Q1 2024 GoDaddy Inc Earnings Call
And we'll be muted throughout the meeting.
Unknown Speaker: Introducing GoDaddy Aero, the all-new AI-powered solution for small businesses. It's like having a second, third, and even fourth employee in your corner.
Introducing.
Yeah.
Hey.
Thank you.
Sure.
Unknown Speaker: GoDaddy Aero creates and optimizes your business to help you save time and increase your customer base. Today, we'll show you how. GoDaddy Aero can help name the business, make logos, build a website, take payments, and much, much more, instantly. So customers can go from idea to online in minutes. And if the business owner wants changes, GoDaddy Aero does it easily. So the business owner can focus on doing what they love.
Unknown Speaker: Go ahead.
Unknown Speaker: Create.
Unknown Speaker: And increase your customer base.
Unknown Speaker: Sure.
Speaker Change: Got it.
Speaker Change: Can you help me.
Unknown Speaker: Maybe.
Unknown Speaker: Yes.
Unknown Speaker: And much much more.
Unknown Speaker: You can go online.
Unknown Speaker: Online.
Unknown Speaker: Godaddy easily.
Unknown Speaker: Can focus on doing what they love.
Unknown Speaker: Aero sends you texts or emails with tips, like when it's time to start a new social media campaign. It creates the campaign for you, including social ads, social posts, and email marketing. Aero will even track sales. And just like that, your campaign is underway.
Speaker Change: Thank you Keith.
Unknown Speaker: When it's time to start a new social media campaign.
Unknown Speaker: <unk>, including social Ad.
Unknown Speaker: And email marketing.
Unknown Speaker: Yes.
Unknown Speaker: Yeah.
Unknown Speaker: Sure.
Unknown Speaker: Your campaign is underway.
Unknown Speaker: GoDaddy Aero helps small businesses reach their full potential. It uses real-time data to assist with marketing and sales, give guidance, and complete tasks. Want to understand what's driving your revenue for the week? Ask Aero. Just tell it what you want it to do, and Aero does it instantly. More customers, more growth. More freedom for small business owners to focus on their passion. GoDaddy Aero can do it all. And this is only the beginning.
Unknown Speaker: Small businesses.
Unknown Speaker: It uses real time data.
Unknown Speaker: Yeah.
Unknown Speaker: Incomplete.
Unknown Speaker: One I understand what's driving your revenue for them.
Unknown Speaker: Yeah.
Unknown Speaker: Once you wanted to do.
Speaker Change: Thank you.
Unknown Speaker: More customers.
Unknown Speaker: Your freedom for small business owners can focus on their passion.
Unknown Speaker: Do it.
Unknown Speaker: It's only the beginning.
Unknown Speaker: Welcome to GoDaddy's first quarter 2024 earnings call. Thank you for joining us.
Speaker Change: Welcome to Godaddy first corner 2024 earnings call. Thank you for joining us.
Christie Masoner: I'm Christie Masoner, Vice President 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. If you'd like to ask a question on today's call, please use the raise your hand feature in the webinar to be added to the queue.
Christina: I'm Christina <unk>.
Unknown Speaker: Vice President of Investor Relations.
Unknown Speaker: Today.
Speaker Change: <unk>, Chief Executive Officer, and Mark Mccaffrey, Chief Financial Officer.
Christie Masoner: Following prepared remarks, we will be.
Christie Masoner: To your questions.
Christie Masoner: 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 and a discussion of why we use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their.
Unknown Speaker: 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.go.id.net or in today's earnings release on our Form 8K, filed with the SEC. Growth rates represent year-over-year comparisons unless otherwise noted.
Unknown Speaker: GAAP equivalents, maybe found in the presentation posted on our Investor Relations site at investors Godaddy.
Unknown Speaker: Or in today's earnings release on our form 8-K furnished with the SEC growth rates represent year over year comparisons unless otherwise noted.
Unknown Speaker: The matters we will 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. 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, May 2nd, 2024, 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 said, I'm pleased to introduce Aman.
Unknown Speaker: The matters, we will be discussing today include forward looking statements such as those relating to future financial results and our strategies, our objectives with respect to future operations.
Unknown Speaker: These forward looking statements are subject to risks and uncertainties that are discussed in detail in our periodic SEC filings.
Unknown Speaker: Actual results may differ materially from those contained in forward looking statements.
Aman: Any forward looking statements that we make on this call are based on assumptions as of today may 2nd 'twenty 'twenty, four and except to the extent required by law. We undertake no obligation to update these statements because of new information or future events.
Aman: With that I'm pleased to introduce Armani.
Amanpal Singh Bhutani: Good afternoon, and thank you for joining us today. At GoDaddy, our mission is to empower everyday entrepreneurs and make opportunity more inclusive for all. Our strategy relentlessly focuses on creating customer value and successfully transitioning it to shareholder value. This is the driving force behind our profitable growth model that maximizes free cash flow. I'm excited by the innovative experiences we are delivering for our customers, the dedication and velocity of execution of our teams, and the trajectory those have created for our company. At our Investor Day, we shared our updated three-year strategic framework and financial targets. As our Q1 results showcase, we are off to a strong start in 2024.
Aman: Good afternoon, and thank you for joining us today.
Aman: Our mission is to empower everyday entrepreneurs.
Aman: Opportunity more inclusive.
Amanpal Singh Bhutani: Our strategy relentlessly focusing on creating customer value.
Amanpal Singh Bhutani: And successfully transitioning to shareholder value. This is the driving force behind our profitable growth model that maximizes free cash flow.
Amanpal Singh Bhutani: I am excited by the innovative experiences we are delivering for our customers the dedication and velocity of execution of our team and the trajectory those have created for our company.
Amanpal Singh Bhutani: Our Investor day, we shared our updated three year strategic framework and financial targets as our Q1 results showcase we are off to a strong start in 2024.
Amanpal Singh Bhutani: In service of our North Star, we continue to expand our free cash flow meaningfully, delivering 26% free cash flow growth year over year. The pillars behind our North Star are accelerating growth in our applications and commerce segment and disciplined margin expansion. In Q1, applications and commerce bookings accelerated to 22%, and normalized EBITDA margin expanded 400 basis points.
Amanpal Singh Bhutani: Service of our Northstar, we continue to expand our free cash flow meaningfully delivering 26% free cash flow growth year over year.
Amanpal Singh Bhutani: Pillars behind our Northstar, our accelerating growth in our applications and commerce segment and disciplined margin expansion in Q1 applications and Congress bookings accelerated to 22% and normalized EBITDA margin expanded 400 basis.
Amanpal Singh Bhutani: At our Investor Day, we also shared our progress on the GoDaddy software platform. The GoDaddy software platform helps create game-changing customer experiences like GoDaddy Aero. It combines the power of our infrastructure, large-scale data, AI, and machine learning, experimentation, and monetization to power our growth and margin drivers. Today, I wanted to provide an update on four of the key initiatives we shared previously.
Amanpal Singh Bhutani: <unk> points at our Investor Day, we also shared our progress on the Godaddy software platform. The Godaddy software platform helped create game changing customer experiences like godaddy arrow. It combines the power of our infrastructure large scale data AI and Ms.
Amanpal Singh Bhutani: <unk> learning experimentation and monetization to power our growth and margin drivers.
Amanpal Singh Bhutani: Today I wanted to provide an update on four of the key initiatives we shared previously.
Amanpal Singh Bhutani: First, enhancing our pricing and bundling capabilities remains an important lever for GoDaddy. This quarter, we focused our pricing and bundling efforts on our productivity solutions, which was a key contributor to the 22% bookings growth in the applications and commerce segment. Our software platform has a vast amount of data, and we leverage that data in more and more pricing and bundling experiments. This gives us powerful insights on how and where to push forward as we continue to roll these learnings into additional products and bundles over time. Second, creating seamless experiences for our customers continues to be a key priority.
Amanpal Singh Bhutani: First enhancing our pricing and bundling capability remains an important lever for godaddy.
Amanpal Singh Bhutani: This quarter, we focus.
Amanpal Singh Bhutani: Pricing and bundling effort on our productivity solutions, which was a key contributor to the 22% bookings growth in applications and Commerce segment.
Amanpal Singh Bhutani: Our software platform has a vast amount of data and we leverage that data in more and more pricing and bundling experimentations.
Amanpal Singh Bhutani: This gives us powerful insights on how and where to push forward as we continue to roll these learnings into additional products and bundles overtime.
Amanpal Singh Bhutani: Second creating seamless experiences for our customers continues to be a key priority.
Amanpal Singh Bhutani: We are removing friction from every piece of the entrepreneur's wheel, saving our customers time and money. We continuously work on simplification and performance improvements that deliver value for our customers. Examples from this quarter include simplifying the editor in Websites Plus Marketing, making it easier for customers to discover new capabilities, reducing provisioning time for the online store to a few seconds, and using AI to streamline managed WordPress website creation to just a few clicks.
Amanpal Singh Bhutani: We are removing friction out of every piece of the entrepreneurs wheel saving our customers time and money.
Amanpal Singh Bhutani: We continuously work on simplification and performance improvements that deliver value for our customers.
Amanpal Singh Bhutani: Examples from this quarter include simplifying the editor in websites plus marketing, making it easier for customers to discover new capabilities, reducing provisioning time for the online store to a few seconds and using AI to streamline managed Wordpress website creation through just a few.
Amanpal Singh Bhutani: Simplified, smart, fast experiences come across as magical to our customers, and customer delight creates customer value, increasing willingness to pay. Third, on commerce, I am pleased to share that annualized GPV continued to grow at a fast pace, surpassing the $2 billion milestone. The primary driver continues to be conversion within our existing base of customers.
Amanpal Singh Bhutani: Place simplified smart fast experiences come across as magical to our customers and customer delight creates customer value increasing willingness to pay phone.
Amanpal Singh Bhutani: I am pleased to share that annualized <unk> continued to grow at a fast pace, surpassing 2 billion milestone. The primary driver continues to be conversion within our existing base of customers.
