GoDaddy Q2 2025 Earnings Report

GoDaddy EPS Results

• Actual EPS: $1.41
• Consensus EPS: $1.34
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $1.01

GoDaddy Revenue Results

• Actual Revenue: $1.22 billion
• Expected Revenue: $1.21 billion
• Beat/Miss: Beat by +$10.42 million
• YoY Revenue Growth: +8.30%

GoDaddy Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 5:00PM ET

GoDaddy (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. GoDaddy Inc. was founded in 1997 and is headquartered in Tempe, Arizona.

GoDaddy Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: GoDaddy raised its full‐year 2025 free cash flow guidance to approximately $1.6 billion, reflecting 21% year‐over‐year growth and a >1:1 conversion of normalized EBITDA to free cash flow.
• Positive Sentiment: In Q2, total revenue grew 8% to $1.2 billion—surpassing the high end of guidance—with A&C revenue up 14% and core platform revenue up 5%, while normalized EBITDA margin expanded by nearly 200 basis points.
• Positive Sentiment: The cohort spending over $500 annually now represents ~9% of the base, delivering near‐perfect retention and driving ARPU up 10% to $230.
• Neutral Sentiment: GoDaddy is piloting agentic AI across Ask Arrow, AI‐driven coding and seamless experience experiments, laying the groundwork for enhanced customer interactions, though broad monetization timing remains to be seen.
• Negative Sentiment: In Q4, GoDaddy will no longer serve as the .co registry provider, leading to an anticipated ~50 basis point bookings and revenue headwind primarily in that quarter.

Presentation

[Christie Masoner, VP & Head - IR at GoDaddy]

Welcome to GoDaddy's second 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 will open up the call for your questions.

[Christie Masoner, VP & Head - IR at GoDaddy]

If 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 to our Investor Relations site at investors.godaddy.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 Masoner, VP & Head - IR at GoDaddy]

These 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, 08/07/2025, 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 Bhutani, CEO & Director at GoDaddy]

Good afternoon, and thank you all for joining us today. At GoDaddy, our mission is to empower entrepreneurs and make opportunity more inclusive for all. We draw inspiration from the ingenuity of our customers who are the people building businesses, chasing dreams, and positively impacting their communities. As our small business survey consistently shows, they are a resilient group and remain optimistic about their own businesses even when navigating increased complexity. That's why we are committed to delivering the critical technology they need combined with the human guidance that is empathetic, accessible and grounded in their success.

[Aman Bhutani, CEO & Director at GoDaddy]

It is this combination that helps our customers thrive and grow with confidence. In the second quarter, our disciplined execution delivered strong results, reflecting the power of our strategy of attracting and retaining high intent customers who generate high lifetime value for GoDaddy. ANC bookings grew 12% against the toughest comparison for the year, and normalized EBITDA margin expanded nearly 200 basis points, reflecting the operating leverage in our model. We made strong progress towards GoDaddy's financial north star of maximizing free cash flow with growth of 21%. Reflecting that momentum, we are raising our full year 2025 free cash flow guidance to approximately 1,600,000,000.0.

[Aman Bhutani, CEO & Director at GoDaddy]

As a leader in bringing AI to micro businesses, we are energized by the transformative potential that AgenTik AI is unlocking for Aero and our customers. This is more than an evolution. It is a leap forward. This quarter, we began testing a new conversational experience that lays the foundation for something truly groundbreaking, an agent that can intelligently complete complex, multistep tasks for our customers, freeing them to focus on what matters most, building their dreams. Imagine a world where entrepreneurs can ask Arrow anything across the full spectrum of our offering and receive instant contextual support seamlessly connected to our expert guides when they need a human touch.

[Aman Bhutani, CEO & Director at GoDaddy]

Brought to the customer experience as Ask Arrow, its goal is to be a fully guided and proactive digital experience powered by agentic AI and elevated by empathetic care. The short video you saw at the start of this call offers just a glimpse into the future we are building for our customers. Behind the scenes, our operations are undergoing a fundamental shift powered by AI. Across the company, employees are embracing AI and agentic tools to accelerate velocity of execution. In one recent example, two interns leveraged our internal agentic platform to build an agent that autonomously diagnoses anomalies in experiments, reducing a process that once took days to just minutes.

[Aman Bhutani, CEO & Director at GoDaddy]

From engineering to accounting, AI and agentic AI is reshaping how work gets done by transforming roles, unlocking efficiency, and enabling our teams to focus on higher impact outcomes. We can't wait to bring all of this to life for you as well. We look forward to sharing a deeper look at Arrow's agentic capabilities at our investor dinner later this year. What we are building is exciting, and we are off to a great start. As always, I also want to share a bit more about our growth initiatives starting with pricing and bundling.

[Aman Bhutani, CEO & Director at GoDaddy]

With half the year behind us, we feel confident that this initiative is on track and delivering across both ANC and core platform for 2025. At the same time, we are actively executing against our 2026 road map, testing and scaling new offerings that represent the next phase of this multiyear journey. These new bundles are based on new partnership capabilities, and the early results have been promising. Pricing and bundling is starting to benefit from our increased code writing velocity using AI. As an example, we recently concluded a test integrating a new partner product into GoDaddy's technology stack over a matter of weeks rather than months.

[Aman Bhutani, CEO & Director at GoDaddy]

Remarkably, nearly 100% of the code was generated by AI and guided by a senior engineer. This was work that would typically have required a small team for a few months. While the exploration of AI driven coding is ongoing across many use cases, This example demonstrate the transformative potential of AI driven coding in pricing and bundling. Scaling this type of result across our teams would create a step function change in velocity, enabling us to test new bundles at a pace many times faster than today. Our next major initiative is seamless experience, an ongoing large scale experimentation machine designed to enhance the entire customer journey from landing page and initial search all the way through to purchase and renewal.

