Q1 2026 GoDaddy Inc Earnings Call

April 30, 2026

Christie Masoner: Welcome to GoDaddy's Q1 2026 earnings call. Thank you for joining us. I'm Christie Masoner, VP of Investor Relations, and with me today are Aman Bhutani, Chief Executive Officer, and Mark McCaffrey, Chief Financial Officer. Following prepared remarks, we will open up the call for your questions. 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 will be referencing both GAAP and non-GAAP financial measures and other operating and business metrics. A discussion of why we use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their GAAP equivalents may be found in the presentation posted to our investor relations site at investors.godaddy.net or in today's earnings release on our Form 8-K furnished with the SEC.

Christie Masoner: Growth rates represent year-over-year comparisons unless otherwise noted. The matters we'll be discussing today include forward-looking statements such as those related to future financial results and our strategies or objectives with respect to future operations. 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, 30 April 2026, and except to the extent required by law, we undertake no obligation to update these statements because of new information or future events. With that, I'm happy to introduce Aman.

Aman Bhutani: Good afternoon, thank you for joining us. At GoDaddy, our purpose is to make opportunity more inclusive for all. We serve over 20 million customers globally, helping them establish their identity, build their presence, and grow their business. We do this through an integrated platform that brings these capabilities together in a seamless AI-powered experience, helping customers move from their idea to execution quickly and at a compelling value. Starting with Q1 results, we delivered revenue growth of 6%. This performance, combined with continued operational execution and structural leverage, drove meaningful expansion in normalized EBITDA margin to 33%, up over 200 basis points. This underscores the durability of our model and continued progress towards our financial North Star, generating strong free cash flow growth of 15% while remaining committed to delivering long-term shareholder returns.

Aman Bhutani: As AI-driven innovation accelerates, customer expectations for speed, simplicity, and measurable outcomes are rising. Customers are increasingly using LLMs across their workflows and getting familiar with chat-based interfaces. We are leaning into this shift, positioning GoDaddy as the platform that helps entrepreneurs turn intent into action through AI-powered experiences and outcomes. Our AI transformation builds on our core strengths of a trusted global brand, leadership in domains, scaled infrastructure, proprietary data, strong engineering talent, and a world-class care organization. Together, these form a differentiated platform that allows us to deliver a seamless one-stop-shop solution for entrepreneurs. We are moving quickly and intentionally with focus on delivering measurable outcomes for entrepreneurs. The positive impact of our AI transformation is clear in three areas. First, the adoption and monetization of our AI-native products. Second, the expansion of Agent Name Service as a new identity layer for the agentic open internet.

Aman Bhutani: Third, the use of AI to drive operational efficiency. First, we are making strong progress on our AI-native products. Airo AI Builder, introduced last quarter on Airo.ai, is an AI-native experience that enables customers to move from idea to execution in minutes, automatically creating websites, applications, and core business capabilities across identity, presence, and commerce. I work directly with customers using Airo AI Builder on a weekly basis, and the customer feedback is shaping our roadmap and accelerating development. Our customers are looking for simple, integrated solutions that support their core jobs to be done, and we are delivering that through Airo AI Builder. It is delivering strong early adoption, and monetization is already scaling with customers. This new Airo AI Builder product offering has rapidly scaled to $10 million-plus in annualized bookings run rate within weeks of its beta launch.

That enables customers to move from idea to execution in minutes automatically creating websites applications and Core Business capabilities across identity presence and commerce.

I work directly with customers using Aero AI Builder, on a weekly basis and the customer feedback is shaping our road map and accelerating development. Our customers are looking for simple Integrated Solutions, that support their core jobs to be done and we are delivering that through Aero AI Builder. It is delivering strong earlier adoption and monetization is already scaling with customers.

Aman Bhutani: While still early, the pace of adoption and quality of customer interaction is strong. Customers are building, publishing, and purchasing incremental credits as they deepen their use of the product. Momentum continues to build week after week as we expand Airo AI Builder's functionality and distribution. We are expanding distribution of Airo AI Builder on godaddy.com and have begun selling it through care. In care, we drive higher adoption of premium plans compared to our online channels and receive direct customer feedback, both positive and constructive, to improve the product. As a next step, we are ramping targeted paid marketing in May, funded through efficiencies elsewhere in the business. We are thoughtfully monitoring the mix between new and existing products as we scale with a focus on optimizing overall customer value and maintaining margin discipline.

This new Aero AI Builder product offering has rapidly, scaled to 10 million plus in annualized. Bookings, run rate, within weeks of its beta launch. While still early the pace of adoption and quality of customer. Interaction is strong, customers are building, publishing and purchasing incremental credits, as they deepen their use of the product momentum continues to build week after week as we expand Aero AI, Builders functionality, and distribution.

We are expanding distribution of Aero AI Builder on godaddy.com and have begun selling it. Through care, in care, we drive higher adoption of Premium plans compared to our online channels and receive Direct customer feedback, both positive and constructive to improve the product. As a next step we are ramping targeted trade marketing.

Aman Bhutani: The second major product initiative we introduced last quarter is the upgrade of Websites + Marketing, bringing AI-native capabilities into the product while maintaining strong cost discipline for both customers and GoDaddy. This upgrade combines AI-driven capabilities with a powerful editor, enabling customers to create and manage their presence more efficiently. The domains funnel remains our largest distribution lever for new customers, and in this quarter, we tested the upgraded product within that path. Early results exceeded our expectations and validated the direction of the product. We are excited to get the upgraded functionality in front of all our customers and are using experimentation to inform improvements on the experience. Our teams have embraced an AI-native approach across our customer products, and we are making meaningful progress delivering customer value. We are expanding these capabilities at a rapid pace while maintaining disciplined investment.

In May funded through efficiencies elsewhere in the business we are thoughtfully monitoring the mix between new and existing products. As we scale with a focus on optimizing overall customer value and maintaining margin discipline.

The second major product initiative, we introduced last quarter is the upgrade of websites plus marketing. Bringing AI native capabilities into the product. While maintaining strong cost discipline for both customers and GoDaddy. This upgrade combines AI driven capabilities with a powerful editor, enabling customers to create and manage their presence more efficiently, the domains funnel remains our largest distribution, level for new customers. And in this quarter, we tested the upgraded product within that path. Early results, exceeded our expectations and validated the direction of the product. We are excited to get the upgraded functionality in front of all our customers and are using experimentation to inform improvements on the experience.

Aman Bhutani: As we scale distribution and marketing, we are confident in our ability to compete effectively. The second component of our AI transformation is Agent Name Service or ANS. We are working with large players and seeing continued interest in this technology. ANS extends the role of domains as a digital identity provider in an agentic open web. We signed a couple of partnerships over the last quarter with real-world use cases and are working hard on aligning key players on the open standard and the use of domain name service or DNS for agent identity and discovery. Championing the open standard and partnerships are key to getting to critical mass of support of the open standard, and we are encouraged by early results. Non-GoDaddy agents in GoDaddy's ANS implementation now number in the thousands.

Our teams have embraced and AI native approach across our customer products and we are making meaningful progress, delivering customer value. We are expanding these capabilities at a rapid Pace while maintaining discipline investment as we scale distribution and marketing. We are confident in our ability to compete effectively.

The second component of our AI transformation is Agent Named Service, or ANS. We are working with large players and seeing continued interest in this technology. ANS extends the role of domains as a digital identity provider in an agentic open web. We signed a couple of partnerships over the last quarter with real-world use cases and are working hard on aligning key players on the open standard and the use of Domain Name Service, or DNS, for agent identity and discovery.

Aman Bhutani: DNS is the foundation of identity on today's internet, and domains are uniquely positioned to play a role in agent identity and trust, extending domain relevance into the future. Third, we are transforming GoDaddy into an AI-native company by deploying AI across our operations to improve speed, efficiency, and customer outcomes. We are driving the most immediate impact in software development, where AI is enabling the rapid creation of customer-facing applications with fewer dedicated teams. We are also testing the replacement of smaller third-party SaaS tools with internally built solutions on Airo AI Builder, particularly across corporate functions, with the goal of reducing both cost and operational complexity. In care, we are advancing to the next phase of AI-powered automation. In Q1, we achieved key proof points across both support and sales.

Championing the open standard and Partnerships are key to getting to critical mass of support of the open standard and we are encouraged by early results. Non- GoDaddy agents in godaddy's, ANS implementation. Now, number in the thousands, DNS is the foundation of identity on today's internet and domains are uniquely positioned to play a role in agent identity, and Trust, extending domain relevance into the future.

Third. We are transforming GoDaddy into an AI native Company by deploying AI across our operations to improve speed, efficiency, and customer outcomes, we are driving the most immediate impact in software development where AI is enabling the rapid creation of customer-facing. Applications with fewer dedicated teams. We are also testing the replacement of smaller, third-party SAS tools with internally built Solutions on Aero AI.

Builder particularly across corporate functions with the goal of reducing both cost and operational complexity.