Amanpal Singh Bhutani: In addition, this quarter, we launched GoDaddy Smart Terminal Flex, a handheld device that allows our customers to accept payments anywhere on the fly. Our commerce offering is growing and sets us up well for our 2024 focus on driving higher-margin subscription revenue through the sale of tailored omnicommerce solutions to our customers. The significant value we are driving with our commerce offering also introduces an opportunity for us to evolve our pricing structure within payments. Last week, we began rolling out phased transaction fee increases across our customer population while still maintaining our status as the best value in payments.
Amanpal Singh Bhutani: In addition, this quarter, we launched Godaddy Smart terminal flex.
Amanpal Singh Bhutani: Handheld device that allows our customers to accept payments anywhere on the fly our commerce offering is growing and sets us up well for 2024 focus on driving higher margin subscription revenue through the sale of tailored omni commerce solution to our customer.
Amanpal Singh Bhutani: The significant value we are driving with our commerce offering also introduces an opportunity for us to evolve our pricing structure within payments lap.
Amanpal Singh Bhutani: Last week, we began rolling out phase transaction fee increases across our customer population, while still maintaining our status as the best value in payments.
Amanpal Singh Bhutani: Fourth, we continue to be tremendously excited about the range of possibilities with GoDaddy Aero. As planned, we started rolling it out to our base in late March. GoDaddy Aero opens the door to many opportunities across discovery, engagement, and monetization, and represents an incremental opportunity as a powerful growth driver over the next couple of years. We have continued to rapidly iterate this experience, and I wanted to share a couple of examples.
Amanpal Singh Bhutani: Fourth we continue to be tremendously excited about the range of possibilities with Godaddy Arrow as planned we started rolling out Godaddy arrow to our base in late March Godaddy Arrow opens the door to many opportunities across discovery engagement and monetization.
Amanpal Singh Bhutani: And represents an incremental opportunity as a powerful growth driver over the next couple of years.
Amanpal Singh Bhutani: We have continued to rapidly iterate this experience and I wanted to share a couple of examples.
Amanpal Singh Bhutani: More customers are discovering GoDaddy Aero, and we have more for them. We launched a new PayLink card to test engagement with payments. A card is a visual representation of a product that is automatically set up and configured by GoDaddy Aero after just a domain purchase.
Amanpal Singh Bhutani: More customers are discovering godaddy arrow and we have more for them.
Amanpal Singh Bhutani: We launched a new bailing card to test engagement with payments a card is a visual representation of a product that is automatically setup and configured by godaddy arrow on just a domain purchase we see early indication that godaddy Arrow does a better job of this.
Amanpal Singh Bhutani: Discovery and engagement with tailings that are normal methods. Another significant change in monetization is that we introduced a paywall for web sites built by Godaddy era.
Amanpal Singh Bhutani: We see early indications that GoDaddy Aero does a better job of discovery and engagement with PayLink than our normal methods. Another significant change in monetization is that we introduced a paywall for websites built by GoDaddy Aero. We are actively testing different points at which this paywall can be triggered, and this is a new flow that we are excited to optimize.
Amanpal Singh Bhutani: Actively testing different points at which this paywall can be triggered and this is a new flow that we are excited to optimize.
Amanpal Singh Bhutani: While all this data is early, we're also excited to see that websites built by GoDaddy Aero are performing well. More domain customers are opting in for a website when we offer them GoDaddy Aero, and key product metrics are either ahead of or within our expectations. These metrics give us confidence that we are achieving our goal of a seamless, intuitive, magical experience for our customers. I also wanted to quickly share that GoDaddy Aero domain search is now on the home page for all desktop users globally, and we are starting to test opportunities to optimize the traditional search experience using these new capabilities.
Amanpal Singh Bhutani: All of this data is early we're also excited to see that websites built by Godaddy Errol are performing well more domain customers are opting in for our website. When we offer them Godaddy Arrow and key product metrics are either ahead or within our expectations. These metrics give us.
Amanpal Singh Bhutani: Confidence that we are achieving our goal of a seamless intuitive.
Amanpal Singh Bhutani: Magical experience for our customers.
Amanpal Singh Bhutani: I also wanted to quickly share that godaddy Aero domain search is now on the homepage or all desktop users globally, and we are starting to test opportunity to optimize the traditional search experience using these new capabilities last but not least Gaby our guide.
Amanpal Singh Bhutani: Last but not least, Gabby, our guide assist bot, is now rolled out across our entire care footprint and is handling escalations and questions from our guides. She also helps with providing call summaries and case notes, helping our guides be more efficient. Every month that goes by, Gabby gets smarter, and over time, we can add use cases and drive further adoption. In closing, we continue to deliver on our key initiatives and unlock new avenues of growth and value creation for the long term.
Amanpal Singh Bhutani: It is now rolled out across our entire care footprint and handling escalation and questions from our guide Gabby also helps with providing call summaries and case notes, helping our guys be more efficient.
Amanpal Singh Bhutani: Every month that goes by Gabby become smarter and overtime, we can add use cases and drive further adoption.
Amanpal Singh Bhutani: In closing, we continue to deliver on our key initiatives.
Amanpal Singh Bhutani: The GoDaddy team is a driven group and shares an unwavering determination to fearlessly push boundaries and prioritize, continuously experiment, meticulously track results, and strive for improvement each day. I am thrilled with the speed of execution as we continue to strive to exceed customer expectations, propel profitable growth, and create enduring shareholder value. With that, here's Mark. Thanks.
Amanpal Singh Bhutani: <unk>, new avenues of growth and value creation for the long term. The godaddy team is driven group and shares and unwavering determination to fearlessly push boundaries and prioritize continuously experiment meticulously track results and strive for improvement each day I am thrilled.
Amanpal Singh Bhutani: With the speed of execution as we continue to strive to exceed customer expectations propel profitable growth and create enduring shareholder value with that here's mark. Thanks, Oman. We are pleased to announce our strong Q1 results and continued track record of durable growth.
Mark Mccaffrey: of durable growth. We've demonstrated attractive progress toward our North Star, delivering strong free cash flow of $327 million, alongside continued execution of our capital allocation strategy, which reduced our fully diluted shares outstanding at the end of the quarter to $146 million. The key pillars underlying our North Star are double-digit growth in our application and commerce segment revenue of 13%, coupled with disciplined, normalized EBITDA margin expansion to 28%, which converts to free cash flow and an impressive one-to-one ratio. Through our seamless technology and comprehensive one-stop shop approach, we are building improved customer value.
Mark: Demonstrated attractive progress toward our north star delivering strong free cash flow of $327 million.
Mark Mccaffrey: Alongside continued execution of our capital allocation strategy, which reduced our fully diluted shares outstanding at the end of the quarter to $146 million a key.
Mark Mccaffrey: Key pillars underlying our northstar or the double digit growth in our application and commerce segment revenue up 13%, coupled with disciplined normalized EBITDA margin expansion to 28%, which converts to free cash flow and an impressive one to one ratio through our seamless technology.
Mark Mccaffrey: Comprehensive one stop shop approach, we are building improved customer value. Our strategic focus is delivering results that drive better attach and conversion while maintaining impressive retention rates. Together. These efforts are building a foundation for enduring shareholder value moving.
Mark Mccaffrey: Our strategic focus is delivering results that drive better attach and conversion while maintaining impressive retention rates. Together, these efforts are building a foundation for enduring shareholder value. Moving to our financial results for the quarter, total revenue grew to $1.1 billion, up 7% on a reported and constant currency basis and exceeding the high end of our guided range on the strength of the pricing and bundling initiatives, as well as strong demand in our aftermarket.
Mark Mccaffrey: To our financial results for the quarter.
Mark Mccaffrey: Total revenue grew to $1 1 billion up 7% on a reported and constant currency basis and exceeding the high end of our guided range on the strength of the pricing and bundling initiative as well as strong demand in our aftermarket <unk> grew 5%.
Mark Mccaffrey: BARPU grew 5% to $206 on a trailing 12-month basis, and our customer count remained stable, despite the headwinds from our divestiture and migration efforts, also impacting revenue by approximately 100 basis points. Additionally, customers with two or more products remained above 50%, and our customer retention rate remained at 85%.
Mark Mccaffrey: <unk> $206 on a trailing 12 month basis, and our customer count remained stable. Despite the headwinds from our divestiture and migration efforts also impacting revenue by approximately 100 basis points. Additionally, customers with two or more products remained above 50% and our customer retention rate remain.
Mark Mccaffrey: Aimed at 85% double clicking into the segments, our higher margin applications and Commerce segment delivered $383 million in revenue growing 13% in line with our guided range. The drivers of this performance included the strength in our bundling and pricing initiative across all major product lines.
Mark Mccaffrey: Double clicking into the segments, our higher-margin applications and commerce segment delivered $383 million in revenue, growing 13% in line with our guided range. The drivers of this performance included strength in our bundling and pricing initiatives across all major product offerings, including productivity solutions, website building products, and commerce. Additionally, annualized GPV for GoDaddy payments grew to $2 billion for the first time.
Mark Mccaffrey: Including productivity solutions website building products and commerce.
Mark Mccaffrey: Additionally.
Mark Mccaffrey: Segment EBITDA margin was 42%, up over 300 basis points. Lastly, ARR for applications and commerce grew 13% to $1.5 billion. Core platform revenue totaled $725 million, growing 4%, which exceeded our guide on strength in domains up 7% and aftermarket up 12%. Our growth was driven by strong demand for domains in the primary and secondary market, increased pricing in the primary market, and a higher average transaction value in the secondary market. This was partially offset by a decrease in hosting our divestitures.
Mark Mccaffrey: Segment EBITDA margin for core platform grew to 30%, up nearly 300 basis points. Lastly, ARR for our core platform segment was $2.3 billion, up 3%. Consolidated normalized EBITDA grew 25% to $313 million while delivering an expanded margin of 28%, up 400 basis points, exceeding our guide. Margin expansion was driven by continued leverage gains within all expense line items on the P&L. Moving on to bookings.