[Aman Bhutani, CEO & Director at GoDaddy]

It is focused on improving discovery and reducing friction, saving our customers time and effort. Through this initiative, we boosted conversion rates, strengthened attach and drove better renewal performance, outcomes that are scaled translate into meaningful financial impact now and in the future. The bookings generated from seamless experience have scaled in an impressive manner, and this initiative has an equally strong road map as pricing and bundling, and its impact and contribution is becoming increasingly comparable. Turning to our commerce initiative, we surpassed a significant milestone, reaching more than 3,000,000,000 in annualized gross payments volume on continued strong conversion of our existing base of customers, a clear signal that our strategy is resonating. Equally exciting, our focus on delivering powerful high value tools is gaining traction.

[Aman Bhutani, CEO & Director at GoDaddy]

Our newly launched rate saver, a credit card surcharging feature that can reduce effective rates from merchants by more than 50% is demonstrating promising early momentum with attach rates climbing. Last but never least, aero discovery and engagement continues to grow, and we expect it to increasingly shape and monetize our future customer cohorts. And our strongest cohorts are ahead of us. Notably, ARO cohorts consistently outperformed non ARO cohorts across key metrics, including average order size, multiproduct attach rates and renewals, serving as a catalyst for the growth in higher lifetime value customers. These gains are compounding, creating long term leverage in our model.

[Aman Bhutani, CEO & Director at GoDaddy]

We are deeply focused on Arrow's continued evolution into a true differentiator that accelerates customer success and drives sustained value across the entire GoDaddy ecosystem. In closing, we are proud of the progress we made in the second quarter as we push our strategy forward, making meaningful progress towards our three year targets outlined at our Investor Day in 2024. Our results reflect the impact of disciplined execution and the growing traction behind our priorities of expanding high intent customers, capturing more wallet share and driving greater lifetime value. As we enter the second half, our teams are focused, our path forward is clear, and our business is well positioned to accelerate the pace of innovation that delivers long term value to our customers and shareholders. With that, here's Mark.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Thanks, Aman. Good afternoon, everyone, and thank you for joining us. Q two was another strong quarter for GoDaddy, underscoring the resilience of our customers and the mission critical solutions that differentiate us in the market. We delivered a and c revenue growth of 14%, expanded normalized EBITDA margins to 31%, and we grew free cash flow to $392,000,000.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Our consistent performance reinforces the strength of our strategy and the discipline of our execution as we progress toward our North Star of maximizing free cash flow over the long term. Total revenue grew 8% to $1,200,000,000 on both a reported and constant currency basis, surpassing the high end of our guided range. Annual recurring revenue grew 9% to $4,200,000,000 and international revenue grew 11%. For our high margin A and C segment, we drove 14% growth in revenue to $464,000,000, in line with our guided range. A and c is now approaching an annualized run rate of approximately $2,000,000,000, nearly doubling over the past four years on the ongoing adoption of our subscription solutions.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

A and C revenue now accounts for 38% of total revenue, which is an all time high, up from 36 at the same time last year. Segment EBITDA margin expanded nearly a 100 basis points to 44%. Our core platform segment delivered revenue growth of 5% to $754,000,000, exceeding our guide. These results were driven by growth in primary domains, up 7%, above units and pricing, and bundling initiatives, alongside continued momentum in aftermarket, which also grew 7%. Segment EBITDA margin expanded by over 200 basis points to 33%.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Moving to profitability. Normalized EBITDA grew 15% to $382,000,000, delivering an expanded margin of 31%, up nearly 200 basis points and in line with our guide for the quarter. The expansion was driven by sustained operational discipline with leverage gains reflected across our p and l. Total bookings grew 7% on a reported and constant currency basis to $1,300,000,000 against the toughest compare of the year. Within that, A and C bookings grew 12% and core platform bookings grew 3%.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

As a reminder, bookings primarily represents cash collected during the period. Importantly, free cash flow grew an impressive 21% to $392,000,000, reinforcing the strengthening of our customer cohorts and the increasing conversion of normalized EBITDA to free cash flow at a ratio that is now greater than one to one. Our go to market strategy is focused on attracting high intent customers who adopt multiple products and generate high lifetime value. Over the past year, cohorts that spend over $500 annually grew meaningfully, and that momentum carried through into q two. This group now represents nearly 9% of our total base, and Arrow is playing a pivotal role in its evolution by intelligently guiding their journey.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

These customers are expanding average order size and fueling GoDaddy's impressive total ARPU growth up 10% to $230. What's more, this cohort demonstrates near perfect retention. The combination of rising ARPU and exceptional retention clearly illustrates the durable pathway we build toward a growing base of sticky, higher lifetime value customers. On total customers, we have largely moved beyond the impacts of eliminating deep discounts and divestitures. That said, we continue to see some residual pressure from migrations as they move through their initial renewal cycles.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Excluding this remaining headwind, customer count has grown in each of the last two months. As these pressures subside and we benefit from strong conversion of higher intent cohorts, we expect a return to customer growth later this year. This momentum underscores the effectiveness of our strategy and the long term value creation embedded in our integrated platform. On the balance sheet, we exited the quarter with $1,100,000,000 in cash and total liquidity of $2,100,000,000. Net debt was $2,800,000,000 representing a net leverage of 1.6 times on a trailing twelve month basis.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Year to date, through August 6, we have repurchased approximately $900,000,000 of our outstanding shares. Our commitment to a disciplined capital allocation framework is unchanged, and share buybacks remain a key mechanism to return value to our shareholders. As of the end of the quarter, our fully diluted shares outstanding was a 142,000,000. Looking ahead, I am pleased to share that given the strength of our performance year to date, our increasing profitability to cash flow conversion, and the proven durability of our business model, we are raising our full year free cash flow target to approximately $1,600,000,000, representing growth of over 18%. Additionally, we are raising our full year 2025 revenue outlook that we provided in February.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

