Prepared remarks
Welcome to GoDaddy's First Quarter 2026 Earnings Call. Thank you for joining us. I'm Christie Masoner, VP of Investor Relations. And with me today are Aman Bhutani, Chief Executive Officer; and Mark McCaffrey, Chief Financial Officer. Following prepared remarks, we will open up the call for your questions. On today's call, we will be referencing both GAAP and non-GAAP financial measures and other operating and business metrics. A discussion of why we use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their GAAP equivalents may be found in the presentation posted to our Investor Relations site at investors.godaddy.net or in today's earnings release on our Form 8-K furnished with the SEC. Growth rates represent year-over-year comparisons unless otherwise noted. The matters we'll be discussing today include forward-looking statements, such as those related to future financial results and our strategies or objectives with respect to future operations.
These forward-looking statements are subject to risks and uncertainties that are discussed in detail in our periodic SEC filings. Actual results may differ materially from those contained in forward-looking statements. Any forward-looking statements that we make on this call are based on assumptions as of today, April 30, 2026. And except to the extent required by law, we undertake no obligation to update these statements because of new information or future events. With that, I'm happy to introduce Aman.
The operator provided instructions to participants for the conference call and the question-and-answer session.
Good afternoon, and thank you for joining us. At GoDaddy, our purpose is to make opportunity more inclusive for all. We serve over 20 million customers globally, helping them establish their identity, build their presence and grow their business. We do this through an integrated platform that brings these capabilities together in a seamless AI-powered experience helping customers move from their idea to execution quickly and at a compelling value. Starting with Q1 results. We delivered revenue growth of 6%. This performance, combined with continued operational execution and structural leverage drove meaningful expansion in normalized EBITDA margin to 33%, up over 200 basis points. This underscores the durability of our model and continued progress towards our financial North Star generating strong free cash flow growth of 15%, while remaining committed to delivering long-term shareholder returns.
As AI-driven innovation accelerates, customer expectations for speed, simplicity and measurable outcomes are rising. Customers are increasingly using large language models across their workflows and getting familiar with chat-based interfaces. We are leaning into this shift, positioning GoDaddy as the platform that helps entrepreneurs turn intent into action through AI-powered experiences and outcomes. Our AI transformation builds on our core strengths of a trusted global brand, leadership in domains, scaled infrastructure, proprietary data, strong engineering talent and a world-class care organization. Together, these form a differentiated platform that allows us to deliver a seamless one-stop shop solution for entrepreneurs. We are moving quickly and intentionally with focus on delivering measurable outcomes for entrepreneurs. The positive impact of our AI transformation is clear in three areas: first, the adoption and monetization of our AI-native products; second, the expansion of Agent Name Service as a new identity layer for the Agentic Open Internet; and third, the use of AI to drive operational efficiency.
First, we are making strong progress on our AI-native products. Airo AI Builder introduced last quarter on Airo.ai is an AI-native experience that enables customers to move from idea to execution in minutes, automatically creating websites, applications and core business capabilities across identity, presence and commerce. I work directly with customers using Airo AI Builder on a weekly basis and the customer feedback is shaping our roadmap and accelerating development. Our customers are looking for simple, integrated solutions for their core jobs to be done, and we are delivering that through Airo AI Builder. It is delivering strong early adoption and monetization is already scaling with customers. This new Airo AI Builder product offering has rapidly scaled to $10 million plus in annualized bookings run rate within weeks of its beta launch. While still early, the pace of adoption and quality of customer interaction is strong.
Customers are building, publishing and purchasing incremental credits as they deepen their use of the product. Momentum continues to build week after week as we expand Airo AI Builder's functionality and distribution. We are expanding distribution of Airo AI Builder on godaddy.com and have begun selling it through Care. In Care, we drive higher adoption of premium plans compared to our online channels and receive direct customer feedback, both positive and constructive to improve the product. As a next step, we are ramping targeted paid marketing in May, funded through efficiencies elsewhere in the business. We are thoughtfully monitoring the mix between new and existing products as we scale, with a focus on optimizing overall customer value and maintaining margin discipline. The second major product initiative we introduced last quarter is the upgrade of Websites + Marketing, bringing AI-native capabilities into the product, while maintaining strong cost discipline for both customers and GoDaddy.