Mark Mccaffrey: In Q1, we achieved 9% growth on a reported and constant currency basis, reaching $1.3 billion. As a reminder, bookings primarily represent the cash collected during the period. Applications and commerce bookings grew 22% from improvements in pricing and bundling for productivity solutions, website building products, and commerce. Core platform bookings increased 3% on the performance of domains in the aftermarket due to strong demand for domains in the primary and secondary market, offset by headwinds in hosting. Subscription bookings grew by two points ahead of subscription revenue.
Mark Mccaffrey: The impressive momentum in our bookings, coupled with our commitment to profitable growth and ability to convert normalized EBITDA to free cash flow at a ratio of 1 to 1, powers our substantial cash generation. Unlevered free cash flow for the quarter grew 18% to $359 million, and free cash flow grew 26% to $327 million. We are committed to effectively managing our balance sheet, and the proactive measures we took to reprice our long-term debt resulted in a 30% favorable change in cash interest payments compared to last year. Capital expenditures for the quarter were also down 81% from data-centered divestitures.
Mark Mccaffrey: Through April 30th, we repurchased 2.8 million shares year-to-date, totaling $346 million. This brings the cumulative shares we purchased under our current authorizations to $2.9 billion and 37 million shares, reducing gross shares outstanding since the inception of these authorizations by 22%, ahead of our three-year targeted reduction of 20%. Fully diluted shares outstanding at the end of the quarter were 146 million shares.
Mark Mccaffrey: Our successful share repurchase program continues to drive impressive ROI for our free cash flow deployment. We have $1.1 billion remaining under our current authorization, and we plan to be in the market every quarter, subject to market conditions and other factors, with a minimum offset to share-based compensation dilution. Moving to the balance sheet, we finished Q1 with $664 million in cash and total liquidity of $1.7 billion. Net debt was $3.2 billion, representing net leverage of 2.4 times on a trailing 12-month basis.
Mark Mccaffrey: Shifting to our outlook, given our strong start to the year, we are raising the lower end of the range for our full-year revenue guidance. We now expect full-year revenue to be between $4.5 and $4.56 billion, representing growth of 6.5% at the midpoint. Additionally, we are targeting Q2 total revenue in the range of $1.1 to $1.12 billion, representing growth of 6% at the midpoint of our range. Additionally, we expect applications and commerce to deliver low to mid-teens growth for Q2 and the full year.
Mark Mccaffrey: In our core platform segment, we expect revenue to deliver low, single-digit growth in the second quarter and the full year. We are proud of our track record of margin expansion, and we will continue to maintain operational discipline to drive further leverage in our model. We expect normalized EBITDA for Q2 to be approximately 28%. Additionally, we remain on track to meet a 31% normalized EBITDA margin in Q4. The full-year normalized EBITDA margin is expected to be approximately 29%.
Mark Mccaffrey: We are on track for our full-year unlevered free cash flow and free cash flow targets of $1.4 billion plus and $1.2 billion plus, respectively. On capital allocation, we will continue to evaluate opportunities for shareholder return, subjecting them to our published rigorous returns-based framework to ensure we achieve the optimal mix for cash flow deployment. The entire GoDaddy team remains committed to delivering against the three-year framework we shared at Investor Day, with 6% to 8% annual top-line growth, fueled by our applications and commerce segment, accelerating normalized EBITDA margin expansion to 33% by 2026, and generation of $4.5 billion plus in cumulative free cash flow.
Mark Mccaffrey: Our profitable growth and one-to-one normalized EBITDA to free cash flow ratio, coupled with our disciplined capital allocation framework, creates significant value for our shareholders. While I am pleased with our progress towards our North Star, we are far from done, and I continue to have strong confidence in our strategy and execution. With that, we will have Christie Masoner from our investor relations team open the call to questions.
Christie Masoner: Thanks, Mark. As a reminder, if you would 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 Ygal Arounian from Citi. Ygal, please go ahead.
Ygal Arounian: Hey, good afternoon, guys. Maybe I'm just going to start on the strong bookings growth. And I know we've talked about pricing, particularly in A&C. You have 22% booking growth in 1Q, almost 10% overall coming off of strong booking numbers in 4Q as well. Typically, we think of that type of acceleration as really meaningful and driving revenue growth acceleration in the back half.
Unknown Speaker: Hey, Ygal. Thanks. Thanks for the question.
Unknown Speaker: You know, couldn't be more excited about the bookings growth in A&C and the momentum we have coming out of Q1 and the impact on the rest of the year, no doubt about it. You know, as we get into the bundling, just a reminder, revenue is recognized from the bookings, and it can be for different periods of time. So that momentum will continue, but given the size of our business, obviously, it takes a while to show up in the revenue growth numbers as we go on. But I couldn't be more excited about it, though.
Unknown Speaker: Just a reminder, too, we do have a few headwinds out there relating to the dispositions. Those will peak in Q2, and we expect them to abate throughout the year. But again, we still have a few of those headwinds out there. And again, we have great momentum.
Unknown Speaker: Okay, great, really helpful. And maybe on Aero, I know you gave some qualitative comments here, but any more you could share, you know, rolling out internationally, we've got a couple months under our belt here. You mentioned you're seeing kind of domain customers move to Aero when they're offered it. Anything you're seeing incremental uplift and conversion, you know, ARPU growth on the, whether it's applications account collectively, or just, you know, websites, it's marketing, anything else investors can kind of hang their hats on how well Aero is doing, or what is this kind of job that you've been expecting? Thank you. Thanks, Ygal.
Unknown Speaker: I'm super excited about Aero. It's the best vehicle we have built to carry products to our customers. We know it's doing very well with new customers, and, you know, as I shared, we've started to roll it out to our base as well. Aero does a fantastic job of getting our customers engaged. And, you know, the metrics that we shared around it continue to be about discovery, which means our customers find that GoDaddy has all these products, about engagement, where they start using those products, or you can say attach them to them, and then monetization, where they start to pay for those products.
Unknown Speaker: And we're very methodically moving through those three phases. What I can share today is that on Discovery, we're seeing fantastic, you know, results there. Customers buy a domain name, they see the cards, they engage with the cards. And customers are starting to learn that, oh, GoDaddy has way more products for me, way more offerings for me. And, you know, I shared a little comment about failings in the prepared market, but I'll also share, you know, the coming soon site, which is, you know, a one-page website that gets created with a domain and gets a great amount of engagement. Just a regular website is getting more engagement with Aero than when we didn't have Aero.
Unknown Speaker: So, you know, these cards are really starting to take off in terms of discovery engagement, which gives us confidence that as we move towards monetization, we're going to have multiple levers at play. And we've started to, you know, build the paywalls and do stuff. And, you know, over the next couple of years, we think this will roll out very well and deliver results for years to come. All right, great. Really helpful. I'm excited to see how this progresses. Thanks, guys. Thanks, y'all.
Mark John Zgutowicz: Our next question comes from Mark Zgutowicz from Benchmark. Mark, please go ahead.
Unknown Speaker: Maybe just a follow-up on that impressive ANC bookings number. Curious how much you'd attribute to product attach versus pricing in terms of that acceleration. And on the pricing side, just curious how pervasive your AI or value-based pricing initiative is across your ANC base. You know, has it touched, you know, all ANC customers at this point? That's the first question. Thanks.
Unknown Speaker: Thanks, Mark. Our sort of value-based pricing, AI-based pricing, and bundling initiatives have not gone across all ANCs. You know, it's starting to roll out across a lot. What you're seeing in the 22% applications and bookings growth is the combination of pricing and bundling really touching our productivity and starting to hit our website business too. So I am super excited about that. There is more to go there. So, you know, we're going to continue to invest in that area and go across not just ANC but, over time, go to every customer, GoDaddy, and bring them on to this new sort of pricing and bundling approach that we have.
Unknown Speaker: Okay, got it. And then I think you had mentioned that arrow is leading to an increasing website attach rate for your domain customers. And I was just hoping you might be able to expand on that a bit, maybe just some KPIs that you're seeing, maybe conversion rate. But that seems to be Maybe, you know, awakening a sleeping giant there for some time, just kind of trying to get a sense of how significant that could be.
Unknown Speaker: Yeah, it's it's still early days, Mark, you know, with our new customers, obviously, that's a smaller stream of customers. But with our new customers, we do see, you know, significant take rates for like the coming soon website or actual website attached. So we see that engagement sort of discovery and engagement, and it's doing really well.
Unknown Speaker: But the large, large opportunity forces in our base, and, you know, we're literally not even five, six weeks from putting Aero into our base. So it's going to take a little time given the large customer base in our base. And our approach to going into it in a systematic manner. You know, we have lots of learnings from taking productivity into our base, taking commerce into our base, where we're taking that same methodical approach and going into the base. And it's going to take a little bit more time for us to gather data, to be able to sort of share it publicly to say, you know, this is what we see. But believe me, I can tell you we're super excited about it. And if the new customer engagement is an indicator of the base, you know, there'll be years, many, many years we'll be talking about this.
Unknown Speaker: That's great. Thanks a lot. Thank you.
Kenneth Wong: Our next question comes from the line of Ken Wong from Oppenheimer. Ken, please go ahead.
Unknown Speaker: Great, I wanted to maybe kind of pick your brain on in terms of the rationale behind kind of changing the payment pricing structure and then how you think about, you know, how that could impact kind of the near-term dynamics. And if you're sensing any kind of customer pushback there.
Unknown Speaker: And we're really trying to create multiple offerings for our customers. And while we maintain our position in the industry for being the best value for money, it allows us to have differentiated products within our portfolio and reach more customers. So this is something you'll see more of, and we'll talk about it over the next few quarters. But really, what it opens us up to is, you know, a broader commerce solution with differentiated pricing across different bundles. And we're trying to set things up for the same sort of mindset of pricing and bundling activity together for commerce as we are bringing to other products.
Unknown Speaker: Yeah, we're very methodical, Ken, in our approach to pricing, like we've talked about, everything is tested. So, you know, we have tests out there, and as we said, you know, it's on a phased basis.
Unknown Speaker: So this is something you'll see more of them will talk about it over the next few quarters, but really what it opens up us up for us.
Unknown Speaker: Broader commerce solution with differentiated pricing across different bundles, and we're trying to set things up for the same sort of mindset of pricing and bundling activity together for Congress as we were bringing to the other products.
