GoDaddy (GDDY) Q1 FY26 earnings call: guidance and Q&A

How does GoDaddy ensure it attracts high-quality customers amidst product changes, and how are AI-driven efficiencies balanced between margin expansion and reinvestment?

GoDaddy defines high-intent customers by their activation and attach of other products, which correlates with good renewal rates. AI efficiencies are balanced by expanding margins and disciplined investment in innovation, prioritizing long-term returns. For example, increased marketing for Airo AI Builder is justified by early data showing appropriate returns, even if immaterial in the current year.

“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 other products.”

asked by Vikram Kesavabhotla · answered by Amanpal Bhutani

What is the growth potential for Airo AI Builder beyond its current $10M+ annualized bookings run rate, and can GoDaddy leverage its hosting capacity for additional AI workloads?

The $10M+ run rate is annualized bookings from subscriptions and credits, with customers showing strong engagement and repeat purchases. It's very early, with distribution expanding to Care and paid marketing starting in May. GoDaddy's hosting capacity is a competitive differentiator for Airo AI Builder, and while there are plans for more direct hosting solutions for customers, the focus remains on microbusiness customers, not enterprise AI workloads.

“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.”

asked by Hoi-Fung Wong · answered by Amanpal Bhutani

What is the expected shape of bookings growth for the rest of the year, and what are the updated thoughts on capital allocation, particularly buybacks and M&A?

Bookings growth rates are expected to be at or above parity with revenue growth for the remainder of the year, indicating gaining momentum. On capital allocation, the company's historical track record of using buybacks to return value to shareholders is a good indicator of future approach. No specific changes to capital allocation strategy or M&A appetite were indicated, emphasizing a disciplined, return-based framework.

“bookings, growth rates should be on par or above. We're looking in that both the quarter and 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.”

asked by Trevor Young · answered by Mark McCaffrey

Can you provide unit economics for Airo AI Builder, including transaction size and credit vs. subscription mix, and when will pricing be reimplemented for the upgraded Websites + Marketing product?

Airo AI Builder is designed to be gross margin positive. It's too early to detail the mix of subscription vs. credits due to its nascent stage and ongoing distribution/marketing ramp-up. For the upgraded Websites + Marketing, any pricing changes will wait until customer experience and metrics like published rates achieve parity, given the significant upgrade and different cost profile.

“Any sort of pricing change would have to wait until we get to parity on the customer experience and metrics like published rates.”

asked by Mark Zgutowicz · answered by Amanpal Bhutani

What is GoDaddy's competitive advantage in ANS, especially against larger competitors, and is the Domain business strategy to maintain/gain share or let lower LTV customers go?

GoDaddy's competitive advantage in ANS stems from its proposal for agents to be registered and discovered via DNS, linking agent identity to domain names. As the world's largest domain registrar, this strengthens the relevance of domains. For the Domain business, the strategy is to let low LTV customers go, focusing on high-intent customers who activate and attach other products, which drives long-term value for GoDaddy.

“The reason GoDaddy has huge right to win here is because within the Agent Name 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.”

asked by Eleanor Smith · answered by Amanpal Bhutani

How does the rollout of Airo Care, with its improved resolution rates in non-English markets, impact GoDaddy's international growth opportunities and approach to new markets?

Airo Care significantly enhances GoDaddy's ability to compete in international markets by providing high-quality support in many languages. The ability to achieve nearly equal performance globally, especially improving non-English markets by over 150%, makes it easier to provide high service levels in smaller Asian markets where GoDaddy might not have a large physical presence. This creates an exciting opportunity for more aggressive expansion into those markets.

“If we can do that with Airo Care, we can definitely be more aggressive in those markets. So we're looking forward to that. And I think it's an exciting opportunity for the future for us.”

asked by Kathleen Alexis Keyser · answered by Amanpal Bhutani