Earnings call transcript Q2 2023

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Christie Masoner

Good afternoon, and thank you for joining us for GoDaddy's Second Quarter 2023 Earnings Call. I'm Christie Masone, Head of Investor Relations; and with me today are Aman Bhutani, Chief Executive Officer; and Mark McCaffrey, Chief Financial Officer.

Following prepared remarks, we will open up the call for your questions.

If you'd like to ask a question on today's call, please use the raise hand feature in the webinar to be added to the queue. On today's call, we will be referencing both GAAP and non-GAAP financial measures and other operating in-business metrics.

posted we financial financial equivalents in measures found the why of and may today's of Relations the in non-GAAP Investor SEC. our our to presentation furnished earnings discussion release use investors.godaddy.net Form measures non-GAAP reconciliations be site on A at our X-K or with to their GAAP Growth rates presented represent year-over-year comparisons unless otherwise noted. respect to strategies we forward-looking statements, those with related include or be our such and today future future discussing will results The matters financial operations. to objectives as

X, forward-looking we except statements by to that of on extent required differ statement no forward-looking XXXX. undertake new the subject events. Actual periodic are this are in these are discussed today, And information risks forward-looking may that These SEC on we and make call to statements law, based in materially to assumptions results our obligations update as future contained Any because uncertainties from those detail in or August of statements. filings.

With that, to Aman. I'm introduce pleased

Aman Bhutani

afternoon, a joining is customers you mission, new of breadth good to our number robust solutions retention of inclusive customers high-quality providing on continued business remains At growing attach. make improved globally. all. a and entrepreneurs In today. for opportunity health for fundamental with make to us thank The empower of everyday mission our strong QX, rates to progress our we GoDaddy, Good and more and

XX% and EBITDA for track X% growth on profitability our and be stronger at to margin. the normalized continue approximately business, in We revenue growth exiting year

$XXX million XX% guide competitive Applications & For segment, growth. QX, revenue with Commerce highly our in of our outperformed our

improvements private while the aftermarket. assets. a domains by with in hosting marketing and quarter, registrations product to as XX%. efficient Innovation, to and in And domain we bundling management We remain under the with new our previously of the come. ability strong integration leader the domains for maintaining on noncore divestitures continues from at and announced adds customer shareholder before. at the X% of underperformance rate Gross through stabilize offset remain grew brand Hosting GoDaddy growth in a in our retention strong Customers attach in years pricing now confidence resulting monetization solutions for our business retention our seen than drive positive trajectory faster value higher ever to underpins are have in and

creating At just move that value already step We In and months, take the generative innovation are for product through there launched are AI-based and to workload have and generative more of to understand on actively quickly strengthening GoDaddy, focused new market towards customers reduce industry. we our advantage a one-stop few to a to driving their fit, changes, we function is buffers multiple features AI our come. customers using shop.

to website, checkout And guided GoDaddy guide. with domain success organization personalized digital path, free automatically customers know, for basic digital a can first payments. guide As we time, has now purchase over The take an will GoDaddy build care years. including XX you the our for they bundle a each AI-powered

way embeds automatically new of our and experience traffic it the The sites. product of identity their our to present built also and so the can context. to marketing social with guide brand creates on can experience, in messages our in to knows creates logo presence generate in logo to colors website. a commerce they solutions proposes years journey post and free to media digital customers unique from a basic It a It customers'

time taken their our And removing digital time, inbox or proposed phone same and messages. can configure guy customers' to writes the respond that customers simple conversation’s at digital messages practically messages. our number and sites to e-mail the to aggregates example, responses a SMS and For giving guide from bring new social the app, inbound one effort the

with unique loyalty driving of across available can this in to our to lifetime the this XX existing and industry. bring and disruptive domain an million pursue is base GoDaddy and a Bundling value. retention offerings is capabilities else These increase purchase position improve new differentiated anything from approach different the in at scale. customers

AI. customers We bringing new new features to these powered are excited about been by our build experiences energized our teams have and to generative

In capabilities. to forward we of November new at look our investor these you dinner demos in showing Tempe,

attaching base which this of GoDaddy is commerce our than on for an rate. I our GPV on our momentum commerce, again impressive our We'll to and always, briefly to growth, strongest continue payments last in more our to component year's year-over-year U.S. our to was Pros, anticipated add to in rate in successful touch pace playbook. through in continue exit also and QX deploy As as our driving delivering double innovating of OmniCommerce we our to GoDaddy on the we domains. launch three wanted Customers through -- Canada solutions. strong base convert growth to priorities: presence, at drive payments

marketing engagement customers Website higher new engagement correlated driving metrics. launches. are is plus with continues product we with website and commerce We performance rates, and a retention perform of to and expect greater know with engagement driver we well, to be that higher

domain not in digital gun. sites third-party hosted impressive performance customers for on in benchmarking offer breast word search recognize in results an an WordPress We rates study, and managed milestone, customers begin only faster, which reached for WordPress GoDaddy's are Managed easiest a customers, solution. of retention rankings the secure with industry's improvements important On Xx to delivering PROS, driving improvement recent solutions loaded fastest, engine and one improved ones most now platforms. enhance a the in have our our as and

