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    GDDY
    Earnings call· Mar 2026(Q1 FY26)

    GoDaddy Q1 FY26 earnings call GDDY

    Apr 30, 2026 Source

    Executive summary

    GoDaddy Q1 FY26 — AI-Driven Growth and Margin Expansion

    GoDaddy delivered strong Q1 FY26 results, driven by robust revenue growth and significant EBITDA margin expansion, fueled by AI-driven efficiencies. The company is actively transforming into an AI-native platform, focusing on new product adoption and operational improvements, while maintaining a disciplined capital allocation strategy. Management is confident in its ability to drive profitable growth and long-term shareholder value through its high-intent customer focus and AI innovation.

    Highlights

    5

    • Total revenue grew 6% on both reported and constant currency basis to $1.3 billion.

    • Normalized EBITDA margin expanded over 200 basis points to 33%.

    • Free cash flow grew 15% to $474 million, with TTM FCF at $1.68 billion.

    • A&C segment revenue grew 12% to $0.5 billion, with ARR up 10%.

    • Airo AI Builder achieved over $10 million in annualized bookings run rate within weeks of beta launch.

    Concerns

    3

    • Total bookings grew 3%, reflecting impact from promotional offers, .CO registry contract expiration, and tougher aftermarket compares.

    • Core Platform bookings declined 1% due to promotional offers, .CO registry contract expiration, and aftermarket strength in prior year.

    • International revenue growth slowed to 7% due to tougher compare from aftermarket transactions in Q1 FY25.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Total Revenue
    $5.195 billion to $5.275 billion
    high materiality
    High
    Q2 2026 Total Revenue
    $1.285 billion to $1.305 billion
    medium materiality
    High
    Full-year 2026 A&C Revenue Growth
    low double digits
    medium materiality
    High
    Q2 2026 A&C Revenue Growth
    low double digits
    medium materiality
    High
    Full-year 2026 Core Platform Revenue Growth
    low single digits
    medium materiality
    High
    Q2 2026 Core Platform Revenue Growth
    low single digits
    medium materiality
    High
    Q2 2026 Normalized EBITDA Margin
    approximately 33%
    high materiality
    High
    Full-year 2026 Normalized EBITDA Margin
    over 33%
    high materiality
    High
    Full-year 2026 Free Cash Flow
    approximately $1.8 billion
    high materiality
    High
    Bookings and Revenue Growth Rates
    at or above parity
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Applications & Commerce (A&C)
    Strong growth driven by continued solid attach of subscription-based solutions. Segment EBITDA margin improved 110 basis points on product mix.
    ARR: $4.3 billionARR Growth: 10%Segment of Total Business: 40%
    		$0.5 billion12%—45%
    Core Platform
    Growth driven by primary domains, with a stronger mix towards higher-priced non-.com TLDs. Partially offset by softness in non-core GoDaddy hosting, .CO registry contract expiration, and tougher compares in aftermarket. Segment EBITDA margin expanded 150 basis points on product mix.
    Primary Domains Growth: 5%
    		$769 million3%—33%
    International
    Growth impacted by tougher compare from aftermarket transactions in the prior year.
    		$416 million7%——

    Operational metrics

    22
    Normalized EBITDA
    $414 million13% growth
    Q1 FY26

    Grew 13% to $414 million.

    Normalized EBITDA margin
    33%210 bps expansion
    Q1 FY26

    Expanded 210 basis points to 33% and exceeded guide for the quarter.

    Cash and investments balance
    $1.3 billion
    Q1 FY26

    Exited the quarter with $1.3 billion in cash.

    Total liquidity
    $2.3 billion
    Q1 FY26

    Total liquidity of $2.3 billion.

    Net debt
    $2.6 billion
    Q1 FY26

    Net debt was $2.6 billion.

    Net leverage
    1.4x
    TTM

    Net leverage of 1.4x on a trailing 12-month basis, within target range.

