GDDY · Q1 2026 Earnings

Bullish

GoDaddy

Reported April 30, 2026

30-second summary

Revenue grew 6.1% YoY to $1.267B (upper half of the $1.250B–$1.270B guide), NEBITDA margin printed 32.6% (60bps above the ~32% guide), and FCF margin hit 37.4% on $474M generated. The real news: Airo AI Builder reached a $10M+ annualized bookings run rate within weeks of beta — the first time GoDaddy has put a hard dollar number on a new AI product — and Q2 NEBITDA is guided to ~33% (vs Q1's 32.6%), extending the margin step-up the FY26 ">33%" target requires. FY26 revenue, NEBITDA, and FCF guides all reaffirmed unchanged.

Headline numbers

EPS

Q1 FY2026

$1.60

Revenue

Q1 FY2026

$1.27B

+6.1% YoY

Gross margin

Q1 FY2026

63.8%

Free cash flow

Q1 FY2026

$0.47B

Operating margin

Q1 FY2026

24.5%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.27B	+6.1%	$1.27B	-0.5%
EPS	$1.60	—	$1.80	-11.1%
Gross margin	63.8%	—	64.6%	-80bps
Operating margin	24.5%	—	24.9%	-40bps
Free cash flow	$0.47B	—	$0.37B	+28.0%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	$1.250B - $1.270B	$1.267B	within upper half of guide range	Beat
Revenue YoY growth	Q1 FY2026	approximately 6% at the midpoint	6.1%	+0.1pts above midpoint	Met
NEBITDA margin	Q1 FY2026	approximately 32%	32.6%	+0.6pts above guide	Beat
Applications and Commerce revenue growth	Q1 FY2026	low double digits	11.6%	at lower end of low double-digit range (10–15%)	Beat
Core Platform revenue growth	Q1 FY2026	low single digits	2.8%	within low single-digit range (1–4%)	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q2 FY2026	$1.285B - $1.305B	+5.3% to +7.0% YoY
Revenue YoY growth	Q2 FY2026	6% at the midpoint	—
NEBITDA margin	Q2 FY2026	approximately 33%	—
Applications and Commerce revenue growth	Q2 FY2026	low double digits	—
Core Platform revenue growth	Q2 FY2026	low single digits	—

Reaffirmed unchanged this quarter: Revenue ($5.195B - $5.275B), Revenue YoY growth (6% at the midpoint)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Applications and Commerce	$0.498B	+11.6%
Core Platform	$0.769B	+2.8%

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Annualized Recurring Revenue (ARR)	$4,288.4 million
Total Customers	20.4 million
Average Revenue Per User (ARPU)	$246
Total Bookings	$1,455.3 million
Airo AI Builder Annualized Bookings Run Rate	Multi-million dollar

Profitability

Q1 FY2026

Segment	Q1 FY2026
NEBITDA Margin	32.6%
Free Cash Flow Margin	37.4%
A&C Segment EBITDA Margin	45.2%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
International	$0.416B	+7.0%

Management tone

Q2 FY25 AI as operating-model leap → Q3 FY25 agentic open internet infrastructure → Q4 FY25 AI as operating system, bookings traded for cohort quality → Q1 FY2026 Airo AI Builder produces real revenue, ANS scales agent count and lands named partners.

Airo AI Builder transitioned from a Q4 "not in guidance, upside option" framing to a Q1 disclosed revenue contributor. Last quarter management emphasized that Airo.ai was excluded from FY2026 guidance and any traction would be "incremental upside." This quarter both the press release and prepared remarks disclose a $10M+ annualized bookings run rate within weeks of beta launch — the first hard number put on a new AI product since the Airo narrative began. The escalation in one quarter from "we won't include it" to "$10M+ run rate" is the most concrete monetization disclosure GoDaddy has made on a new product in this cycle. Management also disclosed Airo AI Builder is "gross margin positive from day one."

Agent Name Service shifted from a TAM-expansion concept to a measurable adoption metric with named partners. Q4 framing: ANS has "potential to create monetization similar to domain registration." Q1 FY2026: non-GoDaddy agents in GoDaddy's ANS implementation "now number in the thousands," and GoDaddy announced ANS partnerships with LegalZoom and Cloudflare in April. Both an adoption metric and the first named partners have now materialized.

Margin language regained the offensive posture it had in Q4. Q1 FY2026 NEBITDA at 32.6% is 60bps above the ~32% bar, Q2 is guided to ~33%, and FY remains "over 33%." The cost-discipline narrative from Q4 — centralized AI-cost interface, proof-of-return criteria — is now backed by another guide beat on margin.

