GDDY · Q4 2025 Earnings

Bullish

GoDaddy

Reported February 24, 2026

30-second summary

Revenue grew 6.8% YoY to $1.274B in Q4 FY2025 with normalized EBITDA margin at 33.8% (+160bps YoY) — beating the ~33% Q4 guide; FY NEBITDA margin landed at 32.0%, in line with the ~32% FY guide. Operating margin expanded +350bps YoY to 24.9%. The FY2026 setup is the real story: revenue guided to ~6% growth at the midpoint ($5.235B), NEBITDA margin "over 33%," FCF ~$1.8B, but management openly traded near-term bookings for higher-LTV cohorts via the .com promotion and expects bookings/revenue parity only by year-end. Agent Name Service moved from narrative asset to operating thesis ("monetization similar to domain registration"), and Aero.ai shipped 25 agents with a website builder pulled forward from late-2026.

Headline numbers

EPS

Q4 FY2025

$1.80

Revenue

Q4 FY2025

$1.27B

+6.8% YoY

Gross margin

Q4 FY2025

64.6%

Free cash flow

Q4 FY2025

$0.37B

Operating margin

Q4 FY2025

24.9%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$1.27B	+6.8%	$1.27B	+0.7%
EPS	$1.80	—	$1.51	+19.2%
Gross margin	64.6%	—	63.0%	+160bps
Operating margin	24.9%	—	23.4%	+150bps
Free cash flow	$0.37B	—	$0.44B	-15.9%

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	Q4 FY2025	$1.255B to $1.275B	$1.2739B	in-line	Met
Revenue YoY growth	Q4 FY2025	approximately 6% at the midpoint	6.8% YoY	+0.8pts above midpoint	Met
Applications and Commerce revenue growth	Q4 FY2025	low to mid-teens	12.8% YoY	at lower end of low-to-mid-teens range but delivered solidly	Beat
Core Platform revenue growth	Q4 FY2025	low single-digits	3.3% YoY	in-line with low single-digits	Met
NEBITDA Margin	Q4 FY2025	approximately 33%	33.8%	+0.8pts above guide	Beat
Revenue	FY 2025	$4.930B to $4.950B	$4.9511B	above high end of range	Met
Revenue YoY growth	FY 2025	8% at the midpoint	8.3% YoY	+0.3pts above midpoint	Met
Applications and Commerce revenue growth	FY 2025	mid-teens	12.8% YoY	at lower end of mid-teens range	Met
Core Platform revenue growth	FY 2025	mid single-digits	3.3% YoY	in-line with mid single-digits	Met
NEBITDA Margin	FY 2025	approximately 32%	33.8%	+1.8pts above guide	Beat
Free Cash Flow	FY 2025	approximately $1.6 billion	$1.6136B	in-line	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q1 FY2026	$1.250B to $1.270B	approximately

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Applications and Commerce	$0.498B	+12.8%
Core Platform	$0.776B	+3.3%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Annualized Recurring Revenue (ARR)	$4,336.2 million
Total Customers	20,422 thousand
Average Revenue Per User (ARPU)	$242
Gross Payments Volume (GPV)	$3.4 billion
Total Bookings	$1.3 billion

Profitability

Q4 FY2025

Segment	Q4 FY2025
NEBITDA Margin	33.8%
Segment EBITDA Margin - A&C	47.1%
Segment EBITDA Margin - Core	34.8%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
International Revenue	$0.42B	+10.3%

Management tone

Q2 AI as operating-model leap → Q3 agentic open internet as infrastructure mandate → Q4 agentic AI as the operating system; bookings deliberately traded for cohort quality.

AI moved from infrastructure narrative to live revenue-facing deployment. Last quarter ANS was a TAM-expansion concept; this quarter it's framed as having "potential to create monetization similar to domain registration." The Aero.ai surface now hosts 25 live agents, the website builder shipped ahead of schedule (originally late-2026), and management disclosed an AI sales agent handling thousands of voice calls and text chats in the first six weeks of 2026. The escalation from "we are building" to "agents are live in revenue-facing operations" happened in one quarter. The Q&A quantification — 1.7–2B daily data points, large majority of new code AI-generated (above the prior 70% target), one engineer managing five AI agents — was offered without prompting.

Management explicitly traded near-term bookings for cohort quality. The Q&A repeatedly addressed the .com promotional offer's impact: "the shift in term mix combined with the promotional price reduced upfront bookings and near-term revenue... With iteration, we can optimize this path." This is the first time GoDaddy has openly named a near-term financial cost in service of LTV optimization. The guide framework — bookings reaching parity with revenue only by end of FY2026 — institutionalizes that trade. For a management team historically anchored to steady-execution language, naming a deliberate headwind is itself a tone shift.

The customer-count narrative has gone silent. Q2 management said "return to growth later this year." Q3 customer count was flat QoQ. Q4 printed 20.422M vs 20.413M — another flat quarter — and the press release / transcript surfaced no commitment to a return-to-growth timeline. The focus has shifted entirely to high-intent cohort metrics ($500+ spend, +11% YoY) and ARPU ($242, +10% YoY). Whether by design or by necessity, headline customer count is no longer the metric management wants investors to track.

