Sang-Jin Byun

Sang-Jin Byun inquired about the deceleration in Applications and Commerce (ANC) bookings growth, asking if the low-teens growth rate is the new expected level given GoDaddy's scale, or if acceleration is possible as the new go-to-market strategy stabilizes. He also requested an update on pricing and bundling tests.

Answer

VP of Investor Relations Christie Masoner explained that the ANC growth is impacted by the upgraded Websites + Marketing experience rollout, with no pricing and bundling contribution assumed during this transition. CEO Aman Bhutani confirmed continued execution on pricing and bundling, citing strong performance in Managed Hosting for WordPress and growth in the LLC formation bundle, particularly through Airo cross-selling.

Sang-Jin Byun asked about the deceleration in Applications and Commerce (ANC) growth, questioning if the low-teens growth is the new expected level or if acceleration is possible as the go-to-market strategy settles. He also requested an update on pricing and bundling tests.

Answer

Christie Masoner, VP of Investor Relations, explained that the upgraded Websites + Marketing experience is rolling out, and no pricing and bundling contribution is assumed during this transition, impacting ANC growth. Aman Bhutani, CEO, confirmed continued execution on pricing and bundling, citing strong performance in Managed Hosting for WordPress and growth in the LLC formation bundle, with new bundles expected soon.

On behalf of Brent Thill, Sang-Jin Byun (speaking as John Byun) asked about the response from professional developers to Airo's capabilities in Managed WordPress and questioned the dynamic of A&C bookings growth slowing relative to revenue growth.

Answer

CEO Aman Bhutani mentioned that new Airo-powered tools for Managed WordPress, like a site optimizer and a chat-based editor, are now in the market but are still in very early stages of adoption, as the initial Airo launch focused on DIY customers. CFO Mark McCaffrey addressed the bookings question by noting the tough Q1 comparison and reaffirmed the full-year A&C revenue growth target of mid-teens, expressing confidence in the overall free cash flow generation.

John Byun, on for Brent Thill, inquired about early traction in acquiring paying subscribers for Airo Plus and asked for examples of how Agentic AI might be implemented.

Answer

CEO Aman Bhutani stated it is 'super early' for Airo Plus and more details will be shared in the future. Regarding Agentic AI, he explained it has the potential to 'super power' Airo's existing automation capabilities and improve core use cases, without providing specific product examples.

Sang-Jin Byun from Jefferies inquired about the factors behind the deceleration in Partners revenue growth to 24% from 29% in the prior quarter. Additionally, he asked about the distribution and marketing strategy for the new Wixel product, given its distinct target user base.

Answer

CFO Lior Shemesh attributed the Partners revenue growth moderation to a 2-point FX headwind and slightly lower-than-expected GPV growth, while reaffirming the segment remains a key long-term growth driver. CEO Avishai Abrahami outlined the Wixel strategy as creating a new funnel by leveraging the existing user base, pursuing strategic partnerships, and applying Wix's disciplined marketing expertise, while emphasizing the product is still in its early stages.

Sang-Jin Byun from Jefferies asked about macroeconomic trends observed beyond business formations and questioned the performance of the core business when excluding the contribution from Formation Nation.

Answer

CEO Jeff Stibel stated that they observed negative macro pressure in Q1 which continued into Q2, compounded by policy uncertainty. Regarding the core business, Stibel argued that looking at it separately is the wrong approach, as the strategy involves intentionally shifting lower-margin 'empty calorie' revenue from LegalZoom to Formation Nation. This move improves LegalZoom's margins, accelerates its shift to higher-value customers and subscriptions, and is accretive to the overall business.

Sang-Jin Byun of Jefferies, on behalf of Brent Thill, asked about month-to-month linearity trends in Q4 and early Q1 and the reasons for the significant drop in Q4 sales and marketing expenses.

Answer

CEO Hayden Brown stated that month-to-month trends followed normal seasonality, with some unexpected strength in GSV per active client late in Q4, and that no specific impact from elections has been observed. He attributed the large step-down in sales and marketing expense to cost reductions in the Enterprise business and a reduction in non-working marketing spend, while clarifying that performance marketing spend was not reduced.

Sang-Jin Byun of Jefferies inquired about the drivers behind the growing traction in Managed Services and the rationale for classifying the new Business Plus plan's revenue under the Marketplace segment instead of Enterprise.

Answer

CEO Hayden Brown attributed Managed Services growth to a strong value proposition and rising market demand, now being enhanced by AI tools like Uma. CFO Erica Gessert explained that Business Plus revenue is recognized in Marketplace because it is sold via a more self-service, lower-cost acquisition model that opens a wider funnel of clients, aligning it with the Marketplace business structure.