meaningful Pro domains. bundling Pros, on have to and I this continue with quarter growth understand guide, simpler launched GoDaddy site expect GPV domains, adopt enhanced an most update double-digit contribution hub we to bringing in its with make made change on the quickly innovation and offerings to and saved communications for share it. month-over-month capabilities the guide it to measuring to content the only payable similar digital healthy product unique GoDaddy a We This payable to for GoDaddy's in is we wanted domains domains generating as are digital customers growth. while are offers. the exciting a and well. is client time that And including

have we closing, applications spend, into be we strong as and we exit to results to organization committed to of expanding deliver progress and are accelerate we channels. the made continued In cash expect growth our in efficient continue commerce us we eager year our and search increasing our growth marketing, remain have feel next about growth eager with to momentum? engine value in our flow and with duplicate our continued to take phase to the all we especially share, to how good and is those with positioned with improvements for We marketing GoDaddy free also and the per margins other remain stakeholders. algorithm

With that, Mark. here's

Mark McCaffrey

Thanks, by accept years, few we suite one-stop GoDaddy build a led side. robust payments including Aman. to and for empowering better differentiated faster product and dedicated with In successfully competitive has partner for ventures last will to investment and and set stronger an entrepreneurs their manage our a marketing OmniCommerce services, shop, tools GoDaddy, the our growth and The just customers. with their this solution our and experience attachment innovation of further growing soon-to-be products. provide product period plus And at of built a long-term and digital propelling retention. a targeted launched even over through guide, GoDaddy product websites

of in the faced we headwinds revenue Grow many thrilled the applications solutions. in our are Create and we year, first acceleration continued consider momentum we the the As our of commerce the in half & with

flow, expect the reaccelerate and model year improve our growth as durable we our flow our Our while targets. and to profitability free continues generate exit on delivering to cash we cash

Moving to results. our financial

up XX%, and is and commerce to by XX%. Our which of EBITDA our segment The create our a surpassing Commerce in X% accelerated billion $XXX ARR, delivering Applications our revenue gross XX% $XXX & in to of XX%. fueled up guide solutions, grew margin applications to segment strength million,

declines was aftermarket annualized $X.X revenue increases. to stronger XX%. billion. $XX growth over in revenue segment offset and platform year-over-year $XXX by aftermarket. our margin comparable in in customers EBITDA pace demand higher million, quarter, flat more GMV GoDaddy billion. billion. on to commerce XX applications payments. our totaled base with segment Core Core by with as to for we growth by This additions $X.X and on ARR platform a domains rapid than are primarily growth core customer from price rate XX% ARR convert X% our year. was continue supported was drove we double for within attract end the and we than Additionally, exit million more the to last to the in and XXXX grew GPV to on greater-than-expected platform of of a XX%

compare year. last X% to decreased on Revenue $XXX a tough from million

we've the a Over years, last upwards $XXX million revenue five two-sided built of marketplace.

a our allows buyer rapidly this this grew larger and as see we This we is participants, agreed seller growth as What at and business and volume of a partnerships. transactions have to the reminder, valuation on business of scaled transact decreased platform As a business upon now slowed. valuation. post-COVID their has operations, normalization

technology Street migration the expect and our stack. the And low go-forward of to is of restructuring year. initiative, XXX end to the core migration we mid-single-digit the basis. a that, steady platform customers on Hub be Temple On planned the GoDaddy the for by completed completed With Main growth top-line business Reg we to Media

The a of GoDaddy but further As customers remains elevated above these expected, XX%. future. products brands this these for the deliver will rate migrations produce churn retention on the quarter, cost branded in efficiencies slightly

total a increased grew X% billion basis. revenue, revenue grew revenue a currency a up $X.XX X%. currency Within basis. and reported to on and on constant excluding X% basis aftermarket. on Constant reported international X% X% revenue Total

and net high-quality X% headwinds migration XXX,XXX efforts. grew the year, from we $XXX $XXX last ARPU despite added customers our to Our from new

margin the grew on Normalized assets. X%, million, impact constant of XX%. growing of basis. EBITDA X% X% totaled and to non-core basis. and the set a aftermarket reported $XXX a billion, while integration $X.X Bookings a excluding on delivering grew currency Bookings X% of

and aftermarket, and well of customer Excluding increases the in in price in applications the strong of bookings growth as commerce. additions impact strong drivers as attach were domains

factors growth We revenue accelerated to to contribute year. expect next these

cash the free totaled quarter Unlevered X%. $XXX for growing million, flow

interest-related cash by increased share rose cash share per leverage, XX% despite free trailing payments. the of prior $XXX $X.XX increase relatively Free was at and flat driven repurchases. million to $X.XX, per flow versus operating XX-month cash a basis. on execution, While flow a flow year's share