Aman Bhutani: On the support side, we launched Airo Care, a new AI-native support technology across voice and chat that handles a wide range of customer queries. We validated it against our existing offering, delivering strong improvements in resolution rates. Our first test improved resolution rate by approximately 50%. Subsequent tests demonstrated that Airo Care can equalize the resolution rates between English and non-English markets, improving performance in non-English markets by over 150% and strengthening care as a global competitive advantage. Airo Care is now rolled out to more than 50 markets and 20 languages. We will continue to expand use cases each month while maintaining a strong focus on customer satisfaction, resolution rate, sales, and cost. On the sales side, our AI-native commerce Airo sales agent makes voice calls and handles the entire commerce sales experience without human intervention.

Existing offering delivering strong improvements in resolution rates. Our first test improved resolution rate by approximately 50% subsequent tests demonstrated that AeroCare can equalize. The resolution rates between English and non-english, markets, improving performance in non-english markets, by over 150%, and strengthening care as a global competitive Advantage. Aero care is now, rolled out to more than 50 markets, and 20 languages we will continue to expand use cases each month while maintaining a strong focus on customer. Satisfaction resolution rate sales and cost.

Aman Bhutani: We have optimized the agent over the last few months, and last quarter, it delivered conversion rates comparable to human-assisted sales for smaller leads. These are exciting milestones, we plan to scale these capabilities throughout the year. Alongside these AI transformation initiatives, we continue to execute on pricing and bundling, seamless experience, and commerce. These programs continue to drive improvements in conversion, attach, and renewal rates. I want to briefly revisit the promotional offer we discussed last quarter. We refined the program to better balance customer acquisition and bookings, These efforts are delivering results. The promotions drove strong gross customer adds and resulted in new domain registrations accelerating by 6% for independent and partner customer populations. Our strategy remains consistent. We are focused on attracting high-intent customers who attach, convert, and grow over time, optimizing for long-term value.

On the sales side, our AI-native Commerce Arrows sales agent makes voice calls and handles the entire commerce sales experience without human intervention. We have optimized the agent over the last few months, and last quarter it delivered conversion rates comparable to human-assisted sales for smaller leads.

These are exciting milestones and we plan to scale these capabilities throughout the year.

Alongside these AI transformation initiatives. We continue to execute on pricing and bundling seamless experience and commerce. These programs continue to drive improvements in conversion attached, and renewal rates.

I want to briefly revisit the promotional offer we discussed last quarter. We refined the program to better balance customer acquisition and bookings, and these efforts are delivering results. The promotions drove strong gross customer adds and resulted in new domain registrations accelerating by 6% for independent and partner customer populations.

Aman Bhutani: Towards this end, we also took the opportunity to remove a lower-value product offering this quarter. This partially offset the customer growth from the promotional offer but did not materially impact bookings. In closing, we are operating in a dynamic environment with rapid change and leaning into our strengths. We serve more than 20 million customers globally. Our domains business and our unwavering focus on micro business customers remains foundational, supported by our scaled integrated platform that connects identity, presence, and commerce. This combination of global reach, proprietary data, seamless technology, and our care organization creates deep customer insight and consistent execution. Our model is built around attracting high-intent customers and helping entrepreneurs start and grow their ventures over time. This drives durable growth and expanding margin and strong compounding free cash flow. We continue to execute with discipline. As we look ahead, our path forward is clear.

Our strategy remains consistent. We are focused on attracting High intent, customers who attach convert and grow over time. Optimizing for long-term value towards this end. We also took the opportunity to remove a lower value product offering this quarter this partially offset, the customer growth from the promotional offer, but did not materially impact bookings.

In closing, we are operating in a dynamic environment with rapid change and leaning into our strengths. We serve more than 20 million customers globally, our domains business, and our unwavering focus on micro business. Customers remains foundational supported by our scaled integrated platform. That connects identity presence and commerce. This combination of global reach proprietary data, seamless technology, and our Care Organization creates, deep customer, insight and consistent execution.

Aman Bhutani: We have a large market opportunity, a strong competitive position, and the financial flexibility to continue investing to deliver enduring shareholder value. With that, here's Mark.

Our model is built around attracting high-end customers and helping entrepreneurs start and grow their Ventures over time. This drives durable growth and expanding margin and strong compounding. Free cash flow. We continue to execute with discipline. And as we look ahead, our path forward is clear. We have a large Market opportunity, a strong competitive position, and the financial flexibility to continue. Investing to deliver enduring shareholder value.

Mark McCaffrey: Thanks, Aman. Good afternoon, everyone. In Q1, our model continued to demonstrate its durability, driving operating leverage, expanding margin, and generating attractive compounding free cash flow. Supported by a strong balance sheet, we had the flexibility to invest in innovation while still maintaining a disciplined capital allocation framework. We delivered revenue at the high end of our guidance while expanding our normalized EBITDA margin by over 200 basis points. At the same time, we generated strong free cash flow of $474 million, bringing our trailing twelve-month free cash flow to $1.68 billion. We deployed capital through share repurchases, reducing fully diluted shares outstanding to 133 million. Our focus remains on consistent execution and delivering solid financial results as we continue to advance our AI transformation.

With that, here's mark.

Thanks so much and good afternoon, everyone.

In the first quarter. Our model continued to demonstrate its durability driving operating leverage, expanding margin and generating attractive compounding free cash flow.

Supported by a strong balance sheet, we had the flexibility to invest in Innovation while still maintaining a disciplined Capital allocation framework.

We delivered Revenue at the high end of our guidance while expanding our normalized ibida margin by over 200 basis points.

At the same time we generated strong free cash flow of 474 million, bringing our trailing 12-month, free cash flow to 1.68 billion.

We deployed Capital through Sherry purchases reducing fully, diluted shares, outstanding to 133 million.

Mark McCaffrey: For the quarter, total revenue grew 6% on both a reported and constant currency basis to $1.3 billion, and ARR grew 6% to $4.3 billion. International revenue grew 7% to $416 million. For our high-margin A&C segment, we drove 12% growth in revenue to half a billion dollars on continued solid attach of our subscription-based solutions. A&C ARR grew 10%, and this segment now represents approximately 40% of our total business. Segment EBITDA margin improved 110 basis points to 45% on product mix. Our core platform segment delivered revenue growth of 3% to $769 million on 5% growth in primary domains with a stronger mix towards higher priced non .com TLDs.

Our Focus remains on consistent execution and delivering solid Financial results as we continue to advance our AI transformation.

For the quarter, total revenue grew 6% on both a reported and constant currency basis to 1.3 billion, and ARR grew 6% to 4.3 billion, International Revenue, grew 7% to 416 million.

For our high margin A&C segment. We drove 12%. Growth in Revenue to half a billion dollars on continued solid attached of our subscription based Solutions.

ANC grew 10% and this segment now represents approximately 40% of our total business.

Mark McCaffrey: This was partially offset by softness in non-core GoDaddy hosting, the .co registry contract expiration, and tougher compares in aftermarket. Segment EBITDA margin expanded 150 basis points to 33% on product mix. Total bookings grew 3% to $1.5 billion, reflecting a few points of impact from our promotional offer we shared last quarter, the .co registry contract expiration, and lapping of prior year aftermarket strength. A&C bookings grew 9%, and core platform bookings declined 1%. As we outlined in February, this quarter reflects the peak impact of both these dynamics. Excluding any FX impact, we expect bookings and revenue growth rates to be at or above parity for the remainder of the year. Our focus on attracting and growing high-intent customers, combined with conversion improvements, is driving durable growth and higher customer quality.

Basis points to 45% on product. Mix our core platform. Segment delivered Revenue, growth of 3%, to 769 million on 5% growth in primary domains with a stronger mix towards higher price noncom tlds.

This was partially offset by softness and non-core, GoDaddy, hosting the dotco registry contract expiration and tougher Compares in aftermarket.

Segment, EBA Market, expanded 150 basis points to 33% on product mix.

Total bookings grew 3% to $1.5 billion, reflecting a few points of impact from our promotional offer we shared last quarter, the .CO registry contract expiration and lapping of prior year, and aftermarket strength.

ANC bookings grew 9% and core platform bookings declined 1%.

As we outlined in February, this quarter reflects the peak impact of both, these Dynamics and excluding any FX impact. We expect. Bookings, and revenue growth rates to be at or above parity for the remainder of the year.

Mark McCaffrey: We are driving increased conversion into primary domains and higher attach through Airo. At the same time, we continue to deliberately manage our product portfolio, exiting lower value offerings and reallocating resources towards higher value opportunities. Our newer Airo cohorts are demonstrating that higher value, with second product attach accelerating 30% faster relative to non-Airo cohorts. These cohorts are contributing to the increase in the number of customers spending more than $500 annually, which represents approximately 10% of our customer base. Higher attach and retention rates above 85% drove ARPU growth of 9% to $246. As we look ahead, Airo AI Builder is beginning to contribute directly to bookings. As Aman noted, this offering is already generating millions of dollars in annualized run rate organically and without dedicated marketing support.

Our focus on attracting and growing high-intent customers, combined with conversion improvements, is driving durable growth and higher customer quality.