Unknown Speaker: Got it. And then maybe Mark just in terms of just reminding us kind of what we should be thinking in terms of the lag between kind of revenue and bookings and specifically on A and C where there's obviously a much larger delta from kind of the teens to the 20s, like how it just helps us kind of think through what that convergence looks like. Yeah, and
Speaker Change: Got it and then maybe.
Speaker Change: Mark just in terms of just.
Ken: Just remind us kind of what we should be thinking in terms of the lag between kind of revenue and bookings and specifically.
Unknown Speaker: On AMC, where there is obviously a much larger delta problem kind of teens to the 20 is like how.
Unknown Speaker: Just help us kind of think through what that convergence looks like yes.
Unknown Speaker: And, you know, I'll take it up a level to, you know, when we think about the bookings to revenue, we have multiple different products, multiple different terms, the revenue can be in come out in many different ways. The way we look at it is, you know, we think bookings is going to be one to two points ahead of revenue for 2024. And that'll give us a lot of momentum as we continue to, you know, see the results of the bundling and pricing initiative, as well as the momentum we're seeing in things like aftermarket. Got it. Thank
Speaker Change: Yes, I'll take it up a level two.
Unknown Speaker: Think about the bookings to revenue we have multiple different products multiple different terms that revenue can be.
Unknown Speaker: Come out in many different ways.
Unknown Speaker: The way we look at it is we think bookings is going to be one to two points ahead of revenue.
Unknown Speaker: For 2024, and that will give us a lot of momentum as we continue to see the results of the bundling and pricing initiatives as well as the momentum we're seeing in things like aftermarket.
Unknown Speaker: Got it. Thank you very much. Just a quick add, Ken, that our general term is just around 12 months, a little over, so that can give you sort of the idea of how bookings, you know, will take about 12 months, get distributed about over 12 months for revenue. Perfect.
Speaker Change: Got it thank you very much.
Unknown Speaker: Quick.
Unknown Speaker: Our general term is around 12 months, a little worse for that that can give you sort of the idea of how bookings.
Unknown Speaker: We will take about 12 months have distributed about over 12 months revenue.
Unknown Speaker: Perfect.
Speaker Change: Thank you.
Josh Beck: Our next question comes from the line of Josh Beck from Raymond James. Josh, please go ahead. Hi Josh, I think you're muted, so.
Unknown Speaker: Our next question comes from the line of Cashback from Raymond James Please.
Speaker Change: Please go ahead.
Josh Beck: Hi, Josh I think your mute itself.
Josh Beck: Okay.
Josh Beck: Sorry about that.
Unknown Speaker: Sorry about that. Yeah, I just wanted to ask about some of the success with the pay links. It sounds like it's driven an uplift in discovery and engagement, maybe versus what you had in place prior. So are there certain channels, whether it's text or social, where it's doing a better job of driving engagement? I would like to understand a little bit more.
Josh Beck: Yes.
Josh Beck: Wanted to ask.
Josh Beck: About some of the success with the pay links it sounds like it's driven a.
Josh Beck: Uplift on discovery and engagement maybe versus what you had in place. Prior so are there certain channels, whether it's taxed or social where it's doing a better job.
Unknown Speaker: Of driving engagement, just like to understand a little bit.
Unknown Speaker: Yes, just some more context behind that covenant if possible.
Unknown Speaker: Yeah, the biggest sort of encouragement for our customers, the best vehicle, you know, we've put in place for Pailing Attach has been Aero, right? And the way it works is that when the customer buys the domain name, all these cards, all these capabilities get set up automatically.
Unknown Speaker: Yes, the biggest sort of encouragement our customers the best vehicle.
Unknown Speaker: We've put in place for failing attacks has been a hero.
Unknown Speaker: And the way it happens.
Unknown Speaker: When a customer buys the domain name all of these cards. All these capabilities get set up automatically and we introduced failing in a very similar way as we have introduced the other capabilities and what we've found is we obviously had existing ways helped.
Unknown Speaker: And we introduced Pailing in a very similar way as we had introduced the other capabilities. And what we found is that we obviously had existing ways of, you know, helping our customers discover Pailings, helping them engage with them, and start to transact using Pailings. But Aero sort of brought it all together in a very simple manner. It was right there in front of customers. And we saw customers engage with it at significantly higher rates than without Aero.
Unknown Speaker: Helping our customers discover failings, helping them engage with them and start to transact using failings, but <unk> sort of brought it together in a very simple manner. It was right there in front of customers and we saw the customers engage with it.
Unknown Speaker: Significantly higher rates than without <unk>. So that's what's driving sort of the engagement with tailings overall four or GP. We did hit the $2 billion annualized GPU milestone this last quarter and the biggest part of that continues to be going into our base of customers and converting them.
Unknown Speaker: So that's what's driving sort of the engagement with Pailings. Overall, for GPV, we did hit the 2 billion analyzed GPV milestone this last quarter, and the biggest part of that continues to be going into our base of customers and converting them to GoDaddy Pendings.
Unknown Speaker: <unk> godaddy payments.
Unknown Speaker: Okay, that's super helpful. And maybe just kind of a follow-on to that last point. You know, when you look at the existing base and you think about the conversion opportunity, should we be looking at, you know, really, when these customers come up for renewal with, you know, their existing payment provider, that's an opportunity for you? Is there, you know, maybe a chance to kind of put some type of, you know, firmer pressure on them to really kind of incentivize them to move over? Just help us kind of understand how you're helping promote that conversion.
Unknown Speaker: Okay.
Speaker Change: Super helpful and maybe just kind of a follow on to that last point.
Unknown Speaker: When you look at the existing base and you think about the conversion opportunities should we be looking at really when these customers come up for renewal with.
Unknown Speaker: Their existing payment provider, that's an opportunity for you is there maybe.
Unknown Speaker: Chairs to kind of put some type of.
Unknown Speaker: Further pressure on them to really kind of incentivize them to move over just just help us kind of understand how youre, helping promote that conversion.
Unknown Speaker: Yeah, you know, there are customer events, customer-side events, for example, like you said, a customer coming up on a renewal that may create an opportunity. But what we really lead with is that we have a relationship with these customers, right? GoDaddy has 65 plus transaction MPFs in care. Our customers are used to having a great relationship with us. So when we engage them, number one, they're open to the idea of us offering them online payments.
Unknown Speaker: Yes.
Unknown Speaker: Customer events customer side events for example, like a set of customer coming upon a renewal of that.
Speaker Change: May create an opportunity, but what we really lead with is that we have a relationship with these customers ramp Godaddy is 65, plus transaction Ips and care our customers are used to having a great relationship with us. So when we engage them number one they are open to the idea of godaddy offering them godaddy payments the second pillar.
Unknown Speaker: The second pillar of, you know, what we approach them with is that we offer them the one-stop shop. They have other relationships with GoDaddy. We can reduce one bill, one partner to work with, we can make it easier. And that's attractive to our customers. Because, you know, a lot of them start by saying, I didn't even realize that you had payments.
Unknown Speaker: What we are focused on with it and we offer them. The one stop shop. They have other relationship with Godaddy, we can reduce one bill one partner to work with me can make it easier and thats attractive to our customers because a lot of them started by the thing that I didn't even realize that you had payments Oh, it's pretty great, though I like the way. This works. So this works seamlessly with all my other stuff either with godaddy.
Unknown Speaker: Oh, it's pretty great. I like the way this works. Oh, this works seamlessly with all my other stuff I do with GoDaddy. So that's a win for us too. And then, you know, you've got pricing that's the best value in the market today, which sort of comes in as the third pillar of that sales pitch. And what we continuously are finding is that that works, that encourages our customers who have great relationships with us, you know, run micro businesses, to adopt GoDaddy payments, and that's what's been driving our GPD.
Unknown Speaker: So that's a win for US too and then you've got pricing that's the best value in the market today, which sort of comes in as a third pillar of that sales pitch and what we continuously are finding is that that works that encourages our customers we have great relationships with us.
Unknown Speaker: Run micro businesses adopt godaddy payments and that's what's been driving our GP growth.
Unknown Speaker: Super helpful. Thank you, Aman. Thank you.
Unknown Speaker: Okay.
Unknown Speaker: Super helpful.
Speaker Change: Thank you.
Vikram Kesavabhotla: Our next question comes from the line of Vikram Kesavabhotla from Baird 6. Please go ahead.
Unknown Speaker: Our next question comes from the line of Vikram <unk>.
Baird: From Baird. Please go ahead.
Unknown Speaker: Hey, can you hear me? Yeah, hey, back. Great. Hey, thanks.
Speaker Change: Hey can you hear me, yes, Hey, Becca.
Vikram Kesavabhotla: Great Hey, thanks, Thanks for taking the questions.
Vikram Kesavabhotla: My first question is for them on I think you mentioned in your prepared remarks that Gabby has now been rolled out to the entire care team I'm just curious what the early data points have been there in terms of the impact thats, having on efficiency I know at the Investor Day, you talked about the potential for that to reduce time and interactions for the team just curious what you're seeing there seen so far there and what the early reception.
Unknown Speaker: Thanks for taking the questions. My first question is for Aman. I think you mentioned in your prepared remarks that Gabby has now been rolled out to the entire care team. I'm just curious what the early data points have been there in terms of the impact that it's having on efficiency. I know at investor day, you talked about the potential for that to reduce time and interactions for the team. I'm just curious what you're seeing there, what you've seen so far there, and what the early reception has been from the care team.
Unknown Speaker: And then from the Caribbean and then my second question is for Mark It looks like you exceeded the first quarter guidance on EBITDA margin. Just wondering if you can talk more about some of the drivers of the outperformance there and how much of that was specific to the quarter versus factors that could ultimately benefit the balance of the year and I'll leave it there. Thanks.
Unknown Speaker: And then my second question is for Mark. It looks like you exceeded the first quarter guidance on EBITDA margin. Just wondering if you could talk more about some of the drivers of the outperformance there and how much of that was specific to the quarter versus factors that could ultimately benefit the balance of the year. And I'll leave it there. Thanks.
