10-Q: GoDaddy Reports Strong Q3 Revenue & EBITDA Growth, Boosts Share Buyback

GoDaddy Inc. announced robust third-quarter 2025 financial results, with double-digit increases in total revenue, operating income, and Normalized EBITDA, alongside a significant expansion of its share repurchase program.

Summary

• Total revenue for the three months ended September 30, 2025, increased by 10.3% to $1,265.3 million, and by 8.8% to $3,677.2 million for the nine months ended September 30, 2025.
• International revenue grew by 14.4% to $422.5 million for the three months ended September 30, 2025.
• Total bookings rose by 9.1% to $1,354.5 million for the three months and by 7.9% to $4,116.8 million for the nine months ended September 30, 2025.
• Operating income increased by 16.9% to $296.7 million for the three months and by 27.0% to $810.3 million for the nine months ended September 30, 2025.
• Net income for the three months ended September 30, 2025, was $210.5 million, an increase of 10.5%, while net income for the nine months decreased by 14.7% to $629.9 million, primarily due to a tax benefit in the prior year period.
• Normalized EBITDA increased by 11.5% to $408.6 million for the three months and by 14.2% to $1,154.7 million for the nine months ended September 30, 2025.
• Net cash provided by operating activities increased by 25.1% to $444.2 million for the three months and by 29.7% to $1,228.8 million for the nine months ended September 30, 2025.
• The board approved an additional $3,000.0 million share repurchase authorization through the end of 2027, with $2,374.7 million remaining as of September 30, 2025.
• Applications and Commerce (A&C) segment revenue grew 13.7% for the three months and 14.8% for the nine months, driven by customer adoption of subscription-based products.
• Core Platform segment revenue grew 8.3% for the three months and 5.4% for the nine months, primarily from aftermarket and domain registration/add-on revenues, partially offset by a decrease in hosting revenues.
• Total customers decreased to 20,413 thousand as of September 30, 2025, from 20,725 thousand as of September 30, 2024, but Average Revenue Per User (ARPU) increased to $237 from $215.
• Domains under management decreased to 80,335 thousand as of September 30, 2025, from 81,658 thousand as of September 30, 2024.

Sentiment

Score: 7

Explanation: The company demonstrated strong operational performance with significant growth in revenue, operating income, EBITDA, and cash flow. The substantial share repurchase authorization reflects management's confidence. While net income for the nine-month period declined due to tax effects and customer/domain counts slightly decreased, the underlying business health and strategic focus on AI are positive indicators.

Positives

• Total revenue increased by 10.3% for the three months and 8.8% for the nine months ended September 30, 2025, demonstrating continued top-line growth.
• Operating income saw significant growth, up 16.9% for the three months and 27.0% for the nine months, indicating improved operational efficiency.
• Normalized EBITDA increased by 11.5% for the three months and 14.2% for the nine months, reflecting strong underlying business performance.
• Net cash provided by operating activities surged by 25.1% for the three months and 29.7% for the nine months, highlighting robust cash generation.
• The Applications and Commerce (A&C) segment showed strong growth, with revenue up 13.7% and Segment EBITDA up 13.0% for the three months, driven by customer adoption of subscription products.
• Average Revenue Per User (ARPU) increased to $237 from $215, indicating success in selling additional products and increasing customer lifetime spend.
• The board authorized an additional $3,000.0 million for share repurchases through 2027, signaling confidence in future cash flows and commitment to shareholder returns.
• The company is actively investing in AI-powered solutions like GoDaddy Airo, enhancing product offerings and customer experience.

Negatives

• Net income for the nine months ended September 30, 2025, decreased by 14.7% to $629.9 million, primarily due to a shift from a significant income tax benefit in 2024 to an income tax provision in 2025.
• Total customers decreased to 20,413 thousand as of September 30, 2025, from 20,725 thousand in the prior year, indicating a slight contraction in the customer base.
• Domains under management decreased to 80,335 thousand as of September 30, 2025, from 81,658 thousand in the prior year.
• Restructuring and other charges increased significantly for the three months ended September 30, 2025, to $5.5 million from $0.4 million in the prior year.
• Hosting revenues within the Core Platform segment decreased by $9.6 million for the nine months ended September 30, 2025, due to end-of-life migrations and asset dispositions.

