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Introduction & Market Context
GoDaddy Inc. (NYSE:GDDY) released its Q1 2025 earnings presentation on May 1, 2025, revealing strong financial performance across key metrics. The company reported 8% year-over-year revenue growth to $1.194 billion, exceeding its guidance range of $1.175-$1.195 billion. The stock closed at $188.33 on the day of the announcement, up 2.14%, reflecting positive market reception to the results.
The domain registrar and web hosting provider continues to benefit from its strategic shift toward higher-margin Applications & Commerce offerings while maintaining modest growth in its Core Platform business. This quarter’s results build upon momentum seen in previous periods, with slight acceleration from the 7% revenue growth reported in Q3 2024.
Quarterly Performance Highlights
GoDaddy delivered robust financial results in Q1 2025, meeting or exceeding all of its targets. Total (EPA:TTEF) bookings grew 8% year-over-year to $1.417 billion, while revenue increased at the same rate to $1.194 billion. The company’s Applications & Commerce segment was particularly strong, growing 17% to $446 million and now representing 37% of total revenue, up from 35% a year ago.
As shown in the following revenue breakdown chart, GoDaddy continues to execute its strategy of shifting its business mix toward the faster-growing Applications & Commerce segment:
Normalized EBITDA (NEBITDA) reached $364 million, representing 16% year-over-year growth and a margin of 30.5%, expanding more than 200 basis points from 28.2% in Q1 2024. This margin expansion demonstrates GoDaddy’s improving operational efficiency and the increasing contribution from higher-margin business segments.
The following chart illustrates GoDaddy’s consistent margin expansion trajectory:
Free cash flow showed exceptional growth, increasing 26% year-over-year to $411 million. Average revenue per user (ARPU) also improved, rising 9% to $225, indicating successful upselling and cross-selling initiatives.
The comprehensive summary of GoDaddy’s Q1 financial performance is captured in this chart:
It’s worth noting that net income declined to $219.5 million from $401.5 million in Q1 2024, primarily due to a one-time tax benefit in the prior year period. Excluding this effect, the company’s operational performance showed strong improvement.
Strategic Initiatives
GoDaddy highlighted four key initiatives driving its sustainable growth and margin expansion: Pricing & Bundling, Seamless Experience, Commerce, and GoDaddy Airo.
The Pricing & Bundling strategy contributed to 14% Applications & Commerce bookings growth as part of a multi-year journey to drive growth across both A&C and Core Platform segments. The Seamless Experience initiative has improved customer conversion, product engagement, and renewals by reducing friction in the customer journey.
In the Commerce area, GoDaddy reported continued growth in Gross Payments Volume (GPV) at a healthy pace, with GoDaddy Capital and Same-Day Payouts gaining traction. GoDaddy Airo has become the largest funnel for Websites + Marketing products, boosting renewal rates, customer spend, and product attachment rates.
The company’s strategy centers around what it calls the "Entrepreneur’s Wheel," which connects Identity (domains, security, hosting), Presence (marketing, content), and Commerce (payments, online stores) in an integrated ecosystem for small business customers.
Capital Allocation & Balance Sheet
GoDaddy maintains a disciplined capital allocation strategy focused on shareholder returns. The company completed its $4 billion share repurchase authorization, buying back 43.7 million shares at an average price of $91 per share and reducing gross shares outstanding by over 25%. The board has approved a new $3 billion repurchase authorization through 2027, signaling continued confidence in the business.
As illustrated in the following chart, GoDaddy has consistently increased its share repurchase activity:
The company’s balance sheet remains strong with $719 million in cash and $1.7 billion in total liquidity. Net debt stands at $3.1 billion with a leverage ratio of 1.9x, down from 2.7x in 2023. GoDaddy has structured its debt profile to provide stability, with 87% fixed-rate debt and maturities well-spaced between 2027 and 2031.
Forward Guidance & Long-Term Outlook
GoDaddy reaffirmed its guidance for Q2 2025 and the full year, projecting Q2 revenue between $1.195-$1.215 billion and full-year revenue of $4.860-$4.940 billion. The company expects Applications & Commerce to continue growing at mid-teens rates while Core Platform is projected to grow at low single digits.
The NEBITDA margin is expected to remain at approximately 31% in Q2 2025, with a 100 basis point expansion for the full year. Free cash flow for 2025 is projected to exceed $1.5 billion.
As shown in the following chart, GoDaddy has consistently met or exceeded its financial targets:
Looking further ahead, the company outlined its three-year path toward what it calls its "North Star," targeting 6-8% annual revenue growth from 2024-2026, a normalized EBITDA margin of approximately 33% by 2026, and cumulative free cash flow exceeding $4.5 billion through 2026.
Conclusion
GoDaddy’s Q1 2025 results demonstrate the company’s successful execution of its strategic initiatives, with strong growth in the Applications & Commerce segment, expanding margins, and robust free cash flow generation. The company’s disciplined capital allocation approach, highlighted by its substantial share repurchase program, underscores management’s confidence in the business model and long-term growth prospects.
As GoDaddy continues its transition toward higher-margin offerings and expands its ecosystem for entrepreneurs, investors will be watching to see if the company can maintain its growth trajectory and achieve its ambitious three-year financial targets. With all Q1 targets met or exceeded and a clear strategic direction, GoDaddy appears well-positioned to capitalize on the ongoing digital transformation of small businesses.
Full presentation:
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