A&C revenue growth of 14.4% for the quarter highlights successful customer adoption of subscription-based products. The company continues to enhance its AI-powered experience, GoDaddy Airo®, with new features like Airo Plus Site Optimizer and Airo Site Designer, demonstrating a commitment to innovation-led growth.

GoDaddy recently launched GoDaddy Capital, a merchant cash advance program, and Same-Day Payouts, expanding its commerce solutions. The company also continues to invest in international business and operations across India, Europe, Latin America, the Middle East, North Africa, and Asia, aiming for global market penetration.

Average Revenue Per User (ARPU) increased to $230 from $210 year-over-year, indicating successful upselling or higher value customer acquisition. This growth in ARPU is critical as total customers decreased by 2.2% and domains under management declined by 2.0% for the period.

Cost of revenue remained stable at 36.3% of total revenue for the three months ended June 30, 2025, while restructuring and other charges significantly decreased to $0.3 million from $6.9 million in the prior year. This indicates effective cost management and a more streamlined operational structure.

Technology and development expenses increased by 4.1% to $214.3 million for the three months ended June 30, 2025, primarily due to higher personnel costs associated with product development. This sustained investment supports the company's focus on AI-powered experiences and a unified infrastructure platform.

Management actively uses foreign exchange forward contracts and interest rate swaps to mitigate exposure to fluctuations in foreign currency exchange rates and variable interest rates, as detailed in Note 10. This proactive approach helps stabilize financial performance against market volatility.

The company identifies significant risks associated with the development, adoption, and use of AI, including potential intellectual property infringement, privacy concerns, data protection, cybersecurity vulnerabilities, and the creation of harmful or biased content. These risks could lead to reputational harm and legal liability.

Evolving legal and regulatory frameworks for AI (e.g., EU AI Act, US state laws) and data privacy (e.g., GDPR, CCPA) pose risks of increased compliance costs, fines, and potential restrictions on product offerings. The company also settled FTC charges related to security practices, highlighting ongoing regulatory pressure.

Reliance on third-party cloud infrastructure like AWS for a substantial portion of its platform exposes the company to service interruptions and security risks. The filing also notes an increase in social engineering attacks and the inherent risks of system failures and data breaches, which could disrupt operations and harm reputation.

Total customers decreased from 20,866 thousand to 20,409 thousand and domains under management declined from 82,056 thousand to 80,413 thousand year-over-year. While ARPU increased, the decline in customer base and domains suggests intense competition and potential market share erosion, as acknowledged in the risk factors.

The company's investment in AI-powered experiences like GoDaddy Airo and expansion into commerce solutions such as GoDaddy Capital and Same-Day Payouts are strategic efforts to differentiate and compete effectively in a rapidly evolving market, aiming to attract and retain customers.

The company's ability to attract and retain customers is sensitive to pricing decisions and competitors' strategies, including discounts and bundling. Risk factors highlight that unsuccessful pricing models or more effective competitor strategies could lead to customer loss or reduced bookings, impacting financial results.

For the three months ended June 30, 2025, cost of revenue (excluding depreciation and amortization) was $442.3 million, maintaining a consistent 36.3% of total revenue compared to 36.3% in the prior year. This indicates effective management of direct costs despite increased sales.

Restructuring and other charges significantly decreased to $0.3 million for the three months ended June 30, 2025, from $6.9 million in the prior year. This reduction suggests that previous restructuring activities have been largely completed, leading to lower related expenses.

Technology and development, marketing and advertising, and customer care expenses all decreased as a percentage of revenue for the three months ended June 30, 2025, compared to the prior year (17.6% vs 18.3%, 7.7% vs 8.3%, and 6.0% vs 6.5% respectively). This indicates improved efficiency and leverage from revenue growth.

Technology and development expenses rose by $8.4 million, or 4.1%, for the three months ended June 30, 2025, primarily due to higher personnel costs. This investment supports the ongoing creation and enhancement of products, particularly AI-powered experiences like GoDaddy Airo, Airo Plus Site Optimizer, and Airo Site Designer.

The company continues its transition of many services to Amazon Web Services (AWS) to host products, indicating a digital transformation effort aimed at improving scalability and flexibility of its infrastructure. This move is critical for accommodating increased customer traffic and product complexity.

GoDaddy holds 358 issued patents and 10 pending applications, with a new trademark application filed for 'Airo'. This demonstrates an ongoing effort to protect its innovations and brand, especially in rapidly evolving areas like AI, which is crucial for maintaining a competitive edge.

The board approved an additional $3,000 million share repurchase program through the end of 2027, following the completion of a prior $4,000 million authorization. This robust program reflects management's confidence in future cash flow generation and commitment to returning value to shareholders.

Net cash provided by operating activities increased by $192.6 million to $784.6 million for the six months ended June 30, 2025. This strong operational cash flow provides ample liquidity to fund ongoing operations, capital expenditures, growth investments, and shareholder return initiatives like share repurchases.

Long-term debt, net of current portion, remained stable at $3,772.4 million as of June 30, 2025, compared to $3,779.1 million at December 31, 2024. The company utilizes interest rate swaps to manage exposure to variable-rate debt, demonstrating a prudent approach to capital structure and interest rate risk.

The company emphasizes its adherence to local and international laws, rules, and regulations relating to the operation and security of its computer network and the processing of personal data, including GDPR and CCPA. This commitment is crucial for maintaining customer trust and fulfilling social responsibility in data handling.

The company is subject to evolving regulations and scrutiny from investors and stakeholders regarding ESG matters. Failure to meet evolving expectations or maintain ESG practices could harm its reputation and ability to attract and retain employees, indicating a growing focus on sustainability risks.

GoDaddy acknowledges its exposure to risks from earthquakes, fires, power outages, floods, and other catastrophic events, including those due to climate change. The company states it has disaster recovery plans and structures in place to support operations, indicating a focus on business continuity and resilience.

The company acknowledges that general macroeconomic and geopolitical conditions, including higher interest rates, inflation, and potential recession, could adversely impact demand for its solutions. Customers may reduce or postpone spending, affecting the company's operating results.

Ongoing geopolitical conflicts (e.g., Russia/Ukraine, Middle East) and trade disruptions, including tariffs, could impair growth prospects and adversely affect international operations. While not materially impacted to date, the company cannot predict future long-term effects.

The legal and regulatory environment for AI and Internet governance is rapidly changing, with new laws (e.g., EU AI Act, 'Take It Down Act') and interpretations emerging. This creates uncertainty, potential for increased compliance costs, and risks of legal liability or fragmentation of the domain name registration system.