Sign in
GI

GoDaddy Inc. (GDDY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $1.194B, up 8% YoY, with Applications & Commerce (A&C) +17% and Core Platform +3%; normalized EBITDA margin expanded to 30.5% and free cash flow rose 26% to $411M .
  • GoDaddy reaffirmed FY2025 guidance: revenue $4.860–$4.940B (+7% YoY midpoint), ~100bps NEBITDA margin expansion, and ≥$1.5B free cash flow; Q2 revenue guided to $1.195–$1.215B with ~31% NEBITDA margin .
  • Management completed the 2022 $4.0B repurchase program (25%+ reduction in fully diluted shares since 2022) and announced a new $3.0B authorization through 2027, highlighting strong capital returns and confidence in cash generation .
  • The Airo AI experience continues to improve attach, conversion, and term length; pricing and bundling delivered ahead of expectations, supporting A&C growth and margin expansion; management emphasized resilient SMB demand and minimal direct tariff exposure .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and cash generation: Revenue +8% YoY ($1.194B), NEBITDA +16% ($364M), NEBITDA margin 30.5%, and free cash flow +26% ($411M) .
  • Segment execution: A&C revenue +17% to $446M with segment EBITDA margin 44.1% (+180bps); Core revenue +3% to $748M with segment EBITDA margin 31.5% (+160bps) .
  • Strategic initiatives gaining traction; CEO: “Airo…is showing up as better attach, term length and renewals…we expect to take this even further” via Agentic AI .

What Went Wrong

  • Customer count declined -2.4% YoY to 20,484 as mix shifts favor higher-intent cohorts and prior divestitures; management expects a return to customer growth later this year .
  • GAAP net income down vs prior year due to lapping non-routine tax benefits; Q1 2024 included a $267.4M non-cash tax benefit making year-over-year comparability noisy .
  • Transactional aftermarket creates volatility; management cautioned larger transactions are not baked into guidance, a key swing factor for near-term revenue .

Financial Results

Consolidated performance vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.148 $1.193 $1.194
Diluted EPS ($)$1.32 $1.36 $1.51
Operating Income ($USD Millions)$253.8 $255.6 $247.3
Operating Income Margin (%)22.1% 21.4% 20.7%
NEBITDA ($USD Millions)$366.5 $384.7 $364.4
NEBITDA Margin (%)31.9% 32.3% 30.5%
Cash from Operations ($USD Millions)$355.2 $340.5 $404.7
Free Cash Flow ($USD Millions)$362.7 $342.0 $411.3
International Revenue ($USD Millions)$369.4 $380.4 $388.8

Segment breakdown

MetricQ3 2024Q4 2024Q1 2025
A&C Revenue ($USD Millions)$423.1 $441.2 $446.4
A&C Segment EBITDA ($USD Millions)$194.6 $206.2 $196.9
A&C Segment EBITDA Margin (%)46.0% 46.7% 44.1%
Core Revenue ($USD Millions)$724.5 $751.4 $747.9
Core Segment EBITDA ($USD Millions)$239.0 $256.5 $235.3
Core Segment EBITDA Margin (%)33.0% 34.1% 31.5%

KPIs

KPIQ3 2024Q4 2024Q1 2025
Total Bookings ($USD Millions)$1,241.7 $1,222.5 $1,417.0
ARR ($USD Millions)$3,974.6 $4,042.6 $4,053.8
Total Customers (000s)20,725 20,511 20,484
ARPU ($)$215 $220 $225
Net Debt ($USD Millions)$3,092.9 $2,764.9 $3,128.3

Q1 2025 actuals vs Wall Street consensus (S&P Global)

MetricActualConsensusSurprise
Revenue ($USD)$1,194,300,000*$1,189,344,690*+$4,955,310 (+0.4%)*
Primary EPS ($)2.103*1.373*+0.730 (+53%)*
EBITDA ($USD)$281,700,000*$357,491,920*-$75,791,920 (-21%)*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$4.860–$4.940B (midpoint +7%) $4.860–$4.940B (midpoint +7%) Maintained
NEBITDA MarginFY 2025~+100bps expansion ~+100bps expansion Maintained
Free Cash FlowFY 2025≥$1.500B ≥$1.500B Maintained
A&C Revenue GrowthFY 2025Mid-teens Mid-teens Maintained
Core Revenue GrowthFY 2025Low single digits Low single digits Maintained
Total RevenueQ2 2025N/A$1.195–$1.215B (+7% YoY midpoint) New
NEBITDA MarginQ2 2025N/A~31% New
Modeling Guide (Capex / Cash Interest / Cash Taxes)FY 2025~$30M / ~$150M / ~$30M Not reiterated in Q1 releaseN/A

