Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Thursday, April 30, 2026 at 5 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Aman Bhutani
  • Chief Financial Officer — Mark McCaffrey
  • Vice President, Investor Relations — Christie Masoner

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Total Revenue -- $1.3 billion, up 6% on both reported and constant currency basis, at the high end of guidance.
  • Normalized EBITDA -- $414 million, up 13%, with margin expanding 210 basis points to 33% and exceeding guidance.
  • Free Cash Flow -- $474 million for the quarter, up 15%, with trailing twelve-month free cash flow of $1.68 billion.
  • Annualized Recurring Revenue (ARR) -- $4.3 billion, representing 6% growth.
  • International Revenue -- $416 million, increased 7% amid tougher comparison for Aftermarket.
  • Aero AI Builder Product -- Surpassed $10 million in annualized bookings run rate within weeks of beta, driven by subscription and incremental credit purchases.
  • Applications & Commerce (A&C) Segment Revenue -- $500 million, up 12%, now 40% of total business; segment EBITDA margin rose 110 basis points to 45% on product mix.
  • Core Platform Segment Revenue -- $769 million, up 3%, with 5% growth in primary domains and EBITDA margin expanding 150 basis points to 33% due to favorable product mix.
  • Total Bookings -- $1.5 billion, up 3%, with A&C bookings up 9% and Core Platform bookings down 1%, reflecting impact from promotional offer, expiration of .co registry contract, and Aftermarket comparison.
  • Customer Growth from Promotions -- Gross customer adds improved by over 100,000, with new domains accelerating 6% among independent and partner populations due to targeted offers.
  • Average Revenue Per User (ARPU) -- $246, an increase of 9%, supported by higher attach and retention rates above 85%.
  • Share Repurchases -- 3 million shares repurchased in the quarter, totaling $280 million, with fully diluted shares outstanding reduced to 133 million; gross share reduction since 2022 now exceeds 31%.
  • Financial Liquidity and Debt -- Cash of $1.3 billion, total liquidity $2.3 billion, and net debt of $2.6 billion with net leverage at 1.4 times trailing twelve-month EBITDA.
  • Agent Name Service (ANS) -- Non-GoDaddy agents deployed in thousands; two new partnerships signed, with ongoing open standard alignment efforts and DNS-based agent discovery as a product differentiator.
  • AeroCare AI Support -- Improved support resolution rate by approximately 50% in testing, with non-English markets seeing resolution rates grow over 150%; now live in more than 50 markets and 20 languages.
  • Outlook for Full-Year 2026 -- Reaffirmed total revenue guidance of $5.195-$5.275 billion (6% growth midpoint), with normalized EBITDA margin expected above 33% and free cash flow target of approximately $1.8 billion.
  • Marketing Investments -- Targeted paid marketing for Aero AI Builder to ramp in Q2, funded by operational efficiencies; disciplined evaluation of returns before further allocation.
  • Product Strategy -- Portfolio optimized by removing lower-value offerings, reallocating resources toward higher-value segments, and increasing investment in AI-native experiences; confirmed minimal bookings impact from product retirement.

SUMMARY

GoDaddy (GDDY +1.13%) reported consistent mid-single-digit revenue and ARR growth, supported by margin expansion and robust free cash flow, while accelerating AI adoption across its platform and operations. Management confirmed that new AI-native products, such as Aero AI Builder, are already contributing notable run-rate bookings and are positioned for broader rollout and scaled marketing initiatives in the coming quarters. International revenue growth moderated due to Aftermarket comparison, but continued AI-driven operational efficiencies and resolution rate gains, especially in non-English markets, signal strengthening global competitiveness beyond top-line metrics.

  • New Aero AI Builder bookings currently exclude any attach revenue, but integration within the broader product ecosystem remains a forthcoming driver.
  • High-intent customer cohorts, particularly Aero users, are attaching second products 30% faster than non-Aero groups, increasing the proportion of customers spending over $500 annually to roughly 10% of the base.
  • Management characterized Q1 as the peak period for bookings impact from both promotional programs and the .co registry contract loss; expects growth rates for bookings and revenue to converge or improve throughout the rest of 2026.
  • Shareholder capital returns remain anchored by repurchases, with over 95% of free cash flow allocated toward buybacks in recent years, though quarterly pacing may fluctuate to preserve long-term flexibility.
  • ANS leverages GoDaddy's DNS leadership to establish a standard for agent identity on the open Internet, and adoption is progressing primarily among third-party agents.
  • Management stated intentions to prioritize retention and growth of high-LTV, high-intent customers even at the expense of lower-value customer attrition, thus focusing on return over market share.
  • AI-driven automation within Care achieved parity in support resolution rates between English and non-English interactions, which may lower global support costs and unlock growth in underserved international markets.
  • Pricing on Aero AI Builder and the upgraded Websites + Marketing solution will remain steady until further operational milestones are reached; management is committed to ongoing product and channel testing before implementing broad price changes.

