GoDaddy Q3 Earnings Call Highlights

Key Points

• GoDaddy’s third-quarter revenue rose 6% to $1.3 billion, while bookings increased 6% to $1.4 billion. Normalized EBITDA grew 10% to $449 million, free cash flow rose 9% to $481 million, and the company continued expanding margins.
• AI platform Airo is driving momentum: its annualized bookings run rate more than doubled to over $100 million, and it became the default option in GoDaddy’s domain-purchase path. Management plans to increase Airo marketing while managing lower AI-related gross margins through model optimization and operational efficiencies.
• GoDaddy reaffirmed its full-year targets, including revenue near the high end of its $5.215 billion–$5.255 billion range, normalized EBITDA margin above 33%, and approximately $1.8 billion in free cash flow. The company also repurchased $1.4 billion of stock year to date and is developing APIs and an Agent Name Service to support AI-agent-driven commerce.

GoDaddy NYSE: GDDY reported third-quarter revenue growth of 6% to $1.3 billion, while total bookings rose 6% to $1.4 billion, as the company highlighted accelerating adoption of its AI-driven Airo platform and continued margin expansion.

Chief Executive Officer Aman Bhutani said Airo’s annualized bookings run rate more than doubled to more than $100 million during the quarter, compared with $50 million in the prior quarter and $10 million two quarters earlier. He said Airo contributed incrementally to bookings growth, more than offsetting the effects of customers migrating away from the company’s legacy Websites + Marketing products.

“Airo is at the heart of meeting this moment,” Bhutani said, describing the company’s strategy to make the platform its flagship website product and, over time, an operating system for micro and small businesses.

Airo Adoption Drives Bookings Momentum

GoDaddy made Airo the default option in its domain-purchase path late in the third quarter, a move Bhutani said is already generating attachment rates above those of Websites + Marketing in that funnel. The company plans to increase marketing behind Airo in the fourth quarter, with incremental spending offset by efficiencies elsewhere in the business.

Chief Financial Officer Mark McCaffrey said much of Airo’s current growth came from existing-customer migrations, while the company had only recently introduced the product to the domain-purchase path. Airo’s starter tier has gained traction, with customers also purchasing token credit packs that support additional usage.

McCaffrey said Airo bookings are currently made up of roughly two-thirds subscriptions and one-third credit packs. The company also said more than 70% of new Airo customers have at least two paid products, compared with slightly more than half of GoDaddy’s overall customer base.

Bhutani said the company is seeing stable free-to-paid conversion rates and favorable customer satisfaction as it expands Airo’s reach. He added that the platform is intended to take on more customer tasks beyond website creation, including marketing, commerce and customer communications.

Revenue, Profitability and Capital Returns

Applications and Commerce bookings grew 8%, accelerating from 7% in the second quarter. Segment revenue increased 9% to $524 million, supported by productivity and commerce growth, though the transition from Websites + Marketing to Airo partially offset the result. Applications and Commerce segment EBITDA margin expanded about 120 basis points to 47%.

Core Platform revenue rose 4% to $818 million, aided by high-value aftermarket transactions as well as new primary domain registrations and renewals across multiple top-level domains. Core Platform segment EBITDA margin was flat at 33%.

GoDaddy’s annual recurring revenue increased 5% to $4.5 billion. International revenue rose 3% to $436 million. McCaffrey said international growth was comparatively slower because the quarter’s aftermarket transactions were concentrated in the U.S., whereas international aftermarket activity had contributed in prior periods.

Normalized EBITDA increased 10% to $449 million, and normalized EBITDA margin expanded approximately 120 basis points to 33%. Free cash flow rose 9% to $481 million, bringing trailing 12-month free cash flow to $1.8 billion.

The company ended the quarter with $1.1 billion in cash, $2.3 billion in total liquidity and net debt of $2.7 billion, equivalent to trailing-12-month net leverage of 1.4 times. GoDaddy repurchased 5 million shares for $477 million in the third quarter. Through Oct. 26, it had repurchased $1.4 billion of stock year to date, reducing fully diluted shares outstanding by 12%, according to McCaffrey.

Margin Outlook and AI Costs

Management acknowledged that Airo carries lower gross margins than internally developed software products such as Websites + Marketing, in part because of inference and token-related costs. McCaffrey said gross margin could face further pressure as Airo grows, though the company expects operational efficiencies across the business to more than offset that effect and support continued normalized EBITDA margin expansion.

Bhutani said GoDaddy is testing open-weight AI models in its own data centers and can route Airo workloads among different models based on the use case. The company expects to use a combination of frontier models, open-weight models and internal infrastructure to balance customer value, costs and margins.

Management also pointed to AI-related productivity gains across functions including software development, customer care, legal, finance, tax and human resources. Bhutani said a large majority of the company’s software is now written with AI tools and that internal efficiency gains should increasingly support investment in Airo, marketing and product development.

Guidance and Agentic-Web Strategy

For the full year, GoDaddy expects revenue toward the higher end of its prior $5.215 billion to $5.255 billion range, helped by aftermarket outperformance in the first three quarters. It expects Applications and Commerce revenue growth of about 10% and Core Platform growth of about 4% for the year.

For the fourth quarter, excluding foreign-exchange effects, the company expects bookings growth to accelerate and run slightly ahead of revenue growth, driven by rising Airo units within Applications and Commerce. GoDaddy reaffirmed its full-year normalized EBITDA margin target of more than 33% and free-cash-flow target of approximately $1.8 billion.

Bhutani also discussed changing demand patterns as more customers begin their online journeys through coding assistants, command-line tools and AI agents. GoDaddy has expanded APIs across domains, hosting, professional email and commerce, though he said the initiative remains early and requires further go-to-market work.

The company plans to test new bundles and competitive offers beginning late this year and into early next year, seeking to improve its visibility in large language models and AI-agent channels. It also views its Agent Name Service, or ANS, as a longer-term opportunity to provide identity and trust infrastructure for transactions among AI agents on the open internet.

GoDaddy plans to provide a broader view of its strategy and investment plans at an Investor Night scheduled for Dec. 1 in Tempe, Arizona.

About GoDaddy (NYSE:GDDY)

GoDaddy Inc NYSE: GDDY is a global technology company that provides online tools and services to entrepreneurs, small businesses and individuals. Its platform helps customers establish, manage and grow an online presence, with offerings that include domain-name registration, website hosting, website and online-store builders, professional email and digital marketing tools.

The company also provides services designed to support commerce and customer engagement, including e-commerce functionality, online appointment scheduling, payments and other business-management capabilities.

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