This upgrade combines AI-driven capabilities with a powerful editor enabling customers to create and manage their presence more efficiently. The domains funnel remains our largest distribution lever for new customers. And in this quarter, we tested the upgraded product within that path. Early results exceeded our expectations and validated the direction of the product. We are excited to get the upgraded functionality in front of all our customers and are using experimentation to inform improvements on the experience. Our teams have embraced an AI-native approach across our customer products, and we are making meaningful progress delivering customer value. We are expanding these capabilities at a rapid pace, while maintaining disciplined investment as we scale distribution and marketing, we are confident in our ability to compete effectively. The second component of our AI transformation is Agent Name Service or ANS.
We are working with large players and seeing continued interest in this technology. ANS extends the role of domains as a digital identity provider in an Agentic Open Web. We signed a couple of partnerships over the last quarter with real-world use cases and are working hard on aligning key players on the open standard and the use of Domain Name Service or DNS for agent identity and discovery. Championing the open standard and partnerships are key to getting to critical mass of support of the open standard and we are encouraged by early results. Non-GoDaddy agents in GoDaddy's ANS implementation now number in the thousands. DNS is the foundation of identity on today's Internet, and domains are uniquely positioned to play a role in agent identity and trust extending domain relevance into the future. Third, we are transforming GoDaddy into an AI-native company by deploying AI across our operations to improve speed, efficiency and customer outcomes.
We are driving the most immediate impact in software development where AI is enabling the rapid creation of customer-facing applications with fewer dedicated teams. We are also testing the replacement of smaller third-party SaaS tools with internally built solutions on Airo AI Builder, particularly across corporate functions with the goal of reducing both cost and operational complexity. In Care, we are advancing to the next phase of AI-powered automation. In Q1, we achieved key proof points across both support and sales. On the support side, we launched Airo Care, a new AI-native support technology across voice and chat that handles a wide range of customer queries. We validated it against our existing offering, delivering strong improvements in resolution rates. Our first test improved resolution rate by approximately 50%. Subsequent tests demonstrated that Airo Care can equalize the resolution rates between English and non-English markets improving performance in non-English markets by over 150% and strengthening Care as a global competitive advantage.
Airo Care is now rolled out to more than 50 markets and 20 languages. We will continue to expand use cases each month, while maintaining a strong focus on customer satisfaction, resolution rate, sales and cost. On the sales side, our AI-native commerce Airo sales agent makes voice calls and handles the entire commerce sales experience without human intervention. We have optimized the agent over the last few months and last quarter, it delivered conversion rates comparable to human-assisted sales for smaller leads. These are exciting milestones, and we plan to scale these capabilities throughout the year. Alongside these AI transformation initiatives, we continue to execute on pricing and bundling, seamless experience and commerce. These programs continue to drive improvements in conversion, attach and renewal rates. I want to briefly revisit the promotional offer we discussed last quarter.
We refined the program to better balance customer acquisition and bookings, and these efforts are delivering results. The promotions drove strong gross customer adds and resulted in new domain registrations accelerating by 6% for independent and partner customer populations. Our strategy remains consistent. We are focused on attracting high-intent customers who attach, convert and grow over time, optimizing for long-term value. Towards this end, we also took the opportunity to remove a lower-value product offering this quarter. This partially offset the customer growth from the promotional offer, but did not materially impact bookings. In closing, we are operating in a dynamic environment with rapid change and leaning into our strengths. We serve more than 20 million customers globally, our domains business and our unwavering focus on microbusiness customers remains foundational, supported by our scaled integrated platform that connects identity, presence and commerce.
