Q2 2026 GoDaddy Inc Earnings Call Transcript
Key Points
- Airo's annualized bookings run rate surged 5x to $50 million in Q2, up from $10 million in Q1, with nearly all growth organic and customer satisfaction high.
- GoDaddy Inc (GDDY) delivered strong Q2 financials: revenue grew 7% to $1.3 billion, normalized EBITDA margin expanded over 200 basis points to 33%, and free cash flow rose 13% to $443 million.
- Customer engagement with Airo is driving higher attach rates: over 70% of Airo users have two or more products, and free-to-paid conversion rates are improving.
- The company is proactively managing AI compute costs through multi-model testing and early cost mitigation, enabling continued margin expansion while scaling Airo.
- New initiatives like the GoDaddy Developer Platform and contributions to ANS/ARD standards position GoDaddy Inc (GDDY) to capture growth in the agentic web and LLM-driven domain discovery.
- Core Platform bookings accelerated in Q2, driven by strength in primary domain registrations and a strong aftermarket quarter, with expectations for mid-single-digit growth in H2.
- Capital allocation remains robust: GoDaddy Inc (GDDY) repurchased $852 million in shares year-to-date, reducing share count by 7%, and is on track for a 25%+ three-year CAGR in free cash flow per share.
- Applications and Commerce (A&C) bookings growth moderated to 7% in Q2, with traditional products like do-it-for-you services and website builders being de-emphasized as capabilities move into Airo.
- The transition to Airo is causing a deliberate trade-off, with A&C bookings expected to remain in high single digits for the rest of 2026, and the timing of Airo's offsetting revenue ramp is uncertain.
- GoDaddy Inc (GDDY) faces headwinds from the .CO registry contract expiration and the exclusion of high-value aftermarket transactions, which together absorb over 200 basis points of full-year revenue growth.
- The company is seeing a shift in domain traffic as LLMs and AI agents change discovery patterns, requiring new API strategies to remain competitive, though the impact is still evolving.
- Q2 normalized EBITDA benefited from timing shifts of certain costs, which are expected to be incurred in the second half of the year, potentially pressuring near-term margins.
- The company is still in early stages of integrating Airo into the domains purchase path, and scaling marketing efforts, meaning the full impact on bookings and revenue is not yet realized.
- Management declined to provide a specific timeline for when Airo will fully offset the decline in traditional product bookings, leaving uncertainty about the duration of the transition period.
Welcome to GoDaddy's second-quarter 2026 earnings call. Thank you for joining us. I'm Christie Masoner, VP of Investor Relations. And with me today are Aman Bhutani, Chief Executive Officer; and Mark McCaffrey, Chief Financial Officer. (Operator Instructions)
On today's call, we'll be referencing both GAAP and non-GAAP financial measures and other operating and business metrics. A discussion of why we use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their GAAP equivalents may be found in the presentation posted to our investor relations site at investors.godaddy.net or in today's earnings release on our Form 8-K furnished with the SEC.
Growth rates represent year-over-year comparisons unless otherwise noted. The matters we'll be discussing today include forward-looking statements such as those related to future financial results and our strategies or objectives with respect to future operations. These forward-looking statements are subject to risks and uncertainties that are
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