GoDaddy exceeded Wall Street’s revenue and adjusted profit expectations for the second quarter. Management attributed the results to continued execution on attracting high-intent customers and leveraging its AI-powered Airo platform to drive higher retention and average order size. CEO Amanpal Singh Bhutani highlighted progress in expanding the Applications & Commerce (A&C) segment and improved operational efficiency, but also acknowledged ongoing customer count pressure, primarily from the elimination of deep discounts and customer migrations.
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GoDaddy (GDDY) Q2 CY2025 Highlights:
- Revenue: $1.22 billion vs analyst estimates of $1.21 billion (8.3% year-on-year growth, 0.9% beat)
- Adjusted EPS: $1.90 vs analyst estimates of $1.78 (6.9% beat)
- Adjusted Operating Income: $266.3 million vs analyst estimates of $264.1 million (21.9% margin, 0.8% beat)
- The company slightly lifted its revenue guidance for the full year to $4.92 billion at the midpoint from $4.9 billion
- Operating Margin: 21.9%, up from 18.5% in the same quarter last year
- Customers: 20.41 million, down from 20.48 million in the previous quarter
- Annual Recurring Revenue: $4.18 billion vs analyst estimates of $4.12 billion (8.5% year-on-year growth, 1.4% beat)
- Billings: $1.28 billion at quarter end
- Market Capitalization: $19.84 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 From GoDaddy’s Q2 Earnings Call
- Willow Miller (William Blair) asked about the A&C segment’s growth deceleration and future trajectory. CFO Mark McCaffrey responded that easier comparisons in the second half and ongoing Airo adoption should support continued growth, especially in high-value cohorts.
- George Josh Beck (Raymond James) inquired about the long-term impact of Agentic AI on GoDaddy’s web and app ecosystem. CEO Amanpal Singh Bhutani described AI as an opportunity to simplify offerings and drive both internal efficiency and customer value.
- Trevor Vincent Young (Barclays) questioned the impact of the .co registry exit and margin trends. McCaffrey clarified this was a one-off decision for profitability reasons and reaffirmed that margin expansion is expected to continue despite tougher second-half comparisons.
- Vikram Kesavabhotla (Baird) asked for updates on Ask Airo’s rollout timeline and customer count recovery. Bhutani said Ask Airo is already in testing and will expand over the next few months, while customer growth is expected as renewal pressures subside.
- Elizabeth Mary Elliott Porter (Morgan Stanley) asked about SEO challenges and opportunities for GoDaddy and its customers. Bhutani explained that diversification of marketing channels and new AI-driven SEO tools are helping to offset search changes and support customer success.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the broader adoption and monetization of Ask Airo and Agentic AI capabilities, (2) the effectiveness of new pricing and bundling initiatives in driving higher average revenue per user, and (3) progress in returning to overall customer growth as migration-related attrition fades. Execution on commerce product enhancements and the rollout of new partner integrations will also be key signposts.
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