GoDaddy Inc. CFO Mark McCaffrey Discusses Strategic Growth and AI Integration at JPMorgan Global Technology Conference

Key Takeaways

TL;DR: GoDaddy (GDDY) reaffirms confidence in its LT growth algorithm (6-8% rev. growth, expanding margins) driven by high-intent customer focus, AI-powered Airo platform monetization, and bundling improvements. Key drivers include $1.8M customers spending >$500/yr and >$1.5B FCF guidance for 2025. AI tools like Conversations and Airo Plus drive engagement, while payments GPV growth and domain leadership underpin resilience. Capital return via buybacks remains prioritized.

1. Financial Performance & Strategy

• LT Targets:
  • 6-8% organic rev. growth, 20% FCF per share CAGR through 2026.
  • $1.5B+ FCF guidance for 2025 (Q1 exceeded expectations, reaffirmed outlook).
  • ~900bps normalized EBITDA margin expansion over the last 5 yrs.
• Capital Allocation:
  • $5B returned via buybacks (25% of shares retired in 4 yrs).
  • Balancing growth investments with shareholder returns; M&A possible but must be strategic, accretive, and integrable into existing tech stack.

2. Customer Strategy & Trends

• Focus on High-Intent Customers:
  • 1.8M customers spend >$500/yr (vs. 1.5M in 2023); higher retention (+85%+) and LTV.
  • Divesting low-value “lower-calorie” customers to prioritize monetizable segments.
• Macro Resilience: Micro/small biz optimism remains strong per Venture Forward surveys; GoDaddy’s tools seen as “mission-critical.”

3. Product & AI Initiatives

• Airo Platform (GenAI):
  • Rolled out to all new customers; existing customers migrated via renewals.
  • Airo Plus monetized at $5/month (premier features); early adoption signals ~$60/yr ARPU uplift.
  • Conversations tool enables real-time engagement (e.g., mobile pizza oven owner booking gigs via AI-driven responses).
• Bundling Strategy:
  • Shift from product-based to cohort-specific bundles (e.g., security + email) to drive attachment rates.
  • Q1 retention improved due to 2–3 product attachments (retention >85%).

4. Core Segment Updates

• Domains:
  • Market leadership (500+ TLDs; secondary domain market dominance).
  • Volume + pricing growth; steady cash flow driver.
• Applications & Commerce (A&C):
  • DD bookings growth (tougher comps in Q2’25).
  • Payments GPV growth driven by converting existing transacting customers; fee increases (still lowest in market) aid margins.

5. Competitive Positioning

• Full-Stack Advantage: Only player with end-to-end tech (domains → transactions).