INDUSTRY GLOSSARY

  • Aero AI Builder: GoDaddy's AI-native product for rapid creation of websites, applications, and business capabilities, offered on Aero.ai.
  • Agent Name Service (ANS): An open standard identity layer utilizing DNS for secure, agent-based Internet interactions, championed by GoDaddy for agent discovery and registration.
  • A&C (Applications & Commerce): The high-margin segment encompassing GoDaddy's subscription-based application and commerce solutions.
  • Core Platform: Segment encompassing primary domains and core hosting, consisting of foundational Internet presence and infrastructure services.
  • Aftermarket: The business involving resale or secondary trading of previously registered domain names and related transactions.
  • AeroCare: GoDaddy's AI-native support platform for voice and chat-based customer service, introduced in Q1 2026.

Full Conference Call Transcript

Aman Bhutani: At GoDaddy Inc., our purpose is to make opportunity more inclusive for all. We serve over 20 million customers globally, helping them establish their identity, build their presence, and grow their business. We do this through an integrated platform that brings these capabilities together in a seamless AI-powered experience, helping customers move from their idea to execution quickly and at a compelling value. Starting with Q1 results, we delivered revenue growth of 6%. This performance, combined with continued operational execution and structural leverage, drove meaningful expansion in normalized EBITDA margin to 33%, up over 200 basis points.

This underscores the durability of our model and continued progress towards our financial North Star, generating strong free cash flow growth of 15% while remaining committed to delivering long-term shareholder returns. As AI-driven innovation accelerates, customer expectations for speed, simplicity, and measurable outcomes are rising. Customers are increasingly using LLMs across their workflows and getting familiar with chat-based interfaces. We are leaning into this shift, positioning GoDaddy Inc. as the platform that helps entrepreneurs turn intent into action through AI-powered experiences and outcomes. Our AI transformation builds on our core strengths of a trusted global brand, leadership in domains, scaled infrastructure, proprietary data, strong engineering talent, and a world-class care organization.

Together, these form a differentiated platform that allows us to deliver a seamless one-stop shop solution for entrepreneurs. We are moving quickly and intentionally with focus on delivering measurable outcomes for entrepreneurs. The positive impact of our AI transformation is clear in three areas. First, the adoption and monetization of our AI-native products. Second, the expansion of Agent Name Service as a new identity layer for the agentic open Internet. And third, the use of AI to drive operational efficiency. First, we are making strong progress on our AI-native products.

AI Builder, introduced last quarter on Aero.ai, is an AI-native experience that enables customers to move from idea to execution in minutes, automatically creating websites, applications, and core business capabilities across identity, presence, and commerce. I work directly with customers using Aero AI Builder on a weekly basis, and the customer feedback is shaping our roadmap and accelerating development. Our customers are looking for simple, integrated solutions that support their core jobs to be done, and we are delivering that through Aero AI Builder. It is delivering strong early adoption, and monetization is already scaling with customers.

This new Aero AI Builder product offering has rapidly scaled to over $10 million in annualized bookings run rate within weeks of its beta launch. While still early, the pace of adoption and quality of customer interaction is strong. Customers are building, publishing, and purchasing incremental credits as they deepen their use of the product. Momentum continues to build week after week as we expand Aero AI Builder’s functionality and distribution. We are expanding distribution of Aero AI Builder on godaddy.com and have begun selling it through Care. In Care, we drive higher adoption of premium plans compared to our online channels and receive direct customer feedback, both positive and constructive, to improve the product.

As a next step, we are ramping targeted paid marketing in May, funded through efficiencies elsewhere in the business. We are thoughtfully monitoring the mix between new and existing products as we scale with a focus on optimizing overall customer value and maintaining margin discipline. The second major product initiative we introduced last quarter is the upgrade of Websites + Marketing, bringing AI-native capabilities into the product while maintaining strong cost discipline for both customers and GoDaddy Inc. This upgrade combines AI-driven capabilities with a powerful editor, enabling customers to create and manage their presence more efficiently. The domains funnel remains our largest distribution lever for new customers, and in this quarter, we tested the upgraded product within that path.

Early results exceeded our expectations and validated the direction of the product. We are excited to get the upgraded functionality in front of all our customers and are using experimentation to inform improvements on the experience. Our teams have embraced an AI-native approach across our customer products, and we are making meaningful progress delivering customer value. We are expanding these capabilities at a rapid pace while maintaining disciplined investment. As we scale distribution and marketing, we are confident in our ability to compete effectively. The second component of our AI transformation is Agent Name Service, or ANS. We are working with large players and seeing continued interest in this technology.

ANS extends the role of domains as a digital identity provider in an agentic open web. We signed a couple of partnerships over the last quarter with real-world use cases and are working hard on aligning key players on the open standard and the use of Domain Name Service, or DNS, for agent identity and discovery. Championing the open standard and partnerships are key to getting to a critical mass of support of the open standard, and we are encouraged by early results. Non-GoDaddy agents in GoDaddy’s ANS implementation now number in the thousands.