Risks

• Inability to continue increasing sales to new and existing customers could harm business and operating results.
• Failure to successfully develop and market products that anticipate or respond timely to customer needs could adversely affect business.
• Significant risks associated with the use, development, adoption, deployment, and maintenance of AI and other new technologies, including increased costs, litigation, reputational harm, and liability.
• Intensifying competition for products, potentially impacting competitive position or market share.
• Pricing decisions may adversely affect the ability to attract and retain customers.
• Continued international presence subjects the company to additional political, economic, social, and regulatory risks.
• Failure to effectively manage future growth could adversely affect operating results.
• Acquisitions and other strategic transactions could require significant management attention, disrupt business, dilute stockholder value, and adversely affect operating results.
• Exposure to the risk of system failures and capacity constraints, including reliance on third-party cloud computing systems like AWS.
• An actual or perceived cybersecurity incident could impair business, protect data, and comply with obligations, leading to substantial costs or liability.
• Reliance on marketing efforts and channels, which may require significant expense and may not be successful or cost-effective.
• Failure to provide high-quality customer care could adversely affect business, brand, and operating results.
• Failure to properly register or maintain customer domain names or comply with applicable laws could subject the company to additional liability.
• Quarterly and annual operating results may be adversely affected by various factors, making future results difficult to predict.
• Level of indebtedness could adversely affect financial condition, ability to raise additional capital, and ability to operate the business.
• Laws, regulations, policies, or claims concerning the domain name registration system and the Internet in general may cause instability and disrupt business.
• Subject to local and international laws, rules, regulations, and orders relating to the operation and security of computer networks and data processing, including privacy of personal data.
• Subject to international laws, rules, and regulations relating to content moderation.
• Activities of customers or the content of their websites could damage reputation and brand or harm business.
• Dependence on customers' continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure.
• Business could be affected by new governmental regulations regarding the Internet.
• Involvement in intellectual property claims and litigation asserted by third parties could result in significant costs and harm to business.
• Potential liability or disputes over registration and transfer of domain names and control over websites.
• Use of open source technology could impose limitations on the ability to commercialize products.
• Subject to certain export controls, including economic and trade sanctions regulations, which could impair international competitiveness.
• Exposure to risks associated with credit card and other payment chargebacks, fraud, and new payment methods.
• Vulnerability to violations of anti-bribery and anti-corruption laws due to global business nature.
• Changes in taxation laws, rules, and regulations may discourage domain name registration or renewal.
• Payments-related operations, including GoDaddy Payments, are subject to various laws, regulations, and restrictions, and failure to comply could materially harm the business.
• Share price may be volatile, and investors may lose all or part of their investment.
• Provisions of charter, bylaws, and Delaware law may have anti-takeover effects.
• No current intention to pay dividends on Class A common stock.
• No guarantee of additional repurchases of Class A common stock under current or future programs.
• Economic conditions in the U.S. and international economies may adversely impact business and operating results.
• Reporting requirements may continue to increase costs or divert management's attention.
• Failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair ability to produce timely and accurate financial statements.
• Business is subject to evolving regulations and scrutiny relating to environmental, social, and governance (ESG) issues.
• Business is subject to risks of earthquakes, fire, power outages, floods, and other catastrophic events.

Future Outlook

The company anticipates continued growth in cost of revenue in absolute dollars due to increased sales of domains and third-party productivity applications. Technology and development expenses are expected to decrease as a percentage of revenue following investments in product development and infrastructure migration. Marketing and advertising, customer care, and general and administrative expenses are expected to fluctuate based on strategic initiatives and business support needs. The company believes existing cash and cash equivalents, along with cash from operating activities, will be sufficient to meet anticipated operating cash needs for at least the next 12 months. Future capital requirements will depend on growth rate, macroeconomic activity, development efforts, brand development, customer care, new offerings, capital equipment, strategic acquisitions, and share repurchases. The ICANN Next Round of new gTLD applications is expected to open in the second quarter of 2026. The transition away from operating as the registry service provider for the .CO TLD is not expected to have a material financial impact. The company expects to make substantially all remaining restructuring payments by the end of the first quarter of 2026.

Management Comments

• GoDaddy helps millions of entrepreneurs globally start, grow and scale their businesses.
• People come to GoDaddy to name their idea, build a website and logo, sell their products and services and accept payments.
• GoDaddy Airo, the company's AI-powered experience, makes growing a small business faster and easier by helping them to get their idea online in minutes, drive traffic and boost sales.
• GoDaddy's expert guides are available 24/7 to provide assistance.
• We believe our estimates and assumptions are reasonable; however, actual results may differ.
• We believe constant currency information is useful in analyzing underlying trends in our business by eliminating the impact of fluctuations in foreign currency exchange rates and allows for period-to-period comparisons of our performance.
• We believe our existing cash and cash equivalents and cash generated by operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months.