This combination of global reach, proprietary data, seamless technology and our Care organization creates deep customer insight and consistent execution. Our model is built around attracting high-intent customers and helping entrepreneurs start and grow their ventures over time. This drives durable growth and expanding margin and strong compounding free cash flow. We continue to execute with discipline. And as we look ahead, our path forward is clear. We have a large market opportunity, a strong competitive position and the financial flexibility to continue investing to deliver enduring shareholder value. With that, here's Mark.
Thanks, Aman, and good afternoon, everyone. In the first quarter, our model continued to demonstrate its durability, driving operating leverage, expanding margin and generating attractive, compounding free cash flow. Supported by a strong balance sheet, we had the flexibility to invest in innovation, while still maintaining a disciplined capital allocation framework. We delivered revenue at the high end of our guidance, while expanding our normalized EBITDA margin by over 200 basis points. At the same time, we generated strong free cash flow of $474 million, bringing our trailing 12-month free cash flow to $1.68 billion. We deployed capital through share repurchases, reducing fully diluted shares outstanding to 133 million. Our focus remains on consistent execution and delivering solid financial results as we continue to advance our AI transformation. For the quarter, total revenue grew 6% on both a reported and constant currency basis to $1.3 billion, and ARR grew 6% to $4.3 billion.
International revenue grew 7% to $416 million. For our high-margin A&C segment, we drove 12% growth in revenue to $0.5 billion on continued solid attach of our subscription-based solutions. A&C ARR grew 10%, and this segment now represents approximately 40% of our total business. Segment EBITDA margin improved 110 basis points to 45% on product mix. Our Core Platform segment delivered revenue growth of 3% to $769 million, on 5% growth in primary domains with a stronger mix towards higher-priced non-.com TLDs. This was partially offset by softness in non-core GoDaddy hosting, the .CO registry contract expiration and tougher compares in aftermarket. Segment EBITDA margin expanded 150 basis points to 33% on product mix. Total bookings grew 3% to $1.5 billion, reflecting a few points of impact from our promotional offer we shared last quarter, the .CO registry contract expiration and lapping of prior year aftermarket strength.
A&C bookings grew 9% and Core Platform bookings declined 1%. As we outlined in February, this quarter reflects the peak impact of both these dynamics, and excluding any FX impact, we expect bookings and revenue growth rates to be at or above parity for the remainder of the year. Our focus on attracting and growing high-intent customers combined with conversion improvements is driving durable growth and higher customer quality. We are driving increased conversion into primary domains and higher attach through Airo. At the same time, we continue to deliberately manage our product portfolio, exiting lower-value offerings and reallocating resources towards higher value opportunities. And our newer Airo cohorts are demonstrating that higher value with second product attach accelerating 30% faster relative to non-Airo cohorts. These cohorts are contributing to the increase in the number of customers spending more than $500 annually, which represents approximately 10% of our customer base.
Higher attach and retention rates above 85% drove ARPU growth of 9% to $246. As we look ahead, Airo AI Builder is beginning to contribute directly to bookings. As Aman noted, this offering is already generating millions of dollars in annualized run rate organically and without dedicated marketing support. In parallel, ANS extends our leadership in a digital identity, positioning us to participate in the next evolution of the Internet infrastructure. As the architecture of the Internet evolves, our current strengths remain as relevant as ever, and our AI transformation positions us to consistently deliver profitable growth and capture value going forward. Turning to margins and free cash flow. Normalized EBITDA grew 13% to $414 million, delivering 210 basis points of margin expansion to 33% and exceeding our guide for the quarter. Operational execution, supported by AI-driven efficiencies and favorable product mix continues to drive margin expansion.
Our expanded margin reflects the efficiency of our model and gives us the flexibility to invest in our AI transformation, while maintaining a strong balance sheet and a durable free cash flow profile. Free cash flow grew 15% to $474 million, with a normalized EBITDA to free cash flow conversion of greater than 1:1. We exited the quarter with $1.3 billion in cash and total liquidity of $2.3 billion. Net debt was $2.6 billion representing net leverage of 1.4x on a trailing 12-month basis and within our target range. On shareholder returns, we repurchased 3 million shares during the quarter, totaling $280 million. Since 2022, our share repurchase programs have resulted in a gross reduction in fully diluted shares outstanding of over 31%. And we ended the quarter with 133 million shares outstanding. Turning to outlook. We are reaffirming our full year 2026 guidance provided in February and expect total revenue to be within a range of $5.195 billion to $5.275 billion, representing growth of 6% at the midpoint of the range.