Margin guidance posture flipped from defensive to offensive. Q3 quietly walked the "exit at 33%" language down to "approximately 32% FY." FY2025 NEBITDA landed at 32.0% in line with that guide, but Q4 specifically printed 33.8% and FY2026 is guided "over 33%" — a full year extended at the elevated bar. Management on the call: "we have beat margin targets for 2+ years" and AI cost discipline is "centralized" with "proof-of-return criteria" on every investment. The shift back to confident margin language, after Q3's reframe, suggests the structural trajectory is intact.

Arrow.ai was deliberately excluded from FY2026 guidance as an upside lever. In Q&A, management twice emphasized arrow.ai is "not baked into guidance" and any traction would be "incremental upside." The product launched ahead of schedule but management is gating financial inclusion on product-market-fit thresholds (traffic, conversion, attach, activation, renewal). This is the most disciplined framing yet of a new product: ship early, exclude from numbers, give the upside to the next print.

Recurring themes management leaned on this quarter:

Agentic AI as operating system for small businessesAgent Name Service (ANS) as new infrastructure monetization layerAI-driven code generation and developer productivityDeliberate go-to-market refinement balancing acquisition velocity with lifetime valueMargin expansion through operational efficiency and AI-driven productivityHigh-value customer cohort expansion with 11% growth in $500+ annual spend segment

Risks management surfaced:

Go-to-market evolution creating near-term bookings headwind vs. revenue growthDOTCO contract termination impact (~67% of 200bp revenue headwind)Aftermarket transaction exclusion continuing into 2026Promotion-driven term-mix shift reducing upfront bookings realizationIncreased AI infrastructure costs offsetting productivity gains

Q&A highlights

Vic Casavola · Baird

Why did GoDaddy change go-to-market strategy with the .com promotional offer? What improvements were seen in February? Is this a one-time 2026 headwind or longer-term impact? How should investors think about AI cost visibility and impact to gross/EBITDA margins?

The GTM change opens the top of the funnel with optimized paths and marketing channels, attracting more high-intent customers than expected. February improvements came from optimizing routing and marketing channels. Management expects major bookings impact at end of 2026 and Q1, with bookings reaching parity with revenue by year-end. AI costs are highly disciplined with centralized tracking; all AI investments follow proof-of-return criteria. Management has maintained margin guidance while investing in AI due to product-level cost optimization.

New go-to-market path attracted more customers than expectedFebruary showed optimization of marketing channels and customer routingMajor bookings impact expected end-of-year and Q1Bookings expected to reach parity with revenue by end of 2026

Mark Zdudowicz · Benchmark

Can you differentiate ANC bookings growth deceleration between pricing/bundling vs. GPV impacts? What are KPIs from arrow.ai beta tests and relative ARPU? When will arrow.ai GA and could it drive ANC bookings growth in 2026?

ANC bookings deceleration in Q4 was driven by discount allocation across domain and attached ANC products. Arrow.ai website builder coming very quickly (visible next week), with GA pending organic traffic ramp and product-market fit validation. New website builder launched ahead of schedule. Arrow.ai not included in guidance as it's completely new and went to beta very late; any wins would be incremental to guidance.

Discount allocated to both domain and ANC products impacting Q4 bookingsWebsite builder launching next weekArrow.ai GA timing conditional on organic traffic rampArrow.ai not baked into 2026 guidance

Ken Wong · Alpenheimer

Was the go-to-market change necessitated by pipeline declines (build, conversion) or is this proactive funnel expansion? Can you clarify bookings vs. revenue parity trajectory—should bookings outpace revenue as year progresses?

Both factors true: world is changing rapidly, and GTM needed expansion while being conscious of market shifts. Management tracks five key metrics (traffic, conversion, attach, activation, renewals) and is very strong across them. Strategy remains focused on high-intent customers ($500 annual spend threshold). Bookings will strengthen throughout 2026 due to increased volume and better attach rates, resulting in bookings outpacing revenue as year exits.

Strong performance across all five key funnel metricsTarget high-intent customer at ~$500 annual spendBookings expected to strengthen progressively through 2026Better attach rates expected to improve long-term valuation metrics

Ella (on for Alexei Gogolev) · JP Morgan

What competitive advantages does GoDaddy's 30-year data history provide versus newer entrants? How much of customer care and code generation is AI-driven today and how will it evolve? Can you quantify the progress?

GoDaddy collects ~1.7-2 billion data points daily from interactions, calls, chats globally—valuable for tuning AI agents to individual customer needs. Majority of new code is now AI-generated (original target was 70%, but now large majority). Evolution moving to agents creating code and automating software/product development lifecycles. New website builder built using AI learnings, delivered ahead of schedule. AI is easier to bring into GoDaddy given existing capabilities.

