GDDYNYSEThe short version
GoDaddy Inc.
GoDaddy is the world's largest domain registrar, selling websites, hosting, email and payments to about 20 million small businesses, converting nearly a third of revenue into free cash flow it returns entirely through buybacks.
Public at $20 in 2015, GoDaddy ran to a $214 close in January 2025 on the margin-and-AI story, then fell roughly 58% to about $89 as growth cooled to mid-single digits.
$89
Share price
$12.1B
Market cap
$4.95B
Revenue (FY2025)
≈15%
FCF yield on market cap
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The statements first
Revenue, margins and cash flow all rose for three years — reported EPS fell on tax accounting
FY2020 → FY2025as reported · $
Revenue$5.0B+8%
Operating margin22.8%+3.2pp
Net income$875M−7%
EPS$6.22−4%
Free cash flow$1.6B+25%
Open the full statements →FY2023–FY2025, as reported.
- Revenue. Up from $4.25B in FY2023 to $4.95B in FY2025 — about 8% a year — with operating income more than doubling to $1.13B as margins climbed from 12.9% to 22.8%.
- Cash. Free cash flow reached $1.58B in FY2025, up 19%, on capex under 0.5% of revenue; it ran 1.8× reported net income and funded $1.6B of buybacks.
- Reported EPS. Fell from $9.27 to $6.34 — but only because FY2023–24 booked ~$1.1B of one-off tax benefits; pretax income actually rose from $404M to $1,020M.
Where growth comes from
The growth is monetization of a flat-to-shrinking base, not more customers
ARPU vs customers vs domains (indexed, 2020 = 100)
ARPU climbs while customers and domains flatten and dip.
- Between FY2023 and FY2025 GoDaddy's revenue grew only because ARPU rose from $203 to $242 while paying customers fell from 21.0 million to 20.4 million and domains under management fell from 83.6 million to 80.8 million,
- even as the global domain market grew about 7.5% (roughly 360 million to 387 million names); GoDaddy's share of registered names slid from 24% to 21%, back to its 2015 IPO level, in a base where 94% of customers first buy a domain.
- The benign read. Applications & Commerce revenue still grew 14.3% and primary domains rose, and management says it will let lower-value customers go — so the shrinking unit count may be a deliberate prune, not funnel erosion. In the filings the two readings look identical.
The business
Two segments: a mature domains core and a faster, higher-margin apps engine
FY2025 revenue by line ($M)
Domains$2,310M47%
Applications & Commerce$1,889M38%
Core — other (legacy)$752M15%
Total $4.95B. A&C grew 14.3%, domains rose, the legacy tail is shrinking.
- Core Platform. $3.06B, 62% of revenue — domains plus a shrinking legacy tail; grew 4.9%, with domains up but 'other' falling from $805M to $752M as customers migrate off end-of-life products.
- Applications & Commerce. $1.89B, 38% of revenue, up 14.3%, at a ~45% segment margin — websites, commerce, payments and resold email. This is where the mix is shifting.
- Recurring and prepaid. About 88% of revenue is annualized recurring; customers pay in advance, leaving $3.3B of deferred revenue that funds the business as float.
Earnings quality
Pretax profit rose 2.5×; reported net income fell — the gap is entirely tax accounting
Pretax income vs reported net income ($M)
FY2023–24 net income was inflated by ~$1.1B of one-off deferred-tax benefits.
- The swing. FY2023 booked a $971.8M tax benefit and FY2024 another $171.5M as GoDaddy released valuation allowances on U.S. deferred tax assets; FY2025 shows a normal $145.0M provision at a 14.2% rate.
- Cash taxes are trivial. GoDaddy paid just $16.5M of cash income tax in FY2025 on $1,020M of pretax income — a $5.3B loss-and-credit carryforward still shields most of what it owes.
- Why it matters. On pretax profit FY2025 is the strongest of the three years; on reported EPS it looks the weakest. The decline is an artifact, not deterioration.
The long view
A decade turned a $31M operating loss into $1.13B and compounded cash ~19% a year
Operating margin, FY2015–FY2025
The recent jump is the maturing of a decade-long operating-leverage machine.
- The transformation. At the 2015 IPO GoDaddy was a levered, unprofitable business — $1.61B revenue, a $31M operating loss. FY2025: $4.95B revenue at a 22.8% margin.
- Cash compounded. Free cash flow rose from $325M in FY2016 to $1.58B in FY2025 — roughly 19% a year — carrying none of the tax noise that distorts reported earnings.
- Debt grew too. Total debt rose to ~$3.8B funding acquisitions, but interest once exceeded the operating result and is now covered more than seven times. The deleveraging is in the denominator.
Competitive moat
A real but narrow moat: domain scale and switching costs, bounded on two sides
GoDaddy vs the nearest listed DIY-website pure-play
| Metric | GoDaddy | Wix |
|---|---|---|
| Revenue | $4.95B | ~$1.76B |
| Operating margin | 22.8% | ~5.7% |
| Domains under management | ~81M | — |
| Share of global names | ~21% | — |
No single rival matches GoDaddy on both scale and profitability in its core lane.
- What carries it. The world's largest registrar — ~81M domains, ~21% of all names — with 20.4M customers renewing above 85%. The domain is the front door: leaving means moving registrar, email and website at once.
- The bound. Pricing power is now exercised by pruning low-value units, which is self-capping — each pruned unit is one fewer to price against. The field is fragmented, with thirty-plus named rivals.
- The AI double-edge. The same AI GoDaddy monetizes through its Airo tools could, in its own risk language, eliminate the need to register a domain name. The offense is real but small; the threat is a stated possibility, not a measured loss.