$XXX July repurchased billion $X to we share and since XX, of $XXX the our million, commitment year-to-date, repurchase shares by XX.X the totaling reduce diluted of current XX% brings authorization which QX. end repurchased authorization period. million of we Through cumulative This XX% shares outstanding to the on million our the XX.X was shares, for fully this to XX% inception by million over reducing since part outstanding and remain shares three-year under the

an the Additionally, out incremental share announced $X authorization to to today, billion program $X total extending to authorization the bring billion buyback and XXXX. we

of On liquidity million at debt the times balance in cash a with $X.X X leverage QX billion to total finished targeted billion. and with of X.X Net we range times. net within $XXX sheet, our times $X.X X stands

XX-basis in the secured Lastly, million each interest reduction save a on refinance of is annually at interest par. issued we refinance outstanding billion through seven $X.X for expected point principal of to years. This payments a next rate $XX

our on to outlook. Moving

X% revenue billion are QX of of at growth range We the to in targeting the midpoint. $X.XXX billion, $X.XXX total representing

we momentum, with at an exit X% of XX%. expect from XX%, basis rate a exit top-line current our the the of points With EBITDA growth XXX of increase normalized XXXX to approximately year

deliver for and growth be XX% and for and and QX increasing in applications the our the year. platform our full between the we In for expectations core X% growth reaccelerate quarter commerce revenue fourth to to to are segment, in full We QX expect year. flat be X%

of EBITDA Normalized point XX%. resulting XXX-basis to approximately increase fourth margin expected the margin QX approximately a acceleration benefits improve This better from improved rate XXXX efforts AI with continued operating our performance, in move from EBITDA is of incorporation loads to into is XX% the quarter, of our of continued a to over XX% normalized leverage marketing cloud full-year and on model. from operating our restructuring

spoke we remain we bridge the in to growth quarter, accelerated revenue the confident last path growth. On about

cash While and flows. improving margins expanding

certain rate bookings. two migration in this non-core year's last year's and revenue points divested FX includes As growth pressure our of approximately business from Difficult aftermarket the compares a assets. and reminder,

expansion in our the of margin we the the We year expect flow bookings the growth as momentum delivering to of to reacceleration drive cash in half remain committed targets. and free we revenue year second exit while

in investor we annual opportunity our posting exciting our both dinner a and next about be with deliver Investor the we remain targets. share our the AI within and to our to initiatives the will product in closing, consider at 'XXXX, We ability November and Planning In more great execute demonstrations in control Day our confident three outlook for years. our our of in QX business in full-year areas

remain strive to entrepreneurial we focused our stewards every one-stop day a an executing micro to businesses, journey with being provide capital, and along of priorities, always, profitability. long-term towards balanced As shop committed against and their strategic on responsible eye growth to

team With Masoner all open Christie for the that, questions. our we call have to will Investor Relations from

Christie Masoner

Instructions]. Thanks, Mark. [Operator

Please from Our Matt of question comes go first William Pfau Blair. ahead. from the line

Matt Pfau

Thanks, of Great. for Two my taking them. questions.

are that Maybe sequential the driving factors on what can core of the the acceleration discuss that ask to increase. quarter healthy business increase. in wanted the just I fourth are Pleasant in you First,

Mark McCaffrey

When off in -- things of to will and second of FX we look couple Yes. have year, Thanks, and QX trade half abating. a Matt. kind consider: at that the the we bookings of one, be

And somewhat We into GoDaddy start have that into better those that increases aftermarket we this which the our completed of through we some abate year. did bookings with migrations of core to compares and of revenue get the we've going year. the the as should -- get we start quarter, now end towards help see our should QX. Obviously, half to the some stack, pricing

year. the in, of coupled rate with us products gives coming of with that this of confidence demand growth through that get funnel that seeing customers have we new front So That, the the the remainder we some we're the will accelerating at as faster. attaching

we application rates coming about that strong good commerce, of in and QX retention XXXX. remaining Our into momentum momentum and have the we going feel out

Matt Pfau

understand out it the Great. Is plan roll to to what us rollout to you And digital for just is just maybe guide, existing your going new well? customers? look base as that help be you going on that can do like? Or to

Aman Bhutani

The we Yes, literally Matt. is the works digital a is Thanks, existing plan customer, roll to the when well. sleeping. as even out customer it to about guide that base for a

the new offer offerings So able create be them. base, will the even to or for guy with

just So, it as of like take you'll will but new, a products us lot see start to with quickly well. other base it do, the

Matt Pfau

my taking questions. for Thanks, Great.

Christie Masoner

go Vikram question Baird. comes Vikram the Kesavabhotla from of next Our from line please ahead.