Unknown Speaker: Vikram, quick word on Gabby, and I'm super excited for what Gabby offers us over the long term, right? Being able to bring the massive amount of data that only GoDaddy has, working with 21 million paying customers and many more over the years, you know, using AI to bring it all together and putting it at the fingertips of every guide in the company. That's a powerful combination, right?
Mark Mccaffrey: A quick word on Gabby and I'm Super excited for what the caveat with us over the long term rate being able to bring the massive amount of data that only godaddy has working with 21 million paying customers and many more over the air using.
Unknown Speaker: Using AI to bring it together and putting it on the fingertips of every guide in the company.
Unknown Speaker: And where we are is that the tool is rolled out, and the guides are starting to use it. There is, of course, always a little bit of time for adoption and training for people learning how to use even a new tool that's AI-powered. But we're super excited about it.
Unknown Speaker: The powerful combination and where we are is that the tool is rolled out.
Unknown Speaker: They're starting to use it there is always a little bit of time for adoption and training for people learning how to use even though new tool.
Unknown Speaker: And AI powered Super excited about it I mentioned a couple of use cases that are already live with <unk>. They will go to the summary, there just going to start to take on costs that otherwise guide would have had to do to sort of start to move up from here.
Unknown Speaker: I mentioned a couple of use cases that are already live with Gabby, where Gabby is able to do the summaries or just start to take on tasks that otherwise guides would have had to do. It's sort of starting to move up from guides doing that to automation and Gabby taking care of that. So there are lots of use cases we have in mind. We have a fantastic roadmap for the next couple of years in front of us, and yeah, pretty excited about it. Alright.
Unknown Speaker: Automation on Gaby taken care of that so there's lots of use cases, we have in mind, we have a fantastic roadmap over the next couple of years in front of us and pretty excited about it.
Unknown Speaker: And Vik, on the normalized feedback margin, you know, I always say, quarter to quarter, you may see some fluctuations depending on the time you spend. Overall, if you look at Q1, we've always said accelerated A&C will be a tailwind to our ability to expand our margins over time. And with the pacing you saw in Q1, we saw some of the benefit of that.
Unknown Speaker: Yes.
Unknown Speaker: And Vic.
Unknown Speaker: We have always said accelerated at AMC will be a tailwind to our ability to expand our margins over time and with the pacing you saw on Q1, we saw some of the benefit of that for the year. We're on track for the 31 to exit.
Unknown Speaker: For the year, you know, we're on track for the 31 to exit, and we feel good about that. And we're on track for the 29 for the entire year. And obviously, we've talked about our ability to expand that going forward. And all that framework remains in place, and, you know, we continue to see the benefit of the A&C tailwind related to that. Great, thank you. Our next question comes from the line of Aaron Kessler from Seaport. Aaron, please go ahead.
Unknown Speaker: Feel good about that and we're on track for the 29 for the entire year and obviously, we've talked about our ability to expand that going out.
Aaron Michael Kessler: And all of those all that framework remains in place.
Aaron Michael Kessler: We continue to see the benefit of.
Aaron Michael Kessler: Great. Thank you.
Aaron Michael Kessler: Thanks, Aaron. On the macro level, I think the word we internally feel represents it best is steadiness. And I think that's been a positive for us, right? We had, and we talked about in 2023, you know, strong growth and customers coming, continuing to come in at the top of the funnel. Of course, some divestitures and integrations as an offset to that for the company, which I look at that as a short-term gain.
Unknown Speaker: Our next question comes from the line of Aaron Kessler from Seaport Aaron. Please go ahead.
Aaron Michael Kessler: But you know, good strong growth ads coming in, the steadiness in the macro, we believe will continue to continue to power that. And again, continuing to have a lot of firepower in terms of really efficient marketing at our disposal, you know; our marketing is getting better and better is driven by data. And, you know, lots, lots of opportunities for us to continue to explore to put more dollars at play and get really efficient returns on those.
Aaron Michael Kessler: Okay great.
Speaker Change: Maybe just first on the any updates upon macro to support trends that you're seeing there and it is customers were flat year over year I assume there is maybe some.
Aaron Michael Kessler: <unk> is an offset to that for the company.
Aaron Michael Kessler: Look at that as a short term gain but look strong gross adds coming in the steadiness in the macro what we believe will contribute continue to power that and again continuing to have a lot of firepower in terms of really efficient marketing at our disposal and our marketing that's getting better and better is driven with data.
Aaron Michael Kessler: And lots of opportunities for us to continue to explore to put more dollars at play and get really efficient returns on them.
Unknown Speaker: Our next question comes from Jian Li from Everport. Jian, please go ahead.
Aaron Michael Kessler: Our next question comes from the line of John Lee from Evercore. Please.
Jian Li: Thank you guys for taking the question. So I want to kind of go back to ARO. First, maybe just to say, it sounds like ARO is still in the early days of monetization. Are you baking in any kind of contribution to revenue and, or, you know, any contribution to bookings for this quarter, for that matter? So if you can kind of talk about the contribution here. And also, I think at investor day, you sort of alluded to ARO being applicable broadly across DIY and pro users. So I'm just wondering if there are any product features for ARO that you're building specifically for the pros or agency community?
Speaker Change: Okay. Thank you guys for taking the question. So I want to kind of go back to Aero first maybe just too it sounds like <unk> in the early days of monetization are you baking in any.
Jian Li: Kind of contribution to revenue and or.
Jian Li: If you can kind of talk about a contribution here and then also I think in the Investor day, you sort of alluded to.
Jian Li: <unk> been applicable broadly across DIY and pro users. So I'm just wondering if there is any product features for aero without your ability specifically for the pros are agency community.
Unknown Speaker: Yeah, thanks, John. I'll start with the first part, and then I'll probably answer the second part there. You know, the way we're looking at it right now, we are in the discovery and the engagement phase; we haven't hit the monetization phase. We're very early on, we're looking at all the statistics, we're looking at the level of engagement around it. But nothing has been built into our bookings or revenue, for that matter, in our model today.
Speaker Change: Yes, Thanks, John I'll start with the first part and then the model probably answer the second part there.
Jian Li: We were looking at right now we are in the discovery and the engagement phase we haven't hit the monetization phase.
Unknown Speaker: We're very early on we're looking at all the statistics, we're looking at the level of engagement around it but nothing thats been built into our bookings or revenue for that matter in our model today.
Unknown Speaker: Yeah, and I think, the way you might think about it, a lot of value is being created for customers with Aero because they're getting a bundled, bundled experience that's seamless, that's connected. And, you know, some of that monetization opportunity we've talked about, like Aero Premium and paywalls, but there's also a monetization opportunity that would happen at renewals, but that would be a year out from the time the customer bought the domain. So just keep that in mind, as well.
Speaker Change: Yes, and I think.
Unknown Speaker: You might think about it a lot of value has been created for customers within aero because they're getting a bundling bundle of experience that is seamless that's connected and some of that monetization opportunity. We've talked about premium pay walls, but theres also a monetization opportunity that would happen on renewals, but that would be a year out from the time the customer.
Unknown Speaker: But that means this is John <unk>.
Unknown Speaker: On your question about Aero features for Pro, the feature that I'm personally very excited about is Aero Insights, which is the capability where Aero assesses an existing website and gives super actionable advice to pros on how to improve that website. You know, we have a version of that that's going to be able to work for customers too. But that product, from the first day, from the ground up, it was built for pros; its first implementation was with WordPress.
Unknown Speaker: That in mind as well.
Unknown Speaker: On your question on Aerostructures for pro the feature of that I'm personally very excited about is aero insights, which is the capability with arrow.
Unknown Speaker: And it's a fantastic product; we get great engagement from pros on it. Again, you know, as with all Aero products, this is still at the discovery and engagement phase; we have not added monetization yet. But, you know, this year we expect to test a number of monetization methods for Aero Insights as well.
Unknown Speaker: There's an existing web site and gifts Super actionable.
Unknown Speaker: Advice to growers on how to improve that website. We have a version of that that is going to be able to work for customers too, but that product from the first day from the ground up because it was built for.
Unknown Speaker: It's first implementation is with Wordpress and it's a fantastic product like we got great engagement from draws on it again.
Unknown Speaker: With all Aero products that is still at the discovery and engagement space, we have not added monetization yet, but this year, we expect to test a number of monetize methods for Aero insightful.
Unknown Speaker: Great, wonderful. And then just a quick follow-up on the GPV strengths that you're seeing. If you can parse out a little bit, is that more customers attached growing? Is it more just a growing GPV per customer? And is it coming from Web Plus Marketing or more on the managed WordPress side? If you can also talk about the growth of these two segments separately as well.
Speaker Change: Alright wonderful and then just a quick follow up on the <unk> trends that Youre seeing if you can parse out a little bit is that more customer attached growing is it more just.
Unknown Speaker: Growing <unk> per customer and its coming from web plus marketing or more on the managed Wordpress site. If you can just talk about also the growth of these two segments separately as well. Thank you.
Unknown Speaker: Thank you.
Unknown Speaker: The biggest piece of the driver for the GP growth is actually converting our customers in the base and a lot of that has to do with a broader solution than just the online solution right.
Unknown Speaker: Thanks Jian. The biggest piece of the driver for GPV growth is actually converting our customers in the base. And a lot of that has to do with a broader solution than just the online solution, right? Where we have, you know, we have our hardware; we own the full stack from the hardware to the operating system on it, to the applications on top of it. And what we're taking really is sort of this omni-commerce solution that we're trying to bundle in different ways and target at the customers that we have. So that's actually the biggest driver of the GPV. And it's a fantastic driver for GPV, right?
Unknown Speaker: We have.
Unknown Speaker: We have our hardware we own the full stack from the hardware to the operating system on it through the applications on top of it we're taking really it's sort of this omni commerce solution that we are trying to bundle in different ways and target to the customers that we have so that's actually the biggest driver of the <unk>.
Unknown Speaker: And it's a fantastic driver for GP rate, we want to be in store with the customer and online we don't want to be just online with the customer we want to sort of have access to all of their business and that's what we're doing with the base of our customers and very often.