We now expect total revenue to be in the range of 4.89 to $4,940,000,000 representing growth of 7% at the midpoint. For the full year, we expect FX neutral bookings growth to be in line with revenue growth. For q three specifically, we are targeting total revenue of 1.22 to $1,240,000,000, also representing 7% growth at the midpoint of the range. Within total revenue, for both Q3 and the full year, we expect applications and commerce revenue growth in the mid teens, and core platform growth in the low single digits. Regarding our outlook, I want to mention that beginning in the fourth quarter of this year, GoDaddy will no longer operate as the registry service provider for the .co top level domain.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

As a result of this change, we anticipate an approximate 50 basis point headwind to bookings and revenue, primarily in the fourth quarter. Importantly, this transition does not affect our ability to execute our strategic initiatives or deliver on our 2025 and 2026 financial commitments. For the third quarter, we are projecting a normalized EBITDA margin of approximately 32%, and we are reaffirming our full year margin expansion target of a 100 basis with continued sequential expansion each quarter this year, exiting 2025 at 33%. We expect normalized EBITDA to maintain greater than a one to one conversion to free cash flow for the full year. Our capital allocation approach remains unchanged, and we will continue to evaluate all opportunities according to our rigorous returns based framework to maximize long term shareholder value.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

In closing, we remain more confident than ever in the strength of our model and our ability to execute toward our targets. Our second quarter results reflect GoDaddy's solid foundation powered by disciplined operations, consistent innovation, and the growing impact of our strategic initiatives. From enhancing and expanding AI powered experiences and solutions like Arrow to attracting higher value customers, we are driving sustainable and profitable growth across the business. With nearly thirty years of consistent growth through a variety of macroeconomic backdrops, GoDaddy is built for durability and long term value creation. That strength is anchored by a high quality recurring revenue base, disciplined cost management, robust free cash flow generation, and a strong balance sheet.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Looking ahead, we are fully committed to delivering on our investor day targets of $4,500,000,000 plus in cumulative free cash flow generation, six to 8% annual revenue growth, and expansion of our full year normalized EBITDA margin to 33% by 2026. With our continued momentum, we remain excited about our path forward. With that, I'll hand it back to Christy to open up the line for questions. Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Thanks, 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 Willow Miller on for Arjun Bhatia at William Blair. Will, please go ahead.

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

Hi, team. Thanks for taking our questions. So maybe we can start with the A and C growth. How should we think about the desal in the quarter? And does this continue through through 2025?

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

Just trying to figure out if there's a trough considering the Arrow strategy is layering in, which should help drive average order size and attach in the segment. And then maybe just a follow-up. What are you seeing in the latest cohort of customers who experience Arrow? Is this helping with the multiproduct adoption?

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. Thanks thanks, Will. No no trough. Right? We we Okay.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Are happy about the momentum of a and c. And overall, as a business, we think that the, you know, bookings and revenue will be on par for the year absent any impact of of f FX. You know, ANC now is at a run rate of about $2,000,000,000 for bookings and revenue. We're really proud of the momentum there, and it's a growing business. It's at 38% of our total business today, and we're looking at it growing to about 40%.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

So we we couldn't be more excited about the momentum within a and c. And, you know, hey. It it was a tough quarter compared considering the growth last year in a and c was upward of 24.

[Aman Bhutani, CEO & Director at GoDaddy]

And maybe I'll just add below that the comps do get easier in the second half of the year for a and c growth. So, you know, you you can keep that in mind.

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

Yep. That's helpful. Thank you.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

On the co I also wanna you had a question on the cohorts related to Arrow. And and listen. We're we're seeing these cohorts. They're coming in. They're converting at higher rates.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Their average order size is being driven up. It's drive driving our increase in, and we have a near perfect retention rate with them. So, you know, the strategy is working. We're getting to those high intent customers, and we're really pleased with the momentum it's providing in the business, not only in a and c, but also in our core platform.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah.

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

Okay.

[Aman Bhutani, CEO & Director at GoDaddy]

On the customers that are sort of over $500 customers, that's where, you know, Mark's talking about the near perfect retention, but that's being driven by the attach that Aero facilitates. So, you know, I think you talked about it's a driving attach. It's a dry driving average order size that we continue to see ARO cohorts outperforming non ARO cohorts every month.

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

That's great to hear. Thank you.

[Aman Bhutani, CEO & Director at GoDaddy]

Yep. Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Josh Beck from Raymond James. Josh, please go ahead.

[Josh Beck, Managing Director at Raymond James]

Thank you for, for taking the question. I I have a higher level question, you know, probably for Ahmad. But, when we think about, you know, the Agentic web and this kind of potential, you know, new front end, how do you think about, you know, kind of making sure that the website ecosystem and app ecosystem remains relevant? I think, you know, in some ways, investors wanna make it, know, you a little bit cut and dry. Like, it's it's either the web or something else.

[Josh Beck, Managing Director at Raymond James]

But just kind of, you know, just big picture, a high level, like, you know, how do you see this affecting the way that, you know, consumers are gathering information and and and what does this mean for GoDaddy?

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Thank you, Josh. I I think, you know, I'm a huge proponent and very bullish on AI, generative AI, and, agentic AI as well. And I think these new capabilities give companies like ours that have access to over 20,000,000 customers brand awareness across the world, the ability to provide, you know, a whole set of products to our customers, but woven together in a manner that's simpler for them to use, more simple than they have ever ever seen before. And we have been a leader and innovator in the AI space for micro businesses from the very beginning.

[Aman Bhutani, CEO & Director at GoDaddy]

Right? I personally am super involved with and I have been for years at the company with how we work with AI and now how we work with AgenTik AI and how it's transforming our customer experience. And you'll see that with Ask Arrow if you were able to catch that little video at the beginning of this call. We're bringing forward a new interaction pattern for Arrow, which just makes it even more easy or seamless or you can say conversational with the customer. And we're even working to bring in sort of AI and human expertise together, so it's seamless between between the two.

