GoDaddy (NYSE:GDDY) reported second-quarter revenue of $1.3 billion, up 7% from a year earlier, as the company advanced its AI strategy around Airo, an agentic operating system designed for small businesses.
Chief Executive Officer Aman Bhutani said GoDaddy has combined its Airo and Airo AI Builder offerings into one platform, which can help small businesses create and operate storefronts, booking systems, client portals and other online tools. The company is positioning Airo as the centerpiece of its broader AI transformation.
Quarterly Financial Results
Chief Financial Officer Mark McCaffrey said total revenue was above the midpoint of the company’s guidance range, while Normalized EBITDA margin expanded by more than 200 basis points.
- Total revenue increased 7% to $1.3 billion.
- Annual recurring revenue rose 6% to $4.4 billion.
- International revenue grew 8% to $427 million.
- Applications and Commerce revenue increased 11% to $515 million, with segment EBITDA margin expanding about 250 basis points to 46.8%.
- Core Platform revenue rose 4% to $783 million, supported by primary domain registrations, renewals and aftermarket activity. Core Platform EBITDA margin reached 33.4%.
- Total bookings grew 6% to $1.4 billion, including 5% growth in Core Platform bookings and 7% growth in Applications and Commerce bookings.
- Normalized EBITDA increased 14% to $434 million, while margin reached 33.4%.
- Free cash flow grew 13% to $443 million. Trailing 12-month free cash flow was $1.73 billion.
McCaffrey said customer retention continued to improve above 85%, while average revenue per user increased 9% to $250. More than half of GoDaddy customers now use at least two paid products, he said, and more than 70% of customers who used Airo this year had two or more products, a higher proportion than among non-Airo customer cohorts.
Airo Transition and Product Strategy
Management said Airo is changing how GoDaddy packages certain products. The company expects the platform to absorb capabilities that had previously been sold separately, including features associated with traditional do-it-for-you services, template-based website builders and some commerce offerings.
McCaffrey said the company estimates that products affected by the transition represented about one percentage point of total bookings in the second quarter. He said professional services, which could previously involve transactions of roughly a couple thousand dollars, are seeing narrower demand as customers use Airo to create more of their online experiences themselves.
The company expects Applications and Commerce bookings growth in the high single digits for the remainder of 2026. Management did not provide a timetable for when Airo’s monetization will fully offset the moderation in bookings from traditional products, saying it is still collecting data as it expands purchase paths and product connections.
Bhutani said GoDaddy is testing Airo in the domains purchase path, its largest funnel, and plans to introduce more commerce, customer communications, phone, interactive voice response, voice and video capabilities within the platform. The company conducted a limited amount of Airo marketing in the second quarter and expects to increase spending during the third and fourth quarters, subject to its returns-based investment framework.
Management said Airo is monetized through a mix of subscriptions and token usage. Bhutani said some customers are highly engaged and are purchasing tokens to build not only websites but broader web applications. McCaffrey added that Airo has shown stronger free-to-paid conversion than the company experienced before Airo.
Domains, APIs and Agentic Web Efforts
GoDaddy said it maintained a consistent share of the broader domains market during the quarter. Bhutani acknowledged changes in customer discovery and search behavior as large language models become more prominent, but said domain funnel economics, traffic and conversion remained healthy in the second quarter.
The company launched its GoDaddy Developer Platform, providing domain APIs intended to allow developers and AI systems to search, purchase, configure and manage domains. Bhutani said the APIs are designed for consumption by LLMs and other AI systems, with GoDaddy planning to expand the approach to hosting, commerce and other parts of its platform over time.
GoDaddy also said it enhanced its Agent Name Service standard and announced plans to contribute it to the Linux Foundation. In addition, the company co-developed the Agentic Resource Discovery specification, intended to help AI agents locate tools, skills, agents and other resources. Bhutani said the initiatives support GoDaddy’s view that domains will remain a foundation for identity and discovery in an AI-driven internet.
Guidance, Margins and Capital Allocation
GoDaddy narrowed its full-year 2026 revenue outlook to $5.215 billion to $5.255 billion, representing 6% growth at the midpoint. The guidance includes more than 200 basis points of cumulative impact from the expiration of the .co registry contract and the company’s exclusion of high-value aftermarket transactions.
For the third quarter, GoDaddy expects revenue of $1.315 billion to $1.335 billion, or 5% growth at the midpoint. The company expects Applications and Commerce revenue growth in the low double digits and Core Platform revenue growth in the low single digits for both the third quarter and full year.
GoDaddy projects a third-quarter Normalized EBITDA margin of approximately 33% and reaffirmed its full-year target of more than 33%. McCaffrey said second-quarter results benefited from the timing of certain costs, including marketing expenses, that are expected to occur during the second half. The company also reaffirmed its approximately $1.8 billion full-year free-cash-flow target.
The company ended the quarter with $1.2 billion in cash and $2.2 billion in total liquidity. Net debt was $2.7 billion, or 1.4 times trailing-12-month net leverage. Through July 29, GoDaddy had repurchased nearly 10 million shares for $852 million, reducing fully diluted shares outstanding by 7% since the start of the year.
GoDaddy plans to host an Investor Night on Dec. 1 at its Tempe, Arizona, headquarters, where it said it will provide a broader update on its AI transformation and its implications for customers, operations and shareholders.
About GoDaddy (NYSE:GDDY)
GoDaddy is a technology company that provides a suite of online services aimed primarily at small businesses, entrepreneurs and individuals looking to establish and grow an online presence. The company’s core activities include domain name registration and aftermarket services, a range of website hosting options, and tools for building, managing and promoting websites. Its product mix is designed to simplify the technical aspects of running a website so customers can focus on their businesses.
Product and service offerings span website builders and managed WordPress hosting, shared and dedicated hosting, e-commerce capabilities, email and productivity solutions, SSL certificates and site security tools, and online marketing and search engine optimization services.
