GoDaddy at Jefferies Conference: Strategic Evolution and Financial Insights

On Thursday, 29 May 2025, GoDaddy (NYSE:GDDY) presented at the Jefferies 2025 Software & Internet Conference, discussing its strategic transformation from a domain company to an integrated platform for entrepreneurs. The company highlighted its strong financial performance and future plans, while addressing both opportunities and challenges in the market.

Key Takeaways

• GoDaddy is evolving into a one-stop-shop for entrepreneurs, bolstered by its Arrow platform.
• The company reported a 6-8% growth rate and improved EBITDA margins by 900 basis points over five years.
• Customer retention rates remain above 85%, with increased adoption of multiple products.
• The Applications and Commerce segment is expected to grow from 30% to 40% of the business.
• GoDaddy has repurchased over 25% of its shares in the past four years.

Financial Results

GoDaddy is experiencing a growth rate between 6% and 8%, with significant improvements in its financial metrics:

• Normalized EBITDA margins have expanded by 900 basis points over the past five years.
• The company has repurchased more than 25% of its fully diluted shares in the last four years.
• Cash flow per share has maintained a compound annual growth rate (CAGR) of 20%.
• The average revenue per user (ARPU) is $225.

Operational Updates

Focusing on entrepreneurs and micro businesses, GoDaddy is enhancing its product offerings and customer engagement:

• Rapid adoption of additional products such as websites and professional emails.
• The Arrow platform, powered by AI, facilitates seamless solutions like website creation and social media management.
• The "Conversations" tool within Arrow improves customer engagement through AI-generated social media responses.

Future Outlook

GoDaddy aims to continue its strategic evolution with a focus on innovation and financial discipline:

• Commitment to being a comprehensive platform for entrepreneurs with integrated solutions.
• Ongoing innovation highlighted by the Arrow platform.
• Balanced capital allocation strategy, emphasizing stock buybacks and strategic investments.
• Continued margin expansion driven by growth in the Applications and Commerce segment.
• A disciplined approach to mergers and acquisitions, ensuring strategic fit and financial viability.

Q&A Highlights

During the Q&A session, GoDaddy addressed several key topics:

• No significant concerns from macro tariff uncertainties, with a healthy customer acquisition pipeline.
• Plans to consolidate multiple SaaS applications into a single app for small businesses.
• Potential for further margin improvement, acknowledging unique cost structures as a domain company.

For a more detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Jefferies 2025 Software & Internet Conference:

Unidentified speaker, Interviewer: Welcome back to day two. Hope everyone had a good day one. We’re going to kick off with Mark at GoDaddy. He’s been the CFO since 2021, and really appreciate you making the journey. I guess my first question is, if they’re not Goggins, they shouldn’t be on your noggin.

How did you land how did you land him?

Mark, CFO, GoDaddy: This is a great place to start, especially 8AM in the morning having

Unidentified speaker, Interviewer: some I was watching the full YouTube video of the whole thing. It was it was a it was a great clip.

Mark, CFO, GoDaddy: It it it you know, we I would like to take full credit for identifying him early in the process, but when the marketing team came to me and said, hey, we want to sign on Walton Goggins, my first reaction was, who?

Unidentified speaker, Interviewer: Just watch White Lotus and you’ll understand who this is. He’s doing a commercial for

Mark, CFO, GoDaddy: So so like any good researcher, I went to my daughter who’s 29 years old, and she explained to me exactly who he is, the journey started. I have to admit, the marketing team really, really nailed this one. And, you know, some of it we didn’t know going in, to be honest with you. We didn’t know he was gonna be the main character in White Lotus. We had no idea that we would be ringing the bell for our tenth year anniversary on the season the week of the season finale, and Walton Goggins was with us on the New York Stock Exchange.

And Kramer and everybody around just was going crazy that he was there. And none of that was anticipated by us. So kudos to the marketing team for really finding somebody who connected with the audience, is engaging, and really, at the end of the day, represents GoDaddy very well. He he’s a small business owner in and of itself. He came to us with the idea of the goggles, and said, I want I wanna I wanna sell goggles.

I wanna sell goggles. So that’s actually a It’s true. It’s a true story.

Unidentified speaker, Interviewer: Do we have a pair to give to our clients today?

Mark, CFO, GoDaddy: You can buy them online. Walter Goggins goggles? And so so so yes, we’re connecting with a new audience out there and it’s fantastic.

Unidentified speaker, Interviewer: Well, how’s been the uplift in business been from it?