Vikram Kesavabhotla

the you I for about behind in fiscal It posted ask like looks there EBITDA raised that if revision. about It the Maybe the applications wanted I the segment. wanted could separately, expectation then quarter. about to and some you you 'XX. commerce to ask looks talk like also about drivers more the second XX% And margins. primary

in exiting drivers XX% and you there You're Thanks. year? expansion main guiding XX%. through the of the Could to year balance some XQ throughout at the talk of of the just the

Mark McCaffrey

bundling sorry, that QX and where front excited of to, really and we are we and of some we're gross strong that attach quicker I'll websites and alluded That, the with getting show retention go. customer payments to to the happening that the in doing at applications half gets coupled start comments tunnel of bundling that coming adds rates. have happy -- really can QX, net see bundled should increases as up we about with in half the back to we momentum through us strong they're customer at coming commerce. at continue with to back that, and pricing in with higher product the Again, did start and continue front that's I the of application the funnel. We payments to choosing

our that work, momentum That well converting the grow the existing to Also out customers throughout the go we about it is seeing on motion We've we're talked previously, payments. in over and GoDaddy seeing but conversion. great as year. AGV

we expansion, get to had On We're the XX%. up forecasting margin about XX%.

have a there. seeing on things couple helping which of efficiency, going us. is We marketing We're greater

moving take into year. more the coming see benefits efficiencies milestones to are to the certain with hit we the cloud. hold that really seeing as really workloads are and We're throughout starting that are of We cost the starting

restructuring the had in QX. also We

will and go of as And as some of back momentum through overall into that we we the half year the go gain there. steam

have lot say, our expanding direction that growth the make same of, coverage. a while pointing that margins through good would feel moving in are I So, parts our we about well all rate as us of applications expanding

Vikram Kesavabhotla

Thank Great. you.

Christie Masoner

Our from next ahead. go line the question please Trevor comes from Young of Trevor Barclays.

Trevor Young

Great.

do one the kind are prior then around year see your organization? that cost of now on domains there, platform which expecting full second on complementary the aftermarket you kind within Or eventually care relative as do guide, line linear for that lines the ex and to And or kind to of First, and the higher-touch digital care core growth alleviate of aftermarket expectations. organization? security underperforming main customer some hosting, within of view headcount the that functionality AI-powered helping you X%

Mark McCaffrey

Thanks, I'll grown the We of there saw quarter. a back We've lot half We million a underperformed 'XX and into really years. this over start 'XX. the Trevor. $XXX of growth platform. saw of core aftermarket with a business coming number

connecting So, the as We're on the demand on transactions and as slowing the put our we And but have growth perspective, it ads we've to compares. talked seems still and gross we're the well the with QX. coming no seeing aftermarket valuations the have seeing within doubt great on are valuations it abated. previously, funnel, volumes in them But buyers. larger

think for lean domain towards And normalization the growth. seeing we're this them we now. So, is a

mid-single-digit to growth our we've we think the we a to expectations, is this and taken back forward. business out half think it of low of year -- be I going going

point this being part. really as the I on aftermarket So, would to

Aman Bhutani

every of and about guide, care item pretty letting more just little flat. early it's the we've where We've last impacts in more And And sort by guide learning, line the see domain that more with creating overall. AI. and But costs over been leverage to couldn't seeing a we're machine over job customer like results Marketing, our in we've business last purchase make get of as showed Care the implementing that in be already few we we that of And already. on able care. excited a efficiencies spend we Trevor, we be about bearing a do frankly, talking in to digital the guide revenue And our year done overall, the phenomenal grew, by digital on to do years efficient. the the leading

Trevor Young

both. Great. Thank you,

Christie Masoner

Our comes the Naved from from next go please of Khan Riley. question ahead. line B. Naved

Naved Khan

Thanks.

Just on the question outlook. a

If year cost is XX% I have because So, reason XXXX, there am is with, right? in it start but XX% cost savings for by thinking about the I a the to have base? still would be helpful. then why will be right you're way? the full year, follow-up. To not I savings, to next guiding layering about be know any there Just a shouldn't So, EBITDA this that, And QX. I think I margin not and mean, comment any

Mark McCaffrey

Yes. in the if points. Naved, same the more in of get into to XX%, by margins and back the XXX QX, on what basis look we'll increased our about QX coming details margin thanks. quarter, XXX points. excited basis first into Day year-over-year, get XXXX, really We're Investor going we Even we've we expansion to look we'll like. We're excited up our our the the

to on. something work we So, continue it's

cash accelerating hitting continue to time, objectives flow to our we're At into going the same in growth efficiencies push find operation, continue our XXXX. and margin and well. revenue We we'll

of to how XXXX. too going the about So, leading the and into first the the to benefit we're going in you us but year work the of ultimately of year half what give done excited I look and want we've our to like, that's half progress, in is don't back much XXXX really a then

Naved Khan

you Got resumption into you digits. right? to think, bridge So getting of of or was, that growth, growth of kind call double shared healthy it. to I -- And the the then the you alluded back the -- one last and sort

would it like be the and full of of have QX? anniversary-ing full think At I it getting -- when how real you to what effect next if about I point war Is to for think of should year? kind would Is the to be in So, start this the early you? that, see about kind timing?