Debt and solvency
$3.8B of debt and near-zero book equity — but 1.6× leverage and 10× coverage
1.6×
Net leverage (TTM)1.4× by 1Q26
10.5×
Interest coverage (NEBITDA)
$2.21B
2029 maturity wall~1.3 years of free cash flow
$2.1B
Liquidity (cash + revolver)
Negative book equity is the residue of $3.55B returned to holders in three years, not eroded capital.
- Why it's manageable. Net debt of $2.7B is 1.6× EBITDA and falling; only ~$25M a year amortizes before the $600M 2027 note; the wall is 2029, coverable from a year of cash flow.
- No binding covenant. The revolver's leverage test only applies above 40% usage — and it is undrawn. The largest liability, $3.3B of deferred revenue, is prepaid customer money that funds the business.
- The honest counter. Buybacks have left no asset cushion: tangible equity is negative $4.4B and $3.6B of goodwill holds value only while cash flows. It's a going-concern balance sheet, not a liquidation-proof one.
Ownership and incentives
Not founder-run: insiders own under 1%, and the alignment runs through pay
CEO compensation actually paid ($M)
Mark-to-market pay swung to −$21.6M in 2025 as unvested equity fell with the stock.
- Skin in the game is thin. All twelve directors and officers hold 1.24M shares — under 1% — and over two years insiders filed roughly 120 open-market sales worth about $60M and not a single open-market purchase.
- But aggregate holdings rose. The selling is largely mechanical vest-and-sell; the group's stake actually grew from 604,699 shares in 2022 to 1,238,337 in 2026 as grants outpaced sales.
- Pay is the alignment. About 91% of the CEO's $23.0M package is equity, and its realized value swings hard with the stock — but no headline pay metric is a per-share measure.
Capital allocation
All free cash flow goes to buybacks — and the price has halved, so each dollar buys more
What $1.8B of buybacks retires, by price paid
| Episode | Price/sh | Shares retired (M) |
|---|---|---|
| 1Q25 accelerated (ASR) | $176.02 | 10.2 |
| FY2025 blended | $157.00 | 11.5 |
| At today's $88.92 | $88.92 | 20.2 |
The same cash retires ~75% more stock at $89 than at 2025's blended price.
- The accelerant. Gross diluted shares fell ~33% since 2021, to 133M by 1Q26. At $89 the same $1.8B retires ~20M shares versus ~11.5M at 2025's blended price — a lower price directly helps the holder.
- The discipline caveat. Management paid $176 in early 2025, barely a year before $89; ~4.4M shares were retired near the peak. The completed $4B program averaged ~$91 — close to today's price.
- No dividend. Over 95% of free cash flow has gone to repurchases, with $2.17B of authorization still running through 2027.
Margin of safety
A ~15% owner's yield that prices in flat-forever cash flow — with one real caveat
12.2%
FCF yield on enterprise value14.9% on market cap
~8×
EV / FY2026e free cash flow
$16.5M
FY2025 cash taxes paidvs $145.0M book provision
$814M
NOL + credit shield remainingdepletes over time
At ~$89 the price embeds free cash flow staying roughly flat in perpetuity.
- At about $89 GoDaddy's roughly 12.2% free-cash-flow yield on enterprise value implies free cash flow staying roughly flat-to-slightly-declining in perpetuity at a 10% discount rate, even as management guides mid-single-digit revenue growth and a 20%-plus free-cash-flow CAGR;
- yet that reported free cash flow is flattered by FY2025 cash taxes of just $16.5 million (1.6% of $1,020.0 million pretax income) against a $145.0 million book provision, a $571.2 million net-operating-loss and $243.0 million credit shield that will lift cash taxes and lower free cash flow as it depletes.
- The near-term counter. Normalizing cash taxes is a headwind above $100M a year (~$128M) that pulls guided FCF from ~$1.8B toward ~$1.7B — but management guides FY2026 FCF up ~14% to ~$1.8B, so the step-up has not yet arrived.
What's priced in
The market is split: targets run $83 to $190 against an $89 quote
Sell-side price targets vs the current quote
Low
$83
Median
$100
Mean
$112
High
$190
16 analysts, no sells, 8 holds — the cash case is accepted, the growth is doubted.
- Scenarios. Bear (cash taxes normalize, ARPU slows): free cash flow roughly flat, value around-to-below $89. Base (the guide extended): mid-teens per-share growth, modestly above $89. Bull (FY2027 drags roll off): well above $89.
- What's embedded. At ~8× EV/FCF the price assumes flat-forever cash flow, while management guides ~6% revenue growth and a 20%-plus free-cash-flow-per-share CAGR — a value buyer is paid for the business merely not to decline.
- The strict read. Normalize cash taxes and expense stock compensation and the owner's yield falls from ~15% toward ~10% — still cheap for the quality, but no longer a screaming discount.
What to watch
A cash-compounding franchise at a value price — or a maturing business monetizing a shrinking base harder each year.
- 01Cash taxes paid: the year they step up materially toward the ~14% book rate is the year the free-cash-flow yield stops being flattered.
- 02Domains under management and share of the global base: a faster slide points to funnel erosion rather than deliberate pruning.
- 03ARPU and the $500-plus customer cohort: stalling ARPU against a flat base would remove the main source of growth.
- 04FY2027 revenue as the .CO and aftermarket drags lapse: no reacceleration means the deceleration is structural, not temporary.
This distills a guided study built chapter by chapter — financials, moat, debt, ownership, and valuation.
Compiled from the full report · 2026-07-19 · For information, not investment advice.