As a reminder, our full year revenue guide incorporates just over 200 basis points of cumulative impact from the expiration of the .CO registry contract, our consistent exclusion of high-value aftermarket transactions and the impacts of our product evolution and our promotional offer. For Q2, we are targeting total revenue of $1.285 billion to $1.305 billion, representing 6% growth at the midpoint of the range. For both the second quarter and the full year, we expect A&C revenue growth in the low double digits and Core Platform growth in the low single digits. For Q2, we are projecting a normalized EBITDA margin of approximately 33%, and we are reaffirming our target of over 33% for the full year. This reflects our ability to drive continued operational leverage and AI-driven productivity gains, while increasing our investments in our AI-native products, marketing and compute costs. For the full year, we expect normalized EBITDA to maintain a greater than 1:1 conversion to free cash flow, and we reaffirm our full year free cash flow target of approximately $1.8 billion.
We continue to be on track to exceed our free cash flow North Star CAGR of 20%. On capital allocation. We operate within a disciplined, return-based framework and have deployed greater than 95% of our free cash flow over the last four years towards share repurchases. Our continued commitment to returning capital is a clear expression of confidence and the strength of our cash flow and the long-term value we are creating. We remain focused on allocating capital to its highest value uses with a priority on driving long-term shareholder returns. In closing, the fundamentals of our business remain strong with consistent engagement and durable drivers of ARPU, supporting our long-term trajectory. As we move forward, we remain focused on disciplined execution and continued progress toward our North Star. We look forward to talking about these and other updates at our investor event later this year. I'll now turn it over to Christie to open the line up for questions. Thank you.
Our first question comes from the line of Vik Kesavabhotla from Baird.
Questions and answers
Can you hear me okay?
We can.
Yes.
Great. So my first one is on the customer base. And I'm curious, as you navigate all these changes in the product portfolio and in your go-to-market strategy, how do you ensure that you're attracting the right type of customer to the platform? And I think you mentioned in the prepared remarks that customer quality is increasing. Be great if you could elaborate some more on how you measure customer quality and what you're observing in the behavior of some of these recent cohorts that's informing your confidence in the strategy right now? And then separate from that, my second question is on, you talked about all these ways that you're using AI internally across the company's operations and some of the proof points that you're seeing already. As you continue to scale those initiatives, how should we think about the opportunity for those efficiencies to flow through to EBITDA and free cash flow in the near term versus being reinvested back into the business to support your product and marketing needs. And I realize it's probably a tough question to answer in a ton of detail quantitatively, but it'd be great to hear your philosophy around how you're balancing those dynamics during what seems like a pretty significant period of change for the business.
Vik, let me take the first one, and Mark can take the second. On the cohorts that we're attracting, our strategy is to attract high-intent customers. The way we define high intent is by looking at the traffic coming in by channel and then looking at the activation and attach of other products. And what we know from years and years of data across our 20 million customers is that if we see that activation and attach of other products, we are going to see good renewal at the end of the one-year term. So that's what really gives us confidence. That's what we're looking for. When we make trade-offs and decisions in the business to attract new customers and to retire certain products or cohorts, what we're looking for is the quality of those customers, the intent of those customers and measuring it through the activation of the other products that they have.
Yes. On the operations, we are balancing several different factors here. One, we have the ability to expand our margins; we have for the past few years. We're continuing to see operational efficiencies by the adoption of AI internally. And then we're paying attention to the disciplined approach we've had in the past around investing in innovation, but using data points that show our path to return before we invest. So we're taking a very disciplined framework approach. And I would say we're balancing it with what we think the long-term return is going to be when we make those investments. For example, we have talked about increasing marketing around AI Builder through the remainder of the year because we are seeing the data points that are showing that return. And while those returns will be immaterial for the current year, we do know the potential to drive future growth for us is there and that makes that return appropriate.