Mark McCaffrey

to peg back and at migrations the of a this about year. specific we're We'll we through turn Yes. But and and when the a more divestitures compares revenue in doing start we impact into the into XXXX. Not Thanks. quarter talk has timetable And we're guide the we try it quarter the -- more as getting as momentum difficult to aftermarket later. look now. into trying We'll anything at about here of as they continue not units. us will half the and year. talk But through kind FX, we go abate of abate fourth tailwinds the on to that accelerating go full-year year right later and look pick to the

Aman Bhutani

excited That could the and for is about and that significant presence base based then can on term, Long we're technology just it's entrepreneur’s our identity attach, products And for well. customer flywheel idea really very to our involves new you in to leading which the lead a to if for is just That path closing remember wheel, creates simple connecting I the way. customer improved engaging not most the through to has commerce as that growth them the that identifying accelerating leads customer reaching about because a company. the a greater the customer. through create add, out customers and

business product do seeing you're us product grown for clearly seen performed and in successfully years the now you've GPV ton we customers of a see course, four us. can that OmniCommerce with years, three have nicely, we love a And us. where business that with from would that it well it our base us solution it has as where over well that has do very the e-mail Of has last

core, is us the will long-term for we're positive innovation what value our years about drive years come shareholder to that to to sharing value confidence It's that's growth the sort of creating momentum to in leads to our attach business, we and So, monetization you strong path for in with pricing and product. path the believe that together the like like long-term opportunities about and accelerating the customer come. retention at give

Mark McCaffrey

And if we to we to I guidance -- could that just we for while the FYI out and reaffirming 'XX, add for range in revenue just look in XXXX are clarify, our [ph].

Naved Khan

Thank you, guys.

Christie Masoner

Our next question Brent from comes Brent of from the Jefferies. line ahead. Thill go please

Unidentified Analyst

is Brent Ben for Thill. This John

had up and First sequentially. question GMV good XX% growth pretty year-over-year accelerate also XX%

customer? Just would have is that what in sort the might be great. wondering just of could seeing I any of and per you that, be you better if are attached, it improvement parse some macro GMV drivers? mean, Or

Aman Bhutani

Yes. macro to function GMV the with. a of as start growing sort of

we a We customers function our through the GMV you, seeing remind of is transact of the a the relationship are of existing bank. more lot more solutions have. To our with have they

but for gives what's happening gets model us So, out to We our a there. of the sort it's financial see a in different It get us, it product barometer. world. great

with So, using the signifies and in and their GoDaddy we off-line more solutions both and for it businesses, are very store growth people more basically happy the

Unidentified Analyst

maybe FIS update Great. Worldpay on any Thanks. And partnership? the

Aman Bhutani

great. Partnership is doing

with them. launched the have product We

launch. the that since customers we're about of very using a a We early still only have think, set our from month in, solutions, new I are

to can't our the I it very excited pretty And about say there pretty get progress. are still wait and the too. progress partners I out with to it's think early, they we those more dare sell and see but customers. happy can't So, that wait

Mark McCaffrey

to minimal, to on going going sorry, the is And the -- was momentum. very we'd XXXX, of said that momentum excitement adds always that XXXX into which start we and again would XXXX be impact see about

Unidentified Analyst

Thank you.

Christie Masoner

ahead. of Our the Godoi Mark next Benchmark. line question go comes please from Mark from

Unidentified Analyst

Hi, Mark. on is guys. Alex This for

question on a payable Just domains.

you contribution in sounds was like and payable last performance meaningful So it from quarter, domains. there characterized XQ modest, is

that the you discuss of in applications not material meaningful outperformance or was commerce driver for as or driver Just perhaps payable the curious if in what domains for whether most -- that. a could

Aman Bhutani

talk at Mark driving I'd commerce But let your growth question still back is and it's around aware, we maybe and early payable customers. very me pretty of I'll million say of step let have big. very domain, what's domains. probably OmniCommerce sort of payable answer Obviously, sort you're Yes. and XX the on

under We million have XX domains management.

you to me We the attach on The the surface payroll up why product. basis. it can we and of for quickly, concept this that is That's from of biggest unique and for over a really have domain to payable last people. the the more the get quarter hear excitement very on opportunity it. new math a we on started domains new ton continuous adds And customers still with journey in it's drivers because a engagement happy us course,

of Our start taking can they've customers don't payments. clicks, couple automatically a understand that brought with the and they domain

know to them capability. right? what guide they we of capability, retention get to through that in live our rate. transact, with with live the ways once we is get the terms start find that So, found path, And math better customer you overall sure enough, we them And

product one it customer, a to two, pretty three have products have a tend with life. sort have have much of mid-XXs. retain If we if we with If have we customer, a We we they customer -- for jumps.