[Aman Bhutani, CEO & Director at GoDaddy]

You know, for me, when I think about GoDaddy, there are two areas of of opportunity. One is what we can do for our customers, which is make things much, much easier for them, which leads to attaching more products, which leads to us being able to, you know, expose them to higher SKUs and so on. But, also, internally, the company transforming where every role in the company is empowered with AI, and those roles evolve and change. And, sure, for now, there's a lot of exploration and utilization of AI, and AgenTeq is growing. But as those two curves cross, I think what you're gonna see is a step function opportunity for companies like ours to be more efficient and provide great products to our customers.

[Aman Bhutani, CEO & Director at GoDaddy]

And we'll we'll actually show you some of this at the investor dinner, later this year. So I'm super excited to sort of bring it all to life.

[Josh Beck, Managing Director at Raymond James]

It's it's super, super exciting. Wanted to, you know, also ask just on the pricing, kind of learning curve from Arrow All Access and certainly the the Arrow Plus logo maker. You've, you know, seemingly done a lot of testing. Do you feel like you've kind of got that at a at a point where this is somewhat of a stable, you know, pricing pattern moving forward? Is it still in heavy experimentation?

[Josh Beck, Managing Director at Raymond James]

Just kind of curious on on the learnings and and how that's influencing, you know, where where the pricing can go.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. You saw us test all access, but you're also seeing different forms of AeroPlus. If if you're watching the different experiments on the site, it's still all very, very early. There are some paths where we're having great success in introducing AeroPlus and can't customers intuitively understand it and go for it. And on on other paths, what we're finding is more education is required, sort of more easing into the path is required.

[Aman Bhutani, CEO & Director at GoDaddy]

So we'll you know, AeroPlus is still very new, just launched in q one. So you'll continue to see us testing it. But overall, we're we're very excited about where Arrow is in terms of creating a higher average order size to attach, where it's getting engagement into multiple products with us, how it's helping us reach sort of that higher end customer and filling a broader set of intents for them. And we can see that, you know, that naturally leads to AeroPlus over time. So, yes, continue to be super excited about that.

[Josh Beck, Managing Director at Raymond James]

Super helpful. Thanks, team.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Trevor Young from Barclays. Trevor, please go ahead.

[Trevor Young, Director & Senior Internet Equity Research Analyst at Barclays Capital]

Great. Thanks. First one for me. On the .co registry change, appreciate the colors sizing that for us. Is there a change here in thinking on whether you want to be a registry versus a registrar?

[Trevor Young, Director & Senior Internet Equity Research Analyst at Barclays Capital]

Or is this just a one off related to that specific country code? And then, Mark, on the 3Q EBITDA margin and full year margin unchanged, it implies diminished margin improvement in the back half versus about two points in the front half. Are there some cost layering in here that we need to be mindful of or some mix differential or anything like that? And then bridging that to the raised free cash flow guide, is there something working capital wise that we need to be mindful of? I think I heard you say that you're now expecting greater than one to one EBITDA to free cash flow conversion. So just hoping you can unpack that. Thank you.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Alright. No problem. Trevor, no change in our philosophy. You know, this was a one off situation where, you know, went out to rebid and the profitability that metrics that were needed to continue in this relationship just weren't there for us. So I I would say it's more on the strategy of our profitable growth and making sure we stay disciplined to our framework versus a change in philosophy.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

On the on the diminished margin expansion, no nothing really to call out here. We are doing well. We're expanding sequentially, quarterly. We're on target for a '33 exit. You know, our comparisons for the margins last year in the second half are a little harder than they were in the first half.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

There's nothing to call out expense wise. And on the free cash flow, it's being driven by our strong bookings and the cohorts coming in. Remember, bookings is the the the beginning of our free cash flow, the top line of our free cash flow. And we're seeing a lot of strength at the at the top of that funnel related to the cohorts we're bringing in. They're coming in at higher average order size, better retention, and that's helping us on our free cash flow.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

So positive momentum in the business and operations was the driver. Nothing to really call call out on working capital or or unique expenses in the second half.

[Trevor Young, Director & Senior Internet Equity Research Analyst at Barclays Capital]

Great. Thank you, Mark.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Vikram Kesavabhotla from Baird. Please go ahead.

[Vikram Kesavabhotla, Senior Research Analyst at Robert W. Baird & Co]

Can you hear me okay?

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yes. Hey, Vic.

[Vikram Kesavabhotla, Senior Research Analyst at Robert W. Baird & Co]

Okay, great. Hey, thanks for taking the questions. My first one is on Ask Arrow. I appreciate the video that you shared at the top of the call and all the commentary around the opportunity from AgenTik tools. I'm just wondering if you could talk more about how you're thinking about the timeline for bringing these solutions to market across your customer base and just what some of the initial feedback has been from the tests that you've been running so far?

[Vikram Kesavabhotla, Senior Research Analyst at Robert W. Baird & Co]

And then my second question is on the customer account. I appreciate all the color on some of the underlying trends there. But on a headline basis, I think you said you still expect to return to growth later this year. And I'm wondering if you can put a finer point on the timeline there, if that's going to happen in the third quarter or the fourth quarter? What you're seeing at the top of the funnel or or other signs that give you confidence that you'll return to growth this year? And I'll leave it there. Thanks.

[Aman Bhutani, CEO & Director at GoDaddy]

Thanks, Vic. Let me start with Ascara. Ascara is actually already being tested on a few pages on the site. So what happened is we replaced that little button at the bottom where customers can ask questions with Ask Arrow. And the initial tests have shown that customers actually like clicking on that button.

[Aman Bhutani, CEO & Director at GoDaddy]

It it it attracts their attention, and, you know, it opens up a model and a conversational experience for them where they can do a few things. You know, now having this initial success where the user interaction pattern seems good and is tested, we're gonna layer in more and more agentic capabilities into Ascuro over the next quarter. So it's very much right in front of us, you know, over the next few months. And and the idea is to keep bringing in more and more capabilities as we see what customers are exploring and what sort of works well. I I think folks probably understand this.