Industry Context

The company operates in a highly competitive and rapidly evolving market characterized by constant change, innovation, and frequent new product introductions. The industry is seeing increasing adoption and development of AI and other new technologies, which presents both opportunities and risks, including potential for increased intellectual property claims and regulatory scrutiny. The domain name registration market continues to adapt to changing technology, with potential impacts from alternative systems like mobile applications and social media channels. Regulatory frameworks related to AI, data privacy (e.g., EU AI Act, GDPR, CCPA), content moderation (e.g., EU DSA, UK OSA), and taxation (e.g., OECD global minimum tax, U.S. state sales tax) are rapidly evolving, increasing compliance complexities and costs. The company's reliance on third-party cloud providers like AWS is a common industry trend, but also introduces dependency risks.

Corporate Governance

Legal Proceedings

• No material changes from the legal proceedings described in the 2024 Form 10-K.
• An agreement was approved by the FTC on May 21, 2025, to settle charges related to certain security practices and advertising, requiring compliance with specific requirements for at least 20 years.

Stakeholder Impact

• Shareholders: Benefit from increased share repurchase authorization, but face potential dilution from future equity raises and stock price volatility. The decline in 9-month net income due to tax effects might be a concern, but strong operational metrics are positive.
• Customers: Benefit from continued investment in new AI-powered solutions like GoDaddy Airo and high-quality customer care. Face risks from potential system failures, cybersecurity incidents, and changes in domain name registration rules or content moderation laws.
• Employees: Benefit from equity-based compensation and continued investment in product development. Face potential impacts from restructuring activities and the company's ability to attract and retain skilled personnel in a competitive labor market.
• Partners/Suppliers: Continued reliance on key partners like AWS and payment processors, with potential for increased fees or service disruptions. The company's transition away from operating as the .CO TLD registry service provider will impact that specific partnership.
• Creditors: The company's level of indebtedness and compliance with debt covenants are important. Strong cash flow generation supports debt servicing, but potential future capital raises could alter the debt profile.

Next Steps

• Continue to increase sales to new and existing customers.
• Develop new solutions and bring them to market in a timely manner, including further deployment of AI, generative AI, agentic AI, machine learning, and similar tools.
• Timely and effectively scale and adapt existing solutions.
• Maintain high customer retention rates and grow the level of customers' lifetime spend.
• Continue to provide high-quality customer care.
• Effectively manage growth and associated investments, including migration of applications and services to the public cloud.
• Integrate acquisitions and achieve expected results from new lines of business.
• Maintain relationships with partners.
• Manage exposure to foreign currency exchange rate fluctuations.
• Stay in compliance with evolving U.S. and international laws, rules, and regulations.
• Attract and retain qualified employees and key personnel.
• Monitor pending legislation and implementation of global minimum tax rules.
• Evaluate timing for adoption and impact of new FASB guidance on disaggregating income statement expenses (effective 2027 fiscal year).
• Evaluate timing for adoption and impact of new FASB guidance on internal-use software costs (effective 2028 fiscal year).
• Make substantially all remaining restructuring payments by the end of the first quarter of 2026.
• Continue to offer .CO to customers in its capacity as an accredited registrar after October 3, 2025.
• Monitor the opening of ICANN's Next Round of new gTLD applications, expected in the second quarter of 2026.

Key Dates

Recommendation

GoDaddy demonstrates strong operational performance with solid revenue, EBITDA, and cash flow growth, indicating a healthy core business. The significant share repurchase program signals management's confidence and commitment to shareholder returns. However, the decline in total customers and domains under management, coupled with the nine-month net income decrease (even if tax-related), presents a mixed picture. The evolving regulatory landscape for AI and internet services, along with intense competition, introduces ongoing risks. While the company is executing well on its strategy, these factors suggest a 'hold' position, allowing investors to monitor the effectiveness of AI integration, customer acquisition trends, and the impact of regulatory changes on long-term growth and profitability before making a more aggressive move.

Keywords

GoDaddy, GDDY, SEC Filing, 10-Q, Quarterly Report, Financial Results, Revenue Growth, EBITDA, Net Income, Cash Flow, Share Repurchase, Applications and Commerce, Core Platform, Domain Registration, Web Hosting, Website Builder, AI Solutions, GoDaddy Airo, Small Business, Entrepreneurship, Internet Services, Cloud Computing, Cybersecurity, Market Risk, Corporate Governance