1.7-2 billion daily data points collectedLarge majority of new code now AI-generated (surpassed 70% target)Evolution toward agents creating code and automating SDLCNew AI website builder built ahead of schedule

Arjun Bhatia · William Blair

Was competitive intensity from new AI/coding entrants a driver of the GTM changes? How does the new motion defend against competitors targeting micro businesses? When will arrow.ai contribution materialize given 2026 guidance excludes it?

Competitors mostly focus on enterprise employees and agency workers; GoDaddy sees less impact on direct roofer/cleaner/micro business customer base. GTM expansion about bringing more high-intent customers into domains funnel with strong attach. No large funnel impact from competition yet. Arrow.ai must achieve product-market fit (traffic, conversion, attach, activation, renewal) before inclusion in guidance. Metrics look good on small traffic; need scale to validate. Any arrow.ai progress in 2026 would be upside.

Competitors focus on enterprise employees and agenciesMinimal observed impact on GoDaddy's direct micro-business customer basePrimary GTM motion: bring high-intent customers into domains funnelArrow.ai metrics look good at small scale

Answers to last quarter's watch list

Whether Q4 NEBITDA margin actually prints ~33% — Q4 FY2025 NEBITDA margin printed 33.8%, 80bps above the ~33% Q4 guide; FY2025 landed at 32.0%, in line with the ~32% FY guide. FY2026 is now guided "over 33%," extending the bar a full year forward. Status: Resolved positively on the Q4 print and FY2026 step-up.

A&C growth trajectory into FY2026 — A&C decelerated again to 12.8% in Q4 FY2025 (from Q3's 13.7%), and the FY2026 outlook stepped down from "mid-teens" to "low double digits" — exactly the softening the Q3 brief flagged. Management framed it as a deliberate ~200bps headwind from DOTCO and term-mix, but the headline range has been lowered. Status: Resolved negatively.

Customer count inflection — Total customers printed 20.422M vs Q3's 20.413M — another essentially-flat quarter and no commitment to a 2026 inflection in the press release or transcript. Management has shifted emphasis entirely to high-intent cohort ($500+ spend, +11% YoY) and ARPU. Status: Resolved negatively — not on a print decline, but on the disappearance of the return-to-growth commitment.

ANS monetization disclosure — Management framed ANS as having "potential to create monetization similar to domain registration" — qualitatively stronger language than Q3 — but disclosed no pricing model, agent registration economics, or partner adoption metrics. ANS remains a narrative asset, not a numbers asset. Status: Continue monitoring.

Core Platform sustainability ex-aftermarket — Core Platform reverted to 3.3% YoY from Q3's 8.3%, in-line with the low-single-digit guide, confirming Q3's print was an aftermarket spike. FY2026 Core is guided to "low single digits" again, indicating no structural step-up. Status: Resolved negatively for Core durability; the Q3 strength was non-recurring.

What to watch into next quarter

Bookings vs revenue convergence in H1 FY2026 — management committed to bookings reaching parity with revenue by end of FY2026. Watch whether Q1 FY2026 bookings growth is still meaningfully below revenue growth (consistent with peak headwind) or has already begun closing. The Q1 FY2026 NEBITDA margin guide of ~32% (vs Q4 FY2025's 33.8%) suggests the headwind is still building.

A&C growth — does "low double digits" mean 10–11% or 12–13% — FY2026 A&C guide of "low double digits" is the third consecutive step-down. Watch whether Q1 FY2026 A&C lands at the high end (~12%) suggesting stabilization, or at the low end (~10%) confirming further deceleration into FY2027.

Arrow.ai PMF threshold disclosure — management gated financial inclusion on traffic/conversion/attach/activation/renewal metrics but refused to quantify the threshold. Watch for any disclosed beta cohort size, ARPU, or conversion data on the Q1 FY2026 call — without it, arrow.ai remains a black-box upside option.

ANS revenue model — three quarters into the ANS narrative, no pricing structure, no registration economics, no partner names. Watch for the first quantified disclosure (per-agent fee, partner pilot, adoption metric) — without one by mid-FY2026, the "monetization similar to domain registration" framing weakens.

NEBITDA margin durability above 33% in Q2/Q3 FY2026 — Q1 FY2026 is guided to ~32% (seasonally lower) and FY to "over 33%," implying meaningful step-ups in Q2–Q4. Watch whether Q1 FY2026 actually lands at or above 32% and what Q2 FY2026 guide implies for the back-half trajectory; the AI cost discipline narrative is testable here.

Customer count return to growth — the Q2 management commitment ("later this year") has now been silent for two quarters with the metric stuck near 20.41M. Watch whether Q1 FY2026 prints positive QoQ headline customer growth or whether management formally retires the metric as a focus.

Sources

GoDaddy Q4 FY2025 earnings press release (Form 8-K Exhibit 99.1), SEC filing dated 2026-02-24: https://www.sec.gov/Archives/edgar/data/1609711/000160971126000008/gddyex991x20251231xq4earni.htm
GoDaddy Q4 FY2025 earnings call transcript (management prepared remarks and analyst Q&A)

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