And commenced with XXx, the to XXx once LTV they goes also us. have

on know there. people go, what see when people didn't was that's this it's QX, product the this is dependent that in more getting and started to to more us saw So, but I all you of working, product, adopt math

it. add me Let

sense. Let that that's makes created using if of you growth it, and the the me GPV. what start quick, sort Hopefully, will, in double-digit month-over-month

Mark McCaffrey

in customer payments, time. I'll that and domains, that faster -- it's together accelerate will as whether product they're on guide stages. we've the to is And that think strong are the starts comments whether rate. excited a whether in to second gross We they we're in it's really wet they add like commerce, it's at applications seen funnel, marketing, Yes. it's into those than only whether Not also where coming initial getting the payable digital are bundling are and stronger general, coming adds coming long at

when on it said, operating decisions and a happens, or efficient help a to that the get better being we and like helps product, get cash all getting prices are faster to really our But faster made we there LTV drives that as drive to that that it the life, we generally, better well. the top be man when margin because we around of efficient product us and flow, Obviously, product, a customer have greater attached, us when find with third we're this get it second that equation. the third and more revenue because -- funnel, revenue helps getting for

So, that and about happening momentum. applications feel the of lot really good driving really we in all a It's commerce.

that coming We are are the of that with as a driving that innovating in top we lot sales the domain momentum starts well, of and seeing it right? positivity hardware on have that the demand. And all

Unidentified Analyst

it. Got Appreciate you, it. Thank guys.

Christie Masoner

comes the Citi. go from line question next of from Our ahead. Ygal Arounian Ygal please

Ygal Arounian

to domains. but re-asking not I'm I want start on this,

know on normalize, I around on a then how that's And that maybe what that, We to new and channel there's we'd some, [indiscernible]. love you're you that, guys growth interesting about big when think two, are You start comment to TLDs aftermarket? other challenging out And the both they around for point which sides. partners in, having if there's impact? than that's say, of that? about you hand seeing let's expectations from continue that in of who know are really were ARPU comment hear. don't see to But just things just have I Do an something users. some interesting pushing kind to guys to involved impacting more if a can

So, your on to love would that. hear view

Aman Bhutani

Yes. domains under domains. I you of probably think to bit for Obviously, already grew. give color saw a Happy on management GoDaddy

So units well. definitely, traffic said, site. well a we're And doing we're of to on demand as bit little as -- to Mark seeing our better where sort coming explain and

search because I our remarks, our marketing my in convert As to that money of engine and us and some abilities mentioned of focus prepared search is spend improving those customers. and significantly in

is you to to we've well that one we're mentions internationally. other So, as happy with And very continued to maybe that well. grow mention

on is As currency, thing Mark we Domains the number we basis, XXX in constant small is shared, lead world, X% we we markets product grew the with sell have X%. customers the And over in right? a one X% domains, reported around markets. internationally internationally

that combination our business. that to I broader the results the for one And best would those of leading registry us. is it's particular are say things business any other So, than Domains

that mentioned market that's and yourself, We're true. leader. You absolutely the

rate this we'll in have assets very We've areas. in and pieces diverse domains search, of the We marketing efficient within many see continued to the work attach to the key the isn't stick, but world good And can to obviously asking grow you're customers, them of what attach be set well. business. dumps, really do grow customers the around to we products where a returns innovate get them about, products those which them, it the while and

a that's bit helpful. Hopefully,

Ygal Arounian

helpful. Yes. That's really

there's maybe overlap. anything an answers segue, it's I so But of to similar. incremental the if A be And I might know. actually think to add. don't lot

gross to the number, I there the believe, in way have the gross So, the commentary, know strong. that? some feels ongoing Is noise your new I the top adds some in any with customer still brands. really which parse you And just out of funnel, of on sunsetting of

driving the demand think, what of doing domains soft about that's commentary out. then the your when domains. -- kind point, -- the that stands under is your to funnel top around still of in funnel, strength of is like, work top strong Even that And your with let's collectively I you it talk SEM if management you're really grew, say, the with

So, bit better. that little understand you. a maybe Thank wanted to I

Aman Bhutani

Yes. Yes.

strong not just search what that. efficient which in really of added prepared So, gross repeated on And the think I did was remarks, for I contributor spend. good That it you U.S., highlight to did it's for strong marketing to And globally. us, and that that is was search were in ads and search a the job it's that is delivering sort us. I that a

a But it's search alone. not

over been couple years. have our of on migraine, focused targeting of and our We the of the our the marketing marketing, measurement improving last

talked going important we've the right? what different to people through about people times for priority funnel More website, a been result is show us. as think we're more seeing up multiple I the has And better. it an

for teams shifted or But and culture improvement an very the talked helps And where that as better site the site the I us. up to and now. there's different is delivers in conversion we we and things whether of things that really much a the that, well. land is the company, happy think and about, of Whereas not. a and as with And experimentation-based course, we gross are on years go measure relied one now ago, this and past may a things a what is way better performs right, well, try they that's out traffic about. the and talked have us then site, maybe have conversion that closely that don't of if ads, in find on care attract for I've past, of that pretty the One great you're I result. asking we're about we combination know we more, I've when what is

Mark McCaffrey

I'll the like ads faster. that. propensity And coming we we gross and hand, a a What want necessarily are are higher of to other on good to add the just is attaching business losing a to really growing to do therefore, customers using churn lot they the the are Yes. that get lifting about that weren't And those have for net on in customers as to the of direction [indiscernible] some to as refer relates and business trading these products. And in the But ads. what we're we we therefore, migration functionality. that

Ygal Arounian

I'll want then... follow-up, don't queue have but back and I Right. I to in jump a the

Aman Bhutani

It's okay, ahead. go

Ygal Arounian

Yes.