DNS is the foundation of identity on today’s Internet, and domains are uniquely positioned to play a role in agent identity and trust, extending domain relevance into the future. Third, we are transforming GoDaddy Inc. into an AI-native company by deploying AI across our operations to improve speed, efficiency, and customer outcomes. We are driving the most immediate impact in software development, where AI is enabling the rapid creation of customer-facing applications with fewer dedicated teams. We are also testing the replacement of smaller third-party SaaS tools with internally built solutions on Aero AI Builder, particularly across corporate functions with the goal of reducing both cost and operational complexity.

In Care, we are advancing to the next phase of AI-powered automation. In Q1, we achieved key proof points across both support and sales. On the support side, we launched AeroCare, a new AI-native support technology across voice and chat that handles a wide range of customer queries. We validated it against our existing offering, delivering strong improvements in resolution rates. Our first test improved resolution rate by approximately 50%. Subsequent tests demonstrated that AeroCare can equalize the resolution rates between English and non-English markets, improving in non-English markets by over 150% and strengthening Care as a global competitive advantage. AeroCare is now rolled out to more than 50 markets and 20 languages.

We will continue to expand use cases each month while maintaining a strong focus on customer satisfaction, resolution rate, sales, and cost. On the sales side, our AI-native commerce Aero sales agent makes voice calls and handles the entire commerce sales experience without human intervention. We have optimized the agent over the last few months, and last quarter it delivered conversion rates comparable to human-assisted sales for smaller leads. These are exciting milestones, and we plan to scale these capabilities throughout the year. Alongside these AI transformation initiatives, we continue to execute on pricing and bundling, seamless experience, and commerce. These programs continue to drive improvements in conversion, attach, and renewal rates.

I want to briefly revisit the offer we discussed last quarter. We refined the program to better balance customer acquisition and bookings, and these efforts are delivering results. The promotions drove strong gross customer adds and resulted in new domains accelerating by 6% for independent and partner customer populations. Our strategy remains consistent. We are focused on attracting high-intent customers who attach, convert, and grow over time, optimizing for long-term value. Towards this end, we also took the opportunity to remove a lower-value product offering this quarter. This partially offset the customer growth from the promotional offer but did not materially impact bookings. In closing, we are operating in a dynamic environment with rapid change and leaning into our strengths.

We serve more than 20 million customers globally. Our domains business and our unwavering focus on micro business customers remains foundational, supported by our scaled integrated platform that connects identity, presence, and commerce. This combination of global reach, proprietary data, seamless technology, and our Care organization creates deep customer insight and consistent execution. Our model is built around attracting high-intent customers and helping entrepreneurs start and grow their ventures over time. This drives durable growth, expanding margin, and strong compounding free cash flow. We continue to execute with discipline, and as we look ahead, our path forward is clear.

We have a large market opportunity, a strong competitive position, and the financial flexibility to continue investing to deliver enduring shareholder value. With that, here is Mark. Thanks, Aman, and good afternoon, everyone.

Mark McCaffrey: In the first quarter, our model continued to demonstrate its durability, driving operating leverage, expanding margin, and generating attractive compounding free cash flow. Supported by a strong balance sheet, we had the flexibility to invest in innovation while still maintaining a disciplined capital allocation framework. We delivered revenue at the high end of our guidance while expanding our normalized EBITDA margin by over 200 basis points. At the same time, we generated strong free cash flow of $474 million, bringing our trailing twelve-month free cash flow to $1.68 billion. We deployed capital through share repurchases, reducing fully diluted shares outstanding to 133 million. Our focus remains on consistently delivering solid financial results as we continue to advance our AI transformation.

For the quarter, total revenue grew 6% on both a reported and constant currency basis to $1.3 billion, and ARR grew 6% to $4.3 billion. International revenue grew 7% to $416 million. For our high-margin A&C segment, we drove 12% growth in revenue to $500 million on continued solid attach of our subscription-based solutions and this segment now represents approximately 40% of our total business. Segment EBITDA margin improved 110 basis points to 45% on product mix. Our Core Platform segment delivered revenue growth of 3% to $769 million on 5% growth in primary domains, with a stronger mix towards higher-priced non-.com TLDs.

This was partially offset by softness in noncore GoDaddy hosting, the .co registry contract expiration, and tougher compares in Aftermarket. Segment EBITDA margin expanded 150 basis points to 33% on product mix. Total bookings grew 3% to $1.5 billion, reflecting a few points of impact from our promotional offer we shared last quarter, the .co registry contract expiration, and lapping of prior-year Aftermarket strength. A&C bookings grew 9%, and Core Platform bookings declined 1%. As we outlined in February, this quarter reflects the peak impact of both these dynamics, and excluding any FX impact, we expect bookings and revenue growth rates to be at or above parity for the remainder of the year.