The customer-count silence continued, but ARPU is doing more of the work. Q4 FY25 retired the explicit "return to growth" timeline. Q1 FY2026 prints 20.4M customers — essentially flat (+13K since 12/31/25) — but ARPU grew 9.3% YoY to $246. The press release leads with high-intent customer attach and cohort velocity, not headline customer count. Management has effectively re-baselined the customer metric without ever formally retiring it.

International growth decelerated, but management attributed it cleanly to a compare issue, not structural softness. International revenue grew 7.0% in Q1 FY2026. On the call, Mark attributed the slower print specifically to lapping large aftermarket transactions that hit international last year ("aftermarket last year was some of the larger transactions hit the aftermarket and contributed to the growth rate overall... it's just a tougher compare from aftermarket for Q1"). This is a meaningfully more benign framing than a structural-softness read.

Recurring themes management leaned on this quarter:

AI-native product monetization acceleration (Aero AI Builder, AeroCare)Agent Name Service as new infrastructure playOperational efficiency through AI deployment across software development and corporate functionsHigh-intent customer cohort quality improvement and ARPU growthMargin expansion through product mix and AI-driven productivityFree cash flow generation and capital returns to shareholders

Risks management surfaced:

Competitive pressure in AI-driven customer experience space.co registry contract expiration impact (200+ basis points FY26 headwind)Product mix transition risk as lower-value offerings are removedInternational market softness in non-core GoDaddy hostingExecution risk in scaling AI agents while maintaining customer satisfaction

Q&A highlights

Vic Casavola · Baird

How does management measure customer quality and what behaviors in recent cohorts inform confidence in strategy? How should investors think about AI efficiencies flowing to EBITDA/FCF versus reinvestment?

Customer quality measured through activation and attachment of other products, which correlates with renewal rates. Management taking disciplined approach to reinvesting AI efficiencies, with example of increasing marketing for AI Builder based on demonstrated ROI data, while balancing margin expansion opportunities.

High-intent customers defined by activation and product attach rates20 million customer historical data used to validate quality metricsPlanning to increase marketing spend on AI Builder for remainder of year due to positive ROI indicatorsReturns from AI Builder marketing expected to be immaterial in current year but support future growth

Ken Wong · Oppenheimer

What is the right way to think about Arrow AI Builder's growth potential and addressable market? Is there potential to utilize GoDaddy's hosting capacity for additional AI workloads?

$10M run rate is annualized bookings from subscriptions and credits, very early stage. Customers engage with product repeatedly, buying more credits. Not limiting to websites—also selling in care and planning paid marketing. GoDaddy hosting is already powering AI Builder and is a competitive differentiator; plans additional hosting integration but focused on GoDaddy's customer base, not enterprises.

$10 million annualized bookings run rate (subscriptions and credits)Just starting to sell Arrow AI Builder in care channelAdding paid marketing to Arrow AI Builder starting in current monthLarge untapped funnels with domains and website paths

Mark Segudowitz · Benchmark

Can management provide unit economics for Arrow AI Builder including average transaction size, subscription vs. credits mix, and margin profile versus Websites Plus Marketing?

Too early to break down subscription vs. credits detail; confirmed product is gross margin positive from day one and designed to work for both customer and GoDaddy economics. Websites Plus Marketing upgrade being tested, all integrated with Aero, testing showed good results. Pricing changes will wait until achieving parity on customer experience and publish rates.

Product is gross margin positive from inceptionWebsites Plus Marketing upgrade moves from template-first to balancing editor and AI capabilitiesTesting showed strong results for new WFOSM productPricing changes deferred until achieving customer experience parity and publish rate targets

Mark Segudowitz · Benchmark

When should investors expect pricing re-implementation for Websites Plus Marketing and how much historical ARPU accretion is attributable to W+M versus other products?

Pricing changes will occur after achieving parity on customer experience and publish rates metrics. Management will not break out product-specific ARPU contribution due to bundling complexity, but noted that pricing discussed is specific to W+M area and there remains contribution from bundling in other areas.

Pricing deferred until customer experience and metrics parity achievedCannot quantify product-specific ARPU attribution due to bundlingConfirmed pricing and bundling still contributing to overall ARPU from other areas

Ella Smith · J.P. Morgan

What is GoDaddy's competitive advantage and right to win in Agent Name Service compared to larger competitors?