Mark, CFO, GoDaddy: You know, I would say we are on a journey and we are on a journey to rebrand ourselves as that one stop shop for for entrepreneurs. We’ve been known as a domain company, people come to us to get their domains, but we’re reaching out to a new audience and that’s a long term journey. We didn’t become a domain company overnight. It took several cycles of going at it and we feel we’re in a good spot with our technology, our innovation, our ability to really serve this market, to go out there and make sure everybody knows exactly what we can do for them. And the Super Bowl in Walton Goggins was the launch of that.

And we’re looking forward to the continued journey around it.

Unidentified speaker, Interviewer: I would assume he probably wants to do more with you.

Mark, CFO, GoDaddy: More to come. How about that? More to come.

Unidentified speaker, Interviewer: Okay. Chapter two of Goggins. Congrats on the momentum in Q1. Maybe if you can just share what you’re seeing from your client base at a high level. There’s been, I think, this tariff and macro uncertainty fear, and it maybe got a little too pronounced, and everyone’s expectation for kind of a reset got too negative.

It seems like a lot of companies are putting up good numbers. I’m not seeing it yet. What are you seeing in your overall business today?

Mark, CFO, GoDaddy: Our customers, the customers we serve, and for those new to the story and those who’ve been with us for a while, just a reminder, we we do entrepreneurs and micro businesses, mom and pop shops, sole entrepreneurs that sometimes have two or three, you know, gigs going on at the same time. And, you know, we’ve been around for twenty eight years. We we’ve seen cycles, and, you know, the one thing that stands out to us all the time is this is a resilient, optimistic group. They want to do more, they want to live their dream, they want to be an entrepreneur, they’re in there for a reason, and when things change around them, they have a tendency to double down or try another venture. And we always say, don’t ever equate business failure to our customers because sometimes they have multiple businesses going on at the same time, and they keep them going.

And we present them a value, especially in times where they’re trying to reach more customers themselves, do more with less. We prevent we we give them the tools that allow them to do that more than ever. And so we’re seeing the resilience of that group. You know, we’ve talked about it coming out of the year. Our average order size at initiation is going up.

They’re using you know, they’re going to that second product faster than they ever did. They’re they’re they’re engaging in getting value. Our ARPU is 225, and for the value they get from that, you know, they’re they’re they’re they continue to engage within our products. Arrow just makes that even easier for them, makes it even better, and makes it more intuitive. So we’ve, you know, the one thing that we always say is, this group is optimistic about what they can do, and and that remains.

Unidentified speaker, Interviewer: On the fastest time to a second product, maybe help explain that. You get the domain. What are the next pit stops that you’re seeing clients go to?

Mark, CFO, GoDaddy: Yeah. Some of the path in the journey has been the same for us. You see a domain, then people want a website, and we allow them to launch a website immediately upon getting the domain name. We offer them eight versions of a website they can launch. It’s created for them through the Arrow experience.

And the email still remains a popular feature. You know, people want a professional email. They don’t think about it, when you go out there and you start to engage with a micro business, the first thing you want to do is make sure that they are a legit business. That email gives that that Kate, four

Unidentified speaker, Interviewer: nine five at gmail dot com. Yeah, I’m not going

Mark, CFO, GoDaddy: I don’t Yeah, exactly, right? We see the journey through the same steps we always have. They’re just doing it faster. They get a domain name, they launch the website, they get the email. We see logos becoming very, very popular.

Premium logos is a new launch of Arrow Plus that we just put into place. And our commerce offering continues to be very attractive for new customers coming in, as well as customers who are in our base that are converting over. So I would say the best thing about it is our customers are going from discovery to engagement, and for us then monetization, faster than they’ve ever done it. And and it’s because they’re getting value. And we’re getting to that customer that comes in wanting to do something with that domain, wanting to do something with that website.

Unidentified speaker, Interviewer: Just to push the elephant out of the room, this whole macro tariff uncertainty piece, it seems like, are you not seeing any concern or any signals in any of the data? Or is there some static and maybe that’s embedded in the guide? How do you think about

Mark, CFO, GoDaddy: We’ve seen we talked about it in Q1, we see the same healthy front of funnel that we’ve seen all through 2024. And a matter of fact, we are again, we called it out in our q one earnings, our retention rates for the customers that are coming in now that have been there for a year and are on the core GoDaddy technology stack are are improving better than our 85% retention rate. So, you know, again, we continue to monitor a lot of signals. We continue to see, you know, make sure we’re checking in. We’re monitoring all we can.

But we’re seeing a consistent, steady, healthy pace. Good to hear. Thanks for pushing the elephant out. So now the elephant’s out. AI.

