GDDY · Q3 2025 Earnings

Bullish

GoDaddy

Reported October 30, 2025

30-second summary

Revenue grew 10.3% YoY to $1.265B, beating the high end of the prior guide and driving a raise of the FY25 revenue guide to 8% growth — the top of the three-year 6–8% range. The subtler shift: prior-quarter language pointed to a 33% normalized EBITDA margin exit; this quarter's "approximately 32% for full year" implies Q4 margin lands materially below that 33% bar, even as Q4 NEBITDA is guided to ~33%. Aero is now framed as "primary customer engagement engine," and management opened a new strategic vector — Agent Name Service — that positions the domain registrar as agentic-internet infrastructure.

Headline numbers

EPS

Q3 FY2025

$1.51

Revenue

Q3 FY2025

$1.27B

+10.3% YoY

Gross margin

Q3 FY2025

63.0%

Free cash flow

Q3 FY2025

$0.44B

Operating margin

Q3 FY2025

23.4%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$1.27B	+10.3%	$1.22B	+3.9%
EPS	$1.51	—	$1.41	+7.1%
Gross margin	63.0%	—	63.7%	-70bps
Operating margin	23.4%	—	21.9%	+150bps
Free cash flow	$0.44B	—	$0.39B	+12.5%

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	Q3 FY2025	$1.22B - $1.24B (7% YoY growth)	$1.2653B	+0.3% above high end; +10.3% YoY vs guided 7% YoY	Beat
A&C Revenue Growth	Q3 FY2025	mid-teens	13.7%	at low end of mid-teens range	Beat
Core Platform Revenue Growth	Q3 FY2025	low single digits	8.3%	above low single-digit range	Beat
NEBITDA Margin	Q3 FY2025	approximately 32%	32.3%	in-line	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q4 FY2025	$1.255B - $1.275B (6% YoY growth midpoint)	6% at midpoint
A&C Revenue Growth	Q4 FY2025	low to mid-teens	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2025	$4.89B - $4.94B (7% YoY growth midpoint)	$4.93B - $4.95B (8% YoY growth midpoint)	+$0.01B - $0.02B at midpoint; +1pt YoY growth	Raised
Core Platform Revenue Growth	FY2025	low single digits	mid single-digits	narrowed/raised to mid vs low single-digits	Raised

Reaffirmed unchanged this quarter: A&C Revenue Growth (mid-teens), NEBITDA Margin (approximately 32%), Free Cash Flow (approximately $1.6 billion), Free Cash Flow YoY Growth (over 18%)

Segment performance

Q3 FY2025

Segment	Q3 FY2025	YoY
Applications and Commerce	$0.481B	+13.7%
Core Platform	$0.784B	+8.3%

Platform metrics

Q3 FY2025

Segment	Q3 FY2025
Annualized Recurring Revenue (ARR)	$4,293.5 million
Average Revenue Per User (ARPU)	$237
Total Customers	20,413 thousand
Total Bookings	$1,354.5 million

Profitability

Q3 FY2025

Segment	Q3 FY2025
NEBITDA Margin	32.3%
Operating Cash Flow	$444.2 million
A&C Segment EBITDA Margin	45.7%
Core Platform Segment EBITDA Margin	33.0%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
International	$0.423B	+14.4%

Management tone

Q1 (not in coverage) → Q2: AI as operating-model leap forward → Q3: agentic open internet as infrastructure mandate.

The AI narrative escalated from operating-model transformation to infrastructure standard-setting. Last quarter management framed AI as a "step function" in velocity — internal use case, customer-facing features. This quarter the framing went one level up: "The next leap forward is the agentic open internet, where AI-powered agents collaborate and complete end-to-end tasks with speed and precision." The Agent Name Service launch positions GoDaddy not as an AI adopter but as the entity attempting to set the identity layer for agentic web — a categorically different narrative ambition than three months ago.

Measurement vocabulary shifted from inputs to business outcomes. In Q2, management celebrated AI-generated code share (a vanity input metric). This quarter: "we are now shifting our focus from measuring code generation to measuring reduction in product cycle time." The "90% AI-generated code" stat is still cited, but explicitly demoted in favor of outcome metrics. This is operational maturity — and it makes the velocity claim harder to dismiss as theater.