I would add, the areas that we're looking at whether it's software development or Care or our use of applications or marketing, all of these areas are accelerated with AI and we see great opportunity to deliver a better outcome for our customers at a lower cost this year and into the future.
Our next question comes from the line of Ken Wong from Oppenheimer.
Can you guys hear me?
Yes.
Yes.
Fantastic. First question, on the $10 million plus of Airo Builder ARR — a lot of your kind of stand-alone AI Builder platform, we've seen them scale up extremely fast. And I realize it's super early, but what's the right way to think about kind of what this business or this product could potentially grow to?
When we talk about the $10 million run rate, we're really talking about annualized bookings. This is very early data. This includes both subscriptions and credits or tokens. We see customers come in by a subscription, engage with the product, enjoy the product, and they keep coming back, improving the website or whatever actions they're trying to complete with the AI Builder. I work directly with a few customers; I have sessions with live customers weekly. What's powerful about Airo AI Builder for our customers is that many customers have ideas but it's hard for them to go through menus and templates and figure it out. If they can just explain in natural language what they want, Airo AI Builder does it for them; it's a compelling, efficient experience. The same subscriber ends up using it more and more, publishing, republishing and buying more credits. That's the run rate we're seeing. In terms of what it could be, it's super early and we're excited about the early adoption.
We just started selling it in Care. We're going to add paid marketing starting this month. We also have the large funnels with domains and website paths which we haven't fully leveraged yet. There's a lot to do to get to the long-term potential run rate, but we're excited about where we started. We're also closely monitoring how customers use this product and whether it changes how they use our other products, because that mix will be important for us as well.
I appreciate the color there. And then just a follow-up also on AI opportunities. You mentioned ANS opening new infrastructure opportunities. And now with Airo AI Builder pushed in your back end beyond websites, is there the potential to potentially utilize GoDaddy's hosting capacity for additional workload, AI workloads, given the market scarcity there? I mean we're sort of having a moment in hosting all of a sudden. And it seems like that's an area you guys could potentially capitalize on?
Airo AI Builder does use GoDaddy hosting. It's one of our competitive differentiators. We can provide hosting at scale that's secure and cost-effective. We're excited about taking something like Airo AI Builder and powering it with our hosting solution. We also have plans to do more with hosting directly for our customers, but we are not aiming for enterprise-focused hosting outside our core customer base. We are very focused on the customers we serve; many new entrants in the AI space are serving enterprises. We have a unique relationship with this type of customer, and we're leaning into that.
Our next question comes from the line of Trevor Young from Barclays.
Great. First one for Mark. On your comments on bookings growth at or above parity with revenue growth for the balance of the year, is there a particular shape of the bookings curve to be mindful of? Q1 implicitly the low point, but will Q2 step all the way back up to where revenue growth is and 2H bookings a bit above that? Or is Q2 going to be maybe a tad ahead because it has an easier compare? And then second one on capital allocation: buybacks here in Q1 were well below free cash flow generation and the 95% payout stat that you've given. Meanwhile, cash at kind of the highest level since mid‑2021, if I'm not mistaken. Just any updated thoughts on capital allocation and buyback appetite with the stock at current levels? And in lieu of buybacks, any updated thoughts on M&A?
Thanks, Trevor. On bookings, growth rates should be on par or above. We're looking for that momentum throughout the remainder of the year. On capital allocation, don't look at any particular quarter; look at our history — it's a good indicator of how we approach this. We look quarter by quarter, make determinations, and buybacks remain a strong lever to return value to shareholders. Our track record of returning capital shows how we approach this, and our philosophy hasn't changed.
Our next question comes from the line of Mark Zgutowicz from Benchmark.