We are driving increased conversion into primary domains and higher attach through Arrow.

At the same time, we continue to deliberately manage our product portfolio, exiting lower value offerings and reallocating resources towards higher value opportunities.

And our newer Arrow cohorts are demonstrating that higher value.

With second product attached accelerating 30%, faster relative to non-AeroC cohorts.

these cohorts are contributing to the increase in the number of customers spending more than $500 annually, which represents approximately 10% of our customer base

Higher attach and retention rates above 85% drove RPU growth of 9% to $246.

Mark McCaffrey: In parallel, ANS extends our leadership in a digital identity, positioning us to participate in the next evolution of the internet infrastructure. As the architecture of the internet evolves, our current strengths remain as relevant as ever, and our AI transformation positions us to consistently deliver profitable growth and capture value going forward. Turning to margins and free cash flow, normalized EBITDA grew 13% to $414 million, delivering 210 basis points of margin expansion to 33% and exceeding our guide for the quarter. Operational execution, supported by AI-driven efficiencies and favorable product mix, continues to drive margin expansion.

As we look ahead, Arrow AI Builder is beginning to contribute directly to bookings. As Amanpal noted, this offering is already generating millions of dollars in annualized run rate, organically and without dedicated marketing support.

In parallel, ANS extends our leadership in digital identity, positioning us to participate in the next evolution of internet infrastructure.

As the architecture of the internet evolves, our current strengths remain as relevant as ever. And our AI transformation positions us to consistently deliver profitable growth and capture value going forward.

Turning to margins and free cash flow, normalized ibida, grew, 13% to 414 million, delivering 20 basis, points of margin expansion to 33% and exceeding, our guide for the quarter.

Mark McCaffrey: Our expanded margin reflects the efficiency of our model and gives us the flexibility to invest in our AI transformation while maintaining a strong balance sheet and a durable free cash flow profile. Free cash flow grew 15% to $474 million, with a normalized EBITDA to free cash flow conversion of greater than 1 to 1. We exited the quarter with $1.3 billion in cash and total liquidity of $2.3 billion. Net debt was $2.6 billion, representing net leverage of 1.4x on a trailing twelve-month basis and within our target range. On shareholder returns, we repurchased 3 million shares during the quarter, totaling $280 million.

Operational execution supported by AI driven efficiencies and favorable product, mix continues to drive margin expansion.

Our expanded margin reflects the efficiency of our model and gives us the flexibility to invest in our AI transformation while maintaining a strong balance sheet and a durable free cash flow profile.

Free cash flow. Grew 15% to 474 million with a normalized ibida to free cash flow conversion of greater than 1 to 1.

We exited the quarter with 1.3 billion dollars in cash and total liquidity of 2.3 billion. Net debt was 2.6 billion dollars representing net leverage of 1.4 times on a trailing 12-month basis and within our target range.

Mark McCaffrey: Since 2022, our share repurchase programs have resulted in a gross reduction in fully diluted shares outstanding of over 31%. We ended the quarter with 133 million shares outstanding. Turning to outlook, we are reaffirming our full year 2026 guidance provided in February and expect total revenue to be within a range of $5.195 to $5.275 billion, representing growth of 6% at the midpoint of the range. As a reminder, our full year revenue guide incorporates just over 200 basis points of cumulative impact from the expiration of the .co registry contract, our consistent exclusion of high-value aftermarket transactions, and the impacts of our product evolution and our promotional offer.

On shareholder returns. We repurchased 3 million shares during the quarter totaling 280 million.

Since 2022.

Our share repurchase programs have resulted in a gross reduction in fully diluted shares outstanding of over 31% and we ended the quarter with 133 million shares at standing.

Turning to Outlook, we are reaffirming our full year, 2026 guidance provided in February and expect. Total revenue to be within a range of 5.195 to 5.275 billion.

Representing growth of 6% at the midpoint of the range.

Mark McCaffrey: For Q2, we are targeting total revenue of $1.285 to 1.305 billion, representing 6% growth at the midpoint of the range. For both Q2 and the full year, we expect A&C revenue growth in the low double digits and core platform growth in the low single digits. For Q2, we are projecting a normalized EBITDA margin of approximately 33%, and we are reaffirming our target of over 33% for the full year. This reflects our ability to drive continued operational leverage and AI-driven productivity gains while increasing our investments in our AI native products, marketing, and compute costs. For the full year, we expect normalized EBITDA to maintain a greater than 1-to-1 conversion to free cash flow, and we reaffirm our full year free cash flow target of approximately $1.8 billion.

high-value aftermarket transactions and the impacts of our product Evolution and our promotional offer

For Q2 we are targeting total. Revenue of 1.285 to 1.305 billion representing 6% growth at the midpoint of the range.

For both the second quarter and the full year, we expect ANC Revenue growth in the low double digits and core platform growth in the low single digits.

For Q2, we are projecting a normalized ibida margin of approximately 33% and we are reaffirming our Target of over 33% for the full year.

This reflects our ability to drive continued operational leverage and AI-driven productivity gains while increasing our investments in our AI-native products, marketing, and compute costs.

Mark McCaffrey: We continue to be on track to exceed our free cash flow North Star CAGR of 20%. On capital allocation, we operate within a disciplined return-based framework and have deployed greater than 95% of our free cash flow over the last 4 years towards share repurchases. Our continued commitment to returning capital is a clear expression of confidence in the strength of our cash flow and the long-term value we are creating. We remain focused on allocating capital to its highest value uses, with a priority on driving long-term shareholder returns. In closing, the fundamentals of our business remain strong, with consistent engagement and durable drivers of ARPU supporting our long-term trajectory. As we move forward, we remain focused on disciplined execution and continued progress toward our North Star. We look forward to talking about these and other updates at our investor event later this year.

For the full year. We expect normalized ibida to maintain a greater than 1 to 1 conversion to free cash flow and we reaffirm our full year. Free cash flow Target of approximately 1.8 billion. We continue to be on track to exceed our free cash flow. Northstar kagar of 20 cents on Capital allocation, we operate with an a disciplined returned base framework and have deployed greater than 95% of our free cash flow over the last 4 years towards share repurchases.

Our continued commitment to returning. Capital is a clear expression of confidence in the cash flow and the long-term value. We are creating

we remain focused on allocating Capital to its highest value uses with a priority on driving long-term shareholder returns

In closing the fundamentals of our business remain strong with consistent engagement and durable drivers of our Pooh. Supporting our long-term trajectory

As we move forward, we remain focused on disciplined execution, and continued progress toward our North Star.

Mark McCaffrey: I'll now turn it over to Christie to open the line up for questions. Thank you.

We look forward to talking about these and other updates at our investor event later this year.

I'll now turn it over to Christy to open the line up for questions. Thank you.

Christie Masoner: Thanks, Mark. As a reminder, if you'd like to ask a question, please use the Raise Hand feature at the bottom of the webinar screen to be added to the queue. Our first question comes from the line of Vikram Kesavabhotla from Baird. Vikram, please go ahead.

thanks Mark, as a reminder, if you'd like

this feature at the bottom of the webinar screen to be added to the queue,

Our first question comes from the line of Vic Queso. From Beard 6, please go ahead.

Vikram Kesavabhotla: Hey, can you hear me okay?

Christie Masoner: We can.

Mark McCaffrey: Yep.

Vikram Kesavabhotla: Okay, great. Thanks. Hey, thanks for taking the questions. My first one is on the customer base, and I'm curious, you know, as you navigate all these changes in the product portfolio and in your go-to-market strategy, you know, how do you ensure that you're attracting the right type of customer to the platform? I think you mentioned in the prepared remarks that customer quality is increasing. It'd be great if you could elaborate some more on how you measure customer quality and what you're observing in the behavior of some of these recent cohorts that's informing your confidence in the strategy right now. Separate from that, you know, my second question is on you talked about all these ways you're using AI internally across the company's operations and some of the proof points that you're seeing already.

Hey, can you hear me? Okay, we can, yep. Okay, great, thanks. Um, hey, thanks for digging the questions. Um, so my first one is on the customer base and I'm curious, you know, as you navigate all these changes in the product portfolio and in your go-to-market strategy, you know, how do you ensure that you're attracting the right type of customer to the platform? And I think you mentioned in the prepared remarks that customer quality is increasing. Be great.

Vikram Kesavabhotla: You know, as you continue to scale those initiatives, how should we think about the opportunity for those efficiencies to flow through to EBITDA and free cash flow in the near term versus being reinvested back into the business to support your product and marketing needs? I realize it's probably a tough question to answer in a ton of detail quantitatively, but it'd be great to hear your philosophy around how you're balancing those dynamics during, you know, what seems like a pretty significant period of change for the business. Thanks.

Aman Bhutani: Thanks, Vik. Let me take the first one. Mark can take the second. On the cohorts that we're attracting. Look, our strategy is to attract high-intent customers. The way we define high intent is looking at the traffic coming in by channel and then looking at the activation and attach of other products. What we know from years and years of data across our 20 million customers is that if we see that activation and attach of other products, we are going to see good renewal at the end of the 1-year term. That's what really gives us confidence. That's what we're looking for.

