GoDaddy Inc. ((GDDY)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
GoDaddy’s latest earnings call paints a picture of robust financial health, underscored by significant growth in revenue and customer engagement. The sentiment during the call was largely positive, driven by advancements in AI and product innovations. Despite facing challenges such as gross margin pressure and a difficult revenue comparison anticipated in Q4, the company remains optimistic, focusing on continued investment in AI capabilities and strategic growth initiatives.
Strong Financial Performance
GoDaddy reported a commendable 10% growth in total revenue alongside a 14% increase in A&C bookings. The company achieved a normalized EBITDA margin of 32%, with free cash flow surging 21% to $440 million, underscoring its solid financial footing.
AI and Product Innovation
The company has made significant strides in AI and product innovation, introducing new capabilities through the Airo platform transformation. With the launch of five new Airo agents, AI-generated code now accounts for 45% of product development, enhancing efficiency and innovation.
Customer Engagement and Growth
GoDaddy has seen a notable increase in customer engagement, with the high-intent customer cohort growing to 10% of its base and ARPU rising by 10% to $237. Retention rates have remained strong at 85%, reflecting the company’s effective customer strategies.
International Revenue Growth
International markets have been a bright spot for GoDaddy, with revenue growing 14%, driven by strong performance in both primary and secondary domain markets.
Capital Allocation and Shareholder Returns
The company has been proactive in returning value to shareholders, repurchasing 9 million shares for a total of $1.4 billion year-to-date, demonstrating a commitment to capital allocation.
Gross Margin Pressure
Despite its successes, GoDaddy faces gross margin pressure due to its product mix and ongoing investments in AI initiatives, a challenge it continues to navigate.
Difficult A&C Revenue Comparison
The company anticipates a slowdown in revenue growth to 6% in Q4, attributed to a challenging A&C revenue comparison, highlighting the need for strategic adjustments.
ANS and AI Ecosystem Challenges
While GoDaddy is launching ANS, the broader adoption and integration of Agentic AI and AI ecosystems present ongoing challenges, requiring continued focus and innovation.
Forward-Looking Guidance
Looking ahead, GoDaddy has raised its full-year 2025 revenue guidance to 8% growth, buoyed by strong financial results and strategic investments in AI. The company remains committed to enhancing customer experience through new Airo agents and the Agentic Open Internet vision, with a strategic focus on pricing, bundling, and seamless experiences to boost customer engagement and retention.
In summary, GoDaddy’s earnings call reflects a positive outlook, driven by strong financial performance and strategic investments in AI and customer engagement. While challenges such as gross margin pressure and revenue comparison exist, the company’s forward-looking guidance and strategic initiatives position it well for continued growth.