Our focus on attracting and growing high-intent customers combined with conversion improvements is driving durable growth and higher customer quality. We are driving increased conversion into primary domains and higher attach through Aero. At the same time, we continue to deliberately manage our product portfolio, exiting lower-value offerings and reallocating resources towards higher-value opportunities. And our newer Aero cohorts are demonstrating that higher value, with second product attach accelerating 30% faster relative to non-Aero cohorts. These cohorts are contributing to the increase in the number of customers spending more than $500 annually, which represents approximately 10% of our customer base. Higher attach and retention rates above 85% drove ARPU growth of 9% to $246.

As we look ahead, Aero AI Builder is beginning to contribute directly to bookings. As Aman noted, this offering is already generating millions of dollars in annualized run rate, organically and without dedicated marketing support. In parallel, ANS extends our leadership in digital identity, positioning us to participate in the next evolution of the Internet infrastructure. As the architecture of the Internet evolves, our current strengths remain as relevant as ever, and our AI transformation positions us to consistently deliver profitable growth and capture value going forward. Turning to margins and free cash flow, normalized EBITDA grew 13% to $414 million, delivering 210 basis points of margin expansion to 33% and exceeding our guide for the quarter.

Operational execution, supported by AI-driven efficiencies and favorable product mix, continues to drive margin expansion. Our expanded margin reflects the efficiency of our model and gives us the flexibility to invest in our AI transformation while maintaining a strong balance sheet and a durable free cash flow profile. Free cash flow grew 15% to $474 million with a normalized EBITDA to free cash flow conversion of greater than one-to-one. We exited the quarter with $1.3 billion in cash and total liquidity of $2.3 billion. Net debt was $2.6 billion, representing net leverage of 1.4 times on a trailing twelve-month basis and within our target range. On shareholder returns, we repurchased 3 million shares during the quarter totaling $280 million.

Since 2022, our share repurchase programs have resulted in a gross reduction in fully diluted shares outstanding of over 31%, and we ended the quarter with 133 million shares outstanding. Turning to outlook, we are reaffirming our full-year 2026 guidance provided in February and expect total revenue to be within a range of $5.195 to $5.275 billion, representing growth of 6% at the midpoint of the range. As a reminder, our full-year revenue guide incorporates just over 200 basis points of cumulative impact from the expiration of the .co registry contract, our consistent exclusion of high-value Aftermarket transactions, and the impacts of our product evolution and our promotional offer.

For Q2, we are targeting total revenue of $1.285 to $1.305 billion, representing 6% growth at the midpoint of the range. For both the second quarter and the full year, we expect A&C revenue growth in the low double digits and Core Platform growth in the low single digits. For Q2, we are projecting a normalized EBITDA margin of approximately 33%, and we are reaffirming our target of over 33% for the full year. This reflects our ability to drive continued operational leverage and AI-driven productivity gains while increasing our investments in our AI-native products, marketing, and compute costs.

For the full year, we expect normalized EBITDA to maintain a greater-than-one-to-one conversion to free cash flow, and we reaffirm our full-year free cash flow target of approximately $1.8 billion. We continue to be on track to exceed our free cash flow North Star CAGR of 20%. On capital allocation, we operate within a disciplined return-based framework and have deployed greater than 95% of our free cash flow over the last four years towards share repurchases. Our continued commitment to returning capital is a clear expression of confidence in the strength of our cash flow and the long-term value we are creating.

We remain focused on allocating capital to its highest value uses, with a priority on driving long-term shareholder returns. In closing, the fundamentals of our business remain strong, with consistent engagement and durable drivers of ARPU supporting our long-term trajectory. As we move forward, we remain focused on disciplined and continued progress toward our North Star. We look forward to talking about these and other updates at our investor event later this year. I will now turn it over to Christie to open the line up for questions.

Christie Masoner: Thank you. Thanks, Mark. As a reminder, if you would like to ask a question, please use the raise hand feature at the bottom of the webinar screen to be added to the queue. We will now open the call for questions. Our first question comes from the line of Vikram Kesavabhotla from Baird. Vik, please go ahead.

Vikram Kesavabhotla: Hey, can you hear me okay?

Christie Masoner: We can.

Vikram Kesavabhotla: Great, thanks. Hey, thanks for taking the questions. My first one is on the customer base. As you navigate all these changes in the product portfolio and in your go-to-market strategy, how do you ensure that you are attracting the right type of customer to the platform? And I think you mentioned in the prepared remarks that customer quality is increasing. Great if you could elaborate some more on how you measure customer quality and what you are observing in the behavior of some of these recent cohorts that is informing your confidence in the strategy right now.

And then, separate from that, you talked about all these ways you are using AI internally across the company's operations and some of the proof points that you are seeing already. As you continue to scale those initiatives, how should we think about the opportunity for those efficiencies to flow through to EBITDA and free cash flow in the near term versus being reinvested back into the business to support your product and marketing needs? I realize it is probably a tough question to answer in a ton of detail quantitatively, but it would be great to hear your philosophy around how you are balancing those dynamics during what seems like a pretty significant period of change for the business.