    Normalized EBITDA to free cash flow conversion
    greater than 1:1
    Q1 FY26

    With a normalized EBITDA to free cash flow conversion of greater than 1:1.

    Share repurchases
    $280 million
    Q1 FY26

    Repurchased 3 million shares during the quarter, totaling $280 million.

    Gross reduction in fully diluted shares outstanding
    over 31%
    since 2022

    Since 2022, our share repurchase programs have resulted in a gross reduction in fully diluted shares outstanding of over 31%.

    Fully diluted shares outstanding
    133 million
    Q1 FY26

    Ended the quarter with 133 million shares outstanding.

    Total revenue
    $1.3 billion6% growth
    Q1 FY26

    Total revenue grew 6% on both a reported and constant currency basis to $1.3 billion.

    Annualized Recurring Revenue (ARR)
    $4.3 billion6% growth
    Q1 FY26

    ARR grew 6% to $4.3 billion.

    Airo AI Builder annualized bookings run rate
    $10 million+
    Q1 FY26

    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.

    New domain registrations acceleration
    6%
    Q1 FY26

    The promotions drove strong gross customer adds and resulted in new domain registrations accelerating by 6% for independent and partner customer populations.

    Airo cohorts second product attach acceleration
    30% fasterrelative to non-Airo cohorts
    Q1 FY26

    Our newer Airo cohorts are demonstrating that higher value with second product attach accelerating 30% faster relative to non-Airo cohorts.

    Customers spending more than $500 annually
    10%
    Q1 FY26

    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.

    ARPU
    $2469% growth
    Q1 FY26

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

    Customer base
    over 20 million
    Q1 FY26

    We serve over 20 million customers globally.

    Airo Care resolution rate improvement
    approximately 50%
    Q1 FY26

    Our first test improved resolution rate by approximately 50%.

    Airo Care non-English market performance improvement
    over 150%
    Q1 FY26

    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%.

    Airo Care rollout
    50+
    Q1 FY26

    Airo Care is now rolled out to more than 50 markets and 20 languages.

    Gross customer adds from promotions
    over 100,000
    Q1 FY26

    The promotions that we did moved gross adds over 100,000 new customers.

    Industry KPIs

    7
    MetricValueDetails
    Customer logo metricsover 20 millioncustomers
    Large customer cohorts10%%
    Software recurring arr$4.3 billionUSD
    Bookings tcv book to bill$1.5 billionUSD
    Genai ai book of business$10 million+USD
    Net revenue dollar retentionabove 85%%
    Ai agentic channel product adoptionthousandsagents

    Orderbook & backlog

    3
    Total bookings$1.5 billionQ1 FY26

    3% growth

    Reflecting impact from promotional offer, .CO registry contract expiration, and lapping of prior year aftermarket strength.

    A&C bookings9% growthQ1 FY26

    Impacted by go-to-market offer and pricing/bundling related to Websites + Marketing upgrade.

    Core Platform bookings1% declineQ1 FY26

    Impacted by promotional offer, .CO registry contract expiration, and aftermarket strength in prior year.

    Product announcements

    5
    ProductTypeDetails
    Airo AI Builderlaunch
    Websites + Marketing (Upgraded with AI-native capabilities)update
    Airo Carelaunch
    Airo Sales Agentlaunch
    Lower-value product offeringdiscontinuation

    Deals & partnerships

    1
    Large playersPartnerships for Agent Name Service (ANS) with real-world use cases.

    Working on aligning key players on the open standard and the use of Domain Name Service (DNS) for agent identity and discovery. Encouraged by early results.

    Risks & headwinds

    5
    Impact of promotional offers on bookingsQ1 FY26 (peak impact)

    A few points of impact on total bookings growth of 3%.

    Mitigation: Refined program to better balance customer acquisition and bookings; optimizing for long-term value by attracting high-intent customers.

    .CO registry contract expirationQ1 FY26 (peak impact), full-year 2026 (over 200 bps cumulative impact on revenue guide)

    Impacted Core Platform segment and total bookings.

