GoDaddy Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : <_ALACRA_META_ABSTRACT>So just to start off, one of the key advantages of GoDaddy is your diverse customer base of 21 million customers, and that really provides a resiliency for the business throughout economic volatility. So just given your very unique lens into the SMB landscape, I think it'd be great to start off, which is what you're seeing from the health of your own customer base and how the macro outlook may change as we go into 2025?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And you recently reported earnings and a question that came up multiple times with investors was around the capital allocation strategy. you guys outpaced your initial targets, but investors looked at the moderating pace of buybacks for the last 2 quarters. And I wanted to ask if there was any change. And Mark, I think you were very clear in saying, look, there was no change. And actually, in fact, you guys entered into an accelerated repurchase agreement on February 17 for $330 million to be completed at the end of Q2. So how should investors read into this moderating [and] an accelerating pace of repurchases. And given your position is just disciplined

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And just shifting back to some of the fundamentals of the business. At your Investor Day, which was about a year ago, exactly, you laid out some key focus initiatives for the year. So just looking back, can you help us at the stage of where you've had the most success on those initiatives? What were some of the inflection points you saw over the year? And how those are forming your go-forward strategy?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. Aman, I want to go back to some of your comments around Airo and the strategy there being first, discovery, then engagement than monetization. And so starting with just the engagement and discovery piece, can you just put a finer point on how customers are -- how Airo is actually just shifting or broadening the starting point of which customers are launching with GoDaddy?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And you referenced a lot of attach, particularly around e-mail. And I think it was about 50% of websites plus marketing subscriptions originated with Airo in Q4, which was up from about 40% in Q3. And I think one of the things I often get asked by investors is, look, I look at the subscription revenue growth within A&C and that's remained fairly steady. It's about 8.7% growth in fiscal '24 versus 8.2% in fiscal '23. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 5:15PM, GDDY.N - GoDaddy Inc at Morgan Stanley Technology, Media & Telecom Conference So just given all the goodness around these attach rates, is there anything that would be holding back that metric? Or should we just start to see it inflect higher as it rolls through?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And one of the areas that you have sort of to push that monetization a little bit faster on Airo is with your Airo Plus SKU?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : I know it's still some of the early days, but could you just outline, I guess, first, the customer metrics and behavior that drove your confidence to kind of move that into the monetization stage. And then just more broadly, what you're seeing from customers as there -- further demand than as Airo Plus as like an independent SKU?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : And how should investors start to think about what's the addressable market for Airo Plus? Is it any of your 21 million customers could start to attach to this product? Should we think of it more as the customers that are buying the websites? Just help us frame kind of where that opportunity fits in.

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And I want to dig back into the pricing and bundling strategy you talked about earlier. You had a lot of success here, particularly within productivity with A&C in 2024. So how are you going to expand the success with pricing and bundling into other areas of the business?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : No, it is. And so it sounds like there could be a bigger opportunity beyond just kind of what you saw in productivity, because you have a much broader portfolio of products that you can optimize for different customer segments. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 5:15PM, GDDY.N - GoDaddy Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. And I want to go back to the customer account for a little bit. In 2024, customer account did decline, but really a function of some of the divestitures, the migrating of certain assets that you did in hosting. When we think about 2025, you guys are leaning back into marketing. It sounds like the top of funnel is still healthy. And you have Airo benefiting the improvement of conversion to customers, so how should we think about just the rate of growth in customer count as we look ahead?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Yes. And you guys have clearly deliberately shifted focus towards that higher value customer with the increased propensity to adopt multiple products. And you could see that in ARPU expansion where you've had about 8.5% growth in 2024, accelerating from 3% in 2023. So any sort of framing of kind of where this could go given the combination of Airo, driving that better LTV and increasing the product portfolio awareness and just the intuitive pricing and bundling strategies that you guys have?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. I'm going to ask another question and then open it up to the audience if there's any questions out there. So I wanted to kind of get to that bookings point. Where in 2024, you saw bookings grow 9% relative to revenue growth of 7% last year and then also guidance for about 7%. And you've acknowledged that there is a duration difference between bookings and revenue that impacts the correlation between those 2 numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 5:15PM, GDDY.N - GoDaddy Inc at Morgan Stanley Technology, Media & Telecom Conference And I think most of us have thought about GoDaddy as being more of an annual monthly business. So can you just help us unpack a little bit more to understand where these duration impacts are that kind of limit that bookings correlating from more closely with revenue growth and how we should start to think about maybe those converging over time?

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. I want to see if there's any questions in the audience. I'll keep going. So I want to get...

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Okay. Question was on GABI from the cost efficiency side and what they can expect going forward.

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : I'd like to take that question just a little bit broader about costs overall. And when we look at your EBITDA margin expansion, you got about 100 bps expansion in 2025 after delivering a really impressive, closer to 400 bps last year. So what are some of the puts and takes embedded in that profitability guide? How are things like some of the infrastructure simplification that you're doing, kind of the global talent pool that you're accessing, and I know the mix shift to A&C is also a positive factor. So just help us, [where do] those puts and takes, maybe stack rank kind of where you're most excited.

Question: Elizabeth Porter - Morgan Stanley & Co. LLC - Analyst : Great. With that, we are just about up on time. So Aman, Mark, thank you so much for joining us today.