If you could elaborate some more on how you measure a customer quality and what you're observing in the behavior of some of these recent cohorts, that's informing your confidence in the strategy right now. Um, and then separate from that. You know, my second question is on you, you talked about all these ways you're using AI internally across the company's operations and some of the proof points that you're seeing already, you as you continue to scale those initiatives. How should we think about the opportunity for those efficiencies to flow through to ebida and free cash flow in the near-term versus being reinvested back into the business? To support your product and marketing needs and I realized it's probably a tough question to answer in a ton of detail quantitatively but it'd be great to hear your philosophy around, how you're balancing those Dynamics during. You know what seems like a pretty significant period of change for the business, thanks.

Aman Bhutani: When we make these trade-offs in the decision, in the business to attract new customers with end of life certain products or retire certain cohorts, what we're looking for is the quality of those, the intent of those customers, and measuring it through the activation of the other products that they have. Then on the operation one?

Thanks Vic. Let me take the first 1 and Mark and take the second uh, on the cohorts that we're attracting. Look, our strategy is to attract High intent customers and the way we Define High intent is looking at the traffic coming in by Channel and then looking at the activation and attach of all the products. And what we know from years and years of data across our 20 million customers is that if we see that activation and attach of other products, we are going to see good renewal at the end of, of the 1 year term. So that's what really gives us confidence. That's what we're looking for. And when we make these trade-offs, in the decision, uh, in the business, to attract new new customers with end of life, certain, products, or retirees,

Mark McCaffrey: Yeah. On the operations, you know, we are balancing several different factors here. You know, one, we have the ability to expand our margins, we have for the past few years. We're continuing to see operational efficiencies by the adoption of AI internally. And then we're paying our attention to the disciplined approach we've had in the past around, you know, investing in innovation, but using data points that show our path to return on those data points before we invest. We're taking a very disciplined framework approach. And I would say we're balancing it with what we think the long-term return is going to be when we make those investments. For example, we have talked about we were going to increase marketing around AI Builder for the remainder of the year.

To the disciplined approach we've had in the past around, you know, investing in Innovation but using data points that show our path to return on those data points, uh, before we invest. So, so we're taking a very disciplined.

Mark McCaffrey: It's because we are seeing the data points that are showing that return. While those returns will be immaterial for the current year, we do know the potential to drive future growth for us is there, and that makes that return appropriate.

Aman Bhutani: Yeah. I think maybe just to add, the areas that we're looking at, whether it's software development or care or our use of applications or marketing, all of these areas are accelerated with AI. We see great opportunity to deliver a better outcome for our customers at a lower cost this year and into the future.

Framework approach, uh, and and I would say we're balancing it with what we think the long-term return is going to be when we make those Investments. For example, we've talked about we were going to increase marketing around AI, uh, Builder, uh, for the remainder of the year. It's because we are seeing the data points that are showing that return. And while those returns will be immaterial for the current year, we do know the potential to drive future growth for us as there. And that makes that return appropriate.

Yeah, I think maybe just to add the areas that we're looking at looking at whether its software development or care or our use of applications or marketing. All of these areas are accelerated with AI and we see great opportunity to deliver a better outcome for our customers at a lower cost this year and into the future.

Ken Wong: Okay. Great. Thank you.

Vikram Kesavabhotla: Okay. Great. Thank you.

Christie Masoner: Our next question comes from the line of Ken Wong from Oppenheimer. Ken, please go ahead.

Okay, great. Thank you.

Our next question comes from the line of Ken Wong from Oppenheimer can. Please go ahead

Ken Wong: Hi. Can you guys hear me?

Aman Bhutani: Yep.

Mark McCaffrey: Yep.

Hi, can you guys hear me?

Ken Wong: Fantastic. 1st question on the $10 million plus of Airo Builder ARR. A lot of your kind of standalone AI Builder platform, we've seen them scale up extremely fast. I realize it's super early, but what's the right way to think about kinda what this business or this product could potentially grow to?

Aman Bhutani: Yeah. Ken, when we talk about the $10 million run rate, what we're really talking about is annualized bookings. You're right, it's very early data. This includes both subscriptions and credits or tokens. What we see is customers come in, buy a subscription, engage with the product, love the product, and they keep coming back and improving the website or whatever actions, whatever job they're trying to complete with the AI Builder. I am directly engaged with a few customers. I actually work with customers every week now, sessions, you know, with live customers. What's magical about the Airo AI Builder and our customers, that our customers have lots of ideas, but it's very hard for them to go through menus and templates and figure it out.

Yep. Fantastic. Uh, first first question on the 10 million plus of of Aero Builder ARR, a lot of your kind of Standalone AI Builder platform. We've seen them scale up, extremely fast, uh and I realized it's super early but what what what's the right way to think about? Kind of what this this business or this product could potentially grow to?

Yeah, can when we talk about the 1000 Dollar run rate, what we're really talking about is annualized, bookings and you're right? It's it's very early data. This includes both subscriptions and credits or tokens, and what we see is customers, come in, buy a subscription engage with the product love the product and they keep coming back and improving the website or whatever. Actions, whatever. Job, they're trying to complete with the AI Builder. I'm directly engaged with a few customers. I actually work with customers every week now sessions, you know, with with live customers and

Aman Bhutani: If they can just in natural language explain, you know, or just say, "I would like this," Airo AI Builder goes and does it for them, and it's sort of a magical, amazing experience for that. That's the run rate we're looking at. You know, in terms of what it could be, it's super early. We're very excited about this early adoption. As I shared in the prepared remarks, we just started selling it in Care. We're going to add paid marketing to it starting this month. There's a lot of things for us to do. Of course, you know, we have the giant funnels we have with domains or website paths, which we haven't touched yet either.

With magical about the airway I build their and our customers that our customers have lots of ideas but it's very hard for them to go through menus and templates and figure it out. So, if they can just in natural language, explain, you know, and or just say I would like this, either way, I build their goals and does it for them, and it's sort of a magical amazing experience for that. So what happens is the same subscriber ends up using in more

Aman Bhutani: There is a lot to do to get to what we think long-term run rate can be, but we're excited about where we started. We're also keeping an eye on, you know, how customers use this product and, you know, does it change how they use our other products, 'cause that mix is gonna be important for us too.

Mark McCaffrey: Yeah.

Ken Wong: Understood. Appreciate the color there. Just to follow up, also on AI opportunities, you mentioned ANS opening new infrastructure opportunities. Now with Airo AI Builder pushing your backend beyond websites, is there the potential to potentially utilize GoDaddy's hosting capacities for additional workload, AI workloads given the market scarcity there? I mean, we're sort of having a moment in hosting all of a sudden, and seems like that's an area you guys could potentially capitalize on.

And more publishing republishing and buying more credits and that's the Run rate we're looking at, you know, in terms of what it could be, it's super early. We're very excited about this early adoption. As I shared in the prepared remarks, we just started selling it in care. We're going to add paid marketing to it, starting this month. So there's, there's a lot of things for us to do. And of course, you know, we have the giant funnels, we have with domains or website, paths, which we haven't touched yet either. So there, there's a lot to do to get to what we think long term run rate can be, but we're excited about where we started. And we're we're keeping an eye on, you know, how customers use this product and, you know, does it change how they use our other products because that mix is going to be important for us to understand appreciate the color there and then just to follow up. Also on, on AI opportunities, you mentioned ANS opening new infrastructure opportunities and now it Arrow AI Builder, pushing your back in Beyond websites is there a potential?

Aman Bhutani: Yeah. Actually, you know, Airo AI Builder does use GoDaddy hosting. It's one of our competitive differentiators. We can provide hosting at scale that's secure, that's, you know, at a great cost. There's definitely sort of excitement from our side to be able to take something like Airo AI Builder and power it with our hosting solution. We also have some plans to do more with hosting directly in our, for our customers, but we're not looking to, you know, go out and do something that's for enterprises or something like that. We are very focused on our customer base, the solutions that our customers need. We feel that we serve a unique customer.

To potentially utilize GoDaddy's hosting capacities for additional workloads, AI workloads, given the market scarcity. There. I mean, we're sort of having a moment in hosting all of a sudden, and it seems like that's an area you guys could potentially capitalize on.

Aman Bhutani: A lot of the new entrants in the AI space are serving enterprises, and we have this unique relationship with this type of customer, so we're really leaning into that relationship and the needs of that customer.

Ken Wong: Great. Thank you, Aman.

Yeah. Actually in you know, 80i Builder, does use GoDaddy hosting its 1 of our competitive differentiators we can provide hosting at scale. That's secure. That's, you know, at a great cost. And so there's definitely sort of excitement from our side to be able to take something like AOA Builder and power it with our hosting solution. We also have some plans to do more with hosting directly, uh, in in our, for our customers. But we're not looking to, you know, go out and do something that's for Enterprises or something like that. We're very focused on our customer base, the solutions that our customers need. We feel that we serve a unique customer, a lot of the new entrance in the AI space are serving Enterprises and we have this unique relationship with this type of customer. So we are really leaning into that relationship and the needs of that customer.

