Domain name registration and web hosting provider GoDaddy (GDDY +5.04%) reported strong third-quarter results Thursday evening and boosted its full-year outlook. The stock was up about 3.7% at 12:20 P.M. ET Friday, according to data provided by S&P Global Market Intelligence.
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GoDaddy is betting on AI
While GoDaddy's bread and butter are traditional online services like domain registration and website hosting, the company has been expanding its artificial intelligence (AI) offerings. GoDaddy's Airo platform is now focused on agentic AI, providing tools to help customers find domain names, design logos, build websites, and craft custom apps.
This AI push is helping drive GoDaddy's revenue higher. The company reported revenue of $1.3 billion in the third quarter, up 10% year over year. Earnings per share came in at $1.51, up from $1.32 in the prior-year period. Applications and commerce revenue, which includes most products that aren't related to domain registration, soared 14%.
For 2025, GoDaddy raised its revenue outlook to a range of $4.93 billion to $4.95 billion, or growth of about 8% at the midpoint. The applications and commerce segment is expected to grow by a mid-teens percentage. The Airo platform is pushing up average revenue per user, which grew by 10% in the third quarter.
GoDaddy generated free cash flow of $440 million in the third quarter, up 21% year over year. For the full year, the company expects free cash flow of around $1.6 billion.
NYSE: GDDY
Key Data Points
Is GoDaddy a buy?
Shares of GoDaddy have tumbled more than 30% this year. The stock looks inexpensive relative to free cash flow, with a market capitalization of roughly $18 billion. While higher-value services within the applications and commerce segment are growing at a double-digit rate, the core domain registration business is dragging down the overall growth rate.
This situation will likely change as the company drives AI-related revenue higher, but it will take time for this diversification to play out. For long-term investors willing to wait it out, GoDaddy looks like an enticing stock to own.