[Aman Bhutani, CEO & Director at GoDaddy]

You know, the AI capabilities, they're they're not deterministic. It's a probabilistic modeling work. And so you have to test it. You have to see that the customer is getting a a a fantastic interaction, and then you sort of roll it out and handle more and more use cases. The thing I would say I wanna ask you is, you know, we we are talking about a real set of agents that actually find and resolve issues or do sales or all of that on the customer's behalf.

[Aman Bhutani, CEO & Director at GoDaddy]

We're not talking about any agent that says, oh, if you wanna do this, you can find it here. You know, we're talking about very, very real AI agentic technology that really simplifies it for our customer.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. And, Vic, on the customer count, just, you know, hey. Our strategy is around going after these high intent customers, and we're seeing improved customer count around the those that are spending more than $500 with us. And and these this cohort is having meaningful contribution to our growth. We're seeing that, like we said, the higher average order size, near perfect retention.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

We're it's working exactly the way we wanted to, if not a little ahead of schedule. On on the total customer count, yes, we are seeing some tail off effect of the migrations as we get through the renewal cycle. Now a reminder, these are mostly one product customers. A lot of time, they're low cost domains. We expect to see it through the rest of the year.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

We're seeing positive signals in the last couple months, but not nothing to call out on the exact timing of when we will say it positive. But again, our focus is on that high intent customer that's gonna spend more than $500 with us.

[Vikram Kesavabhotla, Senior Research Analyst at Robert W. Baird & Co]

Okay. Great. Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question is from the line of Ken Wong from Oppenheimer. Ken, please go ahead.

[Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.]

Fantastic. Thanks for taking my question. I guess my question is kinda merging Vic's and Josh's a little bit. You know, this is probably less of a headwind for you guys versus your peers, but are you guys seeing any change in terms of the the top of funnel? Are you seeing any change in share shift in terms of potentially AI, vibe coding tools?

[Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.]

You know, maybe, you know, taking some share on on kinda your your your web presence products. Any any color there would be great, Aman.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Soup look. I'm super excited about AI and agentic capabilities making it easier for customers, whether that's to find domains or build websites or, you know, any of the features that we talk about. The main point I would make is, one, we're not seeing any direct sort of issue. Our our strategy is to attract a high intent customer.

[Aman Bhutani, CEO & Director at GoDaddy]

We're seeing strong top of the funnel. We're seeing better sort of year over year conversion of those customers, and we're seeing higher attach, higher average order size. So that that's what the metrics are saying. But if I want to sort of look forward the next year or next two years, maybe the context that I would share is that I've been involved deeply into this sort of within our with our teams for many years now. And the things that are possible today, a year ago, I don't think we would have thought possible.

[Aman Bhutani, CEO & Director at GoDaddy]

So if if we're looking at things today and saying, hey. X y z is now made. That's not in my mind, that's not the case at all. We're at the beginning of this new way of working, which is going to be powered by AI, and there's gonna be a lot of movements over the next two to three years as the AI capability improves, as it scales, as it, you know, gets sort of put into every piece of how we work. And to me, that's a massive opportunity.

[Aman Bhutani, CEO & Director at GoDaddy]

Right? Are multiple companies going to use it? Absolutely. But GoDaddy has fantastic brand awareness globally. We have a big customer base.

[Aman Bhutani, CEO & Director at GoDaddy]

We have a lot of customers coming to us, new customers coming to us every year, and we have the opportunity to both build these tools ourselves because of how our technology capability or software development platform has improved. We also have the ability to use our balance sheet and financial position if we want to really provide the best for our customers. And that's, I think, a great opportunity for the company.

[Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.]

Got it. Understood. Appreciate the insights there. And then and then maybe somewhat building on that, I guess, do do you do you feel the the the the value or the or having the starting point at the domain, does that strategic value increase going forward? Yeah.

[Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.]

Maybe a little high level and maybe a little far out, but I'm sure something you guys have noodled on internally.

[Aman Bhutani, CEO & Director at GoDaddy]

You know, we love our position as the world's largest domain registrar. We love our position that the world thinks of GoDaddy to think of domain names. Because every idea when people have the idea, the first thing they think about is, oh my god. Let me protect the name of that idea. Then they do that by buying a domain name.

[Aman Bhutani, CEO & Director at GoDaddy]

That gives us access to those customers when their ideas start. In fact, we see so many ideas that never start because customers search for things. They may not even become our customers, but we are gathering that data all the time. And given our large scale, we get to see search traffic or what people are searching more than probably anybody else. So, you know, our core model of starting with the domain name, making that funnel stronger has been a tremendous advantage for the last twenty eight, thirty years.

[Aman Bhutani, CEO & Director at GoDaddy]

And as we look forward, it's only becoming stronger because we're we've taken the domain name, and we work to reinvent it to say, when you start with the domain name with Arrow, you're gonna get all these other things too. So you're not just starting with the domain name. You're starting almost with sort of set of set of things that start your business, almost like a business in a box just with a domain name.

[Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.]

Fantastic. Thanks a lot, guys.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Egal Arounian from Citi. Egal, please go ahead.

[Ygal Arounian, Director - Internet Equity Research at Citigroup]

Hey. Good afternoon, guys. Thanks for taking my questions.

[Aman Bhutani, CEO & Director at GoDaddy]

How are you doing?

[Ygal Arounian, Director - Internet Equity Research at Citigroup]

Maybe one so just on Arrow and and conversion and monetization updates and, you know, when when you first roll it roll out Arrow, kind of the the the big feature was the creating the initial landing page when you register for a domain and the expectation of that landing page over time turns into into more. I mean, it sounds like you're making progress there, $500 customers, but are are you seeing better conversion in those those landing pages turn into real sites and more products being attached? Can you just update us on on that flow and and how that's been trending?

[Aman Bhutani, CEO & Director at GoDaddy]

Yes, Sigal. You know, the percentage of customers that end up, you know, paid website product with us, the path for that more and more over the last year has become through Arrow. And, for a few quarters, we shared that data, but now it's just sort of gotten up and up and up. Where customers come in, they start with a domain name. We build them the one paid site.

