GoDaddy (GDDY -2.84%), an established name in domain registration and web services, released its second quarter results on August 7, 2025. The highlights include a modest revenue beat, with reported GAAP revenue of $1,217.6 million against a consensus estimate of $1,207.16 million, and GAAP diluted earnings per share (EPS) of $1.41 compared to an estimated $1.35. The company also posted significant year-over-year improvements in operating income and normalized EBITDA (non-GAAP)—a profitability measure that removes certain non-cash and non-operating items. The period reflects continued strength in higher-margin segments, despite a slight drop in overall customer numbers. Overall, the quarter showed profitable growth and expansion in key financial metrics.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP, Diluted) | $1.41 | $1.35 | $1.01 | 39.6 % |
| Revenue | $1.22 billion | $1.21 billion | $1.12 billion | 8.3 % |
| Operating Income | $266 million | $208 million | 27.9 % | |
| Normalized EBITDA (NEBITDA) | $382 million | N/A | N/A | |
| Free Cash Flow | $392 million | $323 million | 21.4 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About GoDaddy: Business Model and Recent Focus
GoDaddy is known primarily for its work in domain registration, providing individuals and businesses the ability to own and manage website addresses. However, it has grown into a broader web services firm, offering website building tools, hosting, website security, and commerce tools. Its client base ranges from individuals and small businesses to professionals managing websites for others. The company divides its business into two main product groups: Applications and Commerce, which includes online store tools and add-on business services, and Core Platform, which encompasses infrastructure like hosting and domains.
Recently, GoDaddy has concentrated on increasing value from what it calls “high-intent” customers—those who are more likely to buy multiple products and stay loyal over time. This has shifted the focus from growing average revenue and retention per user rather than total customer numbers. Another major area is integrating artificial intelligence, specifically with its Airo suite, to support users with tasks such as marketing, domain search, and content creation. Ultimately, retaining high-value users, successfully bundling and upselling services, and expanding use of new technologies are key to GoDaddy’s business strategy.
Quarter in Detail: Segment Results, Product Developments, and Key Metrics
The most substantial growth came from the Applications and Commerce business, which saw revenue increase 14.4% to $463.9 million. This segment, offering e-commerce solutions and add-on tools, also delivered higher profitability, with segment EBITDA (earnings before interest, tax, depreciation, and amortization) up 16.5%. Core Platform revenue, which includes domains and web hosting, grew by 4.8% to $753.7 million (GAAP). Both major areas benefited from ongoing bundling and pricing initiatives, which encourage customers to purchase additional services together, driving up average order size and profitability.
The company’s average revenue per user (ARPU) rose 9.5% to $230. This reflects the company’s intentional push to market more features to existing clients. At the same time, the total customer count fell by 2.2% to 20.4 million. Management continues to stress that quality and lifetime value of users matter more than total volume. International growth was notable as well—GAAP international revenue climbed 10.9% year-over-year.
GoDaddy’s AI-driven Airo platform remains a core innovation area, providing tools that automate content generation, help design logos, and support small business marketing campaigns. The Airo Plus product, a premium version, is still being piloted with users. AI adoption is steadily increasing, with early signs that engaged customers are adding more services and lengthening their subscriptions. Despite this, some external commentators have noted that GoDaddy’s AI features often rely on third-party technology, with slower progress toward developing proprietary systems than other tech peers.
The quarter also saw capital returned to shareholders through ongoing share buybacks. During the first half of 2025, GoDaddy repurchased 5.2 million shares for $906.0 million at an average price of $174.42 per share. Free cash flow, a non-GAAP measure of surplus cash generated from operations after capital expenditures, rose by 21% year-over-year to $391.5 million. Debt remains steady, with net leverage now targeted at under three times EBITDA, tightening from prior guidance as stated by management in Q1 2025.
Looking Ahead: Guidance and Points to Watch
GoDaddy raised its revenue and free cash flow guidance for FY2025 following the results. Management now projects GAAP revenue between $4.89 billion and $4.94 billion for FY2025, which at the midpoint is up 7% compared to FY2024. Guidance for Q3 2025 is revenue between $1.22 billion and $1.24 billion. Free cash flow (non-GAAP) for FY2025 is now targeted at approximately $1.6 billion, up from the previous $1.5 billion target.
In terms of segment guidance, management expects Applications and Commerce revenue to grow in the mid-teens percentage, while Core Platform is likely to remain in the low single digits for full year 2025. Longer term, the company aims to expand its normalized EBITDA (non-GAAP) margin, targeting 33% by year-end 2025. As it continues to prioritize customer value and operational efficiency, investors will want to monitor the ongoing decline in customer numbers—down 2.2% year-over-year to 20,409 in Q2 2025—and the effectiveness of new AI-powered services in driving revenue and retention.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
