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GoDaddy Inc. Class A Common Stock
Our verdict on GoDaddy Inc. Class A Common Stock isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management has lowered the expectation for net deferred gains to be recognized over the next 12 months to $49.9 million, down from the $64.5 million projected in the prior period. (1 revised across 1 tracked commitment)
“As of September 30, 2025, we estimate that $64.5 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months.”
Management expects cost of revenue to increase in absolute dollars due to higher sales volumes in domains and productivity applications. (+4 more commitments)
“We expect cost of revenue to increase in absolute dollars in future periods due to increased sales of domains and third-party productivity applications.”
Management expects marketing and advertising expenses to fluctuate based on discretionary investments and campaign scope. (+2 more commitments)
“We expect marketing and advertising expenses to fluctuate depending on both the mix of internal and external marketing resources used, the size and scope of our future campaigns and the level of discretionary investments we make in marketing to drive future sales.”
Management expects marketing and advertising expenses to fluctuate based on discretionary investments in AI-native solutions like Airo. (+1 more commitment)
“We expect marketing and advertising expenses to fluctuate in the future depending on both the mix of internal and external marketing resources used, the size and scope of our campaigns and the level of discretionary investments we make in marketing to drive sales and to promote awareness of our AI-native solutions, including Airo.”
Management expects technology and development expenses to decrease as a percentage of revenue following a period of investment and infrastructure migration. (+4 more commitments)
“We expect technology and development expenses to decrease as a percentage of revenue following a period of investment in product development and migration toward a unified infrastructure platform.”
See the full cited Management analysis of GoDaddy Inc. Class A Common Stock
How durable is the business?
The Core Platform segment revenue grew 8.3% year-over-year to $784.3 million, driven by domain registrations and aftermarket sales, though its share of total revenue slightly decreased as the A&C segment grew faster. (2 expanding)
“Core platform revenue grew $59.8 million, or 8.3%, for the three months ended September 30, 2025”
The company is deepening its technology moat through 'GoDaddy Airo', its AI-powered experience, which is now being used to drive higher ARPU (Average Revenue Per User), which rose to $230. (2 expanding)
“ARPU $ 230... GoDaddy Airo®, the company's AI-powered experience, makes growing a small business faster and easier”
The Core Platform segment revenue share increased slightly to 61.9% of total revenue, though its growth rate of 4.8% remains significantly lower than the A&C segment. Segment EBITDA margin remained stable at 32.7%. (2 expanding, 1 stable)
“Core platform $ 753.7 61.9 %”
The U.S. market share of total revenue increased to 67.5%, up from 67.2%, indicating strong domestic performance despite international expansion efforts. (5 expanding across 1 engine)
“Core Platform 768.7 60.7 %”
The Applications and Commerce (A&C) segment continues to be the primary growth engine, expanding 14.4% year-over-year. Its revenue share decreased slightly to 38.1% due to the massive scale of Core, but its Segment EBITDA margin improved to 44.4%. (3 expanding across 1 engine)
“Applications and Commerce $ 498.2 39.3 %”
See the full cited Business Model analysis of GoDaddy Inc. Class A Common Stock
Where does growth come from?
Applications and Commerce (A&C) revenue growth is accelerating, driven by productivity applications and commerce solutions. (5 accelerating across 5 signals)
“The $51.8 million, or 11.6%, increase in A&C revenue for the three months ended March 31, 2026 was due to continued customer adoption of our subscription-based products.”
The migration to AWS is a steady trend, resulting in decreased internal data center and systems infrastructure costs. (4 steady, 1 new trend across 5 signals, 1 leading indicator)
“The $7.9 million, or 3.8%, increase in technology and development expenses... was primarily attributable to a $4.5 million increase in public cloud cost as we continue to migrate to a cloud-based infrastructure.”
GoDaddy is transforming its platform into an 'agentic' AI solution called Airo, which automates complex tasks like naming, logo creation, and website building for entrepreneurs.
“For example, we have built and continue to enhance our AI-powered experience, Airo, most recently transforming the platform into an agentic solution built to help our customers with domain searches and naming, logo creation and website and application building.”
GoDaddy is expanding into financial services for small businesses with the launch of a merchant cash advance program.
“Additionally, in 2025, we launched GoDaddy Capital, a merchant cash advance program, and Same-Day Payouts, an option for customers to elect to receive their payouts on the same day as the payment is processed.”
Operating income is accelerating significantly due to lower restructuring charges and improved operational efficiency. (5 accelerating across 5 signals)
“Operating income of $310.5 million, an increase of 25.6%.”
See the full cited Future Growth analysis of GoDaddy Inc. Class A Common Stock
What could break the thesis?
The risk is stable but requires monitoring; total customers at period end decreased slightly to 20,413 (in thousands) from 20,725 a year ago, though ARPU increased from $215 to $237. (1 stable)
“However, these customers often have limited budgets and may choose not to allocate resources to our solutions, especially in times of economic uncertainty or recessions.”
Customer retention remains strong at 85% overall and 90% for long-term customers, suggesting high resilience despite macroeconomic headwinds. ARPU also increased to $242 from $220. (1 easing)
“ARPU $ 242 [vs] $ 220... The retention rate for our customers who had been with us for over three years as of December 31, 2025 was approximately 90%.”
Debt levels remain high but stable at $3,823.1 million. Interest expense for the quarter was $37.8 million, slightly up from $37.2 million year-over-year. The company maintains a $1.0 billion revolver with $998.6 million available. (1 stable)
“Total borrowings under our 2029 Term Loans were $1,440.6 million as of March 31, 2026... Total borrowings under our 2031 Term Loans were $982.5 million.”
ARPU (Average Revenue Per User) increased to $246 from $225, suggesting resilience and successful cross-selling despite macroeconomic uncertainty. (1 easing)
“ARPU $ 246 $ 225”
AI is now a central pillar of the strategy, with 'agentic' AI tools launched to handle core tasks. While R&D costs are rising, the company is seeing adoption with 20.4 million customers and rising ARPU. (1 stable)
“In 2025, we continued to harness the power of AI, with a focus on enabling agentic AI capabilities across Airo and our existing products.”
See the full cited Risk analysis of GoDaddy Inc. Class A Common Stock
GoDaddy Inc. Class A Common Stock analysis by filing period
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