Thanks.

Aman Bhutani: Thanks, Vik. Let me take the first one and Mark can take the second. On the cohorts that we are attracting, our strategy is to attract high-intent customers. The way we define high intent is looking at the traffic coming in by channel and then looking at the activation and attach of other products. From years of data across our 20 million customers, we know that if we see that activation and attach of other products, we are going to see good renewal at the end of the one-year term. That is what gives us confidence. When we make trade-offs in the business, we attract new customers but end-of-life certain products or retire certain cohorts.

What we are looking for is the quality and intent of those customers, measuring it through the activation of the other products that they have. And then on operations—

Mark McCaffrey: On the operations, we are balancing several factors. One, we have the ability to expand our margins; we have for the past few years. We are continuing to see operational efficiencies by the adoption of AI internally. And we are paying attention to the disciplined approach we have had in the past around investing in innovation, using data points that show our path to return before we invest. We are taking a very disciplined framework approach and balancing it with what we think the long-term return is going to be when we make those investments.

For example, we have talked about increasing marketing around AI Builder for the remainder of the year because we are seeing the data points that are showing that return. While those returns will be immaterial for the current year, we know the potential to drive future growth for us is there, and that makes that return appropriate.

Aman Bhutani: Maybe just to add, the areas that we are looking at—whether it is software development or Care, our use of applications, or marketing—are all accelerated with AI, and we see great opportunity to deliver a better outcome for our customers at a lower cost this year and into the future.

Vikram Kesavabhotla: Okay. Great. Thank you.

Christie Masoner: Our next question comes from the line of Ken Wong from Oppenheimer. Ken, please go ahead.

Ken Wong: Hi. Can you guys hear me?

Christie Masoner: Yep.

Aman Bhutani: Yep.

Ken Wong: Fantastic. First question on the $10 million-plus of Aero AI Builder ARR. A lot of your kind of standalone AI builder platforms, we have seen them scale up extremely fast. I realize it is super early, but what is the right way to think about what this business or this product could potentially grow to?

Aman Bhutani: Ken, when we talk about the $10 million run rate, what we are really talking about is annualized bookings. You are right, it is very early data. This includes both subscriptions and credits or tokens. What we see is customers come in, buy a subscription, engage with the product, love the product, and they keep coming back and improving the website or whatever job they are trying to complete with the AI Builder.

I am directly engaged with a few customers—I actually work with customers every week now, sessions with live customers—and what is magical about the AI Builder and our customers is that our customers have lots of ideas, but it is very hard for them to go through menus and templates and figure it out. If they can just, in natural language, explain, “I would like this,” AI Builder goes and does it for them, and it is a magical experience. The same subscriber ends up using it more and more, publishing, republishing, and buying more credits. That is the run rate we are looking at. In terms of what it could be, it is super early.

We are very excited about this early adoption. As I shared in the prepared remarks, we just started selling it in Care, and we are going to add paid marketing to it starting this month. We have giant funnels with domains or website paths that we have not touched yet either. There is a lot to do to get to what we think long-term run rate can be. We are excited about where we started, and we are also keeping an eye on how customers use this product and whether it changes how they use our other products, because that mix is going to be important for us too.

Ken Wong: Understood. Appreciate the color there. And then just to follow up on AI opportunities, you mentioned ANS opening new infrastructure opportunities, and now with Aero AI Builder pushing your back end beyond websites. Is there the potential to utilize GoDaddy Inc.'s hosting capacities for additional AI workloads given the market scarcity there? We are sort of having a moment in hosting all of a sudden, and it seems like that is an area you could potentially capitalize on.

Aman Bhutani: Actually, AI Builder does use GoDaddy hosting. One of our competitive differentiators is we can provide hosting at scale, secure, and at great cost. There is definitely excitement from our side to be able to take something like AI Builder and power it with our hosting solution. We also have some plans to do more with hosting directly for our customers, but we are not looking to go out and do something that is for enterprises. We are very focused on our customer base, the solutions that our customers need. We serve a unique customer. A lot of the new entrants in the AI space are serving enterprises.

We have this unique relationship with this type of customer, so we are leaning into that relationship and the needs of that customer.

Ken Wong: Great. Thank you, Aman.

Aman Bhutani: Thank you.

Christie Masoner: Our next question comes from the line of Trevor Young from Barclays. Trevor, please go ahead.

Trevor Young: Great, thanks. First one for Mark. On your comments on bookings growth at or above parity with revenue growth for the balance of the year, is there a particular shape of the bookings curve to be mindful of—was 1Q implicitly the low point, but will 2Q step all the way back up to where revenue growth is with 2H bookings a bit above that, or is 2Q going to be maybe a tad ahead because it has an easier compare? And then second one on capital allocation, buybacks here in 1Q were well below free cash flow generation and the 95% payout stat that you have given.

