GoDaddy’s first quarter results for 2025 surpassed Wall Street expectations for both revenue and non-GAAP earnings, but the market reacted negatively following the release. Management attributed the quarter’s performance to continued momentum in its pricing and bundling initiatives, increased adoption of AI-powered tools like Airo, and growth in its commerce segment. CEO Aman Bhutani highlighted that “pricing and bundling is a multiyear initiative, and we continue to do further testing with customer cohorts,” while also noting improved customer retention and higher average order size. However, the company’s customer count declined slightly, reflecting its focus on higher-value, “high intent” customers rather than absolute customer growth.
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GoDaddy (GDDY) Q1 CY2025 Highlights:
- Revenue: $1.19 billion vs analyst estimates of $1.19 billion (7.7% year-on-year growth, 0.6% beat)
- The company reconfirmed its revenue guidance for the full year of $4.9 billion at the midpoint
- Operating Margin: 20.7%, up from 15.9% in the same quarter last year
- Customers: 20.48 million, down from 20.51 million in the previous quarter
- Annual Recurring Revenue: $4.05 billion at quarter end, up 7.5% year on year
- Billings: $1.35 billion at quarter end
- Market Capitalization: $25.27 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions GoDaddy’s Q1 Earnings Call
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Elizabeth Porter (Morgan Stanley) asked about small business sentiment amid economic uncertainty. CEO Aman Bhutani acknowledged “some pressure in terms of how our customer base... looks at their positive outlook on the economy,” but said overall sentiment remains within five-year norms and GoDaddy’s value proposition helps mitigate macro risks.
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Ygal Arounian (Citigroup) inquired about the impact of Airo and Airo Plus on average order size and customer retention. CFO Mark McCaffrey reported “broad based” increases in order size and faster attachment of additional products, with improved retention rates for customers engaging with Airo.
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Vikram Kesavabhotla (Baird) sought more detail on the Agentic AI roadmap and the success of pricing and bundling initiatives. Bhutani described Agentic AI as the next step in automating tasks for microbusinesses and highlighted continued positive results from bundling and pricing tests across segments.
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Trevor Young (Barclays) asked about the drivers behind margin expansion and the outlook for returning to customer growth. Bhutani cited a favorable product mix and reiterated that GoDaddy’s focus is on higher-value customers, not total customer count, with expectations of returning to customer growth as effects from prior divestitures subside.
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Brad Erickson (RBC) questioned the relative impact of pricing versus bundling and sought examples of customer engagement with Airo. Bhutani explained that “where bundling is part of it and it’s intertwined well, we see the greater lifetime value,” and cited the popularity of the AI-powered Conversations product for microbusinesses as an example of meaningful engagement.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace of adoption and monetization for Airo and Airo Plus, (2) execution and results from ongoing pricing and bundling tests—including the integration of third-party products, and (3) signs of stabilization or growth in the customer base as GoDaddy laps recent divestitures. The effectiveness of new commerce features and continued operational discipline will also be key areas of focus.
GoDaddy currently trades at $177.19, down from $192.58 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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