GoDaddy Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $1.3 billion, up 7% year-over-year.

Annual Recurring Revenue (ARR): $4.4 billion, a 6% increase.

Applications and Commerce Segment Revenue: $515 million, up 11% year-over-year, with EBITDA margin expanding to 46.8%.

Core Platform Revenue: $783 million, a 4% increase, with EBITDA margin at 33.4%.

Total Bookings: Grew 6% to $1.4 billion.

Free Cash Flow: $443 million, with trailing 12-month free cash flow at $1.73 billion.

Normalized EBITDA: Increased 14% to $434 million, with a margin of 33.4%.

Share Repurchases: $852 million year-to-date, reducing shares outstanding by 7%.

2Strategic Updates and Business Highlights

AI Transformation: GoDaddy is focusing on its AI platform, Airo, which has unified various services into a comprehensive operating system for small businesses. Airo's annualized bookings run rate surged to $50 million, up from $10 million the previous quarter.

Customer Engagement: High customer satisfaction and engagement with Airo, with over 70% of Airo users adopting multiple products.

API Development: Launched a new GoDaddy Developer Platform to enhance API offerings, making it easier for developers and AI systems to interact with GoDaddy products.

Market Positioning: GoDaddy maintains a strong position in the domain registration market, adapting to changes brought by AI and LLMs.

3Forward Guidance and Outlook

Full Year 2026 Revenue Guidance: Narrowed to $5.215 billion to $5.255 billion, reflecting 6% growth at the midpoint.

Q3 Revenue Guidance: Expected between $1.315 billion and $1.335 billion, representing 5% growth.

Normalized EBITDA Margin: Projected at approximately 33% for Q3, reaffirming the full-year target of over 33%.

Free Cash Flow Target: Approximately $1.8 billion for the full year.

4Bad News, Challenges, or Points of Concern

Moderating Bookings: A&C bookings are experiencing a slowdown, attributed to the transition to Airo and a decrease in demand for traditional products like do-it-for-you services.

Competitive Pressures: The emergence of AI agents and LLMs is shifting customer behavior and expectations, impacting domain funnel traffic and engagement.

Transition Period: The shift to Airo is seen as a transformational period, and there is uncertainty regarding the timeline for when Airo will fully offset declines from traditional offerings.

5Notable Q&A Insights

Domains Business: GoDaddy is adapting its domain strategy in response to AI developments, focusing on enhancing API capabilities to remain competitive.

Airo Monetization: The company is optimistic about Airo's growth but acknowledges that it may take time to fully replace revenue from traditional products.

Customer Base Composition: While primarily focused on small businesses, GoDaddy is open to evolving its offerings to larger SMBs or enterprises as the market changes.

Marketing Strategy: Limited marketing spend in Q2 for Airo, with plans to increase efforts in the second half of the year as more capabilities are integrated into the platform. Overall, GoDaddy is navigating a significant transformation with its AI initiatives while maintaining solid financial performance, though it faces challenges in adapting to rapid changes in customer behavior and competitive dynamics.