits. For q two, we are projecting a normalized EBITDA margin of about 31%, and we are reaffirming our full year normalized EBITDA margin expansion target of a hundred basis points. We expect normalized EBITDA to maintain an approximate one to one conversion to free cash flow. Mark McCaffreyCFO at GoDaddy00:13:21We are also reaffirming our full year free cash flow target of at least $1,500,000,000, representing growth of over 11%. Our disciplined capital allocation approach remains unchanged, and we plan to evaluate all opportunities according to our rigorous and returns based framework. I am pleased with our q one accomplishments and strong financial results, a great start to a year that has already underscored the importance of GoDaddy's durable model. The strength of GoDaddy's foundation is evident in our long history of strong customer retention, the growing quality and stability of our customer cohorts, and the competitive advantages we've developed over time as a partner and champion for micro businesses. We are executing with discipline and purpose as we drive towards our North Star, maximizing free cash flow over the long term. Mark McCaffreyCFO at GoDaddy00:14:17We are making steady progress towards our Investor Day targets of achieving $4,500,000,000 plus in cumulative free cash flow generation, underpinned by six to 8% annual revenue growth and expansion of our normalized EBITDA margin to 33% by 2026. With that, I will hand the call over to GoDaddy's vice president and head of IOR, Kristi Masoner. Operator00:14:42Thanks, Mark. As a reminder, if you'd like to ask a question, please use the raise hand feature at the bottom of the webinar screen to be added to the queue. Our first question comes from the line of Elizabeth Porter from Morgan Stanley. Elizabeth, please go ahead. Elizabeth PorterAnalyst at Morgan Stanley00:14:57Hi. Can you hear me? Mark McCaffreyCFO at GoDaddy00:14:58Yeah. Hey, Elizabeth. Elizabeth PorterAnalyst at Morgan Stanley00:15:00Okay. Great. Thank you so much. So I first wanted to ask on the kind of the macro, you know, changes. You know, it sounds like it's a pretty resilient base. Elizabeth PorterAnalyst at Morgan Stanley00:15:11But any signals that we could be deriving from kind of your conversations that may be clouded when we look at things like small business sentiment index in your view. You know? And if we do see some pressure evolve, if at all, like, just a more detailed view on on how that could be incorporated into the guidance. Aman BhutaniCEO at GoDaddy00:15:29Thanks, Elizabeth. This is Aman. I can take that. Aman BhutaniCEO at GoDaddy00:15:32You know, when we look at Aman BhutaniCEO at GoDaddy00:15:33customer sentiment, and I think you're aware we do surveys sort of on a consistent basis. We actually did a survey in April, and we did see some pressure, you know, in terms of how our customer base and micro businesses look at sort of their positive outlook on the economy. We do see some pressure on that. But the broad idea where, you know, our customers continue to be resilient and they feel strongly about, you know, their own performance and that their business will continue to grow is still within sort of the five year norms that that we've seen. So, you know, I what what I would say about sentiment is while we see a little bit of pressure, I think, generally, our customer is still positive. Aman BhutaniCEO at GoDaddy00:16:13And, also, we have very specific data points within the company, right, in terms of our customer churn rate, our average order size, and we continue to see that performing sort of on on a day to day or month to month basis. I'd also like to mention that, you know, when you think about the value that GoDaddy products bring to our customers, It's so much higher than the cost for our customers. And when you attach that, there are customer based indexes towards the service industry. It really puts GoDaddy in a very good position to sort of navigate whatever we see in the macro over the next few quarters. So we we feel good about that. Aman BhutaniCEO at GoDaddy00:16:49And I'll turn it to Mark. Mark McCaffreyCFO at GoDaddy00:16:50Yeah. Yeah. And I think you covered a lot of it, Aman. You know, just a couple of data points. One, you know, our our customer base has a tendency to lean towards services. Mark McCaffreyCFO at GoDaddy00:16:59And and in this market, you know, they're resilient. They're very optimistic. They they are still looking at growing revenue, our tools help them do that effectively and efficiently, compete with some bigger players out there. So so the sentiment right now, you know, there's a lot going on, seems to be, you know, they're looking for opportunities to do more with what they have, and our products obviously fit right into that. So feeling good about it. Mark McCaffreyCFO at GoDaddy00:17:22It's why we're reaffirming the guidance. We feel good about what we're seeing out there, and we've you know, obviously, we monitor constantly. We have many different touch points, whether through the care organization, whether through our surveys, whether through just doing customer visits. And we're seeing the consistent optimism, although, you know, they they are looking at what's going on around them at the same time. Elizabeth PorterAnalyst at Morgan Stanley00:17:43Great. And just as a follow-up, I was hoping to get some early signs and reads from the Arrow plus SKU that just launched, as an independent SKU in in q four. Any feedback on the pricing in particular? And then what are the right customers for Arrow plus? Is it really anyone that's willing to engage in Arrow, or if you could just help us frame the applicable base would be super helpful? Aman BhutaniCEO at GoDaddy00:18:06Yes. As as we shared, you know, Arrow continues to do very, very well, and we're seeing improvements in order size and sort of term. We're seeing improvements in attaching the second and third product with Arrow. And engagement with Arrow is a very good sign for us to put ArrowPlus forward to those customers. And as as you know, you know, ArrowPlus offers an expanded offering, you know, at a very competitive price for our customers. Aman BhutaniCEO at GoDaddy00:18:30In terms of actual metrics from ArrowPlus, it's still very, very early in the testing from ArrowPlus. And as you know, it's hardly a quarter in that we've launched this and expanded it to our customer base. So there's still more to be done there, but we're we're encouraged by where we are today. Elizabeth PorterAnalyst at Morgan Stanley00:18:45Great. Thank you very much. Aman BhutaniCEO at GoDaddy00:18:47Thank you. Operator00:18:49Our next question comes from the line of Yigal Aronian from Citigroup. Yigal, please go ahead. Ygal ArounianDirector - Internet Equity Research at Citi00:18:57Hey, good afternoon, guys. To follow-up on Aero on on the average order size. Mark, you you you quantified that last quarter. I don't know if you can quantify it again this quarter if it's changed at all. But and just more more broadly, what you're seeing, how it's changing in terms of attach, order size, kind of, you know, moving up on to higher tiers and and the strong stronger conversion. Ygal ArounianDirector - Internet Equity Research at Citi00:19:27Love to get more color on that. Mark McCaffreyCFO at GoDaddy00:19:29Yeah. Thanks, Gal. You know, I would say we're seeing similar than to what we saw on q four on the on the increases in the average order size. Broad based, it it we're seeing it going to that second product very quickly. We're attaching very very prominently in those first few days, which has been fantastic. Mark McCaffreyCFO at GoDaddy00:19:50Still still early days on tiers and that type of things, you know, Plus is very, very early to what we've introduced. So we're looking at it from an overall impact to our customers in and of itself and continuing to see that positive behavior around the average order size at initiation, seeing that second product coming in, attaching a lot faster. We're starting to see that show up in our retention rates for our customers who are on the GoDaddy platform. So those are the positive signals we're out there seeing the the engagement around Arrow. And then, obviously, plus, we introduced, and we'll start to measure that as a SKU, but really early stage on the impact of that. Mark McCaffreyCFO at GoDaddy00:20:24It's in and of itself. Aman BhutaniCEO at GoDaddy00:20:25Yeah. And maybe I'll You mentioned conversion. Arrow overall has been good for conversion. It's been good for attach, and and that continues. Aman BhutaniCEO at GoDaddy00:20:32And more and more of our customers are starting with Arrow, and the trend of, you know, customers coming to websites plus marketing through Arrow has has just continued to grow nicely. So that that's something we're very happy about. You know, we want our customers to start with that expanded toolset, to have exposure to that broader base of products that we have because we think that puts our customers in a great position to get that value and puts us in a great position long term to sort of have more and more more products with our customer base. Mark McCaffreyCFO at GoDaddy00:20:59Yeah. Mark McCaffreyCFO at GoDaddy00:21:00And and just, you know, coming back to our strategy is around attracting higher intent customers, and and we are very happy with the results because we are seeing those higher intent customers coming in, and those behaviors are showing that we're really getting to that customer base. Ygal ArounianDirector - Internet Equity Research at Citi00:21:15Okay. Great. And one on, the customer count just given it it remains a focus for investors. Just to be clear, was it your expectation that would, would be down sequentially, as we're still lapping some of those divestitures? Is there any way to parse out what it would have been ex that? Ygal ArounianDirector - Internet Equity Research at Citi00:21:38And then maybe layering on top of that the Super Bowl ad, you know, in February and what you saw out of that, if that drove, incremental, you know, sign ups, customers, free trials, anything like that. Thanks. Mark McCaffreyCFO at GoDaddy00:21:51Carl, you know, on the customer you know, we saw a a stability in our customer base. You know, we we, again, are not focusing on customer growth in and of itself. Our our intent and our strategy is around that higher intent customer. So so it's hard to parse that out into different buckets, so to speak. But, you know, we're we are happy that we're getting to that stronger cohort of higher intent customers, and the stability, is really gen being generated by the fact we're, lapping the actions that we specifically took to get put ourselves in this position in the first place. Aman BhutaniCEO at GoDaddy00:22:22And then to to the Super Bowl or the new campaign that we have, you know, the campaign is going very well. We're very happy with the results in terms of just getting the awareness with a very large base of folks that GoDaddy has much more to offer than domains. You know, this is obviously a very important message, and we think Arrow is a fantastic vehicle to deliver that. But we'll we'll continue to sort of in a very I would I would say in a manner that is disciplined, we'll continue to invest in awareness of what go GoDaddy has to offer. And the current campaign is going going quite well. Ygal ArounianDirector - Internet Equity Research at Citi00:22:56K. Great. Thanks. I I definitely know Walter Goggins a lot better now than I did a few months back. Mark McCaffreyCFO at GoDaddy00:23:01So think to hear that. Aman BhutaniCEO at GoDaddy00:23:04Yeah. And I think he's done great for us. He's been great. Ygal ArounianDirector - Internet Equity Research at Citi00:23:07Thanks, guys. Operator00:23:09Our next question comes from the line of Vikram Kesavola from Baird. Vikram, go ahead. Aman BhutaniCEO at GoDaddy00:23:17Hey, Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:20Hey. Can you hear me? Aman BhutaniCEO at GoDaddy00:23:21Yeah. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:21Okay. Great. Hey. Thanks for taking the questions. Hey. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:25My first one is on Arrow. You referenced the opportunity there with AgenTik.ai. Just wondering if you could talk more about your vision for that and just how you plan to further enhance the Arrow experience from what it looks like today? And then second question is on pricing and bundling. I think you mentioned that, that has been delivering ahead of your expectations in Q1. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:45Just wondering if you can elaborate more on, you know, where you're having the most success with that strategy this year. And, it sounds like you're doing some additional testing as well. Just where do you see the most opportunity to continue leveraging that, across the platform? And, I'll leave it there. Thanks. Aman BhutaniCEO at GoDaddy00:23:58Yeah. Thanks, Vic. On Aero, you know, the power of Aero sort of with it with its birth has been around automation, taking friction out for customers. You know? But that automation is deterministic. Aman BhutaniCEO at GoDaddy00:24:11And what generative AI has done is it's allowed our customers to create content to be able to move very quickly based on the large dataset that we have. But what AgenTik AI offers is to take that simplification that Arrow brings to the next level where, you know, micro businesses, our customers can have agents deployed on their behalf that can get the jobs to be done across different products. Now as the customer shifts context across those products, typically, what you will find is that the customer runs out of time, the customer runs out of energy, the customer runs, you know, potentially out of just the ideas of what they want to do. But with with AI agents, we can fill a lot of those gaps and really support our customers in a different way. We at GoDaddy are also investing. Aman BhutaniCEO at GoDaddy00:24:54I think we've talked about this in the past in a large scale data platform, an AI platform that works that that is very much with the platform mindset of the company. And one of its new capabilities over the last couple of quarters is this idea of personalized AI for that specific customer, which is very important to provide that personalized agentic experience. So that that's something I'm pretty excited about. It's something that I personally spend quite a bit of time on on a weekly basis so that, you know, that's the next thing we we wanna see or the next capability we wanna bring to Arrow. And in terms of pricing and bundling, you know, the nothing has changed in in the program. Aman BhutaniCEO at GoDaddy00:25:31It continues to be a multiyear program. It's delivering ahead of our expectations in q one, and we feel very good about it for the rest of the year based on our testing. And, yes, as I noted, you know, we we are continuing to test new bundles and new pricing options with those bundles, you know, over over the next few quarters, and that sort of sets up the next period for us. And the key thing here is, you know, the the one stop type shop solution that we have and when we can bring in third party products too, you know, the value we bring to our customers so much more than the $225 ARPU that we have. You know, these services are mission critical to our customers. Aman BhutaniCEO at GoDaddy00:26:08And simpler we can make it, the easier we can make it, the more we can we think they'll just adopt our services. So that that's what we're really trying to do with pricing and bundling, and it's it's going great. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:26:19Okay. Great. Thank you. Operator00:26:23Next question comes from the line of Trevor Young from Barclays. Trevor, please go ahead. Trevor YoungAnalyst at Barclays Capital00:26:29Great. Thanks. Just back to returning to active customer growth later in the year. What needs to go right from here for that to play out? Is it just lapping that last divestiture, which I think maybe laps in 3Q? Trevor YoungAnalyst at Barclays Capital00:26:42And are we now largely done with that brand rationalization, which I think was mostly in the hosting area? Or is that kind of an ongoing initiative? And then second question, gross margin continues to expand year on year. I think it's fourth quarter in a row. Can you speak to what's driving that? Trevor YoungAnalyst at Barclays Capital00:26:56Is it just a function of the favorable product mix? Or have there been some underlying savings realized maybe in areas as you, like, exited data centers and shifted more workloads to the cloud? Thank you. Mark McCaffreyCFO at GoDaddy00:27:07Yeah. Thanks, Trevor. On on the on the first part of this, you know, just, you know, I wanna emphasize that our our strategy is not around returning to customer growth per se. Our our strategy is around attracting higher intent customers, and that's what we continue to go after. We are lapping the actions that we took over the last year or so as as you you acknowledge, And that will put us on a more comparable base going forward, which adds to that, you know, tailwind that we should be returning to positive customer growth here later in the year. Mark McCaffreyCFO at GoDaddy00:27:38But, you know, again, we're we're happy with where we are in attracting that higher intent customer who's coming in with a higher average order size, who's attaching to that second product, whose retention is stronger, and therefore, you know, driving that long term value that we talk about. And, obviously, that gets us to our north star. On margin expansion, product mix, nothing nothing to call out on savings per se. We we continue to get a favorable product mix. What I always say is we'll be around 64%, give or take, you know, hundred basis points depending on the product mix, and we continue to fall within that range every quarter. Mark McCaffreyCFO at GoDaddy00:28:10It's a little favorable here or there at times, But but it's the same it's the same drivers. It's just it's the product mix. It's a software that's being sold. It's which which ones are selling a little bit more than others. Trevor YoungAnalyst at Barclays Capital00:28:22Thanks, Mark. Operator00:28:25Next question comes from the line of Alec Randolo from Wells Fargo. Alec, please go ahead. Alec BrondoloDirector - Equity Research at Wells Fargo00:28:31Thank you so much for the question. I would love to dig in to the dichotomy, I guess, between Arrow and Arrow plus As Arrow plus grows, how do you think about what products get, I guess, are in the bundle or in kind of the direct monetization bundle Aero plus versus what products are, you know, given away to customers for free in Aero? Thanks. Aman BhutaniCEO at GoDaddy00:28:51Yeah. Just very broadly, what Aero does is it provides a basic set of functionality across different jobs to be done to the customer with every domain and over time any product purchase at GoDaddy. You know, you buy something, you get those Arrow services for free. They show up, and they're ready to go. What Arrow plus does is across those key services, AeroPlus provides a higher end SKU for them. Aman BhutaniCEO at GoDaddy00:29:17And and that's the key difference. Right? Aero allows the customer to try the product and see that it performed. And then when they get to a certain level of engagement, that triggers for us the idea that this customer likely should be in AeroPlus because they can expand the job to be done. So that's the key difference between Aero and AeroPlus. Alec BrondoloDirector - Equity Research at Wells Fargo00:29:36Perfect. If I can maybe just ask one more. The repurchase, dollars 700,000,000, I think that was the largest repurchase in the last several quarters. Is that a function of, you know, the pressure on the stock after fourth quarter earnings? Are there other dynamics to consider? Alec BrondoloDirector - Equity Research at Wells Fargo00:29:48Any feedback there would be helpful. Mark McCaffreyCFO at GoDaddy00:29:50Yeah. So, you know, in in the first half of this year so far, we bought back $767,000,000, in our in our, 2022 authorization program. If you go back and look, we've we've been opportunistic in the market from, you know, period to period, and we continue to evaluate it under that same strategy. We'll do the same with the 2025 authorization here as we go forward. You know, we always say at a minimum, we're gonna buy back our dilution, but we will continue to be opportunistic in the market. Alec BrondoloDirector - Equity Research at Wells Fargo00:30:18So much. Operator00:30:20Next question comes from the line of Ken Wong from Oppenheimer. Ken, please go ahead. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:30:29Fantastic. Thanks for taking my question. I realize you guys haven't seen any any kind of immediate pressures in terms of macro. You know, as you think back to kind of past downturns, and I know you've talked about potentially being kind of counter macro or counter recession in terms of of of your business. I guess, how are you thinking about some of the objectives you guys are focused on as far as, one, customer growth and then, two, kinda getting customers to buy more? Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:30:55Do you think that you can still see that kind of resilience, you know, in in in a downturn? Aman BhutaniCEO at GoDaddy00:31:01Yeah. When we look back, you know, GoDaddy has grown pretty much through every kind of macro situation and through sort of every recession we've been part of. Now every recession is different. You know, we can't look back and project exactly into the future. But when we think about the business as a whole and our very large customer base, over 20,000,000 customers, you know, the key things we look at is number one, the value we bring to our customers versus the price we charge. Aman BhutaniCEO at GoDaddy00:31:27There is a tremendous amount of consumer surplus there. Customers get tremendous value from a domain name, from a website, from other services we offer, and we're priced very competitively on those. Beyond that, when we look at our opportunity to continue to get high intent customers, which is our strategy, and we've been executing it for a few years, We've been very successful getting high intent customers, and we continue to see that being a strength of our of ours. And third, when you think about our business, we have sophisticated capabilities in terms of pricing or what is what we call pricing and bundling that allows us to approach our customer base in specific cohorts and test and make sure that the changes we're making both optimize growth on the top line and minimize churn for us. And, yes, it's also true that, you know, I think you briefly mentioned that in tougher economic time, there can be some countercyclical behavior, and we feel that, you know, our our offerings are critical to them in a situation where where they need more support. Aman BhutaniCEO at GoDaddy00:32:27But, you know, it's hard to guess what the future is going to be. So, you know, we're keeping a keen eye on it. But like I Aman BhutaniCEO at GoDaddy00:32:33said, those three things make us feel good about our position. Mark McCaffreyCFO at GoDaddy00:32:36Yeah. No doubt our customers today need us more to operate effectively and efficiently in their markets, and and, they need they need more care and guide as they're they're in this complex landscape. So we feel really good about what we're seeing. You know, it's a resilient group, and, you know, we'll continue to monitor. Mark McCaffreyCFO at GoDaddy00:32:53But, you know, I never wanna say we are a counter recessionary, but we we have a tendency to be more mission critical to the micro business in these environments than others. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:03Got it. Really appreciate the color. And then if I could just one more for you, Mark. I know the quarter, it sounds like GPV held up well. Any color in terms of what you might be seeing on that GPV front in April in post tariff world? Mark McCaffreyCFO at GoDaddy00:33:18Yeah. Nothing to call out. We're we're still seeing the conversion of our existing customer base. We're still seeing it at a good pace. We're seeing our customers, you know, transacting healthily. Mark McCaffreyCFO at GoDaddy00:33:28Not nothing nothing to highlight at this juncture. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:31Okay. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:31Thank you. Operator00:33:33Our next question comes from the line of Josh Beck from Raymond James. Josh, please go ahead. Mark McCaffreyCFO at GoDaddy00:33:42Hey, Josh. Josh BeckManaging Director at Raymond James00:33:43Thank you so much for taking the question. Hopefully, you all can hear me. Yeah. I wanted to ask, you know, coming back to the the pricing and bundling. Certainly, it seems like, you know, these third party products is something that you're adding to the, you know, what is probably already a pretty big array of of tests. Josh BeckManaging Director at Raymond James00:34:02So any anything you can share on where you're looking, you know, to maybe add third party solutions kind of, you know, where they fit in? And then second part, just, you know, as we think through the the bookings, you know, I think A and C bookings was 14%. If you look at it on a two year CAGR, I think it accelerated. I think the comps get a little bit tougher as we go into Q2. So just any puts and takes that we should be thinking about with respect to a and c bookings, you know, for the year would would be great. Aman BhutaniCEO at GoDaddy00:34:37Yeah. I can start, and Mark can follow-up on the second part. When we think about pricing and bundling, one of the advantages we have is, yes, we have a breadth of products, but our platform now allows us to bundle third party products very quickly and test them. And we're actually testing across quite broad spectrum of customer cohorts, customers that may have, you know, products that are in our core segment or our e n c segment. So those the number of tests is growing, and that that gives us confidence that, you know, we're gonna get more winners. Aman BhutaniCEO at GoDaddy00:35:07No no specific area to call out that, you know, we're sort of focused on x area versus y y area. We actually have a decent set of listed companies and products that we're working with, and and the testing is going well, which, you know, that that's really the key to communicate with you that we have those more those sort of larger set of offerings to put forward, and and we like what we're seeing. Mark McCaffreyCFO at GoDaddy00:35:30Yeah. On the on the bookings, you know, just a reminder, bookings for us represents the cash collected in the period, and, you know, we've reinforced or reaffirmed our free cash flow targets for the year, even our targets going out through 2026. So we feel really good about the progress we're making overall as a business in the platform and the one stop shop. No doubt, Q1 this year versus Q1 of last year, Tough compare. It was when pricing and bundling really took off last, q one. Mark McCaffreyCFO at GoDaddy00:36:01And while we don't guide to bookings, you know, we we we expect revenue growth for the rest of the year in the mid teens, and we'll continue to, look at the progress pricing and bundling is, is performing. Aman BhutaniCEO at GoDaddy00:36:12Yeah. Just to clarify, that's ANC revenue growth. Mark McCaffreyCFO at GoDaddy00:36:14Yes. ANC. Josh BeckManaging Director at Raymond James00:36:17Got it. Thanks, Chase. Operator00:36:20Our next question comes from the line of Brad Erickson from RBC. Brad, please go ahead. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:36:29Cool. One more on pricing and bundling. Why not? I guess, think about 2024. You know, would you say pricing or bundling had kind of a bigger effect, or were they kind of the same? Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:36:42I know you don't tend to unpack those, but we get a lot of questions from investors on this. And maybe just as you think about what that mix looked like in 2024, for as we look towards 2025 and the bookings there, do you see that mix kind of staying the same, or is maybe one stronger than the other? And what are kind of the inputs of any mix shift there, if there are any? Aman BhutaniCEO at GoDaddy00:37:03Yeah. The I perhaps one way to address this and in the past, I have talked about how hard it is to pull these things separate because the the model is to bundle something, create that value for the customer, test that value, and then to take the price on it. And that price is also actually determined through testing, given engagement with that with that with those set of products. So it it's kinda hard to rip them separate. But one way to talk about it might be that where we see the best return, the sort of long standing lifetime value creation is where we create that value for customers through some sort of bundle. Aman BhutaniCEO at GoDaddy00:37:43Right? And and I know that's not exactly sort of answering right here right now '24 versus 25, but that is a good signal to have that where when bundling is part of it and and it's intertwined well, we see the greater lifetime value coming through it. Hopefully, that helps. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:37:59Yeah. Yeah. No. That's helpful. And then just to follow-up on on Arrow, you know, it's always good to hear kind of some of the examples of how you're seeing customers kind of taking advantage of that in a, hopefully, a value accretive way. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:38:12Just maybe any anecdotes or kind of latest observations you can share and just in terms of, how people are taking advantage and and, you know, thinking of it in the context of the paywall testing and where you see value creation that you could, eventually monetize? Thanks. Aman BhutaniCEO at GoDaddy00:38:28Yeah. We, as you know, we really track very, very carefully the engagement across all of the aero products. And if I had to highlight one, you know, the product that's getting a lot of engagement right now is our conversations product. It's something we've talked briefly about once in a while, but this is a little application that our customers can download and use to talk to their customers. And within this application, we use AI or we use Arrow to actually create responses on behalf of our customers. Aman BhutaniCEO at GoDaddy00:38:56So, you know, like a micro business or solopreneur, they're only one person, but they can sort of talk to a lot of their customers very, very easily. So we're seeing some good sort of some really good engagement on conversations and, you know, not not necessarily specific to conversations, but wherever we see that engagement, that sort of, you know, gets our attention in terms of that there's monetization opportunities there, especially, you know, with something like conversations where we we talk about very large scales and a very, very large number of customers using it. Mark McCaffreyCFO at GoDaddy00:39:24Yeah. And I have to tell you, in this environment, Conversations is becoming quite popular. We were out meeting with the pizza guys as we refer to them. And you're talking about someone who's making pizzas during the day, and they are still having to book their, you know, next event while they're making those pizzas. A pizza I learned takes ninety seconds to make. Mark McCaffreyCFO at GoDaddy00:39:41So within ninety seconds, they're responding using conversations to their incoming calls so that they can line up their next event. And we're seeing that more and more in this environment because revenue and making sure people have pipelines is becoming more prevalent for them. Aman BhutaniCEO at GoDaddy00:39:55Yeah. It's it's great to have, you know, conversations with real customers when they have a real business like Pizza Shop and, you know, use using our products. It's really, really fun. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:40:06Got it. That's great. Thanks, guys. Operator00:40:09Our next question comes from the line of Alexey Gogulov from JPMorgan. Alexey, please go ahead. Ella SmithAnalyst at JP Morgan00:40:16Hi. This is Ella Smith on for Alexei Gogulov. Thank you so much for taking our questions. So first, I was hoping to ask about the impressive ARPU growth. Can you rank order some of the products and contributions which drove ARPU growth to an impressive 9%? Mark McCaffreyCFO at GoDaddy00:40:32Yeah. Well, you talk about it, and it's a little bit of a a flow out. Right? And and remember, bookings is always at at the front end front end of the cycle, and ARPU is always at the back end of the cycle. It's it's a trailing twelve month revenue number. Mark McCaffreyCFO at GoDaddy00:40:44And you really look at our success last year around pricing and bundling, the seamless experience, you know, even some of the momentum around Arrow, those have all been contributing to, you know, the bookings growth. And and now we're rolling into our ARPU growth, which is, again, you know, kind of points to the sustainability of the efforts we're making around going after these higher intent customers. So I would say across the board, it's the strategy working around the higher intent customers who are pushing the average order size up, which are attaching to that second product faster, whose retention rates is getting stronger on our GoDaddy platform. So so just the the the strategy is working. Ella SmithAnalyst at JP Morgan00:41:23That makes a lot of sense, Mark. Thank you so much. And for a quick follow-up, I I was hoping to hear an update about Gaby and how that's being used internally. Can you speak to the optimize optimization potential there? And do you think Gaby would ever become externally facing to your customers? Aman BhutaniCEO at GoDaddy00:41:39Yeah. Super excited about our continued evolution of technology automation AI within care. Gabby continues to take on more and more jobs to be done. You know, we are very excited about sort of Gabby and the conversation bot, which is the external facing version of it, sharing more and more data. No sort of immediate plans to make Gabby be external just yet, but, you know, this is a fast evolving space. Aman BhutaniCEO at GoDaddy00:42:05So, you know, it's hard to say what will happen in six months. I I can tell you about tools that we're using AI on just three months ago, and now we have new technology that's like, oh my god. Like, it's changed amazingly in three months. So but, yeah, super happy about Gabby. Super happy, and, you know, I'm bullish on AI just being a great enhancement for productivity within our organization. Ella SmithAnalyst at JP Morgan00:42:29Great. Thank you so much, Aman and Mark. Aman BhutaniCEO at GoDaddy00:42:31Thank you. Operator00:42:33Our next question comes from the line of Chris Zhang from UBS. Chris, go ahead. Chris ZhangED - Equity Research Analyst at UBS Group00:42:40Hi. Thanks for taking our question. Mark McCaffreyCFO at GoDaddy00:42:41Hi, Chris. Chris ZhangED - Equity Research Analyst at UBS Group00:42:42So first question is on the GoDaddy agency announcement. It's we're it's great to see the announcement last week. As we've noted, anecdotal evidence of agencies already using GoDaddy subscription subscription products. Just wanted to see if you can talk about, a addressable opportunity for your current product suite and the target customer segment of your products? And, I guess, if you could provide either revenue or user mix that are being handled already by agencies today and then also directionally, the adoption within your ANC segment, the adoption of, of managed WordPress, your own subscription solutions, and, I guess, last but not least, the subs the the adoption of Arrow. Chris ZhangED - Equity Research Analyst at UBS Group00:43:30We understand the a the ANC segment may be still the the agency space may be still kinda early for you guys. But, if you could provide any comments along those metrics, that'd be really appreciated. Aman BhutaniCEO at GoDaddy00:43:42Yeah. So I I think you pretty much answered your question as well. It's very, very early in terms of the agency space for GoDaddy. As you know, over the last few years, our products have improved leaps and bounds. You know, we have some great offerings and websites with marketing that are able to do certain jobs to be done for those customers. Aman BhutaniCEO at GoDaddy00:44:02We also have a new and much improved managed WordPress instance that that is just really, really good. You know? So there's there's a couple of products out there. I think we're still exploring. We're still looking at that market. Aman BhutaniCEO at GoDaddy00:44:16I think it continues to be a great long term opportunity for GoDaddy to step in that space, but nothing to share yet. Just all very small and just some little exploration here or there. Mark McCaffreyCFO at GoDaddy00:44:26Yeah. Def definitely a great longer term opportunity. Not nothing that we've built into anything we're talking about today. We're excited about it. That's a a new customer base for us somewhat. Mark McCaffreyCFO at GoDaddy00:44:37But but not nothing to call out today. You know, obviously, as things get traction, we'll share more. Chris ZhangED - Equity Research Analyst at UBS Group00:44:43Alright. Sounds great, Amand and Mark. Just a quick follow-up. I am we just wanted to see if we could provide an update on, your bundling efforts this year aimed at some of the specific hosting customers. Aman BhutaniCEO at GoDaddy00:44:55Yeah. So the bundling pricing and bundling effort this year does have a focus on presence products. Those presence products do include hosting, which sits in the core segment, and they include websites versus marketing and managed WordPress, which are part of the ANC. So just the way we approach this testing is a bit based on customer cohort and the customer engagement. It can involve term of the customer. Aman BhutaniCEO at GoDaddy00:45:18It can involve the products that customer has. But that's an area that is that continues to be an area of focus for us. Chris ZhangED - Equity Research Analyst at UBS Group00:45:26Alright. Thanks so much. Aman BhutaniCEO at GoDaddy00:45:28Yep. Operator00:45:29Our next question comes from the line of Mark Zagutowicz from Benchmark. Alex LavigneEquity Research Associate at The Benchmark Company LLC00:45:32This Alex LavigneEquity Research Associate at The Benchmark Company LLC00:45:39is Alex on for Mark. I understand you're no longer speaking to GMV, but as we think about the reduced barriers to service SMB or larger clients broadly afforded through AI driven product development and efficiencies, which clearly highlights your differentiated signal, would you characterize or qualify the upmarket opportunity today relative to twelve months ago, especially as Arrow Index is your top of funnel exposure away from domains? Thank you. Aman BhutaniCEO at GoDaddy00:46:05Yeah. So, you know, as you know, we we've got a commerce offering that's growing, and I talked about it in the prepared remarks even this time that the new offerings sort of expand our one stop shop. You know, I would say maybe a couple two two years ago, we didn't really have an offering. Today, we have a very compelling offering. For the micro business, we're edging up to, you know, a business that sells a million dollars or just above that, and there's plenty of opportunity above that. Aman BhutaniCEO at GoDaddy00:46:30For now, we continue to be very focused on our existing customers, serving their needs very well, and continuing to evolve the product suite and keeping the pricing competitive. So that that's our current strategy with commerce. And, you know, it's great that we're able to grow GPV in a healthy manner and be able to do it at, I would say, you know, very, very efficiently because we have access to our customer base, and our customers love working with us, and they accept the new offering we delight. Alex LavigneEquity Research Associate at The Benchmark Company LLC00:46:58Got it. Very helpful. Thank you. Aman BhutaniCEO at GoDaddy00:47:00Thank you. Operator00:47:01Our next question comes from the line of Brent Thill from Jefferies. Brent, please go ahead. Analyst00:47:10Hi. This is John again for Brent Thill. Thanks. Just have to wait for the unmute button to pop up. Tim, two questions. Analyst00:47:17One, on the I think at the dinner last year, you know, you talked about Aero maybe also helping with the pros, you know, and maybe it'll be on the managed WordPress side. I'm wondering if you could talk about, you know, how that's going, how are some of your, you know, more professional developer type users responding to it. And then second question was related to the ANC bookings growth. You know, it's it was a little bit slower than revenue growth this time, and I and I I guess that the comp was tougher, but I'm wondering if that's the pattern now. I mean, the last year for first three quarters was running faster than revenue growth. Analyst00:47:53So if you could talk about dynamic, it'd be great. Thank you very much. Aman BhutaniCEO at GoDaddy00:47:57Yeah. On managed WordPress, I can take that, and Mark can follow on the second part. We have a couple of great products that use Arrow's capability. We have the site optimizer. We also have a new editor that uses Arrow capabilities, allows customers to build a managed WordPress site despite talking to to the to the agent about it, the sort of, like, a chat interface. Aman BhutaniCEO at GoDaddy00:48:18So those those products are now in the market. It it it, of course, takes a little time to, you know, get the word out and sort of the go to market on these things, But we like the products. We like the starting point. It's just very, very early, in that area. You know? Aman BhutaniCEO at GoDaddy00:48:30We as you well know that we started with Arrow with the independent customer, with the do it yourself customer, and that was our focus, you know, for the most of the first year. But, you know, we have those new products that we just showcased at the dinner, and we're excited about getting them to more customers. Mark McCaffreyCFO at GoDaddy00:48:46Yeah. And like we said on the bookings, you know, bookings represents cash receipts. We get in the quarter. We've we've talked about our free cash flow targets and reaffirming them for the year. So we feel really good about the pace. Mark McCaffreyCFO at GoDaddy00:48:57No doubt, Q1 bookings compared to a Q1 bookings number is tougher than the revenue comps we have this year. You know, we don't guide the bookings, but, you know, we we expect revenue to grow in the mid teens for a and c. So, you know, we continue to be good with the progress. We continue to be good with the the the what it's generating for us, and we continue to be good with the targets that we put out there. Analyst00:49:20Thank you. Operator00:49:23Our next question comes from the line of Robert Colbreath from Evercore ISI. Robert, please go ahead. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:49:30Hi. Thanks. Great to hear you confirm the the sort of services skew within the customer base overall. But just wondering, specifically within the commerce business inside a and c, does that dynamic sort of hold true as well that that that, you know, there's a skew towards services businesses within your your commerce business within ANC? And then second one I've been getting questions on is just related to Office three sixty five or some of the other Microsoft products. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:49:55I think that they rolled out, some price increases in February for consumers, but now it sounds like, there there was one also for commercial products in, April. So just wondering if if that was sort of baked into your guide, previously or if that's incremental at all to your view, for 25 bookings. Thanks. Aman BhutaniCEO at GoDaddy00:50:14Yeah. For our commerce customers, you know, since the largest source of customers into our commerce offering is our base of customers, you know, it naturally sort of have a tendency to skew towards services customers. Right? So, you know, we we feel that there is what's the best way to say? We we we feel that there's no nothing to sort of say that differentiates our commerce customer from our broader base. Aman BhutaniCEO at GoDaddy00:50:40Let me let me put it that way. Right? Because we are going to the base for our commerce customer. And in terms of Office three sixty five, we have a long term relationship with Microsoft. It's a contractual relationship. Aman BhutaniCEO at GoDaddy00:50:51So, you know, the sort of price increases on their side don't directly impact us. You know? Again, we've we've been working with them for a decade now, and we're very happy with that relationship. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:51:01Okay. Great. Thank you. Operator00:51:04Next question comes from the line of Naved Khan from B. Riley. Naved, please go ahead. Naved KhanManaging Director - Equity Research at B. Riley Securities00:51:11Great. Thank you. Two two questions, please. One on gross margin. I noticed the q one gross margins dipped a little bit more than as usual, and wondering if there's anything there to point out, and should we expect margins to improve sequentially from here on? Naved KhanManaging Director - Equity Research at B. Riley Securities00:51:30And the other question I have is around the digital marketing suite, which you guys introduced last year. What kind of attach rates are you getting on that product? Thank you. Mark McCaffreyCFO at GoDaddy00:51:42Right. Thanks, Naved. On the on the gross margin, it's within the parameters we we talk about. You know, we always say 64, give or take a hundred basis points depending on the product mix, and and that that that thesis still holds true for us. Any given quarter could shift a little bit based on that product mix, whether it's between core platform, ANC or even within the product mix within those separate groups. Mark McCaffreyCFO at GoDaddy00:52:05Nothing to call out. We still are making progress on our normalized EBITDA margin, happy with our ability to expand it and looking forward to hitting our targets in 2026. Aman BhutaniCEO at GoDaddy00:52:15Yeah. And just quickly to touch on digital marketing suite. You know, not nothing to share. It's so small. Doing well. Aman BhutaniCEO at GoDaddy00:52:22Lot lots to do there over the next few years to make it a bigger bigger part of our offering. Naved KhanManaging Director - Equity Research at B. Riley Securities00:52:28As as you on on the digital marketing suite, Aman, as you think about the bundling and pricing, there a sizable opportunity with with that offering, or how should we be thinking about it longer term? Aman BhutaniCEO at GoDaddy00:52:42Yeah. Now it's a you know, without going into any one product, the the marketing suite obviously is an opportunity for us to bundle differently than we do today. Right? And it but it has to go through the testing, and we have to be able to find the right customer boards sort of attach it to. It is one of the many options that we have. Aman BhutaniCEO at GoDaddy00:53:01There there are some that are better options than others. We just have to work through the pipeline of the tests. So it it's great. It's there, and, you know, hopefully, we'll talk about it more over the next few quarters. Naved KhanManaging Director - Equity Research at B. Riley Securities00:53:12Thanks so much. Aman BhutaniCEO at GoDaddy00:53:14Thank you. Operator00:53:15That concludes our call. Let me just turn it over Operator00:53:17to Ramon for closing remarks. Aman BhutaniCEO at GoDaddy00:53:18Well, thank you all for joining, and a big thank you to all GoDaddy employees for another fantastic quarter, and we'll talk to you next quarter.Read moreParticipantsExecutivesChristie MasonerVP of Investor RelationsAman BhutaniCEOMark McCaffreyCFOAnalystsElizabeth PorterAnalyst at Morgan StanleyYgal ArounianDirector - Internet Equity Research at CitiVikram KesavabhotlaSenior Research Analyst at Robert W. Baird & CoTrevor YoungAnalyst at Barclays CapitalAlec BrondoloDirector - Equity Research at Wells FargoKen WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.Josh BeckManaging Director at Raymond JamesBradley EricksonEquity Analyst - Internet at RBC Capital MarketsElla SmithAnalyst at JP MorganChris ZhangED - Equity Research Analyst at UBS GroupAlex LavigneEquity Research Associate at The Benchmark Company LLCAnalystRobert CoolbrithVice President, Internet Equity Research at Evercore ISINaved KhanManaging Director - Equity Research at B. Riley SecuritiesPowered by Key Takeaways In Q1 GoDaddy delivered 8% bookings growth, expanded normalized EBITDA margin to 31%, and grew free cash flow by 26%, reflecting strong execution and business resilience. ANC revenue rose 17% to $446 M with a 44% segment EBITDA margin, while core platform revenue increased 3% to $748 M with a 31% margin, driven by pricing, units and aftermarket strength. Its multi‐year pricing and bundling initiative outperformed expectations in Q1 by leveraging customer cohort testing and third-party integrations to increase average order size and reduce churn. The GoDaddy Aero experience improved customer conversion, attach rates, term lengths and renewals, and the company plans to enhance it with generative AI agents via its AgenTik AI platform. GoDaddy completed its $4 B share buyback, reducing fully diluted shares by over 25%, secured a new $3 B authorization through 2027, and reaffirmed its 2025 outlook of 7% revenue growth and over 11% free cash flow growth. A.I. generated. May contain errors.Conference Call Audio Live Call not available Earnings Conference CallGoDaddy Q1 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) GoDaddy Earnings HeadlinesGoDaddy: The Most Entrepreneurial Cities of 2025 Prove Size Doesn't MatterMay 20 at 11:24 AM | finanznachrichten.deGoDaddy: Strong Free Cash Flow Meets Stagnant Customer GrowthMay 20 at 11:24 AM | seekingalpha.comGold Hits New Highs as Global Markets SpiralWhen Trump took office in 2017, gold was just $1,100 an ounce. By the time he left, it had soared to $1,839. Now… as new tariffs take effect, gold is breaking records again. You've hopefully already seen this in action… but gold is surpassing $3,000 per ounce for the first time EVER.May 21, 2025 | Premier Gold Co (Ad)GoDaddy: Diversified And Growing, But Not Yet A Global CMS ContenderMay 19 at 10:09 PM | seekingalpha.comGoDaddy Inc. to Present at the Jefferies 2025 Software & Internet ConferenceMay 19 at 9:00 AM | prnewswire.comThe Most Entrepreneurial Cities of 2025 Prove Size Doesn't MatterMay 19 at 8:16 AM | prnewswire.comSee More GoDaddy Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like GoDaddy? Sign up for Earnings360's daily newsletter to receive timely earnings updates on GoDaddy and other key companies, straight to your email. Email Address About GoDaddyGoDaddy (NYSE:GDDY) engages in the design and development of cloud-based products in the United States and internationally. It operates through two segments: Applications and Commerce, and Core Platform. The Applications and Commerce segment provides applications products, including Websites + Marketing, a mobile-optimized online tool that enables customers to build websites and e-commerce enabled online stores; and Managed WordPress, a streamlined and optimized website building that allows customers to easily build and manage a faster WordPress site; Managed WooCommerce Stores to sell anything and anywhere online; and marketing tools and services, such as GoDaddy Studio mobile application, search engine optimization, Meta and Google My Business, and email and social media marketing designed to help businesses acquire and engage customers and create content. The segment also offers connected commerce comprising Smart Terminal, a dual screen all-in-one Point-of-Sale system that allows customers to manage in-store inventory and product catalogs and take payments; GoDaddy Payments, a payment facilitator that enables customers to accept all major forms of payments; and email service plans with a multi-feature web interface, and Microsoft Office 365 accounts that connects to customers' domains. The Core Platform segment offers domain products, including primary registrations, domain aftermarket platform, and domain name add-ons, as well as GoDaddy Registry, a provider of domain name registry services; and hosting and security services comprising shared website hosting, virtual private servers, and managed wordpress hosting services, as well as security products with a comprehensive suite of tools designed to help secure customers' online presence. The company serves small businesses, individuals, organizations, developers, designers, and domain investors. 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PresentationSkip to Participants Christie MasonerVP of Investor Relations at GoDaddy00:00:00Welcome to GoDaddy's first quarter twenty twenty five earnings call. Thank you for joining us. I'm Kristi Masoner, VP of Investor Relations. And with me today are Aman Bhutani, Chief Executive Officer and Mark McCaffrey, Chief Financial Officer. Following prepared remarks, we'll open up the call for your questions. Christie MasonerVP of Investor Relations at GoDaddy00:00:17If you'd like to ask a question on today's call, please use the raise hand feature in the webinar to be added to the queue. On today's call, we'll be referencing both GAAP and non GAAP financial measures and other operating and business metrics. A discussion of why we use non GAAP financial measures and reconciliations of our non GAAP financial measures to their GAAP equivalents may be found in the presentation posted on our Investor Relations site at investors.covadidy.net or in today's earnings release on our Form eight ks furnished with the SEC. Growth rates represent year over year comparisons unless otherwise noted. The matters we'll be discussing today include forward looking statements such as those related to future financial results and our strategies or objectives with respect to future operations. Christie MasonerVP of Investor Relations at GoDaddy00:01:00These forward looking statements are subject to risks and uncertainties that are discussed in detail in our periodic SEC filings. Actual results may differ materially from those contained in forward looking statements. Any forward looking statements that we make on this call are based on assumptions as of today, 05/01/2025, And except to the extent required by law, we undertake no obligation to update these statements because of new information or future events. With that, I'm happy to introduce Aman. Aman BhutaniCEO at GoDaddy00:01:28Good afternoon and thank you all for joining us today. At GoDaddy, our mission is to empower entrepreneurs and make opportunity more inclusive for all. In an environment marked by global economic uncertainty with small businesses navigating more complexity, we continue to improve and expand the critical tools necessary for them to run their businesses backed by care that helps make them successful. The inherent value of our products, disciplined innovation and execution of our strategy is the backbone of our business and our strong Q1 results. In Q1, we drove 8% bookings growth and we expanded normalized EBITDA margin to 31%, propelling free cash flow to 26% growth supporting our North Star of maximizing free cash flow over the long term. Aman BhutaniCEO at GoDaddy00:02:21These results and the durability of our model reinforce our confidence in our full year guide and Investor Day targets. Our strategy is steadfastly focused on attracting high intent customers, creating customer value and transforming that value into long term shareholder value. The energy within the company is palpable with the continued acceleration and velocity of execution as we drive towards these goals. As always, I will touch on our key initiatives starting with pricing and bundling. Focused on our present solutions and going across segments, this 2025 initiative delivered ahead of our expectations in Q1. Aman BhutaniCEO at GoDaddy00:03:03Pricing and bundling is a multiyear initiative and we continue to do further testing with customer cohorts that span across our ANC and core platform segments and we are encouraged by the results so far. Our enhanced platform capabilities quickly integrate third party products into our bundles resulting in expanded test options for this initiative. As we had shared, we have continued to shift from the product lens to the customer cohort lens for pricing and bundling maintaining the dual goal of growing bookings and minimizing churn. Our seamless experience initiative continued to deliver improved customer conversion, product engagement and renewals. This initiative is powered by our most sophisticated experimentation pipeline and is focused on removing friction and creating an