[Aman Bhutani, CEO & Director at GoDaddy]

You know, a good percentage of customers take that. They love it, and that makes it easier for us to upsell the paid website. And more and more, that paid website is driven by AI where the whole site is just created for the customer, which which basically disrupts this whole idea that customers come in and they have to build a website using an editor and a template. And it's more about, no. You've got the domain name.

[Aman Bhutani, CEO & Director at GoDaddy]

From that name, we have done a good job of understanding what your idea is about, and we give you, you know, seven, eight options. If you pick one of those options that tells us very clearly what it is that you're in, and now we have a one page site, well, we can take all of that information and, of course, the information we have from many other customers and turn that into a paid product or paid website for you. So that's the path we're going down, and it's just more and more customers end up with a paid product going through the Aeropad.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. And, you know, just taking a a step up. Right? If you think about volume for us being stronger retention rates, you know, better attach, new customers coming in and buying and converting higher, you know, that is doing really, really well for us. The other side of the equation is, you know, the pricing and bundling, giving more value and getting price for it.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

If you look at those as the two drivers, you know, the price element plus the volume element, they are contributing equally now to our growth. And that puts us in a really good spot going forward, pricing for value, but yet also getting the stronger attach retention and new customers coming in and converting at a higher rate.

[Ygal Arounian, Director - Internet Equity Research at Citigroup]

Great. That kinda segues into my second question, Mark, on on pricing and bundling and, you know, you just kinda shift it from a product to cohort lens. How's that going? You know, any learnings or maybe on the trajectory of pricing and bundling and the the opportunity going forward? Thanks.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. The shift to taking the customer cohort has been fantastic. You know, we we have approached it from the customer lens, and the biggest impact that or the biggest thing that's opened up for us is we're look we're able to look at the full relationship with the customer and really help our renewal rates overall because we want to help our customers succeed, and we don't wanna take price if that's gonna lead them to depart. We wanna help them along. We wanna get them the tools that will make them successful.

[Aman Bhutani, CEO & Director at GoDaddy]

And once they are successful, of course, we participate in their success, and that's what the value based offer does for them.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. And and and and to inter interject.

[Aman Bhutani, CEO & Director at GoDaddy]

I know

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

you have more to go. I am jumping Yeah. But, you know, the great part about this cohort that we're seeing it now contribute to both ANC and core platform, and we saw some of that growth start to show up in the domain element of grow core platform because we were bundling the domain with certain things. So so, again, those cohorts are really starting to work, and I know we're we're talking we're thinking about next year already.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Exactly. What I was going to add is that both for pricing and bundling and seamless experience, we feel very good about the road map in front of us because right now, we are testing the bundles that are going to go live in q four of this year or q one of next year that are going to be the pricing and bundling initiative next year. So we we go into this through a lens of experimentation with a lot of confidence. And the same is true for seamless experience where it it is a program that is literally based on thousands of tests that get run that improve the customer experience at many, many, many nodes, allowing us to test very different experiences.

[Aman Bhutani, CEO & Director at GoDaddy]

And we are getting better and better at that. And that's something I called out in my prepared remarks that the you know, if you look at the return coming from these programs, both of these programs are starting to contribute sort of in a similar manner and have great road maps in front of them.

[Ygal Arounian, Director - Internet Equity Research at Citigroup]

Great. Thank you, guys.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you all.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Brad Erickson from RBC. Brad, please go ahead.

[Brad Erickson, Equity Analyst - Internet at RBC Capital Markets]

Hi, guys. Thanks. Maybe I'll just follow on to that last one. I think security was a pretty big driver for you on the pricing and bundling last year. I guess, you're doing all these tests and you talk about the q four launch, any way to think about kinda sizing the magnitude of impact that it had? Because I think it it it I I think it it showed up in the p and l fairly well from the security side. So just how to think about that as as you roll these products out over the next twelve, eighteen months.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Probably turn to Mark a little bit, but my guess is a little early to talk about what the specific bundles would be for 2026. You know, we as we've evolved this capability, we we're a little careful about how how much detail we publicly talk about the specific bundles because they can tend to be quite unique to cohorts of customers. But I I think we'll talk about 2026 when we get to it.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. We're gonna talk about 2026, but coming back to the the the commentary I made before, when we look out at the the contribution across, you know, our our cohorts, how much is being driven by the volume element and the improvement and the, you know, the the attach and convert versus how much is being driven by, you know, pricing and bundling and that value element of it. And the fact that they're now, you know, starting to even themselves out gives you a pretty good idea that we have a good model here that's starting to contribute, and it's based on the balance between the two.

[Brad Erickson, Equity Analyst - Internet at RBC Capital Markets]

Got it. Thanks.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Alex Levine on for Mark Zagutowicz from Benchmark. Alex, please go ahead.

[Alex Lavigne, Equity Research Associate at The Benchmark Company LLC]

Hi, guys. Thanks for taking the questions. First, nice acceleration on ARPU, sequentially. I was hoping you could qualify, uptake from marketing suite or Arrow plus that may have contributed to that.

[Aman Bhutani, CEO & Director at GoDaddy]

You know, the marketing suite and AeroPlus are still pretty new products. So while we're very happy with the attach that's happening with these products and we continue to put them in front of more and more customers, Overall, there there's still small parts. I I don't know, Mark, if you

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

wanna Yeah. And, you know, I'll I'll just talk about Arrow in and of itself. We couldn't be more happy at how the strategy is working and what we're seeing at the top of the funnel and the increased convert and the ability to get to the average order size and the near perfect retention that we're getting from that cohort that is coming in. You know, Arrow plus, you know, that is still in the early stage and and things like that will contribute to Arrow overall. But right now, we're just seeing the experience driving that strong behavior at the top of the funnel.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

We see steady traffic. We see higher convert. We see better attack. We see higher average order size. And that's because the Arrow experience is taking our customers on that journey of what they need much faster, much better, and and that cohort is becoming very strong in our customer base right now.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

It's reached 9% or about 9%, and we continue to see that contributing more and more for our overall growth.