Unidentified speaker, Interviewer: Arrow. Walter Goggins is using Arrow. If he’s using it, everyone should use it, right?

Mark, CFO, GoDaddy: Isn’t it funny? Here’s a guy who just launched his entire business in minutes with us and was selling goggles online. And I have to laugh, I bought them all for my kids at Christmas. They had no idea why I was buying them goggles.

Unidentified speaker, Interviewer: I thought it was a joke, by the way. I I didn’t think it was real.

Mark, CFO, GoDaddy: My kids thought I was insane. And the idea was, you know, here’s a guy who could do anything he wants, but he just wants to have a side gig, and he just wants to have that hustle. It’s the epitome of our customers. Now, okay, he’s a little more famous than most of our customers, I have to admit. But, you know, when you talk about that passion, that eagerness of, hey, I just want to do something I love, and I want to get it out there, that’s the resilience.

That’s the customer we go after.

Unidentified speaker, Interviewer: That’s great. On the retention, you’ve been consistently above 85%. Maybe you can characterize what cohorts are demonstrating more resiliency. What are you seeing?

Mark, CFO, GoDaddy: It’s a great model for us. When we see customers go from a one product to two products with us, our retention goes up. And remember, our average retention is 85, which is impressive. When we see a second product with a customer, it goes up significantly from the 85%. When we see a third product, it it pretty much becomes a customer for life.

And what we’re seeing within, and this is why we go after the high intent customers, when customers come in and they have an intent, they want to do something, they get through to that second product very fast, and more often than not, will go, you know, through and start to look and engage on third products. That those cohorts are becoming more resilient for us. Those cohorts are are are showing, because we’re going a year through Arrow now, and we’re getting to that first, you know, renewal cycle. We’re seeing those renewals come in as we modeled it out. And that that is the customer we’re going after.

And I’ll say it, we went from 1,500,000 customers in 2023 that spent more than $500 with us to 1.8 in 2024 that spent more than $500 with us. That’s a 20% increase in customers spending more than $500 when we have an ARPU of $225. That 20% jump is that cohort that we are going after with intent to make sure they’re getting value from our product. The more value they get, it creates more opportunities for us to continue to give them tools to get through the jobs they need to do. And we feel really good about where we’re going with this.

Unidentified speaker, Interviewer: And just back to Arrow, maybe explain for those that don’t understand what it is, where the usage is, what’s the next direction?

Mark, CFO, GoDaddy: So Arrow is an AI generated software platform that we offer to entrepreneurs now. And if you come in looking, more often than not, for a domain, but you could be looking for anything, a logo, a website, an email coming in directly, you’re put into what we call the Arrow experience. The Arrow experience is taking machine learning and basically presenting you with options. You know, in the past, for example, you would have to come up with your own idea for a website. Arrow presents you eight different options based on the domain you bought of a potential website that you can launch immediately.

It automatically starts to present you emails. It gives you ideas on other domains you may want to secure as part of your business, because you want the traffic around it. It offers you the ability to look at transactions, and then and then once you engage with Arrow, it allows them to get more from their tools through, we call them c two, their customers. They can engage with their customers faster and better, because the tools actually do it. For example, how many mom and pop shops want to do social media responses at 11:00 at night after they close down?

Arrow does it for them. It actually goes out to all the social media platforms, takes all the inbound, writes the responses in their languages, puts it to the owners and says, do you want to send? You hit a button, you say send, and it responds automatically across. I was with a customer, I call them the pizza guys, Larry and Leroy, and they do a mobile pizza oven. And they’re out every day with their mobile pizza oven doing events.

And, you know, it only takes ninety seconds to make a pizza. I don’t know why, being from New York, I never knew that, but it takes ninety seconds to make a pizza. So as they’re flipping the pizzas into the oven, in that ninety seconds, one of them is responding using our tools on social media to their inbound. Why is this important to them? When you’re looking for someone to serve a venue, like a pizza truck, and they don’t respond, they go to the taco truck.

Right? They don’t wait around for a couple hours. They they need to secure that pipeline and that calendar for weeks out. And our tools allow them to do that without having to hire a third person to stand there to do that back in the office. They can do it

Unidentified speaker, Interviewer: in the ninety seconds the pizza’s being made. That’s the epitome of how our tools work with our customers. And when you think about what Arrow is doing, I know you’ve always had tools to help this creation, but when you think about what that’s doing for you now versus past tools, how

Mark, CFO, GoDaddy: would

Unidentified speaker, Interviewer: you compare and contrast what’s

Mark, CFO, GoDaddy: Seamless experience. You know, we have truly become the one stop shop. Alright? It is getting to the second product faster, third product faster, and it is getting to them, we call it value achieved, it’s getting to our customers to value achieved faster. And listen, this is a great model for us.