intuitive experience, saving customers time better spent on growing their businesses. Aman BhutaniCEO at GoDaddy00:03:58The results of our efforts across many experiences and products are found in the increase in average order size and improvement in renewal rate driving customer retention and lifetime value on the GoDaddy platform. Commerce growth remains strong this quarter and annualized gross payments volume increased at a healthy pace with the primary driver continuing to be conversion within our existing base of customers. Our recently launched high margin offerings such as GoDaddy Capital, our merchant cash advance program and same day payouts while still small are gaining traction. These valuable additions priced competitively are important to our customers and strengthen our one stop shop commerce offering. Last but certainly not least, GoDaddy Aero continues to permeate across our products and customer experiences and Aero's demonstrated results are showing up as better attach term length and renewals. Aman BhutaniCEO at GoDaddy00:04:55Data from the thirteen month Arrow customer cohorts shows that we are driving changes in customer behavior with Arrow resulting in more customers purchasing second and third products. Websites plus marketing continues to be the biggest beneficiary and Aero customers are getting better results from their websites too leading to a fantastic win win. While the Aero experience is driving financial results and Aero plus our directly monetized experience is progressing with new improvements, our focus continues to be to engage customers across the broader set of capabilities that Arrow provides. This builds on the success we are already seeing with Arrow and represents a large long term opportunity for our customers and for GoDaddy. And we are still at an early stage. Aman BhutaniCEO at GoDaddy00:05:45Arrow has already shown its powers to automate and use generative AI to provide magical experiences for customers. And with AgenTik AI, we expect to take this even further. Agents powered by our personalized AI platform will take recommendations to our customers to the next level, doing the work for them across multiple jobs to be done. In closing, I want to underscore that GoDaddy has built a durable business, one that has consistently performed across economic cycles and technological shifts. We are driving results and remain focused on what we can control, accelerating the pace of innovation in a disciplined manner. Aman BhutaniCEO at GoDaddy00:06:24The result of our model is profitable growth and the maturity of our operations allows us to deliver results in the current period as we set up the next positioning the business for long term success. With that, here's Mark. Mark McCaffreyCFO at GoDaddy00:06:39Thanks, Aman. I want to take a moment to acknowledge that the broader macroeconomic environment including tariffs is top of mind. To be clear, for GoDaddy, our direct exposure to tariffs is not material. For our customers, their grit and determination alongside our integrated one stop shop solutions delivering unmatched value remains mission critical to their needs, especially as they navigate a complex landscape. Our tools empower them to compete efficiently and effectively. Mark McCaffreyCFO at GoDaddy00:07:11Our durable model and our customers' resilience gives us confidence in our full year 2025 guidance and our investor day targets including our North Star. In q one, we delivered ANC revenue growth of 17%, expanded normalized EBITDA margins over 200 basis points, and grew free cash flow to $411,000,000. We also have fully utilized the remaining portion of our $20.22 $4,000,000,000 authorization to retire over 25% of our fully diluted shares outstanding since inception of the program. Total revenue was at the top end of our guided range growing 8% on a reported and constant currency basis to $1,200,000,000. Annual recurring revenue grew 7% to $4,100,000,000. Mark McCaffreyCFO at GoDaddy00:08:04International revenue grew 10%, surpassing our prior expectations on strong aftermarket sales in international regions. For our high margin a and c segment, we drove 17% growth in revenue to $446,000,000 and 14% growth in bookings on the ongoing strong adoption of our subscription solutions. Segment EBITDA margin expanded nearly 200 basis points to 44%. Our core platform segment delivered revenue growth of 3% to $748,000,000. Core platforms performance this quarter reflected strength in primary domains, up on pricing and units, as well as strength in aftermarket. Mark McCaffreyCFO at GoDaddy00:08:51Core platform bookings grew 5% and segment EBITDA margin expanded by over a 50 basis points to 31%. Moving to profitability, normalized EBITDA grew 16% to $364,000,000 delivering an expanded margin of 31%, up over 200 basis points and exceeding our guide for the quarter. The expansion was driven by favorable product mix and sustained operational discipline from infrastructure simplification and global talent recruitment, alongside increased marketing for our innovative Arrow experience. On bookings, we delivered $1,400,000,000 representing 8% growth on a reported basis and 9% growth on a constant currency basis. As a reminder, bookings primarily represents the cash collected during the period. Mark McCaffreyCFO at GoDaddy00:09:42Free cash flow grew an impressive 26% to $411,000,000. Our efforts are delivering the results we set out to achieve, bringing in higher lifetime value customers who will drive stronger, more profitable growth over time. Our stronger, more resilient cohorts are already translating into improvements with retention above 85% for customers on our GoDaddy platform. We are driving a higher average order size, and our ARPU grew 9% to $225 on a trailing twelve month basis, demonstrating the sustainability of our ongoing efforts. Since year end, our customer count has remained stable at 20,500,000 as we lap the impact of the last divestiture. Mark McCaffreyCFO at GoDaddy00:10:33And looking ahead, we anticipate returning to customer growth later this year. We remain confident that our strategic focus here centered on growing higher lifetime value customers will drive compounding growth in free cash flow over the long term. Turning to the balance sheet. We exited the quarter with $719,000,000 in cash and total liquidity of $1,700,000,000 as we utilized the remaining $767,000,000 under the 2022 share repurchase authorization. Net debt was $3,100,000,000 representing a net leverage of 1.9 times on a trailing twelve month basis. Mark McCaffreyCFO at GoDaddy00:11:13Our goal over the coming quarters is to continue to strengthen our already strong balance sheet, and we are reducing our target net leverage ratio from the previous guidance of two to four times to under three times moving forward, aligned to how we've been operating. In April, we completed our $4,000,000,000.20 22 repurchase authorization program, repurchasing a cumulative 43,700,000.0 shares at an average price of $91, representing a gross share reduction of over 25% in our fully diluted shares outstanding since the inception of the program. Our commitment to a disciplined capital allocation framework is unchanged, and share buybacks remain a key mechanism to return value to our shareholders. With that, I am pleased to announce that our board has approved the 2025 repurchase authorization of up to $3,000,000,000 through 2027. This new authorization reflects our enduring confidence in the strength of our underlying business, the durability of our cash flows, and our belief that investing in our shares currently represents an attractive return opportunity for our capital. Mark McCaffreyCFO at GoDaddy00:12:27Shifting to our outlook, given the strong start to our year and the durability of our model, we are reaffirming our full year 2025 outlook provided in February and expect total revenue to be within a range of 4.86 to $4,940,000,000 representing growth of 7% at the midpoint of the range. For q two, we are targeting total revenue of 1.195 to $1,215,000,000 representing 7% growth at the midpoint of the range. Within that, we expect ANC revenue growth of mid teens and core platform growth of low single digits. For q two, we are projecting a normalized EBITDA margin of about 31%, and we are reaffirming our full year normalized EBITDA margin expansion target of a hundred basis points. We expect normalized EBITDA to maintain an approximate one to one conversion to free cash flow. Mark McCaffreyCFO at GoDaddy00:13:21We are also reaffirming our full year free cash flow target of at least $1,500,000,000, representing growth of over 11%. Our disciplined capital allocation approach remains unchanged, and we plan to evaluate all opportunities according to our rigorous and returns based framework. I am pleased with our q one accomplishments and strong financial results, a great start to a year that has already underscored the importance of GoDaddy's durable model. The strength of GoDaddy's foundation is evident in our long history of strong customer retention, the growing quality and stability of our customer cohorts, and the competitive advantages we've developed over time as a partner and champion for micro businesses. We are executing with discipline and purpose as we drive towards our North Star, maximizing free cash flow over the long term. Mark McCaffreyCFO at GoDaddy00:14:17We are making steady progress towards our Investor Day targets of achieving $4,500,000,000 plus in cumulative free cash flow generation, underpinned by six to 8% annual revenue growth and expansion of our normalized EBITDA margin to 33% by 2026. With that, I will hand the call over to GoDaddy's vice president and head of IOR, Kristi Masoner. Operator00:14:42Thanks, Mark. As a reminder, if you'd like to ask a question, please use the raise hand feature at the bottom of the webinar screen to be added to the queue. Our first question comes from the line of Elizabeth Porter from Morgan Stanley. Elizabeth, please go ahead. Elizabeth PorterAnalyst at Morgan Stanley00:14:57Hi. Can you hear me? Mark McCaffreyCFO at GoDaddy00:14:58Yeah. Hey, Elizabeth. Elizabeth PorterAnalyst at Morgan Stanley00:15:00Okay. Great. Thank you so much. So I first wanted to ask on the kind of the macro, you know, changes. You know, it sounds like it's a pretty resilient base. Elizabeth PorterAnalyst at Morgan Stanley00:15:11But any signals that we could be deriving from kind of your conversations that may be clouded when we look at things like small business sentiment index in your view. You know? And if we do see some pressure evolve, if at all, like, just a more detailed view on on how that could be incorporated into the guidance. Aman BhutaniCEO at GoDaddy00:15:29Thanks, Elizabeth. This is Aman. I can take that. Aman BhutaniCEO at GoDaddy00:15:32You know, when we look at Aman BhutaniCEO at GoDaddy00:15:33customer sentiment, and I think you're aware we do surveys sort of on a consistent basis. We actually did a survey in April, and we did see some pressure, you know, in terms of how our customer base and micro businesses look at sort of their positive outlook on the economy. We do see some pressure on that. But the broad idea where, you know, our customers continue to be resilient and they feel strongly about, you know, their own performance and that their business will continue to grow is still within sort of the five year norms that that we've seen. So, you know, I what what I would say about sentiment is while we see a little bit of pressure, I think, generally, our customer is still positive. Aman BhutaniCEO at GoDaddy00:16:13And, also, we have very specific data points within the company, right, in terms of our customer churn rate, our average order size, and we continue to see that performing sort of on on a day to day or month to month basis. I'd also like to mention that, you know, when you think about the value that GoDaddy products bring to our customers, It's so much higher than the cost for our customers. And when you attach that, there are customer based indexes towards the service industry. It really puts GoDaddy in a very good position to sort of navigate whatever we see in the macro over the next few quarters. So we we feel good about that. Aman BhutaniCEO at GoDaddy00:16:49And I'll turn it to Mark. Mark McCaffreyCFO at GoDaddy00:16:50Yeah. Yeah. And I think you covered a lot of it, Aman. You know, just a couple of data points. One, you know, our our customer base has a tendency to lean towards services. Mark McCaffreyCFO at GoDaddy00:16:59And and in this market, you know, they're resilient. They're very optimistic. They they are still looking at growing revenue, our tools help them do that effectively and efficiently, compete with some bigger players out there. So so the sentiment right now, you know, there's a lot going on, seems to be, you know, they're looking for opportunities to do more with what they have, and our products obviously fit right into that. So feeling good about it. Mark McCaffreyCFO at GoDaddy00:17:22It's why we're reaffirming the guidance. We feel good about what we're seeing out there, and we've you know, obviously, we monitor constantly. We have many different touch points, whether through the care organization, whether through our surveys, whether through just doing customer visits. And we're seeing the consistent optimism, although, you know, they they are looking at what's going on around them at the same time. Elizabeth PorterAnalyst at Morgan Stanley00:17:43Great. And just as a follow-up, I was hoping to get some early signs and reads from the Arrow plus SKU that just launched, as an independent SKU in in q four. Any feedback on the pricing in particular? And then what are the right customers for Arrow plus? Is it really anyone that's willing to engage in Arrow, or if you could just help us frame the applicable base would be super helpful? Aman BhutaniCEO at GoDaddy00:18:06Yes. As as we shared, you know, Arrow continues to do very, very well, and we're seeing improvements in order size and sort of term. We're seeing improvements in attaching the second and third product with Arrow. And engagement with Arrow is a very good sign for us to put ArrowPlus forward to those customers. And as as you know, you know, ArrowPlus offers