[Alex Lavigne, Equity Research Associate at The Benchmark Company LLC]

Got it. Thank you. That's helpful. And then just one last one on a high picture question. As you think about AgenTek and the opportunity that this may catalyze in our an upmarket push for you guys, perhaps something like an MCP, broader integrations there.

[Alex Lavigne, Equity Research Associate at The Benchmark Company LLC]

Just curious if you could elaborate on that, perhaps some of the milestones we should expect over the next twelve months in terms of AgenTic monetization.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. I think over the next twelve months, you can expect to see a GoDaddy that is completely enabled for AgenTic AI where Ascaro uses agent agent technology or MTP or other evolving technology that you know, if if you're asking me about these, I'm sure you know there are new standards coming out sort of every few weeks. And we expect to keep pace with them. We expect to be able to enable the GoDaddy platform for our customers and for our partners, you know, in a in a very significant way using AgenTik AI.

[Alex Lavigne, Equity Research Associate at The Benchmark Company LLC]

Very helpful. Thank you, guys.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Naved Khan from B. Riley. Naved, please go ahead.

[Naved Khan, Managing Director at B. Riley Securities]

Hi. Can you hear me?

[Christie Masoner, VP & Head - IR at GoDaddy]

We can.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Hey, Naved.

[Naved Khan, Managing Director at B. Riley Securities]

Great. So maybe just on the, you know, the commentary you had around the rate saver that delivers up to 50% savings. Just wondering how sustainable is that promo? What kind of economics we we can we can expect out of that? Any color would be would be helpful.

[Naved Khan, Managing Director at B. Riley Securities]

And then on Aero, how much of the flow at the top of the funnel is exposed to Aero today? I think sometime back you mentioned more than half the people see it, but any update on that would be great. Thank you.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Happy to provide that, Nava. On the Ratesaver product, you know, the way it works is that when the merchants adopt it, they're able to reduce their, you know, the fees they pay by by about half. So there there really isn't, I would say, a threshold. Like, it's not a promo that we're offering.

[Aman Bhutani, CEO & Director at GoDaddy]

It's actually a product feature that helps them reduce their cost. So so we expect its adoption to grow in the new cohorts where we put it forward. You know, in the new sales, customers are adopting it very, very fast, but they can understand it. They're like, that makes sense. I need that.

[Aman Bhutani, CEO & Director at GoDaddy]

I want that. That's fantastic. And in the existing base that we have, you know, we're we're also running a campaign to get existing customers, commerce customers, to to turn it on. Now this is all part of a broader strategy at GoDaddy to improve the economics, to improve the SaaS component of our commerce and payments offering. Of course, we've continued to do well on GPV, but we have put our energy toward the SaaS product so we can have a more wholesome offering for our customers.

[Aman Bhutani, CEO & Director at GoDaddy]

And our core strategy is still the same. We are we're enjoying the low CAC to go to our own customers. Our we continue to have fantastic leads. So we know our strategy is working, and we're slowly expanding our Salesforce to be able to go after more and more customers that are in our base already as we have a bigger set of features that go across both both payments, but also the SaaS offering. In terms of Arrow, practically, all customers announced new customers, especially on the top of the funnel, are starting to see Arrow in our in Arrow.

[Aman Bhutani, CEO & Director at GoDaddy]

When Mark talks about the Arrow and non Arrow cohorts, he's very much talking about those customers coming in and being exposed to Arrow. And it's become more nuanced. Customers now have more choices on how they use Arrow, and, you know, that's only developing well because we're able to better segment customers that maybe just wanna buy a domain because they wanna add it to their portfolio and don't want Arrow, but others that want Arrow. And, hence, we're able to push them through a different path and sort of get more more engagement across more products. So, you know, in terms of the rollout, you can expect Arrow to, you know, override things short period of time.

[Aman Bhutani, CEO & Director at GoDaddy]

Basically, every customer is going to be able to see Arrow. We we'll we'll continue to work on how deeply they engage, and we'll continue to work on things like ask Arrow where they engage in a different way in a conversational style, and that will work, we think, differently for existing customers as an example.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. And there's no doubt that now that all our customers at the top of the funnel are are exposed to Arrow that it is helping grow that customer base that is spending more than $500 with us because it is getting them to that attach, that average order size that's higher. So it's having real meaningful impact on our model, and that continues to be a bigger part of our customer base.

[Naved Khan, Managing Director at B. Riley Securities]

Thank you.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you, Nava.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of Elizabeth Porter from Morgan Stanley. Elizabeth, please go ahead.

[Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley]

Great. Thank you so much. I have another AI question, but maybe from a bit of a different angle. We're often hearing about how it's harder for businesses to get their website found as SEO becomes more challenging. So just kind of two questions here.

[Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley]

First, how is GoDaddy managing its own impact by s a l SEO? I know you guys have a big brand recognition, so it might not be as impactful, but just curious how diversified is traffic, any changes that you're making to the marketing strategy? And then second, what's the opportunity for GoDaddy to help its customers navigate this new world, whether it's by specific products or services that you guys can capitalize on? Thank you.

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. Of course. You know, GoDaddy is is a large man, and we we we do quite well in SEO. And we're engaged in in the work to get sort of the similar capability with with the AI LLMs as well. So so all of that makes makes sense.

[Aman Bhutani, CEO & Director at GoDaddy]

And, of course, you know, everyone can see that Google has evolved and, you know, that search traffic is evolving. But so far, GoDaddy has been able to compensate for those changes given our strategy and our approach. We have continued to diversify our channels and how we bring customers to us. We've continued to improve the efficiency of how we reach customers and how and we have improved our conversion rates. So all of those, you know, offsets for us and any changes that happen today.

