Domain registrar and web services company GoDaddy (NYSE:GDDY) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 8.3% year on year to $1.22 billion. The company expects next quarter’s revenue to be around $1.23 billion, close to analysts’ estimates. Its GAAP profit of $1.41 per share was 5.4% above analysts’ consensus estimates.
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GoDaddy (GDDY) Q2 CY2025 Highlights:
- Revenue: $1.22 billion vs analyst estimates of $1.21 billion (8.3% year-on-year growth, 0.9% beat)
- EPS (GAAP): $1.41 vs analyst estimates of $1.34 (5.4% beat)
- Adjusted EBITDA: $381.7 million vs analyst estimates of $372.6 million (31.3% margin, 2.4% beat)
- The company slightly lifted its revenue guidance for the full year to $4.92 billion at the midpoint from $4.9 billion
- Operating Margin: 21.9%, up from 18.5% in the same quarter last year
- Free Cash Flow Margin: 32.2%, down from 34.4% in the previous quarter
- Customers: 20.41 million, down from 20.48 million in the previous quarter
- Annual Recurring Revenue: $4.18 billion at quarter end, up 8.5% year on year
- Billings: $1.28 billion at quarter end
- Market Capitalization: $21.41 billion
Company Overview
Founded by Bob Parsons after selling his first company to Intuit, GoDaddy (NYSE:GDDY) provides small and mid-sized businesses with the ability to buy a web domain and tools to create and manage a website.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, GoDaddy grew its sales at a weak 5.9% compounded annual growth rate. This was below our standard for the software sector and is a rough starting point for our analysis.
This quarter, GoDaddy reported year-on-year revenue growth of 8.3%, and its $1.22 billion of revenue exceeded Wall Street’s estimates by 0.9%. Company management is currently guiding for a 7.2% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 6.8% over the next 12 months, similar to its three-year rate. This projection is underwhelming and implies its newer products and services will not lead to better top-line performance yet.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
GoDaddy’s ARR came in at $4.18 billion in Q2, and over the last four quarters, its growth was underwhelming as it averaged 8.1% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in securing longer-term commitments. 
Customer Base
GoDaddy reported 20.41 million customers at the end of the quarter, a sequential decrease of 75,000. That’s worse than what we’ve observed previously, suggesting the company’s sales momentum is slowing. However, we note that GoDaddy actually increased its annualized recurring revenue (ARR) during the quarter, indicating that its new customers may have signed huge contracts, existing customers stepped up their spending, or some combination of both.
Key Takeaways from GoDaddy’s Q2 Results
We enjoyed seeing GoDaddy beat analysts’ bookings expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 2.9% to $145.97 immediately following the results.
So do we think GoDaddy is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.