an expanded offering, you know, at a very competitive price for our customers. Aman BhutaniCEO at GoDaddy00:18:30In terms of actual metrics from ArrowPlus, it's still very, very early in the testing from ArrowPlus. And as you know, it's hardly a quarter in that we've launched this and expanded it to our customer base. So there's still more to be done there, but we're we're encouraged by where we are today. Elizabeth PorterAnalyst at Morgan Stanley00:18:45Great. Thank you very much. Aman BhutaniCEO at GoDaddy00:18:47Thank you. Operator00:18:49Our next question comes from the line of Yigal Aronian from Citigroup. Yigal, please go ahead. Ygal ArounianDirector - Internet Equity Research at Citi00:18:57Hey, good afternoon, guys. To follow-up on Aero on on the average order size. Mark, you you you quantified that last quarter. I don't know if you can quantify it again this quarter if it's changed at all. But and just more more broadly, what you're seeing, how it's changing in terms of attach, order size, kind of, you know, moving up on to higher tiers and and the strong stronger conversion. Ygal ArounianDirector - Internet Equity Research at Citi00:19:27Love to get more color on that. Mark McCaffreyCFO at GoDaddy00:19:29Yeah. Thanks, Gal. You know, I would say we're seeing similar than to what we saw on q four on the on the increases in the average order size. Broad based, it it we're seeing it going to that second product very quickly. We're attaching very very prominently in those first few days, which has been fantastic. Mark McCaffreyCFO at GoDaddy00:19:50Still still early days on tiers and that type of things, you know, Plus is very, very early to what we've introduced. So we're looking at it from an overall impact to our customers in and of itself and continuing to see that positive behavior around the average order size at initiation, seeing that second product coming in, attaching a lot faster. We're starting to see that show up in our retention rates for our customers who are on the GoDaddy platform. So those are the positive signals we're out there seeing the the engagement around Arrow. And then, obviously, plus, we introduced, and we'll start to measure that as a SKU, but really early stage on the impact of that. Mark McCaffreyCFO at GoDaddy00:20:24It's in and of itself. Aman BhutaniCEO at GoDaddy00:20:25Yeah. And maybe I'll You mentioned conversion. Arrow overall has been good for conversion. It's been good for attach, and and that continues. Aman BhutaniCEO at GoDaddy00:20:32And more and more of our customers are starting with Arrow, and the trend of, you know, customers coming to websites plus marketing through Arrow has has just continued to grow nicely. So that that's something we're very happy about. You know, we want our customers to start with that expanded toolset, to have exposure to that broader base of products that we have because we think that puts our customers in a great position to get that value and puts us in a great position long term to sort of have more and more more products with our customer base. Mark McCaffreyCFO at GoDaddy00:20:59Yeah. Mark McCaffreyCFO at GoDaddy00:21:00And and just, you know, coming back to our strategy is around attracting higher intent customers, and and we are very happy with the results because we are seeing those higher intent customers coming in, and those behaviors are showing that we're really getting to that customer base. Ygal ArounianDirector - Internet Equity Research at Citi00:21:15Okay. Great. And one on, the customer count just given it it remains a focus for investors. Just to be clear, was it your expectation that would, would be down sequentially, as we're still lapping some of those divestitures? Is there any way to parse out what it would have been ex that? Ygal ArounianDirector - Internet Equity Research at Citi00:21:38And then maybe layering on top of that the Super Bowl ad, you know, in February and what you saw out of that, if that drove, incremental, you know, sign ups, customers, free trials, anything like that. Thanks. Mark McCaffreyCFO at GoDaddy00:21:51Carl, you know, on the customer you know, we saw a a stability in our customer base. You know, we we, again, are not focusing on customer growth in and of itself. Our our intent and our strategy is around that higher intent customer. So so it's hard to parse that out into different buckets, so to speak. But, you know, we're we are happy that we're getting to that stronger cohort of higher intent customers, and the stability, is really gen being generated by the fact we're, lapping the actions that we specifically took to get put ourselves in this position in the first place. Aman BhutaniCEO at GoDaddy00:22:22And then to to the Super Bowl or the new campaign that we have, you know, the campaign is going very well. We're very happy with the results in terms of just getting the awareness with a very large base of folks that GoDaddy has much more to offer than domains. You know, this is obviously a very important message, and we think Arrow is a fantastic vehicle to deliver that. But we'll we'll continue to sort of in a very I would I would say in a manner that is disciplined, we'll continue to invest in awareness of what go GoDaddy has to offer. And the current campaign is going going quite well. Ygal ArounianDirector - Internet Equity Research at Citi00:22:56K. Great. Thanks. I I definitely know Walter Goggins a lot better now than I did a few months back. Mark McCaffreyCFO at GoDaddy00:23:01So think to hear that. Aman BhutaniCEO at GoDaddy00:23:04Yeah. And I think he's done great for us. He's been great. Ygal ArounianDirector - Internet Equity Research at Citi00:23:07Thanks, guys. Operator00:23:09Our next question comes from the line of Vikram Kesavola from Baird. Vikram, go ahead. Aman BhutaniCEO at GoDaddy00:23:17Hey, Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:20Hey. Can you hear me? Aman BhutaniCEO at GoDaddy00:23:21Yeah. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:21Okay. Great. Hey. Thanks for taking the questions. Hey. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:25My first one is on Arrow. You referenced the opportunity there with AgenTik.ai. Just wondering if you could talk more about your vision for that and just how you plan to further enhance the Arrow experience from what it looks like today? And then second question is on pricing and bundling. I think you mentioned that, that has been delivering ahead of your expectations in Q1. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:23:45Just wondering if you can elaborate more on, you know, where you're having the most success with that strategy this year. And, it sounds like you're doing some additional testing as well. Just where do you see the most opportunity to continue leveraging that, across the platform? And, I'll leave it there. Thanks. Aman BhutaniCEO at GoDaddy00:23:58Yeah. Thanks, Vic. On Aero, you know, the power of Aero sort of with it with its birth has been around automation, taking friction out for customers. You know? But that automation is deterministic. Aman BhutaniCEO at GoDaddy00:24:11And what generative AI has done is it's allowed our customers to create content to be able to move very quickly based on the large dataset that we have. But what AgenTik AI offers is to take that simplification that Arrow brings to the next level where, you know, micro businesses, our customers can have agents deployed on their behalf that can get the jobs to be done across different products. Now as the customer shifts context across those products, typically, what you will find is that the customer runs out of time, the customer runs out of energy, the customer runs, you know, potentially out of just the ideas of what they want to do. But with with AI agents, we can fill a lot of those gaps and really support our customers in a different way. We at GoDaddy are also investing. Aman BhutaniCEO at GoDaddy00:24:54I think we've talked about this in the past in a large scale data platform, an AI platform that works that that is very much with the platform mindset of the company. And one of its new capabilities over the last couple of quarters is this idea of personalized AI for that specific customer, which is very important to provide that personalized agentic experience. So that that's something I'm pretty excited about. It's something that I personally spend quite a bit of time on on a weekly basis so that, you know, that's the next thing we we wanna see or the next capability we wanna bring to Arrow. And in terms of pricing and bundling, you know, the nothing has changed in in the program. Aman BhutaniCEO at GoDaddy00:25:31It continues to be a multiyear program. It's delivering ahead of our expectations in q one, and we feel very good about it for the rest of the year based on our testing. And, yes, as I noted, you know, we we are continuing to test new bundles and new pricing options with those bundles, you know, over over the next few quarters, and that sort of sets up the next period for us. And the key thing here is, you know, the the one stop type shop solution that we have and when we can bring in third party products too, you know, the value we bring to our customers so much more than the $225 ARPU that we have. You know, these services are mission critical to our customers. Aman BhutaniCEO at GoDaddy00:26:08And simpler we can make it, the easier we can make it, the more we can we think they'll just adopt our services. So that that's what we're really trying to do with pricing and bundling, and it's it's going great. Vikram KesavabhotlaSenior Research Analyst at Robert W. Baird & Co00:26:19Okay. Great. Thank you. Operator00:26:23Next question comes from the line of Trevor Young from Barclays. Trevor, please go ahead. Trevor YoungAnalyst at Barclays Capital00:26:29Great. Thanks. Just back to returning to active customer growth later in the year. What needs to go right from here for that to play out? Is it just lapping that last divestiture, which I think maybe laps in 3Q? Trevor YoungAnalyst at Barclays Capital00:26:42And are we now largely done with that brand rationalization, which I think was mostly in the hosting area? Or is that kind of an ongoing initiative? And then second question, gross margin continues to expand year on year. I think it's fourth quarter in a row. Can you speak to what's driving that? Trevor YoungAnalyst at Barclays Capital00:26:56Is it just a function of the favorable product mix? Or have there been some underlying savings realized maybe in areas as you, like, exited data centers and shifted more workloads to the cloud? Thank you. Mark McCaffreyCFO at GoDaddy00:27:07Yeah. Thanks, Trevor. On on the on the first part of this, you know, just, you know, I wanna emphasize that our our strategy is not around returning to customer growth per se. Our our strategy is around attracting higher intent customers, and that's what we continue to go after. We are lapping the actions that we took over the last year or so as as you you acknowledge, And that will put us on a more comparable base going forward, which adds to that, you know, tailwind that we should be returning to positive customer growth here later in the year. Mark McCaffreyCFO at GoDaddy00:27:38But, you know, again, we're we're happy with where we are in attracting that higher intent customer who's coming in with a higher average order size, who's attaching to that second product, whose retention is stronger, and therefore, you know, driving that long term value that we talk about. And, obviously, that gets us to our north star. On margin expansion, product mix, nothing nothing to call out on savings per se. We we continue to get a favorable product mix. What I always say is we'll be around 64%, give or take, you know, hundred basis points depending on the product mix, and we continue to fall within that range every quarter. Mark McCaffreyCFO at GoDaddy00:28:10It's a little favorable here or there at times, But but it's the same it's the same drivers. It's just it's the product mix. It's a software that's being sold. It's which which ones are selling a little bit more than others. Trevor YoungAnalyst at Barclays Capital00:28:22Thanks, Mark. Operator00:28:25Next question comes from the line of Alec Randolo from Wells Fargo. Alec, please go ahead. Alec BrondoloDirector - Equity Research at Wells Fargo00:28:31Thank you so much for the question. I would love to dig in to the dichotomy, I guess, between Arrow and Arrow plus As Arrow plus grows, how do you think about what products get, I guess, are in the bundle or in kind of the direct monetization bundle Aero plus versus what products are, you know, given away to customers for free in Aero? Thanks. Aman BhutaniCEO at GoDaddy00:28:51Yeah. Just very broadly, what Aero does is it provides a basic set of functionality across different jobs to be done to the customer with every domain and over time any product purchase at GoDaddy. You know, you buy something, you get those Arrow services for free. They show up, and they're ready to go. What Arrow plus does is across those key services, AeroPlus provides a higher end SKU for them. Aman BhutaniCEO at GoDaddy00:29:17And and that's the key difference. Right? Aero allows the customer to try the product and see that it performed. And then when they get to a certain level of engagement, that triggers for us the idea that this customer likely should be in AeroPlus because they can expand the job to be done. So that's the key difference between Aero and AeroPlus. Alec BrondoloDirector - Equity Research at Wells Fargo00:29:36Perfect. If I can maybe just ask one more. The repurchase, dollars 700,000,000, I think that was the largest repurchase in the last several quarters. Is that a function of, you know, the pressure on the stock after fourth quarter earnings? Are there other dynamics to consider? Alec BrondoloDirector - Equity Research at Wells Fargo00:29:48Any feedback there would be helpful. Mark McCaffreyCFO at GoDaddy00:29:50Yeah. So, you know, in in the first half of this year so far, we bought back $767,000,000, in our in our, 2022 authorization program. If you go back and look, we've we've been opportunistic in the market from, you know, period to period, and we continue to evaluate it under that same strategy. We'll do the same with the 2025 authorization here as we go forward. You know, we always say at a minimum, we're gonna buy back our dilution, but we will continue to be opportunistic in the market. Alec BrondoloDirector - Equity Research at Wells Fargo00:30:18So much. Operator00:30:20Next question comes from the line of Ken Wong from Oppenheimer. Ken, please go ahead. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:30:29Fantastic. Thanks for taking my question. I realize you guys haven't seen any any kind of immediate pressures in terms of macro. You know, as you think back to kind of past downturns, and I know you've talked about potentially being kind of counter macro or counter recession in terms of of of your business. I guess, how are you thinking about some of the objectives you guys are focused on as far as, one, customer growth and then, two, kinda getting customers to buy more? Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:30:55Do you think that you can still see that kind of resilience, you know, in in in a downturn? Aman BhutaniCEO at GoDaddy00:31:01Yeah. When we look back, you know, GoDaddy has grown pretty much through every kind of macro situation and through sort of every recession we've been part of. Now every recession is different. You know, we can't look back and project exactly into the future. But when we think about the business as a whole and our very large customer base, over 20,000,000 customers, you know, the key things we look at is number one, the value we bring to our customers versus the price we charge. Aman BhutaniCEO at GoDaddy00:31:27There is a tremendous amount of consumer surplus there. Customers get tremendous value from a domain name, from a website, from other services we offer, and we're priced very competitively on those. Beyond that, when we look at our opportunity to continue to get high intent customers, which is our strategy, and we've been executing it for a few years, We've been very successful getting high intent customers, and we continue to see that being a strength of our of ours. And third, when you think about our business, we have sophisticated capabilities in terms of pricing or what is what we call pricing and bundling that allows us to approach our customer base in specific cohorts and test and make sure that the changes we're making both optimize growth on the top line and minimize churn for us. And, yes, it's also true that, you know, I think you briefly mentioned that in tougher economic time, there can be some countercyclical behavior, and we feel that, you know, our our offerings are critical to them in a situation where where they need more support. Aman BhutaniCEO at GoDaddy00:32:27But, you know, it's hard to guess what the future is going to be. So, you know, we're keeping a keen eye on it. But like I Aman BhutaniCEO at GoDaddy00:32:33said, those three things make us feel good about our position. Mark McCaffreyCFO at GoDaddy00:32:36Yeah. No doubt our customers today need us more to operate effectively and efficiently in their markets, and and, they need they need more care and guide as they're they're in this complex landscape. So we feel really good about what we're seeing. You know, it's a resilient group, and, you know, we'll continue to monitor. Mark McCaffreyCFO at GoDaddy00:32:53But, you know, I never wanna say we are a counter recessionary, but we we have a tendency to be more mission critical to the micro business in these environments than others. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:03Got it. Really appreciate the color. And then if I could just one more for you, Mark. I know the quarter, it sounds like GPV held up well. Any color in terms of what you might be seeing on that GPV front in April in post tariff world? Mark McCaffreyCFO at GoDaddy00:33:18Yeah. Nothing to call out. We're we're still seeing the conversion of our existing customer base. We're still seeing it at a good pace. We're seeing our customers, you know, transacting healthily. Mark McCaffreyCFO at GoDaddy00:33:28Not nothing nothing to highlight at this juncture. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:31Okay. Ken WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.00:33:31Thank you. Operator00:33:33Our next question comes from the line of Josh Beck from Raymond James. Josh, please go ahead. Mark McCaffreyCFO at GoDaddy00:33:42Hey, Josh. Josh BeckManaging Director at Raymond James00:33:43Thank you so much for taking the question. Hopefully, you all can hear me. Yeah. I wanted to ask, you know, coming back to the the pricing and bundling. Certainly, it seems like, you know, these third party products is something that you're adding to the, you know, what is probably already a pretty big array of of tests. Josh BeckManaging Director at Raymond James00:34:02So any anything you can share on where you're looking, you know, to maybe add third party solutions kind of, you know, where they fit in? And then second part, just, you know, as we think through the the bookings, you know, I think A and C bookings was 14%. If you look at it on a two year CAGR, I think it accelerated. I think the comps get a little bit tougher as we go into Q2. So just any puts and takes that we should be thinking about with respect to a and c bookings, you know, for the year would would be great. Aman BhutaniCEO at GoDaddy00:34:37Yeah. I can start, and Mark can follow-up on the second part. When we think about pricing and bundling, one of the advantages we have is, yes, we have a breadth of products, but our platform now allows us to bundle third party products very quickly and test them. And we're actually testing across quite broad spectrum of customer cohorts, customers that may have, you know, products that are in our core segment or our e n c segment. So those the number of tests is growing, and that that gives us confidence that, you know, we're gonna get more winners. Aman BhutaniCEO at GoDaddy00:35:07No no specific area to call out that, you know, we're sort of focused on x area versus y y area. We actually have a decent set of listed companies and products that we're working with, and and the testing is going well, which, you know, that that's really the key to communicate with you that we have those more those sort of larger set of offerings to put forward, and and we like what we're seeing. Mark McCaffreyCFO at GoDaddy00:35:30Yeah. On the on the bookings, you know, just a reminder, bookings for us represents the cash collected in the period, and, you know, we've reinforced or reaffirmed our free cash flow targets for the year, even our targets going out through 2026. So we feel really good about the progress we're making overall as a business in the platform and the one stop shop. No doubt, Q1 this year versus Q1 of last year, Tough compare. It was when pricing and bundling really took off last, q one. Mark McCaffreyCFO at GoDaddy00:36:01And while we don't guide to bookings, you know, we we we expect revenue growth for the rest of the year in the mid teens, and we'll continue to, look at the progress pricing and bundling is, is performing. Aman BhutaniCEO at GoDaddy00:36:12Yeah. Just to clarify, that's ANC revenue growth. Mark McCaffreyCFO at GoDaddy00:36:14Yes. ANC. Josh BeckManaging Director at Raymond James00:36:17Got it. Thanks, Chase. Operator00:36:20Our next question comes from the line of Brad Erickson from RBC. Brad, please go ahead. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:36:29Cool. One more on pricing and bundling. Why not? I guess, think about 2024. You know, would you say pricing or bundling had kind of a bigger effect, or were they kind of the same? Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:36:42I know you don't tend to unpack those, but we get a lot of questions from investors on this. And maybe just as you think about what that mix looked like in 2024, for as we look towards 2025 and the bookings there, do you see that mix kind of staying the same, or is maybe one stronger than the other? And what are kind of the inputs of any mix shift there, if there are any? Aman BhutaniCEO at GoDaddy00:37:03Yeah. The I perhaps one way to address this and in the past, I have talked about how hard it is to pull these things separate because the the model is to bundle something, create that value for the customer, test that value, and then to take the price on it. And that price is also actually determined through testing, given engagement with that with that with those set of products. So it it's kinda hard to rip them separate. But one way to talk about it might be that where we see the best return, the sort of long standing lifetime value creation is where we create that value for customers through some sort of bundle. Aman BhutaniCEO at GoDaddy00:37:43Right? And and I know that's not exactly sort of answering right here right now '24 versus 25, but that is a good signal to have that where when bundling is part of it and and it's intertwined well, we see the greater lifetime value coming through it. Hopefully, that helps. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:37:59Yeah. Yeah. No. That's helpful. And then just to follow-up on on Arrow, you know, it's always good to hear kind of some of the examples of how you're seeing customers kind of taking advantage of that in a, hopefully, a value accretive way. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:38:12Just maybe any anecdotes or kind of latest observations you can share and just in terms of, how people are taking advantage and and, you know, thinking of it in the context of the paywall testing and where you see value creation that you could, eventually monetize? Thanks. Aman BhutaniCEO at GoDaddy00:38:28Yeah. We, as you know, we really track very, very carefully the engagement across all of the aero products. And if I had to highlight one, you know, the product that's getting a lot of engagement right now is our conversations product. It's something we've talked briefly about once in a while, but this is a little application that our customers can download and use to talk to their customers. And within this application, we use AI or we use Arrow to actually create responses on behalf of our customers. Aman BhutaniCEO at GoDaddy00:38:56So, you know, like a micro business or solopreneur, they're only one person, but they can sort of talk to a lot of their customers very, very easily. So we're seeing some good sort of some really good engagement on conversations and, you know, not not necessarily specific to conversations, but wherever we see that engagement, that sort of, you know, gets our attention in terms of that there's monetization opportunities there, especially, you know, with something like conversations where we we talk about very large scales and a very, very large number of customers using it. Mark McCaffreyCFO at GoDaddy00:39:24Yeah. And I have to tell you, in this environment, Conversations is becoming quite popular. We were out meeting with the pizza guys as we refer to them. And you're talking about someone who's making pizzas during the day, and they are still having to book their, you know, next event while they're making those pizzas. A pizza I learned takes ninety seconds to make. Mark McCaffreyCFO at GoDaddy00:39:41So within ninety seconds, they're responding using conversations to their incoming calls so that they can line up their next event. And we're seeing that more and more in this environment because revenue and making sure people have pipelines is becoming more prevalent for them. Aman BhutaniCEO at GoDaddy00:39:55Yeah. It's it's great to have, you know, conversations with real customers when they have a real business like Pizza Shop and, you know, use using our products. It's really, really fun. Bradley EricksonEquity Analyst - Internet at RBC Capital Markets00:40:06Got it. That's great. Thanks, guys. Operator00:40:09Our next question comes from the line of Alexey Gogulov from JPMorgan. Alexey, please go ahead. Ella SmithAnalyst at JP Morgan00:40:16Hi. This is Ella Smith on for Alexei Gogulov. Thank you so much for taking our questions. So first, I was hoping to ask about the impressive ARPU growth. Can you rank order some of the products and contributions which drove ARPU growth to an impressive 9%? Mark McCaffreyCFO at GoDaddy00:40:32Yeah. Well, you talk about it, and it's a little bit of a a flow out. Right? And and remember, bookings is always at at the front end front end of the cycle, and ARPU is always at the back end of the cycle. It's it's a trailing twelve month revenue number. Mark McCaffreyCFO at GoDaddy00:40:44And you really look at our success last year around pricing and bundling, the seamless experience, you know, even some of the momentum around Arrow, those have all been contributing to, you know, the bookings growth. And and now we're rolling into our ARPU growth, which is, again, you know, kind of points to the sustainability of the efforts we're making around going after these higher intent customers. So I would say across the board, it's the strategy working around the higher intent customers who are pushing the average order size up, which are attaching to that second product faster, whose retention rates is getting stronger on our GoDaddy platform. So so just the the the strategy is working. Ella SmithAnalyst at JP Morgan00:41:23That makes a lot of sense, Mark. Thank you so much. And for a quick follow-up, I I was hoping to hear an update about Gaby and how that's being used internally. Can you speak to the optimize optimization potential there? And do you think Gaby would ever become externally facing to your customers? Aman BhutaniCEO at GoDaddy00:41:39Yeah. Super excited about our continued evolution of technology automation AI within care. Gabby continues to take on more and more jobs to be done. You know, we are very excited about sort of Gabby and the conversation bot, which is the external facing version of it, sharing more and more data. No sort of immediate plans to make Gabby be external just yet, but, you know, this is a fast evolving space. Aman BhutaniCEO at GoDaddy00:42:05So, you know, it's hard to say what will happen in six months. I I can tell you about tools that we're using AI on just three months ago, and now we have new technology that's like, oh my god. Like, it's