Okay.

I super love So, then this this helpful. color. all is

your that. of is a say, efficient ecosystem. that of that's the we Is Press So, see tying maybe all the more to you domains really web-building share and you taking into space think the closed-end a It share back just lot the about peers could on coming platforms Thanks. of bringing I and flattish from? your And the you and like of, back board. the marketing kind that let's spend World right? feels in do kind help on seem past fair characterization? driving talked where And going just then globally, the be share across were

Aman Bhutani

Investor view, themselves Yes. newer easier how coming for is That few is think And new get back then, Day And we'll exist, share look I years. to shifting. of obviously, sort is what to overall, quarters, sites. the talk world find if custom for from and the you reducing. build you website provide the still go pressure many from there at last on there's But about taking longer-term And more this more demand that sites least press we sure, a was color more tools easier at on and saw -- if at the share HTML towards there is is what started. goes right, customers that's growing and we demand

two our for job a websites fantastic marketing of Like does that.

testing Because buys customers. see then create thing another in and the at pretty show customer the them for with digital We'll domain, instead we're with and them -- it GoDaddy we'll a next to when live a content and is give website How You us do started. you to differently a behave today, of a you show get make and live they November friction domain, another just decision Tempe. the how you taking with in difficult. customer then a We guy telling you step.

over take effort AI and has started. that this technology to reducing generative terms the to the to do made and of customers step course, allows of have our now But next easier in time easier industry get

to I think you're the going momentum. So, to continue see

are Internet to real of the think a entrepreneurship, presence you'll get coming going are and But to see generative good I up continue the trends underneath there how momentum people adopt the they're able a now course, make that AI and Of to technology population, to Internet. and because secular what running, quickly in tools on difference.

Ygal Arounian

much. so you Thank

Christie Masoner

comes Our Chris from go Stanley. from Kentaro next please ahead. question Morgan Chris,

Unidentified Analyst

to be the macro the QX And ask and kind Christian you. is digital then your table for about think Kentaro how of the would differentiation ability I it's in you six versus listed these your against second Thank industry? like do This how QX. quarter. competitors? capabilities changed to guide. your around Are kind of drive question wanted for the AI Or on web-building the around

Aman Bhutani

No, guide, I question stakes believe a let but said take your you first me can't for digital first. table

that. with me surprise You

a organization look of on touch try to the we give when Let's at of couple we the with color. macro. on There look macro bit sort items that dashboard look and I'll at are them start a our of our few in at or you a to leaders

is coming out are of And representation sort of to that's and of people at demand for One look we them that nonbrand things? demand. going searching a as Google

terms demand. strong, them, markets. those for And And for the searching that company, data markets we they're are domain see how they're not we are better being where the positive searching we and track. in there markets a actually and one means the they're expect in particular for in for demand just trending? a nonbrand just the world searching that saw lift website, sign good a U.K. of is That for what English-speaking a that's we we a that few that And is a

feeling money on. and wants the and generally, is We customer, And engage everyday a build domain, a business better expect the buy their there. to start or spend so entrepreneur more business, to or

I'll we the The behavior can nonbrand does -- group you see, what the And geographically not are talk more the is as in about or markets international but the that for is of sort English-speaking call what market see really we markets, second of those similar us. there, world. well of terms rest searches, big flattish

the to, the broad of But do. U.S. somewhere in is the on that a share talk I globally or has some the couple than GoDaddy take a it markets. about middle. as but good of lot good news, won't I macro sort is But comment not much, probably I better we the as other on there's Rod, of understand if terms of track demand you in phenomenal. And much to we been a macro, what see time done behavior. on that's bit of terms U.S. So, raw demand sort little those. more

there, those and consumer some two many trending point probably that expectation markets, down, months, reversal. of is data but again, what was we for customer to confidence of markets. last over of second And in is look a an at and the bit a track And that we for -- the our months, would it go of of down confidence, main sort see three little all

the sort So, expect maybe you U.K., person. see different instead some which markets behavior it showing But And we think again, as well. coming there other see just if didn't of down in are are towards, more you that markets, of I mention a you're flat. of off, macro I'll going actually sort and

a But geographic little of of look hopefully, the core we of couple at on little that couple bit a on lens you of bit a it. color of a metrics gives that sort and a

a purposes. generate second terms lot other which I content of that guide uses want question, a uses guide, I technology In to digital reiterate AI that the is think to was using the generative built AI AI digital just of for a

is And every to with that couple our purchase. goal in domain

that trying experience a And it's So, whether for when do you customer. is that what buy through for path in particular it it's that it's whether do doing and get digital for customer best work it's What guy them adding and say, products, then domain, and from enabled look. come a new path, is find whether in customer to the actually that automatically posting the something, to something. buy is it's or And reminding "Hey, them this me. it's that a not says, doing trying advance way take it's a

as this, don't that stable that, at think keep like of right? can you So, we stakes If all. I

talking look the at look even not across I sort at our of landscape. if I'm about I technology -- and industry, If