Unknown Speaker: We want to be in the store with the customer and online; we don't want to be just online with the customer; we want to sort of have access to all of their business. And that's what we're doing with the base of our customers. And very often, you know, it starts with a sale of a piece of hardware. And that's a great place. And we have always said that the biggest opportunity in front of us for commerce is conversion.
Unknown Speaker: <unk>.
Unknown Speaker: And Thats a great spot.
Unknown Speaker: We've always said the biggest opportunity in front of us for commerce is converting our existing customer base, Thats, where youre seeing the growth the GDP today.
Speaker Change: Alright. Thanks.
Unknown Speaker: Thanks, Jim.
Elizabeth Mary Elliott Porter: Our next question comes from the line of Elizabeth Porter from Morgan Stanley. Elizabeth, please go ahead.
Unknown Speaker: Our next question comes from the line of Elizabeth quarter from Morgan Stanley. Please go ahead.
Unknown Speaker: Hi, thank you so much. I wanted to ask again about Arrow. You were clearly seeing the benefit with more cash and ARPU, but I wanted to better understand how Arrow might be changing any sort of top of funnel demand. You noted some stronger gross customer ads. And then second, what is the potential impact on improving customer growth after some muted growth over the last couple years? Thank you.
Unknown Speaker: Stronger gross customer ads.
Unknown Speaker: And then second what is the potential for publication on improving customer growth factor from Needham.
Unknown Speaker: The last couple of years. Thank you.
Unknown Speaker: Yeah, on Aero changing the top of the funnel, you know, we're excited about being able to market the GoDaddy brand as a provider of not just this expansive set of products and capabilities but the provider that can bring you those capabilities in a seamless, intuitive, almost magical manner. So, you know, Aero is not just an experience for our customers, not just a platform that GoDaddy has. It's something we're taking into our marketing and looking at ways to really, you know, dive into customer perception.
Unknown Speaker: Yes on air with changing the top of the funnel, we're excited about being able to market that.
Unknown Speaker: Godaddy brand is a provider of not just this expansive set of products and capabilities, but the provider that can bring you those capabilities in a seamless intuitive almost magical manner. So it was not just an experience for our customers. It's not just a platform that godaddy has.
Unknown Speaker: And, you know, if the customer thinks about GoDaddy and thinks about domain names, Aero is going to help the customer think about GoDaddy and think about a lot of things together. So, that is the largest piece of shifting the top of the funnel with Aero, Elizabeth, if that makes sense.
Unknown Speaker: Dive into customer perception.
Unknown Speaker: It's really taking the go-to-market plan for Aero into every bit of our marketing, into every channel that we have, and making that really, really successful. In terms of customer growth, you know, yes, we absolutely see, in the medium and long term, a growing customer base for GoDaddy. We see that as a key sort of point of growth. We have brand awareness globally that is fantastic, like it's unparalleled. We have amazing products to bring to them. We have plenty of firepower in RP&L to be able to reach those customers, right? So, we absolutely believe there are a lot more customers for GoDaddy to reach and add to that 21 million every year.
Unknown Speaker: Really really successful in terms of customer growth.
Unknown Speaker: Yes, we absolutely see in the medium and long term.
Unknown Speaker: Our growing customer base for Godaddy, we see that as a key sort of point of growth.
Unknown Speaker: Have the brand awareness globally that is fantastic.
Unknown Speaker: We have amazing products to bring to them, we have plenty of firepower in our P&L, you'll be able to reach those customers. So we absolutely believe there are a lot more customers will go down in the region at about 21 million every year.
Unknown Speaker: Yeah, and we continue to be impacted by the testers and migrations that we've talked about. A lot of that's peaking in Q2 as some of these are starting to lap, but it will abate over time. And as I always say, in these scenarios, while we're attracting more of the customers with higher intent that are attaching to that second product and are engaging in the bundles, it's very, very happy with, or on the back end, we're losing what I call low-calorie customers that weren't really in there with any intent. So we're happy with the model. It should start to abate over time, and we'll keep everybody posted throughout the quarter on this.
Speaker Change: Yes, we can.
Unknown Speaker: Continue to be impacted by the divestitures migrations that we've talked about a lot of that is peaking in Q2 as some of these are starting to lap.
Unknown Speaker: Overtime.
Unknown Speaker: Great, that makes a lot of sense. And then, on the margin side of the equation, there's a kind of mix shift to A and C, but also leverage as revenue growth re-accelerates and you guys are taking also some specific cost actions to manage expenses. So just wondering if there's any way to like stack rank some of these drivers as it relates to the margin expansion that you guys have in the outlook. Yeah, and Elizabeth, I
Speaker Change: Great quarter, Thanks, and then a follow up on the margin side of the equation.
Unknown Speaker: Or is that kind of mix shift.
Unknown Speaker: You can also leverage as revenue growth Reaccelerate from you guys are taking also some specific to the cost actions to manage expenses.
Unknown Speaker: Yeah, and Elizabeth, I look at it in three buckets. We have the, you know, what I would say the tailwind related to ANC growing at a higher profit point, which continues to be, I would say, you know, a big driver. The other big driver is, you know, our access to global talent pools now that our international base is growing, and our ability to move into markets that are more cost effective is helping us.
Unknown Speaker: And then I would say the third, probably not as big as the other two, but the third continues to be our emphasis on structure simplification. And that is just getting more efficient, you know, reducing the number of locations we have, getting, you know, getting out of leases, that type of environment. So those three buckets are the big contributors to how we continue to expand our margin, and that will continue as we go into the next years. Right?
Unknown Speaker: Yes.
Unknown Speaker: What I would say the tailwind related to AMC growing at the higher profit point, which continues to be I would say the big driver. The other big driver is our access to global pallet pools now as our international base grows our ability to move into markets that are more cost effective is.
Unknown Speaker: It is helping US and then I would say the third probably not as big as the other two but the third continues to be our infrastructure simplification and that is just getting more efficient and reducing the amount of locations. We have getting getting out of leases that type of environment. So those three buckets are the big contributors to how we continue to expand our margin.
Unknown Speaker: That will continue as we go into the outer years.
Speaker Change: Alright, thank you.
Trevor Vincent Young: Our next question comes from the line of Trevor Young at Barclays. Trevor, please go ahead.
Unknown Speaker: Our next question comes from the line of Trevor Young at Barclays Charter. Please go ahead.
Unknown Speaker: Great, thanks. On the aftermarket, this is the second consecutive quarter of double-digit growth. But meanwhile, it looks like your full year expectations there are still kind of in low single digit territory. What's driving that outsized growth right now? It looks like ATVs are up almost 20% on the year plus the benefit of easier comparisons, just trying to understand if something has structurally changed in demand for that business, you know, what's causing that resurgence, and relatedly, what would cause it to slow from here?
Speaker Change: Great. Thanks on aftermarket second consecutive quarter here of double digit growth.
Trevor Vincent Young: While it looks like your full year expectations, there are still kind of in the low single digit territory.
Unknown Speaker: What's driving that outsized growth right now it looks like Atvs are up almost 20% on the year plus the benefit of easier compares just trying to understand if something has structurally changed in demand for that business and whats, causing that resurgence and relatedly what would cause it to slow from here.
Unknown Speaker: And thank
Speaker Change: Thanks Trevor.
Unknown Speaker: We definitely have seen a pick up what I would say in the average transaction value and in Q1, we saw the return of the larger transactions that had been missing in the prior periods.
Unknown Speaker: And thanks, Trevor. And, you know, we definitely have seen a pickup, what I would say, in the average transaction value. And in Q1, we saw the return of the larger transactions that had been missing in the prior periods. Again, we don't hold these into the model because they come in, you know, on the short term, and they can create some volatility. But we were, and we did see the benefit of that in the 12% growth in aftermarket this quarter.
Unknown Speaker: We don't believe is into the model because they come in.
Unknown Speaker: On the short term and that can create some volatility.
Unknown Speaker: We did see the benefit of that in the 12% growth in aftermarket this quarter.
Unknown Speaker: From a steady-state point of view, we still think this is a business that is going to have low single-digit growth. We're continuing to see volume at the lower end grow. We're continuing to see good average transaction values at the lower end grow. But, you know, we definitely saw the benefit in Q1 of some of those larger transactions. But like we've said, we don't build that into the model, and we only build in what we can see right now.
Unknown Speaker: From a steady state point of view, we still think this is a business that is going to be low single digit growth. We're continuing to see the volume at the lower end grow we're continuing to see good average transaction value with a low or even grow.
Unknown Speaker: But we definitely saw the benefit in Q1 and some of those larger transactions, but like we've said, we don't build that into the model and we only built in what we can see right in front of us.
Unknown Speaker: That makes sense. And just a quick follow-up on the Hart internet sale. How much of a drag will that be on hosting Reds? And was that previously contemplated in the 24 guide?
Speaker Change: That makes sense and just a quick follow up on the heart Internet sale, how much of a drag will that be on hosting Reds and was that previously contemplated in the 'twenty four guide.
Unknown Speaker: Yeah, I think the best way to say that was something we contemplated earlier when we were talking about our guide for this year. We hadn't closed it and announced it, but far enough along, we built it into the model.
Speaker Change: I think the best way to say that we previously contemplated that when we were talking about our guide for this year, we haven't closed it and announced it but we are far enough along we built that into the model.
Unknown Speaker: Okay, and anything on sizing the drag, you know, we look at it.
Speaker Change: Okay and anything upsizing the drag.
Unknown Speaker: We look at it as overall, the debestitures are about 100 basis points for the year, with that peaking in the second quarter and abating through the rest.
Unknown Speaker: We look at it is overall the divestitures of about 100 basis points for the year with that peaking in the second quarter and abating through the rest of the year.
Unknown Speaker: Okay, great. Thank you, Mark. Our next.
Speaker Change: Okay, great. Thank you Mark.
John Bayou: Our next question comes from John Bayou from Jeffries. John, please go ahead.
Unknown Speaker: Our next question comes from the line of John <unk> from Jefferies. Please go ahead.
Unknown Speaker: All right, thank you, this is it. Yeah, just unmuted. Thank you. This is Jon Bion for Brentzell.