You know, when we have healthy customers that are doing well, and I say healthy as in they’re engaging, not medically healthy, when we have good customers that are out there that are engaging, that are using our products, that are making money, it creates that environment that we continue to be able to sell into that customer base. We have over 20,000,000 customers. And, you know, not only do we have new customers coming in, we have the ability to enter into our customer base and continue to sell them their tools as they come up for renewals, continue to give them opportunities to do things better, continue to convert them over to a platform as a one stop shop. And let’s not forget about our care organization. Our care organization still is, I’ll call it, the best in the world.

Our care organization is there because this is a group of micro businesses that needs to have help at times to make sure everything is working seamlessly and they’re getting everything out of our tools. Again, it’s a great model.

Unidentified speaker, Interviewer: Maybe let’s talk about financial true norths, revenue, bottom line, how you think about the framework. And I know you went through maybe a little of a difficult phase with investors asking for maybe slower growth, higher margin. I think you’ve delivered that. Stock had an incredible reaction. Curious just kind of your thoughts on

Mark, CFO, GoDaddy: Yeah. I’ll start. How many companies out there today are growing between 68%, have expanded their normalized EBITDA margins by 900 basis points in five years, have bought back over 25% of their fully diluted shares in the last well, I’ll say less than four years, but let’s just say four years, and then is keeping up on a cash flow per share CAGR of 20%. Now, flow per share is our North Star, and everything we do is geared towards continuing to improve that cash flow per share. But our model is durable, it’s resilient, it’s based on some great customers.

And our ability to not only return value to our shareholders through stock buybacks, we can also invest in innovation. And we can also invest in making sure we’re staying close to our customers, getting them the products they need. That balance, that’s the LTV this model creates. It’s working well, as you’ve seen, it allows us to deliver and it allows us to do it over a long term. We generate a lot of free cash flow.

Balancing shareholder return and innovation is very important to us, and and we we have the ability to do that because we have a strong balance sheet. So we we feel really good about where we are. Obviously, we put out a thesis, investment thesis last year for three years. Twenty twenty six will be the last of those three years. But we feel really good about the markers we put out there, the ability achieve it, and the ability to keep this going and keep this journey going because this is a long term value play.

Unidentified speaker, Interviewer: Is there a killer app for small businesses in your suite? Meaning, is there something new that’s going to really help them? Or is this maybe just existing categories that’s just easier and more seamless, there’s a consolidation? My wife owns a small business, and I’m like, why do you need eight SaaS apps for eight female employees and a burn a doodle?

Mark, CFO, GoDaddy: Like, this is crazy to me. She should come to Arrow, and and she can do it on one app. I think that’s the beauty of of our customer base is, you know, they’re they don’t want to manage eight apps, and God forbid one of them is not working. Alright. How many have called to customer care and never gotten a response?

Alright. When you have eight apps and you have to deal with eight potential things not working together, that that’s a problem for a micro business.

Unidentified speaker, Interviewer: Is there a killer app though that brings people over the top and says, okay, I do need to consolidate? Are you seeing like one or two different areas that are

Mark, CFO, GoDaddy: I I wouldn’t say that’s one or two different areas. I would say we continue to see when micro businesses come to us and our ability to fix their problems or address their problems, it creates the ability for us to convert them over to what we do best. That’s why our care organization is great. Not only does it provide great service to them, it is a money generator for us. And they record revenue for us.

And that’s because of their ability to reach into that base, address their problems, and get them to come over and use not only products that they may be using with other providers, but also products that they just need to be better. And that’s been the secret sauce of our care organization.

Unidentified speaker, Interviewer: Is one solution that you’re excited about that maybe is under adopted and you think could show better uptake?

Mark, CFO, GoDaddy: I think the one that gets me excited right now is conversations. And conversations is the tool I talked about where it takes all the inbound social media, allows it to, for a small business, being on multiple different platforms is important. Being able to respond to those multiple different platforms is a problem, but it’s a job to be done. And this tool, Conversations, allows them to take all that inbound and creates the responses for them. And it creates it based on their voice.