Earnings Call Themes & Trends

TopicQ3 2024 (prev)Q4 2024 (prev)Q1 2025 (current)Trend
AI / Airo initiativesGlobal rollout of Airo; optimizing monetization pathways Airo became largest funnel for Websites + Marketing; Airo Plus SKU testing; personalization & Agentic AI roadmap Airo driving attach, term, renewals; Airo Plus early; Agentic AI to “do the work for” customers Strengthening, moving into monetization
Pricing & BundlingOngoing; supported durable growth and margins Delivered ahead of expectations; 2025 focus on presence products and hosting cohorts Ahead of expectations in Q1; expanded testing incl. third-party products Continuing to drive bookings/ARPU
Commerce / GPVNot detailed in Q3 PR beyond segment growth GPV $2.6B (+55% YoY); added GoDaddy Capital & same-day payouts Healthy conversion in existing base; services skew; same-day payouts traction Sustained growth; new monetization vectors
Macro / TariffsNot a focus in Q3 PRFX small headwind flagged for 2025 Tariff exposure “not material” for GDDY; SMBs resilient; sentiment mixed but stable Resilient demand, monitoring FX/aftermarket
Platform / WordPress—Re-architected Managed WordPress (2x faster); Airo Site Designer testing New Managed WordPress features with Airo capabilities; site optimizer & editor Product upgrades advancing
Aftermarket—Strength returned, but volatile large transactions Largest swing factor; not assumed in guide Volatility persists

Management Commentary

  • CEO: “Airo…is showing up as better attach, term length and renewals…With Agentic AI, we expect to take this even further. Agents…will…do the work for [customers] across multiple jobs to be done.”
  • CFO: “Total revenue was at the top end of our guided range…normalized EBITDA margin…exceeding our guide…We…retired over 25% of our fully diluted shares outstanding since inception of the program.”
  • CFO on macro: “For GoDaddy, our direct exposure to tariffs is not material…our customers’ resilience gives us confidence in our full year 2025 guidance.”
  • CEO on pricing/bundling: “Delivering ahead of our expectations in Q1…we are encouraged by the results…testing new bundles and pricing options…including third-party products.”

Q&A Highlights

  • Airo Plus is in early testing; Airo continues to drive higher attach, faster second-product adoption, and positive cohort retention signals; management will ramp marketing as confidence builds .
  • Customer count stability expected to turn to growth later in 2025, with focus on higher-intent cohorts (average order size and attach improving) .
  • Aftermarket is the biggest transactional swing factor; larger deals are not assumed in guidance, contributing to revenue variability .
  • Commerce GPV trends healthy post-tariff headlines; services skew persists within commerce customer base .
  • International revenue grew 10% YoY; FX headwinds modeled as modest; U.S. growth expected to outpace international by ~200bps for FY (from prior call) .

Estimates Context

  • Q1 2025 results vs S&P Global consensus: revenue beat by 0.4% ($1,194.3M vs $1,189.3M), Primary EPS beat by 53% ($2.103 vs $1.373), while GAAP EBITDA missed by 21% ($281.7M vs $357.5M). The mix shift to higher-margin subscription solutions supports NEBITDA growth and margin expansion, but GAAP EBITDA is lower given operating expense timing and non-GAAP adjustments . Values retrieved from S&P Global.*
  • Implication: Expect upward revisions to EPS and revenue models near term; caution on consensus EBITDA frameworks that differ from company’s normalized EBITDA presentation (NEBITDA). Values retrieved from S&P Global.*

Q1 2025 Actual vs Consensus Detail (S&P Global)

MetricActualConsensusSurprise
Revenue ($USD)$1,194,300,000*$1,189,344,690*+$4,955,310 (+0.4%)*
Primary EPS ($)2.103*1.373*+0.730 (+53%)*
EBITDA ($USD)$281,700,000*$357,491,920*-$75,791,920 (-21%)*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Reaffirmed FY guide and Q2 outlook underscores durable execution; combination of A&C growth, pricing/bundling and Airo monetization is driving free cash flow and margin expansion .
  • Shareholder returns remain a core catalyst: completion of $4B buyback (25%+ FD share reduction) and new $3B authorization through 2027 signal confidence in intrinsic value and cash generation .
  • Airo platform is transitioning from engagement to monetization (Airo Plus, site optimizer, WordPress editor); expect incremental attach and ARPU tailwinds, with broader base rollout over coming quarters .
  • Watch transactional aftermarket variability and FX as near-term swings; management does not assume large aftermarket deals in guide, creating asymmetry for upside surprises .
  • Cohort quality over quantity: lower customer count YoY but improving average order size, multi-product attach and retention; management targets customer growth resumption later in 2025 .
  • Cash conversion remains strong (approximate 1:1 NEBITDA to FCF per management), with FY2025 ≥$1.5B FCF target intact—supports ongoing buybacks and optionality for investment .
  • Trading lens: Near-term narrative likely rewards beats on EPS/revenue and the new $3B buyback; monitor Q2 delivery on ~31% NEBITDA margin and A&C mid-teens growth to sustain momentum .

Additional Q1 2025 Context: Press Releases

  • GoDaddy Agency launched to connect agencies with SMB leads and tools (commissions, premium WordPress tools, co-branded campaigns), expanding partner ecosystem and potential A&C attach pathways .
  • Company communications emphasized resilient SMB sentiment amid macro uncertainties, reinforcing demand stability for GoDaddy’s mission-critical offerings (if referenced).