Aman Bhutani: Thank you.

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

Great. Thank you Alan. Thank you.

Trevor Young: Great. Thanks. First one for Mark. On your comments on bookings growth at or above parity with rev growth for the balance of the year, is there a particular shape of the bookings curve to be mindful of? Q1 implicitly the low point, but will Q2 step all the way back up to where rev growth is and H2 bookings a bit above that? Or is Q2 gonna be maybe a tad ahead 'cause it has an easier compare? Second one on capital allocation, buybacks here in Q1 well below free cash flow generation and the 95% payout stat that you'd given. Meanwhile, cash at kind of the highest level since middle of 2021, if I'm not mistaken. Just any updated thoughts on capital allocation and buyback appetite with the stock at current levels?

Question comes from the line of Trevor Young from Barclays Trevor. Please go ahead.

Trevor Young: In lieu of buybacks, any updated thoughts on M&A? Thank you.

Mark McCaffrey: All right. Thanks, Trevor. On the first, on the bookings, you know, growth rates should be on par or above. We're looking at that at both a quarter on an annual basis for the remainder of the 9 months. It should give you a sense of the momentum we're starting to gain as we go out throughout the year. On capital allocation, you know, what I always say is don't look at any particular quarter, look at our history. Our history is a good indicator of how we approach this. You know, we look at the quarter going forward, we make determinations. Buybacks are still a strong way or a strong lever for us to return value to our shareholders.

Great, thanks. Um, first 1 for Mark, on your comments on bookings growth at, or above par, with rev growth for the balance of the year. Is there a particular shape of the bookings curve to be mindful of 1 Q? Implicitly the low point but will 2 Q step all the way back up to where rev growth is and 2. H bookings. A bit above that or is 2 Q going to be maybe a tad ahead because it has an easier compared and then second 1 on Capital allocation BuyBacks here in 1 Q. Well below free cash flow generation and the 95% payout stat that you'd give in, meanwhile cash at kind of the highest level since middle of 21 if I'm not mistaken, just any updated thoughts on Capital allocation and buyback appetite with the stock, it current levels and then Lua BuyBacks any updated thoughts on m&a. Thank you.

Mark McCaffrey: Again, look at our track record, our history of what we've done and, you know, it'll give you a good idea of how we continue to approach it, and the way we look at it hasn't changed.

All right, thanks Trevor. And on the first on the bookings, uh, you know, growth rates should be on par or above. Uh, we're looking in that on both a quarter on an annual basis for the remainder of the 9 months, so it should give you a sense of the momentum. We're starting to gain as we go out throughout the year on Capital, allocation. Um, you know what, what I always say is, don't look at any particular quarter or look at our history or history. Uh, is a good indicator of how we approach this. Uh, you know, we look at the quarter going forward, we make the terminations, uh, and buy backs are still a strong way or strong lever for us to return value to our shareholders. So, so, uh, again, look at our track record our history of what we've done and

You know, uh, it'll give you a good idea of how we continue to approach it. And, and the way we look at it hasn't changed

Trevor Young: Great. Thank you.

Great. Thank you.

Christie Masoner: Our next question comes from the line of Mark Zgutowicz from Benchmark. Mark, please go ahead.

Our next question comes from the line of Mark suguru from Benchmark Mark. Please go ahead.

Mark Zgutowicz: Thanks, Christy. Hey, guys. You just closed $10 million in annualized bookings, the run rate for Airo AI Builder within sounds like weeks of beta. Can you break down the unit economics there? Like, what's the average transaction size? How much of that run rate's coming from credit top ups versus the initial plan purchase? What's the margin profile relative to legacy W+M?

Thanks Chrissy. Um, hey guys, uh, you just closed 10 million in annualized, bookings, the Run rate for Aero AI Builder.

Within uh sounds like weeks with beta. Can you break down the unit economics there like what's the average transaction size? How much of

That run rate is coming from credit top UPS versus the initial plan purchase.

Aman Bhutani: Yeah, Mark, you know, overall, we remain committed to what we have shared in the past, that we're building a product that serves our customer, but comes at a gross margin and a price point that works for our customer and for GoDaddy. From the very first day, we have continued to look at this product as a gross margin positive product, as a product that can continue to grow and deliver the economics for the company. You know, in terms of what is subscription and what is credits, we're so early. Like, this has to bake, you know, this has to grow. There are going to be, I think, so many ups and downs as we enter marketing, as we, you know, open the channels, as we drive more traffic even from godaddy.com to this product.

And what's the margin profile relative to Legacy a w Plus?

Yeah, Mark, you know, overall, we remain committed to what we have shared in the past but we are building a product that serves our customer, what comes out of gross margin and a price point, that works for our customer and for GoDaddy. So from the very first day, we have continued to look at this product, as a ghost mod margin positive product as a product that can continue to grow and deliver the economics for the company. You know, in terms of what is subscription and what is credits. We're so early like this has to bake you know, this has to grow that they are going to be. I think so many ups and downs as we enter marketing as

Aman Bhutani: It's too early to talk about sort of the more detailed pieces of how, of what's happening here. In terms of the comparison to Websites + Marketing, as we had shared in the prepared remarks and last quarter as well, we have an upgrade for Websites + Marketing going out this year. That product focuses more on exactly that need for that customer and the economics that would be needed to make it successful. We did test that product, and it all works together. It's all together with Airo. It's, it's not like, you know, going to be something different when it comes out. We tested that experience, and it did quite well in the test. As I'd said last quarter, Websites + Marketing, the current version, is an established champion.

Aman Bhutani: It is going to take a little while to test the challenger Websites + Marketing, the new version, and we expect to do that this year. As we roll through the year, we're gonna test sort of the new product, new version a couple of times, and we expect it to win sometime this year.

We, you know, open the channels, as we drive more traffic even from godaddy.com to this product. So it's too early to talk about sort of the more detailed pieces of, uh, of how of what's Happening Here in terms of the comparison to websites plus marketing. As we had shared in the prepared remarks and last quarter as well, we, we have an upgrade for websites plus marketing. Going out this year that product focuses more on exactly that that need for that customer and the economics, that would be needed to make it successful. We did tests uh that product and it it all works together. It's all together with Aro. It's not like, you know, going to be something different when it comes out but we tested that experience and it did quite well in the test. But as I said last quarter websites plus marketing, the current version is an established Champion. It is going to take a little while to test the challenge or websites plus marketing, the new version and we expect to do that this year. As we roll, through the year, we're going to test sort of the

Mark Zgutowicz: Got it. Maybe a follow-up then on the upgrade, the W+M upgrade, it being tested now on the domains funnel, and it sounds like you're having some really solid early results there. Just curious when we should expect pricing to be reimplemented at Websites + Marketing specifically, and whether you can quantify how much of the historical ARPU accretion that you've witnessed from pricing and bundling has been attributable to W+M versus other products? Thanks.

New product, new version, a couple of times. And we expect it to win sometime this year.

Got it, and maybe a follow-up. Then, on the upgrade—the W upgrade being tested. Now, on the domains funnel, and it sounds like you're having some really solid early results there. Just curious, when should we expect pricing to be re-implemented for Websites + Marketing specifically, and whether you can quantify how much of the historical r—

Accretion.

Aman Bhutani: Yeah. I can take the first part, and Mark, if you can take the second. On the pricing initiatives around Websites + Marketing, because this is a very significant upgrade and there's a lot of moving parts, we're moving from a solution that is template first and uses AI to a solution that balances editor capabilities and AI capabilities, and frankly, just comes with a different set of cogs and, you know, profile that we're working with. It, you know, any sort of pricing change would have to wait till we get to parity on the customer experience and metrics like publish rate, so that we can be certain that the product is the new version is delivering what customers expect. Once we've done that, then we can look at any sort of pricing initiative.

That you've witnessed from pricing and bundling has been attributable to W, plus M versus other products. Thanks.

Mark McCaffrey: Yeah. On the contribution to ARPU, you know, we don't get into, you know, distinguishing between products because it gets very difficult with the concept of bundling because multiple products are involved. I will highlight that the pricing that we talked about is specific to this area and not to the other bundling aspects that we've had. There's still contribution in our ARPU related to our pricing and bundling, it's just not to this one specifically.

Template first and uses AI to a solution that balances editor capabilities and AI capabilities. And frankly just comes with a different set of cogs and you know profile that that we're working with it. You know any sort of pricing change would have to wait till we get to parity on the customer experience and the and metrics like publish rate. So, so that we can be certain that the product is the new version is delivering what customers expect. And once we've done that, then we can look at any sort of pricing initiative.

Mark Zgutowicz: Got it. Thanks, Mark. Thanks, guys.

Yeah, and and on the contribution, to our food, you know, we don't get into, you know, distinguishing between products because it gets very difficult with the concept of bundling because multiple products are involved. But I, but I will highlight that. The, the pricing that we talked about is specific to this area and not to the other bundling aspects that we've had. So there's still contribution in our rpu related to our pricing and bundling, uh, it's just not to this 1 specific.

