GDDYNYSEThe short version
GoDaddy Inc.
GoDaddy is the world's largest domain registrar and a subscription platform for small-business web presence — websites, email, payments and marketing — serving about 20 million customers and generating roughly $1.6 billion of annual free cash flow.
The shares doubled to a $214 peak in January 2025, then gave it all back — down about 58% to $89 by mid-2026 — while free cash flow set a fresh record.
$88.92
Share price
$12.5B
Equity value
$4.95B
FY2025 revenue
12.6%
Free-cash-flow yield
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The statements
A decade of rising cash on a low-capital, recurring-revenue base
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 →As reported: revenue, margins, net income, EPS and free cash flow, FY2020–FY2025.
- Revenue. Up 8.3% to $4.95 billion in FY2025 and roughly tripled over the decade; growth now comes from revenue per customer ($242, up from $203 in 2023), not from adding customers.
- Margins and earnings. Operating margin reached 22.8% and net income was $875 million, or $6.22 diluted — an earnings line that is lumpy where the cash line is not.
- Free cash flow. $1.58 billion in FY2025, higher every year for a decade, on capital spending under 0.5% of revenue; it exceeds net income because subscriptions are paid in advance.
Price vs cash
The price halved while the cash flow rose
Equity Value vs Trailing Free Cash Flow
Equity value fell about 60% to $12.5B; trailing free cash flow rose about 25% to $1.58B.
- Multiple, not cash. The market cut GoDaddy's equity value by about 60% while its free cash flow rose roughly a quarter and 2026 free cash flow is guided higher still, compressing the multiple from about 25 times free cash flow to under 8 — a re-rating of the price, not a downgrade of the cash.
- The counter. Part of the fall is rational: the 2026 revenue guide implies about 6% growth, Q4 bookings grew 5%, and the 10-K names AI as a risk that could remove the need to register a domain — a slow grower with terminal risk can deserve 8x, not 25x.
Where growth comes from
All the growth is price per customer, not more customers
Revenue per Customer vs the Unit Base (2020 = 100)
Revenue per customer up about 42% since 2020; customers and domains roughly flat to down.
- All ARPU, one segment. Revenue rose 16.4% over two years entirely on pricing and mix — customers down 2.9%, domains down 3.3% — concentrated in Applications & Commerce, at a 45.4% margin against Core's 33.0%.
- The counter, in the same breath. The unit decline is substantially deliberate pruning, retention held near 85%, and both customers (+13k) and domains (+598k) turned up in Q1 2026.
- The anchor risk. The domain that attaches 94% of customers is the same product the 10-K warns AI could make unnecessary — the central risk to cash being reliably higher a decade out.
Every dollar of GoDaddy's two-year revenue growth came from raising revenue-per-customer from $203 to $242 on a customer and domain base each shrinking about 3%, and that lift is concentrated in one higher-margin segment — Applications & Commerce, at a 45.4% segment-EBITDA margin and ~46% of segment EBITDA on ~38% of revenue — all resting on the domain that anchors 94% of customers, the same product GoDaddy's 10-K warns AI could make unnecessary.
What you actually earn
The double-digit yield is nearer 8.5% once fully charged
12.6%
Headline FCF yield
8.5%
After stock comp + normal tax-4.1 pts
-1% to +2%
Perpetual growth the price implies
~14%
2026 forward yield (the counter)
Reported $1,575.5M FCF, less $317.8M stock comp and a normalized tax on the $16.5M actually paid.
- Two honest charges. Reported free cash flow adds back $317.8 million of stock comp and rests on just $16.5 million of cash tax paid on $1,020 million of pretax profit — a shield that is running down. Charge both and the owner yield falls to about 8.5%.
- Priced for stagnation. At that burdened level the single-stage arithmetic implies owner cash flow grows roughly -1% to +2% a year forever — little room left for durable growth.
- The near-term counter. Management guides 2026 free cash flow to about $1.8 billion, a roughly 14% forward yield, so the business is not yet in terminal decline.