Speaker Change: Okay got it thank you.
Unknown Speaker: You've pushed through the price increase on productivity and now on payments. I'm just wondering, you know, how much pricing power is left, especially given it seems a lot of SMBs are still, you know, somewhat struggling. And then on that last point, I know there was a question earlier on macro, but, anything you could share on the health of the SMBs? Anything different this Q1 versus last quarter? I don't know if there's any change for the better or worse in terms of SMB health and sentiment. Thank you. Thanks, John. Regarding the pricing.
John Bayou: Yes, just on mute thank you.
John Bayou: John.
John Bayou: Thanks Al.
John Bayou: So you push through a price increase on productivity.
Unknown Speaker: Now on payments I'm, just wondering how much pricing pilots left.
Unknown Speaker: Especially given it seems a lot of smbs as coal.
Unknown Speaker: Some are struggling and then on that last point.
Unknown Speaker: Early on macro.
Unknown Speaker: Anything you could share on the health of the F&B is anything different in this Q1.
Unknown Speaker: Versus last quarter on the Disney Channel.
Unknown Speaker: <unk> for the better or worse in terms of the F&B health and sentiment. Thank you.
Unknown Speaker: Thanks, John. On the pricing and bundling, you know, I just want to clarify a little bit. These are not push pricing changes. It really is an approach to create new and differentiated bundles to have pricing that's, you know, value-based and differentiated. It's not sort of a simple price increase that one might see. All of the pricing and bundling capabilities are based on large-scale data and machine learning. We see that we have a very large customer base. The more we apply this thinking, we do see some runway in front of us to do that, and so we think it's a great leveler.
Speaker Change: Thanks, John on the pricing and bundling.
Speaker Change: Just want to clarify a little bit.
Unknown Speaker: <unk> pushed pricing changes it really is an approach to create new and differentiated bundles to have pricing.
Unknown Speaker: Value base differentiate it.
Unknown Speaker: It's not sort of.
Unknown Speaker: The price increase that one might see.
Unknown Speaker: All of the pricing and bundling capabilities or based on sort of large scale data and machine learning. We see we have a very large customer base of more we apply this thinking we do see some runway in front of us to.
Unknown Speaker: To do that and so we think it's a great lever.
Unknown Speaker: I'll maybe point back to our growth and margin driver slides during investor day, and pricing and bundling was the biggest pillar. Because again, it's not just about price increases. It's about creating the right bundle and pricing it in a dynamic manner to get the best return both for booking growth and for renewal at the same time. So that's just a little bit of context for what you might think about our pricing and bundling initiative.
Unknown Speaker: I'll, maybe pointing back to our growth and margin drivers slide during the investor day, and sort of pricing and bundling or the biggest pillar because again, it's not just about price increase it's about creating the right bundle and pricing it in a dynamic manner to get the best return both for bookings growth and.
Unknown Speaker: And for renewal at the same time.
Unknown Speaker: That's just a little bit of.
Unknown Speaker: Context for how you might think about our pricing and bundling initiative in terms of the macro I think the best what we view as sort of we see a steadiness to the macro and we think Thats a positive we think.
Unknown Speaker: In terms of the macro, I think that's what we view as sort of a steadiness in the macro. And we think that's positive. We think for our customers; they always tend to be an optimistic group. We never do a survey with our customers.
Unknown Speaker: For our customers.
Unknown Speaker: They always tend to be an optimistic group.
Unknown Speaker: We never we never do a survey with our customers and they never come back with sort of where I think the world Sky is falling we're always optimistic about their business.
Unknown Speaker: And they never come back with sort of, well, I think the world sky is falling. They're always optimistic about their business. And the study macro, I think, just helps them have a little bit more optimism.
Unknown Speaker: Now the study macro I think just helps them have a little bit more optimism.
Speaker Change: Great. Thank you very much.
Speaker Change: Thanks, John.
Unknown Speaker: Our next question comes from the line of Chris Kuntarich from UBS. Chris, go ahead.
Unknown Speaker: Our next question comes from the line of Chris <unk> from UBS. Please go ahead.
Unknown Speaker: Okay.
Christopher Louis Kuntarich: Great. Thanks for taking the time to answer the question. Maybe just the first one would be around paywalls. Can you just unpack a little bit what you mean by that and the use of that around Aero? And the second question would be just back to marketing. Aman, you were calling out really just the strength of GoDaddy's brand overall at this point. We saw some really nice leverage in the first quarter. Just how should we be thinking about kind of leverage for the remainder of the year and what's kind of predicated on that guide from a marketing perspective and maybe kind of how you think about using, continuing to, or needing to continue to push on Aero awareness versus maybe more lower funnel tactics? Thanks.
Speaker Change: Great. Thanks for taking the question maybe just first one would be around paywalls can you just unpack a little bit what you mean by that and the use of that around arrow.
Christopher Louis Kuntarich: Second question would be just back to marketing Amman, you were calling out really just kind of the strength of go Daddy's brand overall at this point, we saw some really nice leverage in the first quarter, just how should we be thinking about kind of leverage for the remainder of the year and what's kind of predicated in that guide from a marketing perspective, and maybe kind of how you think about using.
Christopher Louis Kuntarich: Continuing to our meeting to continuing to push on Aero awareness versus maybe more lower funnel tactics. Thank you.
Unknown Speaker: Yeah, let me start by talking about the Aero paywall. You know, the type of thing we're talking about is you buy a domain name, and suddenly you've got a logo, you've got a coming soon website created, you've got eight versions of websites created that you can choose one from, you've got an email address that's been created for you, you've got a pay link, that's all that's ready to go, you can take payments on it 60 seconds later, right, you've got marketing campaigns that are set up for you already.
Aman: Yes, let me start by talking about the Aero paywall. The type of thing that we're talking about is you buy a domain name and suddenly got a logo you've got coming soon website created you've got it varies on the websites created that you can choose one from <unk> got an email address that's been created for your gut feeling that's ready to go you can take payments on it 60 seconds.
Unknown Speaker: <unk> got marketing campaigns that are set up for you already.
Unknown Speaker: We're looking for engagement, and we're gathering data about how customers engage with these different capabilities or products or cards, as we call them, right? The paywall is a technology that basically looks at that usage. And at a certain point of value created for the customer, to interrupt the customer and say, hey, if you want, and let's say a better logo, or if you want to improve this website in a certain way, or you want to edit this website here, you actually have to start to have a paid plan. Like it was great that you had that Aero did all this work for you. And we love it that you love it too!
Unknown Speaker: We're looking for engagement and we're gathering data about how customers engage with these different capability of the product for cards as we call them.
Unknown Speaker: The paywall is a technology, which basically looks at that usage and at a certain point of value created for the customer to lift truck the customer and say Hey, if you want and let's say a better logo or if you want to improve this website in a certain way already one edits. This website here you actually have to start to have a base plan.
Unknown Speaker: It was great.
Unknown Speaker: But at this point, now, you have to pay for it, right? And that's, you know, paywalls and sort of having the ability to dynamically become part of the customer journey and introduce friction where you want to get paid is a sophisticated sort of capability that SaaS companies have. And I'm very excited to have it at GoDaddy too, right? And Aero, given its breadth of products, really offers us the capability to have lots of different paywalls that we're testing. So I shared an example, I think, in the past about a paywall for websites.
Unknown Speaker: That eroded all this work for you and we love it or you love it but at this point now you have to pay for it right and that's.
Unknown Speaker: Paywalls and sort of being.
Unknown Speaker: Some part of the customer journey and introduce friction where you want to get paid as sophisticated sort of capability that SaaS companies have and I'm very excited to have it at godaddy to rate in Aero.
Unknown Speaker: It's a breath of products really offers us the capability to have lots of different paywalls that would test. So I shared an example, I think in the past about a pay off of websites.
Unknown Speaker: But slowly, what you're going to see is us sort of understanding the customer journey, the flow, and then interrupting that and, you know, looking to sort of sign up for a subscription with that customer. And in terms of marketing, as I said, we're, you know, I'm going to say this, and Mark will probably say something related to it too, and we laugh about it internally sometimes. You know, I'd, of course, like to spend a lot on marketing with Aero and tell the whole world about the capability we have, but we're very disciplined in our approach to looking at the return on marketing.
Unknown Speaker: Slowly what youre going to see is us sort of understanding the customer journey to flow in and interrupting that in looking looking to sort of sign up with a subscription with that customer and in terms of marketing.
Unknown Speaker: Im going to say there isn't a mark will probably say something.
Unknown Speaker: We laugh about it sometime internally I have of course like to spend a lot on marketing with arrow and tell the whole world about the capability, we have but we're very disciplined in our approach of looking at the return on marketing and that has to do with my history.
Unknown Speaker: And that has to do with my history, you know, going back many, many years, you know, relying on gathering a lot of data on how our marketing, how our marketing channels are working, how are we really getting value from them. So, you know, we'll continue to stay super disciplined and look to spend, you know, whatever we can within our guidelines. But I think in terms of leverage for the Aero, Mark, do you want to- And this applies to marketing and all investments, really.
Unknown Speaker: Going back many many years relying on gathering a lot of data how is our market how our marketing channels are working how are we really getting value from them. So we'll continue to say, it's super disciplined and look to spend.
Unknown Speaker: Whatever we can within within our guidelines, but I think in terms of leverage for the Aramark.
Unknown Speaker: This applies to marketing all investments really at the end of the day, we will.
Unknown Speaker: We like to use data in order to understand, you know, what's going to get us the best return. And when we feel we understand that, we're willing to invest in it. Marketing is the same thing for us, right? Well, we want to get to the point where we understand the monetization formula, and then we can start to optimize for that. So we feel good about our ability to make those decisions across the board and leverage across all of our P&L. And obviously, our ability to continue to expand the margin, especially as we see the uptick in ANC and the tailwind that that has.
Unknown Speaker: To the point, where we understand the monetization formula and then we can start to optimize for that so we feel good about our ability to make those decisions across the board in a leveraged across all of our P&L.
Unknown Speaker: And obviously, our ability to continue to expand the margins, especially as we see the uptick in AMC and the tailwind that that gives us going into the future.