Meanwhile, cash is at the highest level since 2021, if I am not mistaken. Any updated thoughts on capital allocation and buyback appetite with the stock at current levels? And in lieu of buybacks, any updated thoughts on M&A? Thank you.

Mark McCaffrey: Thanks, Trevor. On bookings, growth rates should be on par or above. We are looking at that both on a quarterly and an annual basis for the remainder of the nine months, which should give you a sense of the momentum we are starting to gain as we go throughout the year. On capital allocation, what I always say is do not look at any particular quarter; look at our history. Our history is a good indicator of how we approach this. We look at the quarter going forward, we make determinations, and buybacks are still a strong lever for us to return value to our shareholders.

Look at our track record and our history of what we have done, and it will give you a good idea of how we continue to approach it. The way we look at it has not changed.

Trevor Young: Great. Thank you.

Christie Masoner: Our next question comes from the line of Mark Zgutowicz from Benchmark. Mark, please go ahead.

Mark Zgutowicz: Thanks, Christie. Hey, guys. You disclosed $10 million in annualized bookings run rate for Aero AI Builder within, it sounds like, weeks of beta. Can you break down the unit economics there? What is the average transaction size? How much of that run rate is coming from credit top-ups versus the initial plan purchase? And what is the margin profile relative to legacy Websites + Marketing?

Aman Bhutani: Mark, overall, we remain committed to building a product that serves our customer but comes at a gross margin and a price point that works for our customer and for GoDaddy Inc. From day one, we have looked at this as a gross-margin-positive product that can continue to grow and deliver the economics for the company. In terms of subscription versus credits, we are so early—this has to bake and grow. There will be ups and downs as we enter marketing, open channels, and drive more even from godaddy.com with this product, so it is too early to talk about detailed mix.

In terms of the comparison to Websites + Marketing, as we shared in the prepared remarks and last quarter as well, we have an upgrade for Websites + Marketing going out this year that focuses on the needs of that customer and the economics needed to make it successful. We tested that experience and it did quite well. The current version is an established champion. It is going to take a little while to test the challenger—Websites + Marketing, the new version—and we expect to do that this year. As we roll through the year, we are going to test the new version a couple of times, and we expect it to win sometime this year.

Mark Zgutowicz: Got it. And maybe a follow-up on the Websites + Marketing upgrade being tested now in the domains funnel—it sounds like you are having solid early results. When should we expect pricing to be reimplemented for Websites + Marketing specifically? And can you quantify how much of the historical ARPU accretion from pricing and bundling has been attributable to Websites + Marketing versus other products?

Aman Bhutani: I can take the first part, and Mark can take the second. On pricing initiatives around Websites + Marketing, because this is a very significant upgrade with a lot of moving parts, we are moving from a solution that is template-first and uses AI to a solution that balances editor capabilities and AI capabilities and comes with a different set of COGS. Any pricing change would have to wait until we get to parity on the customer experience and metrics like publish rate, so we can be certain that the new version is delivering what customers expect. Once we have done that, then we can look at pricing initiatives.

Mark McCaffrey: On the contribution to ARPU, we do not break out by product because bundling makes it difficult—multiple products are involved. I will highlight that the pricing we talked about is specific to this area and not to other bundling aspects we have had. There is still contribution in ARPU related to pricing and bundling; it is just not to this one specifically.

Mark Zgutowicz: Got it. Thanks, Mark. Thanks, guys.

Aman Bhutani: Thank you.

Christie Masoner: Our next question comes from the line of Arjun Bhatia from William Blair. Arjun, please go ahead.

Willow Miller: Hi, team. I am Willow on for Arjun Bhatia. Thanks for taking our question. Can you unpack A&C bookings growth? Was it largely impacted by the recent promotional activity in the quarter, or is there anything else to call out? I am trying to appreciate the decel and the timeline to inflect growth from initiatives like Aero and then pricing and bundling historically.

Mark McCaffrey: Willow, nothing to call out different than what we talked about last quarter. There are various aspects across bookings that were impacted. The two specific to A&C are the go-to-market offer—there is an allocation element when we bundle products together in the initial order that will impact A&C—and the pricing and bundling related to the upgrade to the Websites + Marketing product. Those are the two impacts on A&C bookings, and as we go throughout the year, we expect some of that to pass. On revenue, it is more evened out because of the subscription nature of what we do, but on bookings, that was mostly peaked in Q1.

Willow Miller: Great. Thank you.

Christie Masoner: Our next question comes from the line of John Bayonne on for Brent Thill at Jefferies. John, please go ahead.

John Bayonne: Hi, can you hear me? Great, thank you. Just two questions. First, on the Aero AI Builder run rate—can you clarify whether that includes any attach or is it just subscriptions and credits? And second, on international revenue growth decelerating—last year was mostly within the 10% to 14% range. Is there anything you can call out there? Thank you.