Aman Bhutani: Thank you.

Got it. Thanks, Mark. Thanks guys.

Christie Masoner: Our next question comes from the line of Arjun Bhatia from William Blair. Arjun, please go ahead.

Thank you.

Our next question comes from the line of Arjun Bhatia from William Blair.

Arjun. Please go ahead.

Willow: Hi, team. I'm Willow on for Arjun Bhatia. Thanks for taking our question. Can you unpack A&C bookings growth? Was it largely impacted from the recent promotional activity in the quarter, or is there anything else to call out? I'm just trying to appreciate the detail and the timeline to inflected growth from initiatives like Airo and then pricing and bundling historically.

[Analyst] (William Blair): Hi, team. I'm Willow on for Arjun Bhatia. Thanks for taking our question. Can you unpack A&C bookings growth? Was it largely impacted from the recent promotional activity in the quarter, or is there anything else to call out? I'm just trying to appreciate the detail and the timeline to inflected growth from initiatives like Airo and then pricing and bundling historically.

Hi team. I'm Willow, on for Arjun. Bati, thanks for taking your question. Uh, can you unpack A and C? Bookings? Growth. Was it largely impacted from the recent promotional activity in the quarter, or is there anything else to call out? I'm just trying to appreciate the del and the timeline to inflect to growth from initiatives like Arrow.

Mark McCaffrey: Yeah. Thanks, Willow. You know, nothing to call out different than what we talked about last quarter. You know, there are various aspects across our bookings that were impacted. The two specific to A&C are the go-to-market offer. There is an allocation element when we bundle products together in the initial order that will impact A&C. Then what we were just talking about on the pricing aspect, the pricing and bundling related to the upgrade to the Websites + Marketing product. Those are the two impacts on A&C bookings. Obviously, as we go throughout the year, we expect some of that to pass. Now, on revenue, it's more evened out because of the subscription nature of what we do, but on bookings, that was mostly peaked in Q1.

And then, pricing and bundling historically.

Willow: Great. Thank you.

[Analyst] (William Blair): Great. Thank you.

Yeah. Thanks, Willow. You know, nothing to call out different than when we talked about last quarter. The, you know, there there are various aspects across, uh, our our bookings, uh, that were impacted the 2 specific to, uh, ANC are the go to market offer. There is an allocation element when we bundle products together in the initial order that that will impact ANC, uh, and then what we're just talking about on the, on the pricing aspect, the pricing and bundling regulated to the upgrade, to the website. Bookmarking product, those are the 2 impacts on ANC bookings. And and, and obviously, as we go throughout the year, we we expect uh, some of that to to, uh, pass now on Revenue, it's more evened out because of the subscription nature of what we do. But, but I'm booking is that, that was mostly peaked in q1.

Great. Thank you.

Christie Masoner: Our next question comes from the line of John Byun on for Brent Thill at Jefferies. John, please go ahead.

Our next question comes from the line of John Bayon on for brentville at Jeffrey's John. Please go ahead.

John Byun: Oops. Hi, can you hear me?

Oops.

Christie Masoner: Yes, we can hear you.

John Byun: Great. Thank you. Just two questions. Again, on the Airo AI Builder, in terms of monetization, is it just the subs and the AI credit for the product itself, or are you starting to generate anything from, you know, upsell or cross-sell of other GoDaddy products? Follow-up would be, international revenue growth seemed to slow a little bit to 7% from, I think last year was mostly within 10% to 14% range. I don't know if there's anything you can call out there. Thank you.

I can you we can hear you great. Thank you. Um, just a 2 questions on again on the Arrow. AI Builder. Um, in terms of monetization, is it just a subs and the AI credit for the product itself? Or are you, uh, trying to generate anything from

Aman Bhutani: Yeah. Thanks, John. On the run rate for Airo AI Builder, that's just the subscription and credits for Airo AI Builder. We have not baked in sort of attach or other products into that yet. All of that is to come. You know, you will see over the next few weeks, this product sort of become a bigger part of the GoDaddy ecosystem. As it does that, then we can have additional bookings that relate to those customers. But for now we're just, you know, trying to give you the cleanest picture of this new product so that, you know, folks can understand the overall AI story at GoDaddy.

You know, upsell cross sale of other code editing products. And then follow up would be International Revenue. Growth seem to spill a little bit to, to 7% from. I think last year was mostly within 10 to 14% range. I don't know if there's anything you can U call out there. Thank you.

Mark McCaffrey: On the international revenue, the only thing to call out is aftermarket last year was with some of the larger transactions hit the aftermarket and contributed to the growth rate overall. We didn't see those type of transactions in Q1, the larger ones, so it's just a tougher compare from aftermarket for Q1.

Yeah, thanks John, uh, on the Run rate for Aero AI Builder, that's just the subscription and credits for a AI Builder. We have not baked in sort of a touch or other, uh, products into that yet all of that is to come, you know, you you will see over the next few weeks, uh, this product sort of become a bigger bigger, part of the GoDaddy ecosystem. And as it does that, then then we can have additional bookings that that relate to those customers. But, but for now we're just, you know, trying to give you the cleanest picture of this new product so that, you know, folks can understand the overall, AI story of go at GoDaddy.

And, uh, on on the International Revenue. Uh, the only thing to call out is aftermarket last year was uh, with some of the larger transactions hit. Uh, the aftermarket and and contributed to the growth rate, uh, overall, uh, we didn't see those type of transactions in q1. The larger ones. So, so it's, uh, just the tougher compared from aftermarket, uh, for q1.

John Byun: Okay, great. Thanks very much.

Great. Thanks very much.

Christie Masoner: Our next question comes from the line of Aleksey Gogolev on for Alexei Gogolev at J.P. Morgan. Ella, please go ahead.

Our next question comes from the line of Ella Smith, on for Alexei Gov at J.P. Morgan. Hello, please go ahead.

Aleksey Gogolev: Good evening. Thank you for taking our questions. First, I was hoping to ask about the ANS. What do you think is GoDaddy's competitive advantage or right to win as it comes to the ANS, especially versus larger competitors?

Aman Bhutani: The biggest thing about ANS is that we have put to the world that agents that we believe will be roaming the Internet, and will be larger in terms of traffic than human traffic soon, should be registered on the Internet. Large destinations, whether those are websites, systems, platforms, other, you know, organizational enterprises, should recognize agents that are registered. If they're not registered, it is going to be very difficult to trust agents, it's going to be very difficult to transact with agents, it's going to be very difficult to just know which agents are real and which are fake. We think we can avoid all of that by registering agents using Agent Name Service, which again, is backed by an open standard.

Good evening. Thank you for taking our questions. So first, I was hoping to ask about the ANS, what do you think? Is godaddy's competitive advantage or right to win as it comes to the ANS especially versus larger competitors?

So the biggest thing about ANS is that we have put to the world that agents that we believe will be roaming the internet and we larger in terms of traffic than human trafficking soon, should be registered on the internet and large destinations whether those are websites systems platforms. Other, you know,

We should recognize agents that are registered, because if they're not registered, it's going to be very difficult to trust agents. It's going to be very difficult to transact with agents—it's going to be very difficult.

You just know which agents are real and which are fake. And

Aman Bhutani: The reason GoDaddy has a huge right to win here is because within the Agent Name Service open standards, we say that while people should register agents with ANS, those agents should be discovered using DNS, which is domain name service. Domain name service is a directory on the Internet that everybody uses. It's one directory, it replicates everywhere. Agent registries are popping up in every company. How do you bring that together? You bring that together by connecting those registries to the one directory. If we connect it to the one directory and in that directory put the agents under the domain name, then the domain name becomes core to the identity and trust relationship that agents have now and into the future.

We think we can avoid all of that by registering agents using agent named service which again is backed by an open standard. The reason GoDaddy has a huge right to win here is because within the agent named Service open standard. We say that while people should register agents with ANS they should be those agents should be discovered using DNS, which is domain name service, domain domain name Services is a directory on the internet that everybody uses its 1 directories.

Agent, Registries are popping up in every company. So, how do you bring that together? You bring that together by connecting those Registries to the 1 directory and if we correct connected to the 1 directory and in that directory, put the agents under the domain name.

Aman Bhutani: As the world's largest domain registrar, it's obviously, you know, good for us if domains plays that role. You know, what we're excited about, and we're seeing good reaction from the large players, and of course they want to take their time to understand things, but what we're really offering to the world here as an open standard is a beautifully elegant, scalable solution, and it already exists. Nobody has to recreate it. Hopefully that helps a little bit to understand why Agent Name Service is so important and why it links back to GoDaddy as the world's largest domain registrar.

Then the domain name becomes core to the identity and Trust relationship that agents have now and into the future, which as the world's largest domain. Registar. It's obviously, you know, good for us. If domains plays that role and you know what, we're excited about. And we're, we're seeing good reaction from the large players. And of course, they, they want to take their time to understand things but what it

Aleksey Gogolev: That's very clear, Aman. Thank you. If I may, a follow-up for the domain business. We were hoping to ask a question about your strategic objectives for the domain business. Is your intention to maintain or gain share, or would you be willing to let some lower LTV domain customers go at the expense of your market share?