Speaker Change: Understood. Thank you very much.
Speaker Change: Thank you.
Naved Ahmad Khan: Our next question comes from the line of Naved Khan from B. Reilly. Naved, please go ahead.
Unknown Speaker: Hey.
Unknown Speaker: Hi, can you hear me? Yeah, we can. So just a quick question on the booking growth for ANC. It's pretty impressive. And in your commentary, you kind of attributed that to pricing and bundling. I just want to double-click on that.
Speaker Change: Hi can you hear me.
Naved Ahmad Khan: Jonathan.
Naved Ahmad Khan: Hey, So just a quick question on the on the <unk>.
Naved Ahmad Khan: Booking growth for AMC.
Unknown Speaker: Impressive.
Unknown Speaker: <unk>.
Unknown Speaker: In your commentary you kind of attributed that to pricing and bundling I just wanted to demonstrate.
Unknown Speaker: Unknown Attendee Is it more bundling versus pricing that's kind of driving this? How should we understand it from the outside looking in? And then, at the end of the day, Aman, I think you talked about value-based pricing and leveraging dynamic pricing and things like that. How much of that is happening currently and how much scope there is for that to kind of, do it further and more broadly.
Speaker Change: And then.
Unknown Speaker: At the Investor Day, I'm on I think you had talked about value based pricing.
Unknown Speaker: And leveraging dynamic pricing and things like that how much of that is is happening currently and how much how much scope is there too.
Unknown Speaker: Yeah, Naved, thanks for that question. So, you know, the approach we've taken with value-based pricing is that the pricing and bundling initiatives sort of work together on it, if you will, they go hand in hand because it's really looking at, you know, what the engagement is for that customer, what value that customer has, what, you know, bundles of services that we can create for them, and then how should we, how should we price that?
Unknown Speaker: Yeah, Naved.
Aman: Yes. Thanks for that question. So the approach we've taken with value based pricing is that the pricing and bundling initiatives sort of works together on it if you will they go hand in hand, because it's really looking at what the engagement is for that customer what value that customer has.
Unknown Speaker: And, you know, where Mark and I talked a little bit about the areas where we've already invested in that, we actually want to take that thing across our whole portfolio. So sitting here, we do believe that, as we said yesterday, there's sort of at least three years of goodness for us that we see with the pricing and bundling initiative. And, you know, we're excited about going after that opportunity because we do have a huge base of 21 million customers that we can approach with that kit and that type of thing.
Unknown Speaker: Where we have mark talk a little bit about the areas, where we've already invested in that in that we actually want to pick that thinking across our whole portfolio. So sitting here, we do believe that.
Unknown Speaker: As we said at Investor day sort of at least three years of goodness for us that we see with the pricing and bundling initiative and we're excited about going after that opportunity because we do have a huge base 21 million customers that we can approach with that with that type of thinking.
Speaker Change: Thank you.
Unknown Speaker: Thank you. Uh, no, that's what I wanted to kind of get a better handle on. It seems like uh we're leveraging both to then kind of, Ultimately, get the sale done or renewal happen. Maybe just a quick follow-up on CAPEX. It wasn't discussed, it was just assumed.
Unknown Speaker: No.
Unknown Speaker: What I wanted to kind of getting better hand, Lauren seems like.
Unknown Speaker: Leveraging both kind.
Unknown Speaker: Kind of.
Unknown Speaker: I was going to actually get the sale done.
Unknown Speaker: Hoffman.
Speaker Change: Maybe just a quick follow up on Capex. It doesn't just because it's rather than assume.
Speaker Change: It stays where you guided to at the beginning of the year or maybe it hasnt changed.
Alexei Gogolev: Thank you. Our next question comes from Alexei Gogolev from J.P. Morgan. Alexei, please go ahead.
Speaker Change: Thank you. Our next question comes from the line of Alexia <unk> from Jpmorgan Alexey. Please go ahead.
Unknown Speaker: Hello, everyone. Thank you for letting me ask the question. Mark, I was wondering if you could give us some insight into how Create and Grow ARR was doing this year and what is your expectation for the rest of the year?
Alexei Gogolev: Thank you for letting me ask the question.
Alexei Gogolev: Mark I was wondering if you could give us some insight how we.
Speaker Change: We can grow.
Unknown Speaker: We're doing this year and what they.
Alexei Gogolev: Is your expectation for the rest of the year.
Unknown Speaker: Yeah, without getting into the specifics of, you know, , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Speaker Change: Yes, without getting into the specifics of.
Alexei Gogolev: Growth rate around <unk>.
Unknown Speaker: Remember it is our lagging of our lagging indicators. So we generally will trail revenue not only the bookings to revenue formula, but it also trails with revenue too.
Unknown Speaker: Trailing 12 months that impact so while we expect to see healthy growth in any of our.
Unknown Speaker: <unk> that we.
Unknown Speaker: Again.
Unknown Speaker: Lacked throughout the year, but it will continue to increase over time.
Unknown Speaker: <unk>.
Unknown Speaker: We continue to look at it growing as a subscription base continues to grow and Thats a good sign of health.
Unknown Speaker: We continue to see that <unk> has been very healthy and our applications ecommerce as well as very steady within our core platform. We continue to see.
Unknown Speaker: Should be one to two points ahead of.
Unknown Speaker: Overall, sorry, the subscription bookings should be one to two points ahead of revenue throughout the year.
Unknown Speaker: Okay, thank you, Mark. And then the second question was about the WorldPay partnership. Could you provide an update on how it's faring and also that significant improvement in total GPV or annualized GPV? Has there been any tailwind coming from that partnership? Yeah,
Speaker Change: Okay. Thank you Mark and then the second question was about <unk> partnership could you provide an update on how that's faring in that also that significant improvement in.
Unknown Speaker: <unk> GTD or annualized CPE has there been any tailwind coming from that working partnership.
Unknown Speaker: Yeah, the Worldplay partnership isn't necessarily driving GPV growth, but we like the partnership with Worldplay. We're excited about what the new team there is doing. Obviously, they have had a lot going on over the last few months, but we think they're in a great place. We're very excited about the product offering we have with them, and we're excited about them selling more and more every month. So that's where we are. But our GPV is mostly growing without selling into our own base. Thank you, Aman.
Unknown Speaker: Yes.
Unknown Speaker: Partnership with isn't driving the GP growth necessarily.
Ygal Arounian: And our last question comes from the line of Ygal Arounian from Citi. Again, go ahead, Ygal. You're muted, Ygal.
Speaker Change: We like the partnership with Workday, we're excited about with the new team.
Ygal Arounian: Roughly when we have with them and we're excited about them sort of selling more and more every month.
Ygal Arounian: Where we're at.
Ygal Arounian: But <unk> is mostly growing with us selling into our own base.
Ygal Arounian: Thank you.
Ygal Arounian: And our last question comes from the line of <unk> all around the interest city on again go ahead.
Ygal Arounian: You're on mute.
Unknown Speaker: Hey, everyone. Thanks for letting me ask a follow-up question and taking a couple more minutes of your time. Last week, VeriSign made some comments about, you know, how they're going to kind of ramp up marketing spend in particular, how they're going to work a little bit more one-on-one with their distributor partners to try to open up the funnel for DOTCOM in particular. So I'm getting a lot of questions, and there's been a lot of interest from investors on that point.
Ygal Arounian: Hey, everyone. Thanks for letting me ask a follow up in most Tech Inc.
Ygal Arounian: A couple of more minutes of your time.
Ygal Arounian: Last week bare side.
Unknown Speaker: Some comments about.
Unknown Speaker: How they're going to kind of wrap up market expanded in particular, how theyre going to.
Unknown Speaker: At work.
Unknown Speaker: More.
Unknown Speaker: 101 with with there.
Unknown Speaker: Our distributor partners to try to open up the funnel for Dot com.
Unknown Speaker: Particular so.
Unknown Speaker: So I thought I'd just ask it from your point of view and, you know, what that might mean for you. You know, what you're seeing on DOTCOM or, just in general, as both a registrar and a registry, you know, what you guys are seeing in kind of like the, I know you have broader exposure, so what you're seeing in that disparity in DOTCOM versus total domains. And if you're getting a little bit more support from VeriSign, does that mean more efficiency in marketing spend where you can kind of, you know, spend a little?
Unknown Speaker: What youre seeing.
Unknown Speaker: Dot com.
Unknown Speaker: Just in general is that both the registrar and registry.
Unknown Speaker: What you guys are seeing in kind of like the broader exposure. So what youre seeing in that in that disparity in dock Comverse as total domains and.
Unknown Speaker: If you are getting a little bit more support from bare side does that mean more efficiency and marketing spend where you can spend.
Unknown Speaker: Spend a little bit more.
Unknown Speaker: We opened up the top of the funnel up a little bit more just what can that mean for your business. Thanks.
Unknown Speaker: Thanks, Ygal. I think you kind of answered the question. We have a diversified portfolio of domain names, right? If you're familiar with it, you know, we have the opportunity to sell over 400 different TLDs, the opportunity to have massive brand awareness globally. We're in more markets than any other domain registrar, in my view, right? And then we have the opportunity to really create merchandising and offerings that are unique compared to other players. So we think, you know,
Speaker Change: Thanks again.
Unknown Speaker: Right.
Unknown Speaker: Yes.
Unknown Speaker: Familiar with it we.
Unknown Speaker: Have the opportunity to sell over 400 different <unk> the opportunity to have massive brand awareness globally, we're in more markets than any other domain registrar.
Unknown Speaker: We have the opportunity to really create merchandising and offerings that are unique compared to other players. So we think we have a great diversified portfolio on demand, obviously, we love all our partners.
Speaker Change: We want to work with everyone.
Speaker Change: Okay. Thank you.
Unknown Speaker: We have now finished the Q&A. I'll turn it back over to you, Aman.
Unknown Speaker: We have now finished the Q&A I'll turn it back over to Ken. Thank you for joining US we'll see you in a quarter.
Amanpal Singh Bhutani: Thank you for joining us. We'll see you in a quarter. Bye-bye.