GoDaddy's headline 12.6% free-cash-flow yield shrinks to about 8.5% once stock comp and a normalized cash tax are charged against the $16.5 million of cash income tax it actually paid on $1,020 million of pretax profit, and at that burdened level the price implies owner cash flow grows only about -1% to +2% forever — a yield already priced for terminal stagnation rather than the clean double-digit bargain the headline suggests.
Segment economics
The higher-margin software layer is doing the lifting
FY2025 Revenue by Line
Core: Domains$2,310.5M47%
Applications & Commerce$1,889M38%
Core: Hosting & other$751.6M15%
Applications & Commerce is 38% of revenue and the part still compounding at a double-digit rate.
- Two segments. Applications & Commerce grew 14% to $1.9 billion at a 45.4% segment margin; the larger Core platform grew 5% at 33%. A dollar shifting to A&C lifts the blend twice over.
- Payments flywheel. GoDaddy Payments processed $3.4 billion of volume, up 31% — wiring the company into daily cash flow, a deeper switching cost than an annual renewal.
- The disclosure gap. GoDaddy withholds the net-revenue-retention and standalone payments figures peers like Wix report, so per-customer durability rests partly on a metric it keeps to itself.
The shrinking base
The customer count fell on purpose, not from erosion
Why the base shrank
| Deliberate lever | Period | Stated effect |
|---|---|---|
| Eliminated deep discounts | 2023–24 | Fewer low-intent adds; higher-quality cohorts |
| Hosting divestitures | 2023–24 | Removed non-core, lower-retention accounts |
| End-of-life migrations | 2023–25 | Churn at renewal, mainly one-product domains |
| Retired a low-value product | Q1 2026 | Little impact on bookings |
Retention held near 85%; customers and domains both turned up in Q1 2026.
- Quality over quantity. The base slipped from 21.0 million (2023) to 20.4 million while ARPU rose from $203 to $242; customers spending over $500 a year grew toward 10% of the total, at near-perfect retention.
- The tap still works. Late-2025 promotions added over 100,000 gross customers and lifted domain registrations 6%; the count and domains under management both turned up in Q1 2026 (+13,000 and +598,000).
- What it still owes. A return to customer growth guided for 2025 arrived, barely, in 2026 — pruning is a one-time reset, after which the case leans again on the ARPU lever.
Cash vs profit
Operating cash climbs in a straight line where profit swings
Net Income vs Operating and Free Cash Flow
Operating cash flow rose every year for a decade; reported net income did not.
- Cash is the cleaner signal. For a business paid in advance, cash leads profit: FY2025 free cash flow of $1.58 billion exceeded net income of $875 million, and capital spending was under 0.5% of revenue.
- A customer-funded float. $3.3 billion of deferred revenue — about eight months of sales — funds the model; receivables run about six days and payables fell, so no working-capital tricks flatter the cash.
- No book equity to anchor on. Tangible common equity is about -$4.4 billion; the asset is the recurring-cash annuity, not the balance sheet. Net debt is $2.7 billion, roughly 1.7x free cash flow.
Buybacks
Nearly all the cash buys back stock — the count is really falling
Weighted-Average Diluted Shares
Down about 18% from the 2021 peak — real per-share accretion.
- A near-pure buyback machine. No dividend, no acquisitions since 2022; more than 95% of free cash flow now retires stock, cutting the audited diluted count 18% from its 2021 peak (the company's 'gross' 31% figure is before dilution).
- Price discipline is the weak spot. The completed $4-billion program averaged about $91, but 2025's heaviest buying ran near $162–$176, months before the stock halved — deployed mechanically, not cheaply.
- A better recent mark. In Q1 2026, near the lows, GoDaddy bought 3.0 million shares at about $93; whether the remaining $1.9 billion authorization is deployed as well is the record to watch.