So it goes back and looks at how they’ve responded before, comes up with what they think their appropriate response is going to be, and then allows them to pretty much send it out there. What we’re finding and seeing in the data is our customers are getting better responses from the AI generated responses that Arrow is creating than they were getting from their own created responses, which means the AI engine is really being effective for them in coming in. And I laugh. Why this one excites me is the amount of customers I talk to that worry about the social media element of what they need to do is amazing. And this happens to me all the time.

It’s a husband or wife or mom and pop shop, and right now they depend on their teenage daughter or son to do their social media responses. And all of sudden they come and go, oh my god, they’re going to college, what are we going to do? Like how are we going to do all this? And I love walking them through the conversations tool, and going, yes, say goodbye, you’re going to miss them, but don’t miss them for this. Right?

Our tool can do it for you. You don’t have to go out and hire somebody.

Unidentified speaker, Interviewer: Just on capital allocation, you did a $4,000,000,000 buyback, you renewed a $3,000,000,000 plan through ’27. Many ask, okay, buyback’s great, but do you need to do some tuck in deals to continue to fuel the product engine?

Mark, CFO, GoDaddy: We feel really good, it comes back to the balance of our capital allocation program, but our ability to innovate. Our CEO is fantastic. We’ve created an environment of experimentation. Our ability to innovate in the last three years has been great. You’ve seen it.

Arrow is a product of that. More to come as we get out through the year. But we feel good about meeting our customer needs. And I always say this. In technology industry, there are two important things.

You have to be able to innovate and you have to be able to understand your customer needs. If you don’t own that customer relationship, it’s hard to understand what people need. We have them both. We own the relationship and we have the ability to innovate. Now, M and A for us, we have always applied three criteria.

It has to be strategic, has to work financially, and it has to be something we can integrate into the core GoDaddy technology stack. When you’re doing well internally, organically, like we’re doing right now, the bar around those three get gets even higher. Doesn’t mean, you know, there might not be something out there, but we will evaluate it using the same disciplined approach. We we feel we’re in a great spot. There’s nothing that we’re sitting here saying, oh my god, we need to go do this.

We feel we’re good, we have the ability to innovate, and we have the ability to do everything internally. Having said that, if something meets those criteria and works and makes sense, we have we have the ability to do it as well.

Unidentified speaker, Interviewer: Margins at 31, why not 40?

Mark, CFO, GoDaddy: Oh, come on. We continue the journey and we really like how many companies have, I always say, public companies improve normalized EBITDA by 900 basis points in five years? We’ve done that. And the journey will continue. We’ve set up an efficient operating model, and I pointed out in Q1 earnings, we’re growing revenue at greater than two times we’re growing our operating expenses right now.

That that’s because we’ve created an efficient model that allows us to not have to grow our operating footprint in order to meet our our customer needs and grow our revenue, ultimately grow the company. So so 33% we feel really good about for next year, and we know the journey continues.

Unidentified speaker, Interviewer: Yeah. I guess my point would be, I mean, you know Adobe and many of these others well. They’re producing faster growth and higher margin. So it just seems like there’s still a lot of leverage, it would seem, in the bottom line. I understand that you can only move the top line this fast, it just seems like there’s big room.

What would inherently not give you the ability I’m not saying short term, but long term to hit some of the other peers that are in your industry? Yeah.

Mark, CFO, GoDaddy: So every company is different. And we are very happy with our model, how our model works. We are a domain company. We have a core platform, which has been around for a long time. That creates a different fundamental structure than a lot of other companies have out there.

And while it generates a lot of cash for us, we have costs associated with being a domain company that are different than most companies. We’ve expanded into applications and commerce, which is our second segment, which includes both third party software products as well as our own software products. It is at a higher profit margin, and it is growing faster than our core platform, And it does give us the momentum. As that becomes a bigger part of our business, it will become a bigger part of our profitability. We exited last year around, I think it was around 30% of our business.

This year, we’re expecting it around 40%. But as applications and commerce continues to grow, that really creates a tailwind for our profitability. Now, remember, applications and commerce, you know, think about us traditionally if, you know, a lot of people come in to us as a domain that goes into our core platform. When they’re attaching that second and third product, that usually, not always, but usually comes in through our applications and commerce segment. So the cost of acquisition is more profitable in that segment as well, which gives us a lot of tailwind.

And that creates that momentum that we’re able to use our brand around domains. You know, we get 60% direct traffic to our site based on our brand as a domain company, and allows us to continue to that attach, which gets into the model that I talked about of the second product, the third product, and the higher retention rates.

Unidentified speaker, Interviewer: Apologize we didn’t have the goggles. Next year, when you come back, we’ll have them for everyone. This presentation has now finished.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.