changed amazingly in three months. So but, yeah, super happy about Gabby. Super happy, and, you know, I'm bullish on AI just being a great enhancement for productivity within our organization. Ella SmithAnalyst at JP Morgan00:42:29Great. Thank you so much, Aman and Mark. Aman BhutaniCEO at GoDaddy00:42:31Thank you. Operator00:42:33Our next question comes from the line of Chris Zhang from UBS. Chris, go ahead. Chris ZhangED - Equity Research Analyst at UBS Group00:42:40Hi. Thanks for taking our question. Mark McCaffreyCFO at GoDaddy00:42:41Hi, Chris. Chris ZhangED - Equity Research Analyst at UBS Group00:42:42So first question is on the GoDaddy agency announcement. It's we're it's great to see the announcement last week. As we've noted, anecdotal evidence of agencies already using GoDaddy subscription subscription products. Just wanted to see if you can talk about, a addressable opportunity for your current product suite and the target customer segment of your products? And, I guess, if you could provide either revenue or user mix that are being handled already by agencies today and then also directionally, the adoption within your ANC segment, the adoption of, of managed WordPress, your own subscription solutions, and, I guess, last but not least, the subs the the adoption of Arrow. Chris ZhangED - Equity Research Analyst at UBS Group00:43:30We understand the a the ANC segment may be still the the agency space may be still kinda early for you guys. But, if you could provide any comments along those metrics, that'd be really appreciated. Aman BhutaniCEO at GoDaddy00:43:42Yeah. So I I think you pretty much answered your question as well. It's very, very early in terms of the agency space for GoDaddy. As you know, over the last few years, our products have improved leaps and bounds. You know, we have some great offerings and websites with marketing that are able to do certain jobs to be done for those customers. Aman BhutaniCEO at GoDaddy00:44:02We also have a new and much improved managed WordPress instance that that is just really, really good. You know? So there's there's a couple of products out there. I think we're still exploring. We're still looking at that market. Aman BhutaniCEO at GoDaddy00:44:16I think it continues to be a great long term opportunity for GoDaddy to step in that space, but nothing to share yet. Just all very small and just some little exploration here or there. Mark McCaffreyCFO at GoDaddy00:44:26Yeah. Def definitely a great longer term opportunity. Not nothing that we've built into anything we're talking about today. We're excited about it. That's a a new customer base for us somewhat. Mark McCaffreyCFO at GoDaddy00:44:37But but not nothing to call out today. You know, obviously, as things get traction, we'll share more. Chris ZhangED - Equity Research Analyst at UBS Group00:44:43Alright. Sounds great, Amand and Mark. Just a quick follow-up. I am we just wanted to see if we could provide an update on, your bundling efforts this year aimed at some of the specific hosting customers. Aman BhutaniCEO at GoDaddy00:44:55Yeah. So the bundling pricing and bundling effort this year does have a focus on presence products. Those presence products do include hosting, which sits in the core segment, and they include websites versus marketing and managed WordPress, which are part of the ANC. So just the way we approach this testing is a bit based on customer cohort and the customer engagement. It can involve term of the customer. Aman BhutaniCEO at GoDaddy00:45:18It can involve the products that customer has. But that's an area that is that continues to be an area of focus for us. Chris ZhangED - Equity Research Analyst at UBS Group00:45:26Alright. Thanks so much. Aman BhutaniCEO at GoDaddy00:45:28Yep. Operator00:45:29Our next question comes from the line of Mark Zagutowicz from Benchmark. Alex LavigneEquity Research Associate at The Benchmark Company LLC00:45:32This Alex LavigneEquity Research Associate at The Benchmark Company LLC00:45:39is Alex on for Mark. I understand you're no longer speaking to GMV, but as we think about the reduced barriers to service SMB or larger clients broadly afforded through AI driven product development and efficiencies, which clearly highlights your differentiated signal, would you characterize or qualify the upmarket opportunity today relative to twelve months ago, especially as Arrow Index is your top of funnel exposure away from domains? Thank you. Aman BhutaniCEO at GoDaddy00:46:05Yeah. So, you know, as you know, we we've got a commerce offering that's growing, and I talked about it in the prepared remarks even this time that the new offerings sort of expand our one stop shop. You know, I would say maybe a couple two two years ago, we didn't really have an offering. Today, we have a very compelling offering. For the micro business, we're edging up to, you know, a business that sells a million dollars or just above that, and there's plenty of opportunity above that. Aman BhutaniCEO at GoDaddy00:46:30For now, we continue to be very focused on our existing customers, serving their needs very well, and continuing to evolve the product suite and keeping the pricing competitive. So that that's our current strategy with commerce. And, you know, it's great that we're able to grow GPV in a healthy manner and be able to do it at, I would say, you know, very, very efficiently because we have access to our customer base, and our customers love working with us, and they accept the new offering we delight. Alex LavigneEquity Research Associate at The Benchmark Company LLC00:46:58Got it. Very helpful. Thank you. Aman BhutaniCEO at GoDaddy00:47:00Thank you. Operator00:47:01Our next question comes from the line of Brent Thill from Jefferies. Brent, please go ahead. Analyst00:47:10Hi. This is John again for Brent Thill. Thanks. Just have to wait for the unmute button to pop up. Tim, two questions. Analyst00:47:17One, on the I think at the dinner last year, you know, you talked about Aero maybe also helping with the pros, you know, and maybe it'll be on the managed WordPress side. I'm wondering if you could talk about, you know, how that's going, how are some of your, you know, more professional developer type users responding to it. And then second question was related to the ANC bookings growth. You know, it's it was a little bit slower than revenue growth this time, and I and I I guess that the comp was tougher, but I'm wondering if that's the pattern now. I mean, the last year for first three quarters was running faster than revenue growth. Analyst00:47:53So if you could talk about dynamic, it'd be great. Thank you very much. Aman BhutaniCEO at GoDaddy00:47:57Yeah. On managed WordPress, I can take that, and Mark can follow on the second part. We have a couple of great products that use Arrow's capability. We have the site optimizer. We also have a new editor that uses Arrow capabilities, allows customers to build a managed WordPress site despite talking to to the to the agent about it, the sort of, like, a chat interface. Aman BhutaniCEO at GoDaddy00:48:18So those those products are now in the market. It it it, of course, takes a little time to, you know, get the word out and sort of the go to market on these things, But we like the products. We like the starting point. It's just very, very early, in that area. You know? Aman BhutaniCEO at GoDaddy00:48:30We as you well know that we started with Arrow with the independent customer, with the do it yourself customer, and that was our focus, you know, for the most of the first year. But, you know, we have those new products that we just showcased at the dinner, and we're excited about getting them to more customers. Mark McCaffreyCFO at GoDaddy00:48:46Yeah. And like we said on the bookings, you know, bookings represents cash receipts. We get in the quarter. We've we've talked about our free cash flow targets and reaffirming them for the year. So we feel really good about the pace. Mark McCaffreyCFO at GoDaddy00:48:57No doubt, Q1 bookings compared to a Q1 bookings number is tougher than the revenue comps we have this year. You know, we don't guide the bookings, but, you know, we we expect revenue to grow in the mid teens for a and c. So, you know, we continue to be good with the progress. We continue to be good with the the the what it's generating for us, and we continue to be good with the targets that we put out there. Analyst00:49:20Thank you. Operator00:49:23Our next question comes from the line of Robert Colbreath from Evercore ISI. Robert, please go ahead. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:49:30Hi. Thanks. Great to hear you confirm the the sort of services skew within the customer base overall. But just wondering, specifically within the commerce business inside a and c, does that dynamic sort of hold true as well that that that, you know, there's a skew towards services businesses within your your commerce business within ANC? And then second one I've been getting questions on is just related to Office three sixty five or some of the other Microsoft products. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:49:55I think that they rolled out, some price increases in February for consumers, but now it sounds like, there there was one also for commercial products in, April. So just wondering if if that was sort of baked into your guide, previously or if that's incremental at all to your view, for 25 bookings. Thanks. Aman BhutaniCEO at GoDaddy00:50:14Yeah. For our commerce customers, you know, since the largest source of customers into our commerce offering is our base of customers, you know, it naturally sort of have a tendency to skew towards services customers. Right? So, you know, we we feel that there is what's the best way to say? We we we feel that there's no nothing to sort of say that differentiates our commerce customer from our broader base. Aman BhutaniCEO at GoDaddy00:50:40Let me let me put it that way. Right? Because we are going to the base for our commerce customer. And in terms of Office three sixty five, we have a long term relationship with Microsoft. It's a contractual relationship. Aman BhutaniCEO at GoDaddy00:50:51So, you know, the sort of price increases on their side don't directly impact us. You know? Again, we've we've been working with them for a decade now, and we're very happy with that relationship. Robert CoolbrithVice President, Internet Equity Research at Evercore ISI00:51:01Okay. Great. Thank you. Operator00:51:04Next question comes from the line of Naved Khan from B. Riley. Naved, please go ahead. Naved KhanManaging Director - Equity Research at B. Riley Securities00:51:11Great. Thank you. Two two questions, please. One on gross margin. I noticed the q one gross margins dipped a little bit more than as usual, and wondering if there's anything there to point out, and should we expect margins to improve sequentially from here on? Naved KhanManaging Director - Equity Research at B. Riley Securities00:51:30And the other question I have is around the digital marketing suite, which you guys introduced last year. What kind of attach rates are you getting on that product? Thank you. Mark McCaffreyCFO at GoDaddy00:51:42Right. Thanks, Naved. On the on the gross margin, it's within the parameters we we talk about. You know, we always say 64, give or take a hundred basis points depending on the product mix, and and that that that thesis still holds true for us. Any given quarter could shift a little bit based on that product mix, whether it's between core platform, ANC or even within the product mix within those separate groups. Mark McCaffreyCFO at GoDaddy00:52:05Nothing to call out. We still are making progress on our normalized EBITDA margin, happy with our ability to expand it and looking forward to hitting our targets in 2026. Aman BhutaniCEO at GoDaddy00:52:15Yeah. And just quickly to touch on digital marketing suite. You know, not nothing to share. It's so small. Doing well. Aman BhutaniCEO at GoDaddy00:52:22Lot lots to do there over the next few years to make it a bigger bigger part of our offering. Naved KhanManaging Director - Equity Research at B. Riley Securities00:52:28As as you on on the digital marketing suite, Aman, as you think about the bundling and pricing, there a sizable opportunity with with that offering, or how should we be thinking about it longer term? Aman BhutaniCEO at GoDaddy00:52:42Yeah. Now it's a you know, without going into any one product, the the marketing suite obviously is an opportunity for us to bundle differently than we do today. Right? And it but it has to go through the testing, and we have to be able to find the right customer boards sort of attach it to. It is one of the many options that we have. Aman BhutaniCEO at GoDaddy00:53:01There there are some that are better options than others. We just have to work through the pipeline of the tests. So it it's great. It's there, and, you know, hopefully, we'll talk about it more over the next few quarters. Naved KhanManaging Director - Equity Research at B. Riley Securities00:53:12Thanks so much. Aman BhutaniCEO at GoDaddy00:53:14Thank you. Operator00:53:15That concludes our call. Let me just turn it over Operator00:53:17to Ramon for closing remarks. Aman BhutaniCEO at GoDaddy00:53:18Well, thank you all for joining, and a big thank you to all GoDaddy employees for another fantastic quarter, and we'll talk to you next quarter.Read moreParticipantsExecutivesChristie MasonerVP of Investor RelationsAman BhutaniCEOMark McCaffreyCFOAnalystsElizabeth PorterAnalyst at Morgan StanleyYgal ArounianDirector - Internet Equity Research at CitiVikram KesavabhotlaSenior Research Analyst at Robert W. Baird & CoTrevor YoungAnalyst at Barclays CapitalAlec BrondoloDirector - Equity Research at Wells FargoKen WongManaging Director & Senior Analyst at Oppenheimer & Co. Inc.Josh BeckManaging Director at Raymond JamesBradley EricksonEquity Analyst - Internet at RBC Capital MarketsElla SmithAnalyst at JP MorganChris ZhangED - Equity Research Analyst at UBS GroupAlex LavigneEquity Research Associate at The Benchmark Company LLCAnalystRobert CoolbrithVice President, Internet Equity Research at Evercore ISINaved KhanManaging Director - Equity Research at B. 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