We, what we really offering to the world here at an open standard is a beautifully elegant, scalable solution. And it already exists, nobody has to recreate it. So hopefully, that helps a little bit to understand why Agent named service is so important. And why it links back to go, daddy is the world's largest domain registra.

It's very clear Roman. Thank you.

and uh, if

Aman Bhutani: I think we've said that, you know, we will let low LTV customers go because our focus is high-intent customers. If I step back and look at the domains business, you know, we continue to be the world's largest domain registrar by far. Over the last 30 years, all kinds of competition has come into the world, right? We have seen very low price domain registrars, we've seen people use domain as loss leaders, we've seen people give them for free, we've seen blockchain, and the list goes on. Now the new normal includes LLMs and app builders and lots of things. We are coming to that world with a lot of experience in competing in this business and a lot of tools to compete in this business.

I follow up for the Domain business. We're hoping to ask some questions, or a question, about your strategic objectives for the Domain business. Is your intention to maintain or gain share, or would you be willing to let some lower LTV Domain customers go at the expense of your market share?

Aman Bhutani: What we have consistently found is that the value is in the high-intent customer. The value is in the customer that has good intent, buys a domain name, and then does other things with it. By doing those other things, that's what drives LTV for GoDaddy, that's what drives our business.

So I think we we've said that, you know, we will let low LTV customers go because our focus is high in 10 customers and and if I step back and look at the domains business, you know we continue to be the world's largest domain registered by far over the last 30 years. All kinds of competition has come into the world. Right? We we have seen uh, very low price domain registers. We've seen people use domain as loss leaders, we've seen people who give them for free. We've seen blockchain and the list goes on, and now the new normal includes llms and app Builders and lots of things. So we we are coming to that world with a lot of experience in Computing in this business and a lot of tools to compete in this business. But what we have consistently found is that the value is in the high intent.

Aleksey Gogolev: Great. Thank you, Aman.

The value is in the customer that has good intent by the domain name. And then those other things with it—and by doing those other things, that's what drives LTV for GoDaddy, that's what drives our business.

Great. Thank you, Avon.

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

Our next question comes from the line of Naveed Khan from B Riley. Navid. Please go ahead.

Naved Khan: Great. Thank you, Christy. I'm curious, Aman, how much of the traffic-

Naved Khan: Are you exposing to the website, to the Airo website builder? Is this still something you're testing and iterating, or you already kinda rolled it out broadly? That's one question. The other is just on the app builder. You said, I think, the plan is to put some marketing dollars behind it. Maybe you're already doing it. How significant is that, and what will it take for you to go from you know, going from sort of testing the waters or kind of putting more or increasing the allocation that you have on marketing front behind this? Thank you.

Great. Uh thank you Christie. Um, I'm curious man. How much of the traffic

uh,

Uh, are you exposing the website to the Aero website builder?

um, is this still uh, something you're testing and iterating or

You already kind of roll it out, broadly. So that, that's, that's 1 question. The other is just on the, uh, app builder. Um, you said, I think, uh, the plan is to put some marketing daughters behind it, maybe you're already doing it. How significant is that and what will it take for you to do?

Go from.

Aman Bhutani: Yeah. On the first, Naved, from godaddy.com, we are still sending only a small amount of traffic into this new experience. Our largest funnels on godaddy.com are our domains path, and they are our create path, which is the website path, and both those paths currently go into the existing champion version of Websites + Marketing. Over this year, we expect that to evolve, but, you know, as that evolves, more and more traffic will go to this, to the new products, and I'm super excited about them, and it'll definitely grow, you know, the usage of the products, the units on the products, and the $ associated with that. When we look at godaddy.com, it is still a small amount of traffic, and we have a ways to go in terms of being able to drive more traffic to it.

You know, going from sort of testing the waters or kind of putting more, or increasing the allocation that you have on the marketing front behind this. Thank you.

Aman Bhutani: In terms of the marketing plan for Airo Builder, we expect to spend a significant number of dollars this year, and we are starting in Q2 this year towards that. Now, we're going to fund that, those dollars with other efficiencies in the business, so, you know, Mark doesn't have to change any of his plans. We, when we look at that, it's the same disciplined approach that we have done in the past, where we look at what we are spending, what the return is, and then we increase it, and we improve it. This is core to our evidence-based decision-making culture.

Aman Bhutani: You know, you'll start to see us spend more in marketing, and what we're looking for is the traffic coming to the product, the engagement with the product, the sign-up with the product, people buying it, people publishing sites, and then people coming back and engaging with it and buying credits. That's the whole chain we're looking at, and over the next few, 2 or 3 quarters, our expectation is to ramp that up.

Mark McCaffrey: Yeah. Just to reiterate, there's no change in the framework of how we approach this. We'll use the data, and when we see the returns, we'll continue to invest into the marketing.

Amount of traffic. And we have a ways to go in terms of being able to drive more traffic to it in terms of the marketing plan for Aero Builder, we expect to spend a significant number of dollars this year and we are starting in Q2 this year towards that. Now we're going to fund that those dollars with other efficiencies in the business. So you know, Mark doesn't have to change any of his plan but we when we look at that it's a it's the same discipline approach that we have done in the past where we look at what we are spending, what the return is. And then we increase it and we increase it and we improve it. And this is core to our evidence basis decision-making culture. You know, you'll start to see us spend more in marketing and what we're looking for is the traffic coming to the product, the engagement with the product, the sign up with the product people buying it, people put P publishing sites and then people coming back and engaging with their own buying credits. So, that's the whole chain. We're looking at and over the next few few or 3 quarters our expected,

Naved Khan: Maybe just to kind of follow up on that, on the Airo AI Builder, how is pricing evolving? Is it something that's set in stone, or is that something that you're testing and might change? Give us your thoughts then on that.

Is to ramp that up. Yeah. And just to reiterate, there's no change in the framework of how we approach this. We'll use the data, uh, and when we see the returns, we will continue to to invest into the marketing.

And and maybe just to kind of follow up on that on the, on the AI app builder. How is pricing, evolving? Is it? Uh, something that's, uh, set in stone or is that something that you're testing? And

Aman Bhutani: We did test a couple of different plans, Naved, and we're happy with the plan we've settled with. That's why that's one of the gates in terms of ramping up marketing spend. We're happy with the current plans. The current plans include a starter plan that you can get just started with for free with a few credits, or just free plan, and then a starter and a professional and an ultimate plan, and it has a subscription and a credit system with it. We think we have a good setup here, and for the foreseeable future we're going to stick to it. There are levers that we can pull over time, but for now we're just gonna focus on scaling it as fast as possible.

Uh might change. Give us your thoughts on on that.

Naved Khan: Great. Thank you.

We did test a couple of different plans, and we're happy with the plan we've settled on. Uh, that's why that's one of the gates in terms of ramping up marketing, spam. So we're happy with the current plan. The current plans include a starter plan that you can get started with for free, with a few credits, or just a free plan, and then a starter, and then a professional and an ultimate plan. And it has a subscription and a credit system with it. So we think we have a good setup here, and for the foreseeable future, we're going to stick to it. There are levers that we can pull over time, but for now we're just going to focus on scaling it as fast as possible.

Aman Bhutani: Thank you.

Great. Thank you.

Christie Masoner: Our next question comes from the line of John Halpert on for Deepak Madhavan from Cantor Fitzgerald. Jack, please go ahead. Jack, I think you're muted.

Thank you.

Our next question comes from the line of Jack Halpert, on for Deepak Matan from Cantor Fitzgerald. Jack, please go ahead.

John Halpert: Oh, there we go. You guys hear me now?

Jack, I think you're muted.

Christie Masoner: Yes, we can.

John Halpert: Awesome. Thank you. Just one for me. You guys mentioned removing a lower value product offering this quarter. Can you just give some more color on what exactly that product was and maybe how much it impacted customer count, revenue, and if there are any other lower value products that you're evaluating in the portfolio?

Aman Bhutani: Yeah, let me take that. Mark can jump in. You know, as we talked last quarter, we have taken bold steps in terms of our promotional offers because we are in a dynamic environment. We need to test faster, we need to move faster. As part of those promotions, what you saw from us last quarter is we actually saw a significant gain in customer growth adds. In fact, the promotions that we did moved growth adds over 100,000, brought us over 100,000 new customers. It's a very, very large number for us with a set of promotions. When we saw those promos, and of course we optimized, we decided to optimize those promotions to balance bookings and customer growth because we want to stay with a high-intent customer.

Oh, there we go. You guys hear me now? Yes, we can. Awesome. Thank you. Uh, just one for me. You guys mentioned removing a lower value product offering this quarter. Can you just give us some more color on what exactly that product was, and maybe how much it impacted customer count and revenue? And if there are any other lower value products that you're evaluating in the portfolio,

Aman Bhutani: When we look forward, you know, we're really excited about our ability to do that. When we bring in that many number of customers, we also take the opportunity to make tough decisions on products that we're gonna retire, and that's what we did in this last quarter. The promos that we had did very well in attracting customers. We, what we did is we decided to tune them to balance bookings and customer count, and then we took the opportunity to retire an old product that actually had an impact in customer count, but I think Mark can confirm, little to no impact on bookings.