Track record
Management delivers the cash targets and trims the growth ones
2022–2024 Plan Scorecard
| Metric | Target | Outcome |
|---|---|---|
| Revenue growth | 10%+ CAGR | Missed (~6%) |
| Normalized EBITDA margin | 24–26% | Exceeded (25→29%) |
| Cumulative unlevered FCF | ~$3.8B | Met |
| FCF per share growth | 20%+ CAGR | Met (~22%) |
The current plan tracks the same way: cash and margin ahead, revenue at the low end.
- Cash met, growth missed. Across two multi-year plans, GoDaddy hit or beat every cash and margin target and undershot the revenue one — converting slower growth into margin and per-share cash.
- Pay follows the cash line. The 2025 bonus dropped revenue as a metric, ran on bookings and EBITDA for a 113% payout, and say-on-pay passed with 92.4%; half of long-term pay vests on relative shareholder return.
- Insiders sell, never buy. Every open-market insider trade on record is a sale — about $57 million, heaviest in 2025 near the highs — with no purchases through the drawdown.
Ten years out
Even a declining decade leaves revenue near today's level
FY2035 Revenue Scenarios
Bear (-2%/yr)
$4.0B
Base (+5%/yr)
$8.1B
Bull (+7%/yr)
$9.7B
Revenue is lower than today only if pricing power reverses and the unit base erodes together for years.
- The bar is structural. With retention near 85% and more than 89% of revenue recurring from existing customers, revenue is lower in a decade only if pricing power reverses and units keep eroding, together, for years.
- Direction, high confidence. The report puts roughly 90% confidence on year-ten revenue being higher; free-cash-flow-per-share is harder, given a depleting tax shield and stock comp that must be repurchased first.
- The tail is real. That downside is the AI-disintermediation risk the 10-K names — a tail, not the central path, and what the residual doubt represents.
Liquidity
Liquid stock and long-dated options clear the practical filters
A round trip: doubled to a January-2025 peak, then gave it all back through mid-2026.
- Deep underlying. Twenty-day average dollar volume is about $211 million a day; a 1% position (~$71 million) could be exited in two to four sessions, with zero zero-volume days in sixty.
- Long-dated options. Listed LEAPS run to January 2028 — well past a one-year threshold — with 30-day implied volatility near 47% (52-week range 24–66%) and a put/call open-interest ratio near 0.74.
- One caveat. Depth concentrates in the front months; the far-dated LEAPS strikes trade at materially wider spreads than the penny-wide equity.
The price today
At $89, a double-digit cash yield against a company-named AI risk
Share Price vs the Street's Marks
52-week low
$75
Today
$88.92
Median analyst target
$100
Average analyst target
$112
Sixteen analysts: eight holds, eight buys or better, no sells; the debate is the multiple, not the estimates.
- The arithmetic. At about $89 the equity is ~$12.5 billion, ~$15.2 billion of enterprise value after $2.7 billion of net debt — a 12.6% free-cash-flow yield on equity, near 10% on enterprise value, 8.5% fully burdened.
- Two-sided by construction. A market-value drawdown far larger than the cash hit is the setup this kind of buyer hunts; the honest offset is that a ~6% grower with genuine terminal risk can deserve 8x, not 25x.
- What decides it. Re-accelerating bookings, a returning customer count, or visible Airo and Agent Name Service revenue would argue over-correction; further estimate cuts or a shrinking domain funnel would say the market was right.
What to watch
A rare gap between price and cash, shadowed by a risk the company names itself
- 01Total customers and ARPU: sustained net additions with ARPU still rising confirm deliberate pruning; a falling count while ARPU flattens says erosion.
- 02Cash tax paid: climbing toward the high-teens as loss carryforwards deplete pulls the burdened yield toward 7%.
- 03Buyback price: the remaining $1.9 billion deployed near today's levels rather than chased into a rally.
- 04Airo and Agent Name Service: any disclosed attach or revenue sizes GoDaddy's answer to the AI threat.
This distills a guided study of GoDaddy built chapter by chapter — the statements, the cash, the moat, and the price.
Compiled from the full report · 2026-07-13 · For information, not investment advice.