GoDaddy Q2 Earnings Beat Estimates, Revenues Increase Y/Y, Shares Drop

GoDaddy GDDY reported second-quarter 2025 earnings of $1.41 per share, which beat the Zacks Consensus Estimate by 5.22% and increased 28.2% on a year-over-year basis.

GDDY generated revenues of $1.22 billion, surpassing the Zacks Consensus Estimate by 1.13%. Revenues increased 8% year over year, both on a reported and on a constant-currency (cc) basis. International revenues increased 11% year over year.

Total customers at the end of the second quarter were 20,409, down 2.2% year over year. Average revenues per user (ARPU) were $230, up 9.5% year over year. Total annualized recurring revenues (ARR) were $4.18 billion, up 8.5% year over year. 

GDDY shares dropped 3.55% in after-hours trading following the results. The company’s shares have plunged 23.8% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 12.2%.

GDDY’s Q2 Top-Line in Detail

Applications and Commerce (A&C), comprising websites, productivity applications, and payments and commerce, generated $463.9 million (contributing 38.1% to total revenues), up 14% on a year-over-year basis.

The Core Platform, consisting of domains, aftermarket, hosting and security, increased 4.8% year over year to $753.7 million (contributing 61.9% to total revenues).

Total bookings of $1.3 billion increased 7% year over year both on a reported and on a cc basis.

GDDY’s Q2 Operating Results

In the second quarter of 2025, the normalized EBITDA margin expanded 190 basis points (bps) year over year. 

A&C EBITDA margin expanded 90 bps while the Core Platform EBITDA margin expanded 220 bps on a year-over-year basis.

Total cost and operating expenses as a percentage of revenues declined 340 bps year over year to 41.8%.

The second-quarter 2025 operating margin expanded 340 bps year over year to 21.9%.

GoDaddy’s Balance Sheet & Cash Flow

As of June 30, 2025, cash and cash equivalents were $1.1 billion compared with $719.4 million as of March 31.

As of June 30, 2025, GoDaddy had a total debt of $3.8 billion, and net debt was $2.8 billion. 

The free cash flow was $391.5 million in the second quarter compared with the previous quarter’s $411.3 million.

GoDaddy Offers Q3 & Raises 2025 Revenue Guidance

For both the third quarter and 2025, GoDaddy expects A&C revenue growth in the mid-teens and Core revenue growth in the low single digits.

For the third quarter of 2025, the company expects revenues of $1.22-$1.24 billion, indicating year-over-year growth of 7% at the mid-point. For the third quarter, GDDY anticipates a normalized EBITDA margin of roughly 32%.

The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $1.23 billion, suggesting 7% growth over the figure reported in the year-ago quarter. The consensus mark for third-quarter 2025 earnings is pegged at $1.47 per share, indicating 11.4% year-over-year growth. 

Beginning the fourth quarter of this year, GoDaddy will no longer operate as the registry
service provider for the .CO top-level domain (TLD). This is expected to have a negative impact of roughly 50 bps on bookings and revenues.

For 2025, GoDaddy raised its guidance and now expects total revenues of $4.89-$4.94 billion, indicating year-over-year growth of 7% at the mid-point.

The normalized EBITDA margin expansion for the year is expected to be more than 100 basis points, with continued sequential expansion each quarter, exiting 2025 at 33%.

The Zacks Consensus Estimate for 2025 revenues is pegged at $4.9 billion, suggesting 7.2% growth over the figure reported in 2024. The consensus mark for 2025 earnings is pegged at $5.92 per share, indicating 22.1% year-over-year growth.

For 2025, GoDaddy now anticipates a free cash flow of $1.6 billion.

Zacks Rank & Stocks to Consider

GDDY currently carries a Zacks Rank #3 (Hold).

Lumentum LITE, Cisco Systems CSCO, and Vipshop VIPS are some stocks worth considering in the broader Zacks Computer and Technology sector. While Vipshop currently sports a Zacks Rank #1, Cisco and Lumentum have a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumentum shares have jumped 32.3% year to date. Lumentum is set to report its second-quarter 2025 results on Aug. 12.

Cisco Systems shares have appreciated 18.2% year to date. Cisco is set to report its fourth-quarter fiscal 2025 results on Aug. 13.

Vipshop shares are up 12.3% year to date. Vipshop is set to report its second-quarter 2025 results on Aug. 14.

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