Chapter 4

Capital Allocation

GoDaddy has turned itself into a near-pure buyback machine. It pays no dividend, has made essentially no acquisitions since 2022, and now routes more than 95% of free cash flow into repurchasing its own stock — shrinking the diluted share count from a 171-million peak to 141 million [1]. That converts the cash flow of the prior chapters into per-share value. The open question for a reader who cares about buyback quality is price discipline, and the record is two-sided: a four-year program averaging roughly $91 a share, but its single largest year spent near the top.

From buying growth to buying shares

For most of its public life GoDaddy grew partly by acquisition. It bought Host Europe Group in 2017 (the year investing cash outflow reached $1.6 billion), the Neustar registry business and Poynt — now GoDaddy Payments — in 2020–2021, and a string of smaller assets. Business-acquisition spend ran $424.7 million in 2020 and $367.7 million in 2021 [2]. Then it stopped: business acquisitions fell to $72.5 million in 2022 and to zero in each of 2023, 2024 and 2025 [3].

The capital that once bought companies now buys stock. Repurchases climbed from $458.6 million in 2019 to $1,294.6 million in 2022 and $1,601.9 million in 2025 [4]. Cumulative repurchases since January 2022 reached about $5.1 billion by the first quarter of 2026 [5].

Source: derived from reported cash-flow statements — FY2021 10-K [6]; FY2023 10-K [7]; FY2025 10-K [8].

This is a defensible pivot. A domain-and-web-presence franchise that already earns a double-digit free-cash-flow yield on its own equity has a high bar for external deals, and management has chosen to clear that bar by buying the asset it knows best. It also removes the integration risk that inorganic growth carries. The cost is optionality: with M&A shelved, the durability of the business now rests almost entirely on the organic engine examined in Moat and Durability, not on redeployment into new lines.

The share count is genuinely coming down

The buybacks are large enough to move the count that matters. Weighted-average diluted shares fell from a peak of 171.1 million in 2021 to 140.6 million in 2025, a decline of about 18% [9][10]. Because the base keeps shrinking, per-share value builds faster than net profit over time: from 2022 to 2025 net income attributable to GoDaddy grew from $352.2 million to $875.0 million while diluted earnings per share climbed from $2.19 to $6.22 — a near-tripling against a roughly two-and-a-half-fold rise in profit, with the difference coming from the smaller share count [11][12].

Source: weighted-average diluted share counts, FY2022 10-K (2020–2022) [13] and FY2025 10-K (2023–2025) [14].

One qualifier belongs next to that number. The company frames the reduction more generously — a 31% cut in cumulative gross fully diluted shares [15] — but "gross" counts every share bought back before netting the stock issued to employees. Stock-based compensation ran $317.8 million in 2025 (Cash Quality), and offsetting that dilution absorbs a meaningful slice of the repurchase budget each year. The 18% decline in the audited diluted count is what actually accrues to a shareholder; it is real, but it is not 31%.

The price paid tells a less flattering story

The completed $4-billion authorization repurchased 43.7 million shares at an average price of $91 — close to where the stock trades today [16]. Taken alone that looks disciplined. But the average is anchored by cheap buying in 2022 and 2023; at the margin, the most recent large tranches were done at much higher prices. GoDaddy used accelerated share repurchase agreements to buy 1.4 million shares at $139.65 in 2024 and 4.4 million shares at $176.02 in 2025 [17]. The 2025 ASRs deployed the final $767.4 million of the old authorization in the first quarter, settling in April 2025 just before the shares began their slide toward $89 [18].

Sources: FY2025 10-K equity note (2024 and 2025 ASRs) [19]; Q1 2025 deck ($4B program average) [20]; Q3 2025 10-Q (9-month open-market) [21]; Q1 2026 10-Q [22].

The pattern in that table is the concern. Repurchase intensity did not fall as the price rose — it climbed. 2024, when the stock spent much of the year in the $100s, was the lightest recent buyback year at $676.5 million [23]; 2025, which opened near the peak, was the heaviest at $1,601.9 million. Buying 8.6 million shares for $1,392.6 million across the first nine months of 2025 — an average near $162 — was money spent close to the top [24]. This is the honest answer to whether management exploits a depressed price to shrink the count: it shrinks the count reliably, but through 2025 it deployed capital mechanically, roughly in line with cash generation, rather than leaning in when the stock was cheap.

The most recent data point cuts the other way. In the first quarter of 2026, with the shares near their lows, GoDaddy bought 3.0 million shares for $279.7 million — an average of about $93 [25]. That is the first large tranche in two years bought at a price a value buyer would welcome, and it is what makes the read forward-looking rather than settled.

Funded by cash, not leverage

Whatever one thinks of the timing, the buybacks have not been financed by stretching the balance sheet. GoDaddy issued no new term loans in 2025 and repaid $24.6 million; the entire $1.6 billion of repurchases came out of the year's operating cash flow, and financing outflows ($1,587.1 million) tracked the buyback almost exactly [26]. Net debt has held near $2.7 billion — about 1.7 times free cash flow (Cash Quality) — so the return of capital has not raised leverage. There is no dividend: the company has never paid one and does not intend to, leaving repurchases as the sole channel for returning cash [27]. For an investor who will tolerate modest leverage when the cash yield is high, that combination — self-funded buybacks, stable net debt, no dividend obligation — is the right structure.

The read

Management's intent is not in doubt. It reauthorized $3 billion of repurchases through 2027 in April 2025, calling it a reflection of "enduring confidence" in the business [28], and $1,885.5 million of that authorization remained available at the end of the first quarter of 2026 [29]. GoDaddy is a committed, count-shrinking allocator that returns nearly all of its free cash flow and funds it without leverage — which, at a free-cash-flow yield near 10%, is accretive per share almost regardless of entry price.

The weaker point is execution. Through 2025 the company bought on a schedule set by cash generation rather than by valuation, and it completed a program at $176 months before the stock halved. That is a real mark against the "exploits weakness" version of the buyback case, and it is the strongest fact a bull on capital allocation has to concede. What would change the read is simple to watch: whether the remaining $1.9 billion authorization is deployed harder at today's prices than it was at last year's. The first quarter of 2026, at roughly $93 a share, is an encouraging start; a second and third quarter of the same would settle the question in management's favor.