GoDaddy's 2025 Q1 Earnings Call: Unraveling Contradictions in Customer Growth, Airo Impact, and Margin Expectations

Customer growth strategy and expectations, impact of Airo on average order size and customer engagement, gross margin expansion in 2025, customer acquisition and marketing spend, and impact of Airo on average order size are the key contradictions discussed in GoDaddy's latest 2025Q1 earnings call.



Strong Financial Performance and Growth:
- GoDaddy reported 8% bookings growth and expanded its normalized EBITDA margin to 31%, with 26% growth in free cash flow, reaching $411 million in Q1 2025.
- The growth is attributed to disciplined execution of pricing and bundling strategies, improved customer retention, and the expansion of high-margin offerings.

Customer Engagement and Retention:
- The company's average order size increased, and customer retention rates improved, with higher intent customers showing better engagement and conversion.
- The improvements were driven by the seamless experience initiative and the Airo Plus experience, which offers customers expanded capabilities, leading to longer term relationships.

Airo's Impact on Product Engagement:
- GoDaddy's Airo experience has resulted in better attach rates and increased conversion among customers purchasing additional products, particularly in the websites plus marketing segment.
- This trend is supported by Airo's automation capabilities, which simplify tasks for customers, leading to more product adoption and higher financial results.

Macroeconomic Stability and Customer Resilience:
- While there are pressures on customer economic sentiment, small businesses and micro entrepreneurs remain optimistic about their growth and continue to view GoDaddy as mission critical for their operations.
- GoDaddy's strong customer retention and the high value proposition of its products contribute to customer resilience despite macroeconomic uncertainties.