[Aman Bhutani, CEO & Director at GoDaddy]

But we fundamentally believe that given our position that as the world evolves, we will have an opportunity to be a leader in the new space as well. So that that's where we're focused. And in terms of our customers, you know, one of the products we're most excited about, and we teased it just a little bit in that video early on in this call, is the ability for our customers to have an agent actually do SEO optimization and other optimizations on their website on a continuous basis. You know, we see internal projects that are doing things like that. We have a pretty interesting experiment running that does it completely autonomously, and measures completely autonomously.

[Aman Bhutani, CEO & Director at GoDaddy]

So these these are sort of new technologies, you know, using AgenTeq AI, and we think we'll we'll be able to bring those to bear for our customer. Then for the customer, the interaction's going to be probably as simple as asking Arrow where ask Arrow. Arrow prompts them and says, hey. I could help you with this, and the customer basically just has to say yes and sign up for it, and and then the agent is able to do the rest.

[Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley]

Great. And then maybe just a quick follow-up on on the AskAram. Just the surface area of what you can go after in supporting small businesses is very significant. So as you think about the expansion of capabilities, are there certain areas or workflows that you're highly focused on kind of near term? Are there any other areas that could be surprising to investors that you could start to address?

[Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley]

You know? And then are there any areas that are really just kind of out of the scope, of what you guys are trying to to look to with this product?

[Aman Bhutani, CEO & Director at GoDaddy]

Yeah. So, you know, the the customer jobs to be done done that we're very focused on are are the entrepreneurs we all which we have talked about, you know, many times. What AgenTik AI does is it and the technology transformation we're going internally for AI is that it allows us to bring all our capabilities together in a very conversational experience for our customers. And the second piece, which I also talked about briefly in the prepared remarks, is that what we're seeing is the integration we do with our partners. AgenTic coding or coding done with AI is very, very that's a very good use case for it, for various reasons.

[Aman Bhutani, CEO & Director at GoDaddy]

And as we scale that, that's where I think the surprise and delight element's gonna come from where GoDaddy is going to likely be able to bring in more partners faster and be able to test them much faster and bring those experiences to our customers. And and, you know, we think that area is gonna phenomenally evolve over the next, I I wanna say, six. I don't even wanna say twelve months. I think in the next six months, we'll probably see a lot of changes, and and you'll see partners on the site And, of course, we'll talk about it with you.

[Aman Bhutani, CEO & Director at GoDaddy]

We'll we'll talk about it on these earnings calls and talk about where we see the best results.

[Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley]

Great. Looking forward to it. Thank you.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you, Elizabeth.

[Christie Masoner, VP & Head - IR at GoDaddy]

Our next question comes from the line of John Bayoune from Jefferies. John, please go ahead. Think we might have lost John. That was the last question. So over to you, Aman. Oh, never mind. He came back.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

John,

[Willow Miller, Equity Research Associate at William Blair & Company, L.L.C]

go ahead.

[John Byun, SVP at Jefferies]

Can you hear me okay?

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

We can.

[John Byun, SVP at Jefferies]

Okay. Yeah. Just hit the wrong button. Thank you very much. John here for Brent Hill.

[John Byun, SVP at Jefferies]

So questions actually on the core platform. It looked like you've seen maybe some renewed relative strength there, you know, especially with domains. Even the primary, not just the aftermarket being up, I would say, well, mid to high single digit. Wondering, you know, is that something that can be sustainable as you kinda alluded to error helping there? And then on the .co registry, the impact of 50 basis point, should we assume that continues through part of next year as well?

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Yeah. Cup couple things. I'll start with the core platform. You know, we're seeing the benefit of, you know, a pickup in the aftermarket. No doubt we saw activity in some of the larger transactions return in the first half of the year.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

But we're also seeing the benefit of the positive impact of pricing and bundling within domains. And, you know, we we we talked about it at the beginning of the year. We're starting to see that flow through. Again, I would say there is it's sustainable pricing and bundling in and of itself. We'll continue to look and test into it, but we're really happy with the momentum and the and the added lift, not only it's giving to our volume and domains, but also our ability to get value from those domain sales in and of itself.

[Mark McCaffrey, Chief Financial Officer at GoDaddy]

Again, increasing the top of the funnel, and that conversion part of it is really, really working. On Dotco, to a lesser extent. I mean I mean, the we'll see an outsized impact. I mean, the whole thing is immaterial in and of itself, but we wanted to call it out for the fourth quarter. It'll be a very small impact into next year and and doesn't change our ability to meet what we put out there as, as milestones for 2026.

[John Byun, SVP at Jefferies]

Great. Thank you.

[Christie Masoner, VP & Head - IR at GoDaddy]

I'll now turn the call over to Aman to close this out.

[Aman Bhutani, CEO & Director at GoDaddy]

Thank you, Christy, and thank you all for joining us. As always, a fantastic thank you to all GoDaddy team members across the world. We're super excited about the products we're building, the customers we have, and, you know, the best is still in front of us. Thank you very much.

Participants

Executives

• Christie Masoner, VP & Head - IR
• Aman Bhutani, CEO & Director
• Mark McCaffrey, Chief Financial Officer

Analysts

• Willow Miller, Equity Research Associate at William Blair & Company, L.L.C
• Josh Beck, Managing Director at Raymond James
• Trevor Young, Director & Senior Internet Equity Research Analyst at Barclays Capital
• Vikram Kesavabhotla, Senior Research Analyst at Robert W. Baird & Co
• Ken Wong, MD & Senior Analyst at Oppenheimer & Co. Inc.
• Ygal Arounian, Director - Internet Equity Research at Citigroup
• Brad Erickson, Equity Analyst - Internet at RBC Capital Markets
• Alex Lavigne, Equity Research Associate at The Benchmark Company LLC
• Naved Khan, Managing Director at B. Riley Securities
• Elizabeth Porter, Executive Director - Equity Research at Morgan Stanley
• John Byun, SVP at Jefferies