But lot things. already are generative testing of or AI-ready want at capabilities. We're we a there I people have there and course, these domain AI name. similar see the do technologies point of out starting a don't to anyone of many things. Of And

we And I've them. them. quarter, bring tested I there two are want set it that are that main right. the the and that's going have capabilities names the anyone way off to And one to But today or with customers. talked about in we last isn't think start mentioned or past, to I people of live being else of millions

with thing. big started may So, just that's or assume and There a was we -- somewhere we've to want little a for experience. understand that posted guess, it, customers video I two-minute I'm two to it's what late. to that And today, minute we have folks that the one. I joined video we great what post our pointing our is I a way assume for you to great

want what much to effort how to that and and have care And tools. we guy them us taking more want are and happens problems from and digital away do same is one their today not, to time, they the And want or give to at they letting access give that them that do us they encourage them. us want confidence, that. now. the in solve to they customer the would Customers And customer call us right believe it

that all we that -- have customer we're can so take it that And customer do with with of care scale us. we and in that to to buys the literally every trying enable and we learning every

Mark McCaffrey

from identity is set. have we to entire distinctions to presence, we have technology the of one commerce, add the I'll

life financials. to that we the customers faster, AI, and our their bundling the us across for when makes with and into we it So, us us, and use LTV generative that could domain, journey entire journey, we take driving start gets faster gets for

distinctions we to we're use great have around. it. they of stack one is the So, entire excited the about But around are technology really it

Unidentified Analyst

thing learned functionality having can people customers add we year to see see last I'll working I demo quick that powerful. them is one very that Maybe think and that other is

invite you, of and I I joined. of So, all know you many would

So, all November. in of to I would invite Tempe you

of experience showing illuminate I you idea is then without a So, us, better way. do in demoing yourself will that it the it much customers. can with it you think sort what And our for

Aman Bhutani

much And the November. is cooler temperature in

Christie Masoner

go Navid question Khan line of ahead. the comes Please Our Riley. next from B. from

Navid Khan

Yes, follow-up. good. quick a Okay

as And price the saw wanted question yourself increase competition. What had what to it such domains for the I So, Google of A&C participants on one in thoughts other I space. was on then sold on means transaction, magnitude terms Square is other being And the segment. your we the a the increase? to was get of the

Aman Bhutani

Yes.

the can touch the to Peter. then, And if Let on I or to first. domains pricing that me piece on take want touch you Mark,

the Customers and or is On flow. they'll there's options Google domain other might this, space, their the in exist at disruption like a look anytime the customer look tend it, transition to for way we that there's what heads up them. put experience Navid, at a

domains, broad leadership care just and people the large GoDaddy world transactional provide awareness position brand of high a our from our what and we number the very NPS, sort in given And given brings given of understanding of bundle In that domain, to think positioned the beyond. to very that see with And I it's that we we're if the right? table. terms and attach we're there some disruption more well of us, to advantageous happens to

just we mean, the business. a the mains attracting when were the came But leader is job at customers, and we're I delivering, say a we're think maybe our do And business into think fantastic goal great Google job growing is we is providing in to to down. products. a we're doing And the Google good the way domains leader customer’s when leading it I in

I And I is website question pricing, that. So, the marketing then plus the on think. we're pricing? assume with AMC okay to

Mark McCaffrey

color. by into it gotten of the each we've different magnitude down of I'll think of a don't I pricing give the Yes. breaking little components it.

year, doing I as renewals. year, we pricing increases on as focused mostly on renewals. around well we're new it think This last

than is those of start go rates throughout QX, did we year. -- took we increases the retention in would sticking with at materialize them and So, Obviously, see always year. last should pricing end we we as say the to priority I our but

Navid Khan

you. Thank

Mark McCaffrey

Navid. Thanks,

Christie Masoner

turn for now some the will to closing remarks. call I Aman over

Aman Bhutani

we're margin, by good products and just for remind call. super Christie, We're you, you we've and GoDaddy bringing that excited our demonstrating and excited -- Thank the about Thank commerce quarter. I year next now. about QX. the Anderson just setting into into QX forward well. where I'll base we at accelerating have of trajectory excited attaching to We're strong very next much. e-mail market. year the really all growth employees the we're super going And end about thanking are all another with demonstrated look shareholders with to to the Ending our and super up

GoDaddy (GDDY) 3 Aug 232023 Q2 Earnings call transcript