Aero's framing escalated from cohort catalyst to primary engagement engine. Last quarter Aero was "reshaping our lifetime-value math" with 9% customer base penetration. This quarter the $500+ cohort is "approximately 10% of our base" and Aero is "our primary customer engagement engine and key catalyst for our strategic growth initiatives." The progression — feature → cohort catalyst → primary engagement engine — has happened over two quarters. Notable that the cohort percentage moved only from 9% to ~10% while the rhetorical weight roughly doubled.

Guidance language stayed disciplined where it counts. Management used "solid, profitable growth" and "continued strength" rather than escalating superlatives. The FY revenue raise to 8% — top of the three-year 6–8% range — is significant, but management did not claim the three-year range itself needs updating. That restraint matters because the Q4 implied growth (6%) reverts toward the bottom of the range, suggesting management views Q3's 10.3% as exceptional rather than the new baseline.

The NEBITDA exit-rate language quietly receded. Last quarter: "approximately 33% exiting 2025." This quarter: "approximately 32%" for the full year. There is no commentary in the press release explaining the reframe. For a management team that has been precise about margin trajectory, the disappearance of "33% exit" without comment is itself the signal.

Recurring themes management leaned on this quarter:

Agentic AI transformation across product, platform, and infrastructureVelocity and efficiency gains from AI-generated code reducing product cycle timeCustomer cohort quality improvement driving higher lifetime value and ARPU expansionANC bookings acceleration (14%) signaling platform stickiness and attach growthAgent Name Service (ANS) as infrastructure play positioning GoDaddy for agentic open internetOperational discipline maintaining 32% EBITDA margin while investing in AI innovation

Risks management surfaced:

Gross margin pressure from product mix and continued AI investment spendingMore difficult ANC revenue comparison in Q4Expected impact from DOTCO registry contract expirationExecution risk on multiple new agent launches across Aero.ai over weeks aheadCompetition in emerging agentic AI and browser space from larger tech players

Q&A highlights

Vikram Kesavotla · Baird

How will AI and agentic services impact the importance of domains and websites going forward? What metrics are you tracking to measure customer base health beyond total customer count?

Management believes AI creates a symbiotic relationship with domains—easier website creation drives more domains needed. AI and agentic services will require domain infrastructure for identity/validation (Agent Naming Service). Focus on high-intent $500+ customer cohort shows near-perfect retention, strong attach rates, and meaningful bookings contribution.

High-intent $500+ customer cohort exhibits near-perfect retention ratesSecond product attachment rates higher than previous cohorts10% ARPU growth this quarterTargeting expansion of $500+ cohort to higher percentage of customer base

Egal Arounian · Citi

How is Aero.ai rolling out and integrating with current Aero product? How does monetization work with AeroPlus, and what are the drivers of strengthening customer core dynamics?

Aero.ai is built on GoDaddy platform and links to existing customer experience. Strategy uses Aero.ai for rapid testing of agents (new features every 5-7 days), then successful ones migrate to GoDaddy.com. AeroPlus (beta, rolling to full release) monetizes agents via paywalls. High-intent cohort attaching at higher rates with near-perfect retention.

New product capabilities launching every 5-7 days on Aero.aiAeroPlus paywall monetization coming to both Aero.ai and GoDaddy.comHigh-intent cohort showing near-perfect retention rates over 12+ months since Aero launchSecond product attachment significantly higher for this cohort

Trevor Young · Barclays

Can you elaborate on the experimentation culture shift with smaller teams using AI? Is the aftermarket strength driven by higher-end domains or lower-price segments?

Smaller teams (3-5 people) now write 90% code via AI, enabling faster releases without bottlenecks. Aero.ai serves as testing ground before bringing successful features to main platform. Aftermarket strength was primarily high-value transactions ($10k+), though lower-end secondary market remained solid.

Teams of 3-5 producing 90% AI-generated codeMultiple releases per week possible on Aero.ai vs. constrained GoDaddy.comReturn to high-value aftermarket transactions (above $10,000)Continued strength in lower-price domains secondary market

Ken Wong · Oppenheimer

What is the rationale for GoDaddy's ability to win in agent naming services similar to SSL/domains? What are the primary drivers supporting the higher guidance raise?

Agent Naming Service (ANS) solves identity/validation problem for agents similar to how DNS solved it for websites. ANS attaches to DNS infrastructure, embeds certificates (GoDaddy is CA), and enables agent discovery. Guidance raise driven by overall momentum across business—even excluding aftermarket beat, underlying growth is ~8% in primary/secondary domains and A&C.