You just closed $10 million in annualized bookings run rate for Airo AI Builder within weeks of beta. Could you break down the unit economics there? What's the average transaction size? How much of that run rate is coming from credit top-ups versus the initial plan purchase? And what's the margin profile relative to legacy Websites + Marketing?
Overall, we remain committed to building a product that serves our customer and delivers gross margin and a price point that works for both our customers and GoDaddy. From day one, we've designed this product to be gross margin positive and to deliver appropriate economics. Regarding subscription versus credits, we're very early; this needs to bake and grow. There will be variability as we enter marketing and open channels and drive more traffic. It's too early to provide detailed disclosures on the split between subscription and credits. As for comparison to Websites + Marketing, we haven't fully rolled out the upgraded Websites + Marketing yet; that product focuses on a slightly different set of customer needs and economics. We tested that upgraded experience and it performed well. The current established Websites + Marketing champion will take time for challenger testing and to reach parity on metrics like published rates. We expect to test and iterate the new version and expect it to win sometime this year.
Got it. And maybe a follow-up on the Websites + Marketing upgrade being tested in the domains funnel with solid early results. When should we expect pricing to be reimplemented at Websites + Marketing specifically, and can you quantify how much historical ARPU accretion has been attributable to Websites + Marketing versus other products?
On pricing for Websites + Marketing, because this is a significant upgrade and a lot of moving parts, we're moving from a template-first solution to one that balances editor capabilities and AI capabilities. That shift brings a different cost profile. Any pricing changes will wait until we reach parity on customer experience and metrics like published rates so we can be confident the new version delivers what customers expect. Once we've achieved that, we can consider pricing changes.
On the contribution to ARPU, we don't break out contributions by specific product because bundling makes it difficult; multiple products are involved. I will note that the pricing discussed is specific to Websites + Marketing and distinct from other bundling aspects. Bundling and pricing efforts across the business continue to contribute to ARPU, but we don't isolate Websites + Marketing's exact contribution publically.
Our next question comes from the line of Arjun Bhatia from William Blair.
Can you unpack A&C bookings growth? Was it largely impacted from the recent promotional activity in the quarter? Or is there anything else to call out? I'm trying to appreciate the deceleration and the timeline to inflected growth from initiatives like Airo and then pricing bundling historically.
Thanks, Willow. Nothing different than what we talked about last quarter. There are various aspects across our bookings that were impacted. Two specific to A&C are the go-to-market promotional offer and the allocation element when we bundle products together in the initial order that will impact A&C. And then the pricing and bundling related to the Websites + Marketing upgrade is another factor. Those are the two impacts on A&C bookings. As we go through the year, we expect some of that to pass. On revenue, the subscription nature of the business evens things out, but bookings peaked in Q1 given those dynamics.
Our next question comes from the line of John Byun on for Brent Thill at Jefferies.
Can you hear me?
Yes, we can hear you.
Just two questions. On the Airo AI Builder monetization, is it just the subscription and AI credits with the product itself? Or are you starting to generate anything from upsell or cross-sell by the GoDaddy products? And then a follow-up: international revenue growth seemed to slow a little bit to 7% — anything to call out there?
On the run rate for Airo AI Builder, that's just the subscription and credits for Airo AI Builder. We have not baked in attach or cross-sell to other GoDaddy products into that run rate yet. All of that is to come. Over the next few weeks, this product will become a bigger part of the GoDaddy ecosystem and you should expect additional bookings related to those customers over time. For now, we want to give you the cleanest picture of this new product. Regarding international revenue, last year we saw some larger aftermarket transactions that contributed to growth rates; we did not see similar large aftermarket transactions in Q1 this year, so the compare was tougher for Q1.
Our next question comes from the line of Ella Smith on for Alexei Gogolev at JPMorgan.
So first, I was hoping to ask about ANS. What do you think is GoDaddy's competitive advantage or right to win as it comes to the Agent Name Service, especially versus larger competitors?