Aman Bhutani: Thanks, John. On the run rate for Aero AI Builder, that is just the subscription and credits for AI Builder. We have not baked in attach or other products into that yet. All of that is to come. Over the next few weeks, this product will become a bigger part of the GoDaddy Inc. ecosystem, and as it does that, we can have additional bookings that relate to those customers. For now, we are trying to give you the cleanest picture of this new product so that folks can understand the overall AI story at GoDaddy Inc.

Mark McCaffrey: On international revenue, the only thing to call out is Aftermarket. Last year, some of the larger transactions hit Aftermarket and contributed to the overall growth rate. We did not see those larger transactions in Q1, so it is a tougher compare for Aftermarket in Q1.

John Bayonne: Great. Thanks very much.

Christie Masoner: Our next question comes from the line of Ella Smith on for Alexey Gogulov at JPMorgan. Ella, please go ahead.

Ella Smith: Good evening. Thank you for taking our questions. First, on ANS, what do you think is GoDaddy Inc.’s competitive advantage or right to win as it comes to ANS, especially versus larger competitors?

Aman Bhutani: The biggest thing about ANS is that we have put to the world that agents—which we believe will be roaming the Internet and be larger in terms of traffic than human traffic soon—should be registered on the Internet. Large destinations—websites, systems, platforms, other organizations—should recognize agents that are registered. If they are not registered, it will be very difficult to trust agents, to transact with agents, or to know which agents are real versus fake. We think we can avoid all of that by registering agents using Agent Name Service, which is backed by an open standard.

GoDaddy Inc. has a huge right to win here because within the ANS open standard, agents should be discovered using DNS, which is Domain Name Service. DNS is the one directory on the Internet that everybody uses; it replicates everywhere. Agent registries are popping up in every company, so how do you bring that together? You connect registries to the one directory. If we connect it to the one directory and put agents under the domain name, then the domain name becomes core to the identity and trust relationship that agents have now and into the future, which, as the world’s largest domain registrar, is obviously good for us if domains play that role.

We are excited by the reactions from large players. They want to take their time and understand things, but what we are offering is a beautifully elegant, scalable solution that already exists. Nobody has to recreate it. That is why ANS is so important and why it links back to GoDaddy Inc. as the world’s largest domain registrar.

Ella Smith: That is very clear, Aman. Thank you. And for the domains business, what are your strategic objectives? Is your intention to maintain or gain share, or would you be willing to let some lower LTV domain customers go at the expense of market share?

Aman Bhutani: We have said that we will let low LTV customers go because our focus is high-intent customers. Stepping back, we continue to be the world’s largest domain registrar by far. Over the last 30 years, all kinds of competition has come into the world—very low-price registrars, domains used as loss leaders, domains given for free, blockchain, and now LLMs and app builders. We come to that world with a lot of experience competing in this business and a lot of tools. What we have consistently found is that the value is in the high-intent customer who buys a domain name and then does other things with it.

By doing those other things, that is what drives LTV for GoDaddy Inc. and drives our business.

Ella Smith: Great. Thank you, Aman.

Christie Masoner: Our next question comes from the line of Naved Khan from B. Riley. Naved, please go ahead.

Naved Khan: Great, thank you, Christie. I am curious, Aman, how much of the traffic are you exposing to the Aero website builder? Is this still something you are testing and iterating, or have you already rolled it out broadly? And on the app builder, you said the plan is to put some marketing dollars behind it—maybe you are already doing it. How significant is that, and what will it take for you to go from testing the waters to increasing the allocation on the marketing front behind this? Thank you.

Aman Bhutani: On the first, from godaddy.com we are still sending only a small amount of traffic into this new experience. Our largest funnels on godaddy.com are our domains path and our create path, which is the website path. Both currently go into the existing champion version of Websites + Marketing. Over this year, we expect that to evolve, and as it evolves more traffic will go to the new products. I am excited about them, and it will definitely grow usage and dollars associated with that. So on godaddy.com it is still a small amount of traffic, and we have ways to go in terms of driving more.

In terms of the marketing plan, for Aero AI Builder we expect to spend a significant number of dollars this year, starting in Q2. We are going to fund those dollars with efficiencies elsewhere in the business, so Mark does not have to change any of his plans. It is the same disciplined approach we have used in the past—look at spend versus return, then increase and improve it. This is core to our evidence-based decision-making culture. You will start to see us spend more in marketing. We are looking for traffic coming to the product, engagement, sign-up, purchases, site publishing, and then people coming back to engage and buy credits.

Over the next two or three quarters, our expectation is to ramp that up.

Mark McCaffrey: Just to reiterate, there is no change in the framework of how we approach this. We will use the data, and when we see the returns, we will continue to invest in the marketing.

Naved Khan: Maybe just to follow up on the AI app builder—how is pricing evolving? Is it set in stone, or is that something you are testing and might change?

