GoDaddy (NYSE:GDDY) executives leaned heavily into an “agentic AI” narrative on the company’s fourth-quarter and full-year 2025 earnings call, while also outlining the near-term financial trade-offs from a revamped domain go-to-market strategy and reaffirming expectations for continued margin expansion and strong free cash flow generation in 2026.
Agentic AI strategy centers on Airo, internal automation, and digital identity
CEO Aman Bhutani framed the company’s next phase around what he described as an “agentic open internet for small business,” supported by “nearly 2 billion customer signals captured every day.” He said GoDaddy’s data, infrastructure, and scale give it an advantage in deploying AI agents that can both recommend and execute tasks, shifting customers away from tools that require expertise to agents that provide and implement expertise automatically.
- Evolving Airo into an “agentic operating system” for small businesses, brought to life on Airo.ai.
- Driving efficiency internally by embedding AI across functions, including software development and sales/care workflows.
- Launching Agent Name Service (ANS), an identity layer intended to anchor AI agent identity to DNS, leveraging GoDaddy’s domain leadership.
On Airo.ai, Bhutani said the company launched a beta late last year and is ramping traffic this quarter. He noted that Airo.ai already has “25 agents live,” spanning tasks across idea validation, domain registration, website building, application building, marketing tools, and compliance. He also said GoDaddy is “capturing value through paywalls within the experience,” but the company did not provide detailed Airo.ai financial metrics, stating it would share more as adoption scales and monetization becomes more meaningful.
Internally, Bhutani said AI tools are now generating the majority of GoDaddy’s code and that “new code bases are almost entirely AI-generated,” adding that the company is running experiments on “agent-only dev teams.” He also highlighted an internal AI sales agent that handled “thousands of voice calls and text chats” in the first six weeks of 2026 with “healthy conversion rates” and “very high engagement rates.”
On ANS, Bhutani positioned it as a trust framework for the “agentic era,” designed to link agents to verifiable, domain-based identity. Management announced that MuleSoft (a Salesforce company) launched an integration between MuleSoft’s Agent Fabric and GoDaddy ANS, which Bhutani said validates the framework and extends it into enterprise workflows. He compared the monetization potential to domain registration over time, while emphasizing its role in reinforcing GoDaddy’s position in digital identity.
2025 results: bookings growth, margin expansion, and strong free cash flow
Bhutani said GoDaddy delivered 7% bookings growth in 2025 and expanded Normalized EBITDA margin to 32% for the year, which he attributed to operational execution, reduced cycle times, and improved structural leverage. He also highlighted 19% free cash flow growth in 2025.
CFO Mark McCaffrey reported fourth-quarter revenue of $1.3 billion, up 7% on both a reported and constant currency basis, at the high end of guidance. International revenue grew 10% to $420 million, and ARR grew 7% to $4.3 billion. Fourth-quarter Normalized EBITDA grew 12% to $431 million, with margin of 34%, up 160 basis points and above guidance. Fourth-quarter free cash flow increased 8% to $370 million.
By segment in Q4, Applications and Commerce revenue grew 13% to $498 million with segment EBITDA margin of 47%, while Core Platform revenue grew 3% to $776 million, driven by aftermarket strength and primary domain growth, partially offset by what McCaffrey called softness in “non-core GoDaddy hosting.”
For the full year, McCaffrey reported approximately $5 billion in revenue, up 8% reported and constant currency. International revenue rose 11% to $1.6 billion. Applications and Commerce revenue increased 14% to $1.9 billion, and Core Platform revenue rose 5% to $3.1 billion. Full-year Normalized EBITDA grew 14% to $1.6 billion at a 32% margin, and free cash flow grew 19% to $1.6 billion, with conversion greater than 1:1 versus Normalized EBITDA.
Cohort and retention commentary: Airo lift, ARPU gains, and “near-perfect” retention in top cohorts
McCaffrey said GoDaddy’s “highest value cohorts,” defined as customers spending more than $500 annually, grew 11% and now represent about 10% of the base, with “meaningfully higher second and third product attach rates and near-perfect retention.” He said ARPU increased 10% to $242 and that overall retention rates rose above 85%.
Management also shared cohort observations tied to Airo. McCaffrey said cumulative annual spend from Airo cohorts has grown in the “high teens” since launch, and the velocity of a second product attach accelerated by nearly 30% versus non-Airo cohorts. In Q&A, Bhutani said the largest attaches historically have been websites and email, and he added that newer offerings such as LLC formation are starting to attach more recently.
Go-to-market shift: promotional .com offer boosts volume but weighs on near-term bookings
A key topic in Q&A was a new, streamlined purchase experience for new domain customers and a promotional one-year .com offer. Bhutani said the goal is to open the top of the funnel and attract more high-intent customers, describing it as more than a discount—an optimized path paired with marketing channel activation. He said demand was greater than expected, increasing new customer volume for one-year term domain units, but the term mix shift and promotional price reduced upfront bookings and near-term revenue.
McCaffrey added that shifting from multi-year to annual terms impacts bookings more than revenue, given revenue recognition timing, while the discount allocation across products in the initial order creates some revenue impact. He said the company expects bookings growth to trail revenue growth in Q1 due to the combined effects of the go-to-market evolution, the .co contract termination, and a tough comparison against strong aftermarket performance last year. By year-end, he said the company expects bookings and revenue growth to be “relatively on par,” with bookings improving as volumes increase and attach improves.
2026 outlook: mid-single-digit revenue growth and continued cash generation
For 2026, McCaffrey guided to revenue of $5.195 billion to $5.275 billion, or about 6% growth at the midpoint, with Applications and Commerce revenue growth in the low double digits and Core Platform growth in the low single digits. He said the outlook incorporates “just over 200 basis points” of cumulative impact from the .co registry contract expiration, continued exclusion of high-value aftermarket transactions, and the go-to-market and product evolution.
McCaffrey said GoDaddy expects Normalized EBITDA margin to exceed its Investor Day target of approximately 33%, driven by continued operational efficiencies and AI productivity gains, partially offset by higher AI costs. The company guided to approximately $1.8 billion in free cash flow for 2026 and maintained its expectation of conversion greater than 1:1.
For Q1 2026, GoDaddy guided to revenue of $1.25 billion to $1.27 billion and a Normalized EBITDA margin of approximately 32%, representing about 150 basis points of year-over-year expansion.
On capital allocation, McCaffrey said GoDaddy deployed 100% of 2025 free cash flow to repurchase 10.2 million shares for $1.6 billion. He said that since 2021, repurchases have reduced fully diluted shares outstanding by approximately 33%, ending 2025 with 136 million shares outstanding.
In closing remarks, Bhutani said GoDaddy is leaning into its domain leadership, brand, platform scale, engineering velocity, and 24/7 care organization while advancing Airo, ANS, and product innovation, calling 2026 an important year for the company’s AI-driven strategy.
About GoDaddy (NYSE:GDDY)
GoDaddy is a technology company that provides a suite of online services aimed primarily at small businesses, entrepreneurs and individuals looking to establish and grow an online presence. The company’s core activities include domain name registration and aftermarket services, a range of website hosting options, and tools for building, managing and promoting websites. Its product mix is designed to simplify the technical aspects of running a website so customers can focus on their businesses.
Product and service offerings span website builders and managed WordPress hosting, shared and dedicated hosting, e-commerce capabilities, email and productivity solutions, SSL certificates and site security tools, and online marketing and search engine optimization services.