    Mitigation: Acknowledged as a factor in guidance; focus on other growth drivers like higher-priced non-.com TLDs.

    Tougher compares in aftermarketQ1 FY26

    Impacted Core Platform segment and international revenue growth (7% vs. 10-14% range).

    Mitigation: Focus on attracting and growing high-intent customers, conversion improvements, and product portfolio management.

    Softness in non-core GoDaddy hostingQ1 FY26

    Partially offset Core Platform revenue growth.

    Mitigation: Reallocating resources towards higher value opportunities and leveraging GoDaddy hosting for new products like Airo AI Builder.

    Impact of product evolution on revenueFull-year 2026

    Full-year revenue guide incorporates over 200 basis points of cumulative impact from product evolution.

    Mitigation: Deliberately managing product portfolio, exiting lower-value offerings, and reallocating resources towards higher value opportunities.

    What to watch in Q2 FY26

    5

    Airo AI Builder distribution and marketing ramp-up

    Next quarter (Q2 FY26)
    CurrentDistribution expanding to godaddy.com and Care; targeted paid marketing ramping in May.
    TargetIncreased adoption, usage, and bookings run rate.

    Why it matters

    Airo AI Builder is a key AI-native product with significant early traction, and its successful scaling is crucial for future growth and AI monetization.

    As a next step, we are ramping targeted paid marketing in May, funded through efficiencies elsewhere in the business.

    Q&A highlights

    6

    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

    2 min read5 chapters

    Detailed Narrative

    01

    AI Transformation and Product Innovation

    GoDaddy is undergoing an AI transformation, focusing on three key areas: AI-native product adoption and monetization, expansion of Agent Name Service (ANS), and AI-driven operational efficiency. The Airo AI Builder, launched last quarter, has rapidly scaled to over $10 million in annualized bookings run rate. The company is expanding its distribution and plans targeted paid marketing in May, funded by internal efficiencies. AI-native capabilities are also being integrated into the Websites + Marketing product, with early test results exceeding expectations.

    02

    Agent Name Service (ANS) and Digital Identity

    GoDaddy is actively developing and promoting Agent Name Service (ANS) to extend the role of domains as a digital identity provider for the Agentic Open Web. The company has signed partnerships and is working to align key players on an open standard using Domain Name Service (DNS) for agent identity and discovery. Non-GoDaddy agents in GoDaddy's ANS implementation now number in the thousands, reinforcing the belief that domains are uniquely positioned for future agent identity and trust.

    03

    AI-Driven Operational Efficiency

    AI is being deployed across GoDaddy's operations to improve speed, efficiency, and customer outcomes. This includes software development, where AI enables rapid creation of customer-facing applications, and testing internal solutions to replace third-party SaaS tools. In Care, Airo Care, an AI-native support technology, has improved resolution rates by approximately 50% and equalized performance in non-English markets, rolling out to over 50 markets and 20 languages. An AI-native commerce Airo sales agent has achieved conversion rates comparable to human-assisted sales for smaller leads.

    04

    Customer Acquisition and Quality

    The company's strategy focuses on attracting high-intent customers, measured by activation and attach of other products. Recent promotional offers drove strong gross customer adds, accelerating new domain registrations by 6% for independent and partner populations. GoDaddy also took the opportunity to remove a lower-value product offering, which partially offset customer growth but had no material impact on bookings, aligning with the focus on optimizing for long-term value and higher-value offerings.

    05

    Financial Performance and Capital Allocation

    GoDaddy delivered revenue at the high end of its guidance and expanded normalized EBITDA margin by over 200 basis points to 33%. Free cash flow grew 15% to $474 million, with a trailing 12-month FCF of $1.68 billion. The company repurchased 3 million shares totaling $280 million, reducing fully diluted shares outstanding by over 31% since 2022. Management reaffirms its full-year guidance for revenue, EBITDA margin, and free cash flow, emphasizing a disciplined, return-based capital allocation framework.

    AI-generated summary of the company’s earnings call. Not investment advice.