Agent Naming Service embedded in DNS infrastructure with certificate authority integrationCore growth (ex-aftermarket) approximately 8%Ahead of schedule on three-year free cash flow CAGR targetStrength across primary/secondary domains and A&C segments

Mark Seguriewicz · Benchmark Company

Is ANC forward acceleration driven by new product adoption or pricing/bundling? What caused deleverage in ANC adjusted EBITDA YoY, and what are the token cost implications for gross margin?

ANC strength driven by high-intent $500+ cohort via higher AOV and attach (both new and pricing/bundling contributing equally). ANC EBITDA deleverage attributable to product mix shifts, expected to continue in similar range. Management monitoring AI/token costs closely; using internal models and alternate capabilities to offset external costs while targeting 33% normalized EBITDA margin.

Pricing/bundling and customer quantity/retention contributing equally to ANC growthANC segment normalized EBITDA deleverage due to product mix (not AI spend concerns)Target 33% normalized EBITDA for next year maintainedInternal model hosting and alternate model capabilities used to manage AI costs

Answers to last quarter's watch list

A&C revenue growth re-acceleration in Q3 — A&C grew 13.7%, decelerating 70bps from Q2's 14.4% and landing at the low edge of "mid-teens" guidance. The implied H2 re-acceleration from easier comps did not materialize. Q4 guide of "low to mid-teens" implies further softening. Status: Resolved negatively.

Total customer count return to growth — Customer count was 20.413M vs Q2's 20.409M — essentially flat QoQ, not the headline positive print management hinted at. The "return to growth later this year" language from Q2 was not repeated as a near-term commitment in this print. Status: Continue monitoring.

Normalized EBITDA margin trajectory toward 33% exit — Q3 printed 32.3%, slightly above the ~32% guide. But the FY framework was simultaneously restated from "exiting at 33%" to "approximately 32% for the full year," and Q4 is now guided to ~33% rather than confirming an exit-rate commitment. The 33% Q4 number is consistent with the prior arc, but the "exit" language has gone missing. Status: Resolved negatively — not on the print, but on the framework change.

Ask Arrow broader rollout and any attach/ARPU disclosure — Management provided cohort-level color: $500+ ARPU customers now ~10% of base, near-perfect retention, higher attach. ARPU grew 10% YoY to $237. Aero.ai launched as separate experimentation surface with new features every 5–7 days. Status: Resolved positively.

.CO TLD headwind containment — Press release mentions "expected impact from DOTCO registry contract expiration" as a Q4 risk; no quantified Q4 bps update beyond the prior ~50bps. The Q4 revenue guide of 6% YoY (vs Q3's 10.3%) is consistent with that drag plus a more difficult ANC comp. Status: Continue monitoring.

What to watch into next quarter

Whether Q4 NEBITDA margin actually prints ~33% — the FY "approximately 32%" language requires Q4 to land at ~33%, but the prior "exit at 33%" framing has quietly disappeared. If Q4 lands at 32.5% or below, the margin walk-back becomes explicit and the FY26 33% target comes under pressure.

A&C growth trajectory into FY26 — A&C decelerated to 13.7% in Q3 and the Q4 guide implies further softening to "low to mid-teens." Watch whether the FY26 outlook still anchors A&C at mid-teens or whether the language steps down toward "low teens" given the ANC comp difficulty management flagged.

Customer count inflection — Q2 management said "return to growth later this year." Customer count was flat QoQ in Q3. Watch whether Q4 finally prints positive YoY headline customer growth or whether the timeline slips into FY26.

ANS monetization disclosure — management positioned ANS as a multi-year TAM expansion but disclosed no revenue model. Watch for Q4 or FY26 commentary on pricing structure, agent registration economics, or any partner adoption metrics — without them, ANS is a narrative asset, not a numbers asset.

Core Platform sustainability ex-aftermarket — Core grew 8.3% in Q3 with high-value (>$10K) aftermarket as the primary driver. Q4 guide reverts to "low single-digits." Watch whether Q4 Core lands above the low-single-digit range (suggesting aftermarket strength persists) or in-line (confirming Q3 was the spike).

Sources

GoDaddy Q3 2025 earnings press release (Form 8-K Exhibit 99.1), SEC filing dated 2025-10-30: https://www.sec.gov/Archives/edgar/data/1609711/000160971125000206/gddyex991-20250930xq3earni.htm
GoDaddy Q3 2025 earnings call transcript (analyst Q&A and prepared remarks summaries)

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.