Aman Bhutani: We did test a couple of different plans, Naved, and we are happy with the plan we have settled on. That was one of the gates for ramping up marketing spend. The current plans include a free plan with a few credits to get started, then Starter, Professional, and Ultimate plans. It has a subscription and a credit system. We think we have a good setup and, for the foreseeable future, we will stick to it. There are levers we can pull over time, but for now we will focus on scaling it as fast as possible.

Naved Khan: Great. Thank you.

Christie Masoner: Our next question comes from the line of Jack Halpert on for Deepak Mathivanan from Cantor Fitzgerald. Jack, please go ahead. Zach, I think you are muted.

Jack Halpert: Oh, there we go. You guys hear me now? Awesome, thank you. Just one for me. You mentioned removing a lower-value product offering this quarter. Can you give more color on what exactly that product was and how much it impacted customer count and revenue? And are there any other lower-value products you are evaluating in the portfolio?

Aman Bhutani: Let me take that, and then Mark can jump in. As we talked last quarter, we have taken bold steps in our promotional offers because we are in a dynamic environment and need to test and move faster. As part of those promotions, we saw a significant gain in gross customer adds. The promotions moved gross adds by over 100,000—it brought us over 100,000 new customers. It is a very large number for us from a set of promotions. We optimized those promotions to balance bookings and customer growth because we want to stay with a high-intent customer.

When we bring in that many customers, we also take the opportunity to make tough decisions on products that we are going to retire, and that is what we did this quarter. The promos did very well in attracting customers. We tuned them to balance bookings and customer count, and then we took the opportunity to retire an old product that had an impact on customer count but, I think Mark can confirm, little to no impact on bookings.

Mark McCaffrey: That is right. This was a product that we offered in prior years. It was not generating the value that we needed, so we are not going to support it anymore and will reallocate those resources. It did not have any impact on bookings and did have a slight impact on churn within our customer group. We will continue to evaluate our portfolio because our goal is to optimize for our higher-value offerings and, in certain cases, make the choice to move away from a lower-value offering that is not meeting our return thresholds.

Jack Halpert: Great. Thanks very much.

Christie Masoner: Our next question comes from the line of Kishan Patel on for Josh Beck at Raymond James. Kishan, please go ahead.

Kishan Patel: Hi, this is Kish Patel on for Josh Beck. As chatbots, AI mode, and other AI-native discovery surfaces continue to gain, have you observed any notable changes in top-of-funnel traffic patterns, customer acquisition behavior, or conversion paths? And how are you thinking about GoDaddy Inc.’s positioning if more customer journeys begin in AI interfaces rather than traditional search?

Aman Bhutani: On traffic to the top of the funnel, it is consistent with what we talked about last quarter. We had shared that we do see some impact to traffic in search because of the move to AI mode, but we were able to offset that impact to traffic by improving conversion on our side. That relationship has continued; we have not seen any further change in the trajectory versus previous quarters. In terms of customer journeys starting in AI bots, there are lots of new interfaces emerging. Wherever customers are starting their journey, we want to provide them value, and we want an exchange of value for us.

A simple example: if we get to a world where everybody has an agent and that agent goes out and does things, we want to make sure we have the APIs and offerings where those agents can work with GoDaddy Inc. as successfully as with anybody else. We see that world slowly developing as the new normal, and that is what we have to compete with. We have competed over 30 years against lots of companies with lots of business models. This is a new one. We think AI is here to stay, and we are excited and organizing our teams to compete in that world.

Kishan Patel: Thanks very much.

Aman Bhutani: Thank you.

Christie Masoner: Our next question comes from the line of Elizabeth Porter from Morgan Stanley. Elizabeth, please go ahead.

Kathleen Alexis Keyser: Awesome, thanks. This is Katie Keyser for Elizabeth. With AeroCare now being rolled out to multiple markets and multiple languages, and highlighting improved resolution in non-English-speaking markets, does that change your international growth opportunity at all? More broadly, how does AI-enabled multilingual Care change or accelerate the approach to entering markets that previously were less attractive because of support or localization costs?

Aman Bhutani: As you know, Care is core to our competitive differentiation and core for the customer experience. Our customers need that support, whether through voice or chat. We provide that capability in many markets in 22 languages globally, and those are just our core languages—translated into even more. Having AeroCare natively provide that ability will allow us to compete much better in international markets. We are excited about the first data point where using AeroCare within our messaging system performed almost equally globally. That is great news. It is difficult to provide the high level of service and high NPS we have in smaller markets or where we may not have a big presence.

If we can do that with AeroCare, we can be more aggressive in those markets. We are looking forward to that, and it is an exciting opportunity for the future.

Christie Masoner: Thanks, Katie. I will turn the call back over to Aman for closing remarks.

Aman Bhutani: Thank you, Christie. Thank you all for joining. We are super excited to be where we are with a great journey in front of us. A big thank you to all GoDaddy Inc. employees for a great quarter, and I will see you next quarter.