GoDaddy Q2 Earnings Beat Estimates on Revenue Growth, Airo Gains

GDDY’s Q2 Top-Line Performance

Total bookings increased 5.7% year over year to $1.42 billion. On a constant-currency basis, bookings grew 5.2%. Annualized recurring revenue increased 5.7% to $4.42 billion, highlighting continued expansion in subscription-based services.

International revenues climbed 7.9% year over year to $427.1 million, or 7.1% on a constant-currency basis. GoDaddy ended the quarter with 20.5 million customers, up 22,000 sequentially and 35,000 from the end of 2025.

GoDaddy’s Segment Results Show Broad Growth

Applications and Commerce revenues increased 11% year over year to $514.8 million. The segment continued to benefit from customer adoption of GoDaddy’s presence, productivity and commerce solutions. Applications and Commerce bookings grew 7%.

The segment’s EBITDA rose 17.2% year over year to $241.1 million. Its EBITDA margin expanded 250 basis points to 46.8%, reflecting favorable product adoption and disciplined execution.

Core Platform revenues rose 3.9% year over year to $783.2 million. Growth was supported by primary domain registrations and renewals, including demand for both .com domains and higher-priced non-.com top-level domains. Higher aftermarket volume also contributed to the segment’s performance.

Core Platform bookings increased 5% year over year, improving from the first quarter as the company moved beyond the peak impact of a promotional offer. Segment EBITDA increased 6.4% year over year to $261.9 million, while the margin expanded 70 basis points to 33.4%.

GDDY Benefits From Airo Adoption

Airo remained the centerpiece of GoDaddy’s AI strategy. Its annualized bookings run rate reached $50 million, representing a fivefold increase from the $10 million disclosed in the previous quarter. Management noted that most of the growth was organic, with customer satisfaction remaining high.

More than 70% of customers who used Airo during 2026 had at least two products, exceeding the rate among non-Airo customers. GoDaddy is testing Airo within the domain-purchase path and plans to broaden its capabilities across commerce, communications and other business functions.

The company also launched the GoDaddy Developer Platform. Its new APIs allow developers and AI systems to search, purchase, configure and manage domains directly through their existing tools. Management expects API access to expand over time into hosting and commerce services.

GoDaddy’s Profitability Expands

Normalized EBITDA increased 13.7% year over year to $434.1 million. The normalized EBITDA margin improved 210 basis points to 33.4%. Management is funding higher AI product, marketing and computing investments through productivity improvements and continued cost discipline.

Operating income surged 28.6% year over year to $342.5 million. The operating margin expanded 450 basis points to 26.4%, helped by revenue growth and operating leverage.

GDDY’s Cash Flow and Balance Sheet

As of June 30, 2026, total cash and cash equivalents were $1.2 billion. Total debt was $3.8 billion, while net debt stood at $2.7 billion. The trailing-12-month net leverage ratio was 1.4 times.

Net cash provided by operating activities increased 16.5% year over year to $442.5 million. Free cash flow rose 13.3% year over year to $443.5 million, while trailing 12-month free cash flow reached $1.73 billion.

In the second quarter of 2026, the company repurchased 9.8 million shares for $851.8 million.

GoDaddy Narrows 2026 Revenue Guidance

For the third quarter of 2026, GoDaddy expects revenues between $1.315 billion and $1.335 billion. The midpoint implies year-over-year growth of 5%, reflecting a difficult comparison with strong prior-year aftermarket activity.

Management narrowed its 2026 revenue outlook to $5.215-$5.255 billion from the previous range of $5.195-$5.275 billion. The midpoint represents growth of approximately 6%.

GoDaddy continues to expect low-double-digit Applications and Commerce revenue growth and low-single-digit Core Platform growth for both the third quarter and full year. The company projects a third-quarter normalized EBITDA margin of approximately 33% and reaffirmed its full-year target of more than 33%.

Management also maintained its 2026 free cash flow forecast of approximately $1.8 billion.

GDDY’s Zacks Rank & Stocks to Consider

GoDaddy currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Arista Networks ANET, ACI Worldwide ACIW and Analog Devices ADI. Each stock carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arista Networks shares have gained 30.5% in the year-to-date period. Arista Networks is set to report second-quarter 2026 results on Aug. 4.

Shares of ACI Worldwide have gained 20.6% in the year-to-date period. ACI Worldwide is set to report the second-quarter 2026 results on Aug. 6.

Shares of Analog Devices have rallied 35.2% in the year-to-date period. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19.

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