Yeah, let me take uh take that and then Mark can jump in. Um you know, as as we talked last quarter we have taken both steps in terms of our promotional offers because we we are in a dynamic environment and we need to test faster. We need to move faster. And as part of those promotions, what you saw from us last quarter is we actually saw a significant gain in customer growth ads. In fact, the promotions that we did moved uh growth ads over 100,000 brought us over 100,000 new customers. It's a very, very large number for us with, with a set of promotions. But when we saw those promos and of course, we optimize, we decided to optimize those promotions to balance, bookings and customer growth because we want to stay with a high intent customer, but when we look forward, you know, we're really excited about our ability to do that. But when we bring in that many number of customers, we also take the opportunity to make tough decisions on products that we're going to retire, and that's what

Mark McCaffrey: Yeah. That's right. This was a case of a product that we had offered in prior years. It wasn't really generating the value that we needed, so we're just not gonna support it anymore, and we're gonna reallocate those resources. It didn't have any impact on bookings and did have a slight impact on churn within our customer group. Again, I would look at this, we will continue to evaluate our portfolio because our goal is to optimize for our higher value offerings and, in certain cases, make the choices between that and a lower value offering that may not be getting the return anymore that we need.

We did in this last quarter. The promos that we had it very well in attracting customers. We, what we did is we decided to tune them to balance, bookings and customer count. And then we took the opportunity to retire an old product that that actually had an impact in customer account. But I think, Mark can confirm little to no impact on bookings. Yeah, that that's right. And this is a case of a, a product that we had offered in Prior years. Uh, it wasn't really generating the value that we needed. Um, so we're, we're just talking to support it anymore, and we're going to reallocate those resources. Uh, but it didn't have any impact on bookings. And, and, and did have a, a slight impact on, uh, on churn within our customer group. But again, I, I would look at this, we will continue to evaluate our portfolio because our goal is to optimize for our higher value offerings. And in certain cases, make the choices between that and a lower value offering, that may not be getting the return any more that we need.

John Halpert: Great. Thanks very much.

Great. Thanks very much.

Aman Bhutani: Thank you.

Christie Masoner: Our next question comes from the line of Kishan Patel on for Josh Beck at Raymond James. Kishan, please go ahead.

Kishan Patel: Hi, this is Kishan Patel on for Josh Beck. As chatbots, AI mode, and other AI-native discovery surfaces continue to gain scale, have you observed any notable changes in top-of-funnel traffic patterns, customer acquisition behavior, or conversion paths? How are you thinking about GoDaddy's positioning if more customer journeys begin inside AI interfaces rather than traditional search?

Aman Bhutani: Yeah, you know, on the traffic coming to the top of the funnel, I think consistent in the last quarter in terms of what we've talked about before, I think we had shared that we do see some impact to traffic in search because of the move to AI mode, we were able to offset that impact to traffic by improving conversion on our side. That same relationship has continued. We haven't seen any further change in that or the trajectory of that versus what we saw in previous quarters.

Hi, this is K. Matalan for Josh Beck. As chatbots, AI mode, and other AI-native discovery surfaces continue to gain scale, have you observed any notable changes in top-of-funnel traffic patterns, customer acquisition behavior, or conversion paths? And how are you thinking about GoDaddy's positioning if more customer journeys begin inside AI interfaces rather than traditional search?

Aman Bhutani: In terms of, you know, customer journeys starting in AI, bots or, you know, there's lots of new interfaces and sort of new things that we're looking at. The way I look at it is, you know, what we're looking for is, you know, wherever customers are starting their journey, you know, how can we provide them the value that we have? When we provide them the value, is this an exchange of value for us? Like, are we able to build on it?

Yeah, you know, on on the traffic coming to the top of the funnel. I think consistent in the last quarter, in terms of what we've talked about before. I think we had shared that, we do see some impact to traffic in in search because of the move to AI mode. But we have, we were able to offset that impact the traffic by improving conversion on our side. So that, that, that same relationship has continued. We haven't seen any further change in in that, or the trajectory of that versus what we saw in previous quarters. In terms of, you know, customer Journeys starting in AI, uh, Bots or, you know, there there's lots of new interfaces and sort of new things that we're looking at. The, the way I look at it is, you know, what we're looking for is, you know, wherever customers are starting their Journey, you know, how can we be, how can we provide in the value that we have? And when we provide them the value,

Aman Bhutani: The simple example of that is that, you know, if people, let's say if we get to a world where everybody has an agent and that agent goes out and does things, we want to make sure that we have the APIs, we have the offerings where those agents can work with GoDaddy as successfully as with anybody else. 'Cause we see that world slowly developing as the new normal, and that's what we have to compete with. You know, we've competed over 30 years with lots of companies, with lots of business models, and this is a new one, and we think AI is here to stay, so we're actually excited and organizing our teams to compete in that world.

Value—is there an exchange of value for us? Like, are we able to build on it? And the simple example of that is that, you know, if people—let's say, if we get to a world where everybody has an agent and that agent goes out and does things, we want to make sure that we have the APIs, we have the offering where those agents can work with GoDaddy as successfully as with anybody else. Because we see that world slowly developing as a new normal, and that's what we have to compete with. And, you know, we've competed over 30 years with lots of companies, with lots of business models. And this is a new one, and we think AI is here to stay. So we're actually excited and organizing our teams to compete in that world.

Kishan Patel: Thanks very much.

Aman Bhutani: Thank you.

Thanks very much.

Thank you.

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

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

Katie Keiser: Awesome. Thanks. This is Katie Keiser for Elizabeth. Just with Airo now being rolled out to multiple markets, multiple languages, highlighting kind of improved resolution in those non-English-speaking markets, does that change your kind of international growth opportunity at all? I guess just broadly, you know, how does AI-enabled multilingual care kind of change or accelerate the approach to entering markets that maybe previously were less attractive because of, you know, support or kind of localization costs? Thank you.

Awesome, thanks. This is, uh, Katie Keaser for Elizabeth. Um, just with Arrow Care now being rolled out to multiple markets, multiple languages, highlighting kind of improved resolution in those non-English-speaking markets.

Aman Bhutani: Yeah. As you know, you know, care is so core to our competitive differentiation and so core for the customer. We know our customer needs that support, whether it's through voice or chat, that we provide that capability in many markets in 22 languages all over the world, and those are just our core languages and translated in even more. Having Airo Care, which natively provides that ability, is definitely going to allow us to compete much better in international markets. We're excited about this first data point where by taking AI or Airo Care and using it within our messaging system, actually, that's the test that I talked about in the prepared remarks.

Does that change your kind of international growth opportunity at all? And I guess just broadly, you know, how does AI-enabled multilingual care kind of change or accelerate the approach to entering markets that maybe previously were less attractive because of, you know, support or kind of localization costs. Thank you.

Aman Bhutani: That test being able to perform almost equally globally is great news for us because it's so difficult for us to provide that high level of service that we have, that huge NPS that we have in smaller markets, in Asian markets, in, you know, where we may not have a big presence. If we can do that with Airo, we can definitely be more aggressive in those markets. We're looking forward to that, and I think it's an exciting opportunity for the future for us.

Yeah, as, you know, you know, care is so core to our competitive differentiation and so core for the customer, we know our customer needs that support whether it's through voice or chat, that we provide that capability in many markets in 22 languages, all over the world, and those are just the core languages and translate it in in even more. So, having Aero care, which natively provides that ability, is definitely going to allow us to compete much better in international markets, and we really, really excited about this first data point where, by, by taking AI or Aero care. And using it within our messaging system, actually, that's, that's the test, that, that I talked about in the prepared remarks

See that test being able to perform almost equally globally is great news for us because it's so difficult for us to provide that high level of service that we have that huge NPS that we have in smaller markets in Asian markets. In, you know, where we may not have a big presence. If we can do that with the Aero care, we can definitely be more aggressive in those markets. So we're we're looking forward to that and I think it's an exciting opportunity for the future for us.

Christie Masoner: Katie, I think you're muted.

Katie, I think you're muted.

Katie Keiser: Well, that's it for me. Thank you.

Christie Masoner: Thanks, Katie. I'll turn the call back over to Aman for closing remarks.

Well, that's it for me. Thank you.

Aman Bhutani: Thank you, Christie. Thank you all for joining. Super excited to be where we are and a great journey in front of us. A big thank you to all GoDaddy employees for a great quarter, and I'll see you next quarter.

Thanks, Katie. I'll turn the call back over to Aman for closing remarks.

Thank you, Christie. Thank you all for joining. Uh, super excited to be where we are and a great journey in front of us. A big thank you to all GoDaddy employees for a great quarter, and I'll see you next quarter.

Operator: Goodbye.

Goodbye.

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