GoDaddy's advantage is that ANS leverages DNS (domain name service), which is the single universal directory on the internet, whereas competitors have fragmented agent registries. By registering agents under domain names, the domain becomes core to agent identity and trust, giving GoDaddy structural advantage as world's largest domain registrar. ANS is an open standard and scalable solution already exists.

ANS backed by open standardANS agents discovered via DNS, the single universal internet directoryDomain names become core to agent identity and trust relationshipsGoDaddy positioned to connect fragmented agent registries to single DNS directory

Answers to last quarter's watch list

Bookings vs revenue convergence in H1 FY2026 — Largely resolved. Q1 FY2026 bookings grew 2.7% YoY ($1.4553B) vs revenue growth of 6.1%, with management explicitly stating Q1 reflects the "peak impact" of the promotional offer, .co registry contract expiration, and aftermarket lapping, and that bookings growth will be "at or above parity" with revenue growth for the remainder of the year. Status: Resolved positively through guide; full resolution requires Q2 print.

A&C growth — does "low double digits" mean 10–11% or 12–13% — A&C printed 11.6%, sitting mid-range. FY2026 A&C guide reaffirmed at "low double digits"; Q2 FY2026 guided to the same. Status: Continue monitoring — the print is in-range.

Airo.ai PMF threshold disclosure — Resolved positively. Management disclosed a $10M+ annualized bookings run rate within weeks of beta launch. Per Q&A, Airo AI Builder is "gross margin positive from day one," paid marketing is being added starting Q2, and care-channel distribution has begun. The product moved from "excluded from guidance" to a quantified run rate in one quarter. Status: Resolved positively.

ANS revenue model — Partially resolved. ANS now has a quantified adoption metric (non-GoDaddy agents "in the thousands"), named partners (LegalZoom and Cloudflare announced in April), and a stated competitive thesis (DNS as universal directory, GoDaddy as largest registrar). Still no per-agent pricing or revenue contribution figure. Status: Continue monitoring — adoption metric and partners materialized but the monetization structure has not.

NEBITDA margin durability above 33% in Q2/Q3 FY2026 — Q1 printed 32.6% (above the ~32% guide) and Q2 is guided to ~33%. The cadence required to land FY2026 "over 33%" remains on rails. Status: Resolved positively through Q2 guide; full resolution requires Q2 actual.

Customer count return to growth — Customer count printed 20.4M, up only 13K since 12/31/25. Management has not restored the "return to growth" commitment. The ARPU narrative ($246, +9.3% YoY) is now load-bearing in place of customer count. Status: Resolved negatively — not on a decline, but on the continued absence of any return-to-growth commitment.

What to watch into next quarter

Airo AI Builder Q2 run rate update — management put a $10M+ annualized bookings number on the Q1 print "within weeks" of beta. Q2 will be the first full quarter of paid marketing and care-channel distribution. Watch for a specific dollar figure — a step-up from $10M+ to a meaningfully larger number would validate the PMF; a vague restatement would suggest the early ramp didn't extend.

Whether Q2 NEBITDA actually prints ~33% — Q2 guide of ~33% requires +40bps QoQ from Q1's 32.6%. With FY guide "over 33%," Q2 needs to land at-or-above guide to keep H2 implied step-ups achievable.

Bookings growth vs revenue growth convergence — management committed to bookings growth at or above parity with revenue for the remaining nine months. Q1 bookings grew 2.7% vs revenue 6.1%; Q2 needs to show meaningful closure of that gap to validate the "peak impact in Q1" framing.

International growth normalization — management attributed the Q1 7.0% print to lapping prior-year aftermarket strength. Watch whether Q2 reaccelerates (validating the compare narrative) or stays at or below 7% (suggesting something more durable).

ANS first pricing or revenue disclosure — thousands of non-GoDaddy agents now use ANS and LegalZoom and Cloudflare are named partners. Watch for the first per-agent registration fee or quantified revenue contribution — without one, the "monetization similar to domain registration" frame loses credibility.

A&C growth — does Q2 hold at ~11–12% — A&C printed 11.6% YoY. Watch whether Q2 holds in the 11–12% range (stabilization) or steps lower (confirming a trajectory toward the low end of "low double digits" into FY27).

Sources

GoDaddy Q1 FY2026 earnings press release (Form 8-K Exhibit 99.1), SEC filing dated 2026-04-30: https://www.sec.gov/Archives/edgar/data/1609711/000160971126000035/gddyex991-20260331xq1earni.htm

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.