The biggest thing about ANS is that agents that we believe will roam the Internet and grow in traffic should be registered on the Internet so destinations — websites, systems, platforms and other organizations — can recognize and trust them. If agents are not registered, it will be difficult to trust agents and to transact with them. Registering agents using Agent Name Service, which is backed by an open standard, helps address that. GoDaddy has a strong right to win because within the ANS open standard we use the Domain Name System for discovery. DNS is a universal directory that replicates everywhere; agent registries are appearing across companies, and connecting those registries to the single DNS directory enables broad discovery. If agents are placed under domain names in that directory, the domain becomes core to identity and trust for agents now and in the future. As the world's largest domain registrar, this role aligns with our core strengths. We're seeing good reactions from large players; they want to take time to understand it, but ANS is an elegant, scalable solution that already leverages existing Internet infrastructure, so nobody has to recreate a directory from scratch.
If I may, a follow-up about the Domain business: Is your intention to maintain or gain share? Or would you be willing to let some lower-LTV domain customers go at the expense of market share?
We have said we will let lower-LTV customers go because our focus is on high-intent customers. Looking at the Domains business, we remain the world's largest domain registrar by far. Over the last 30 years we've faced many competitive pressures — low-priced registrars, loss-leader strategies, free domains and disruptive technologies — and we continue to compete. Our experience shows that value is in the high-intent customer: someone who buys a domain and then uses other products. That behavior drives LTV for GoDaddy and drives our business. We're focused on attracting customers who demonstrate that intent and drive higher lifetime value.
Our next question comes from the line of Naved Khan from B. Riley.
I'm curious, Aman, how much of the traffic are you exposing to the Airo Website Builder? Is this still something you are testing and iterating or have you rolled it out broadly? And on the App Builder marketing plan: you said you plan to put marketing dollars behind it. How significant is that and what will it take to ramp marketing allocation materially?
From godaddy.com, we are still sending only a small amount of traffic into the new Airo experience. Our largest funnels on godaddy.com are the domains path and the create (website) path, and both currently route to the established Websites + Marketing champion. Over this year, we expect that to evolve and more traffic will go to the new products, which will grow usage and dollars associated with them. So on godaddy.com it's still a small traffic allocation, and we have room to grow. For marketing, we expect to spend a significant amount this year and are starting in Q2. We'll fund that marketing with efficiencies elsewhere in the business, so it fits within our disciplined framework. When we look at spend, we focus on evidence-based decision making: measure returns, then scale. You'll start to see us spend more in marketing, and we're looking for traffic, engagement, sign-ups, publishing sites and repeat purchase of credits. Our expectation is to ramp that over the next two to three quarters.
To reiterate, there's no change in our framework. We'll use the data and when we see returns, we'll continue to invest in marketing.
And maybe to follow up on pricing for AI App Builder: is pricing set in stone or are you testing and might change?
We tested several plans and are satisfied with the plan we've settled on. That's one of the gating items for ramping marketing spend. We're happy with the current plans: a starter free option with a few credits, plus starter, professional and ultimate paid plans that include a subscription plus credits. We believe this is a good setup and for the foreseeable future we'll stick with it. There are levers we can pull over time, but for now we will focus on scaling quickly.
Our next question comes from the line of Jack Halpert on for Deepak Mathivanan from Cantor Fitzgerald. Jack, I think you're muted.
There we go. You guys hear me now?
Yes, we can.
Just one for me. You mentioned removing a lower-value product offering this quarter. Can you give more color on what that product was and how much it impacted customer count and revenue, and if there are any other lower-value products you're evaluating in the portfolio?
As we discussed last quarter, we've taken deliberate actions around promotional offers to test and move faster. The promotions we ran last quarter generated significant gross customer adds — over 100,000 new customers from that set of promotions. In optimizing those promotions to balance bookings and customer growth, we also took the opportunity to retire an older, lower-value product this quarter. That retirement had an impact on customer count but little to no impact on bookings. These are deliberate portfolio choices; when we see offers that attract many customers, it's also an opportunity to remove lower-value offerings and reallocate resources to higher-value products.
Yes, that's correct. The product we retired wasn't generating the return we needed, so we're not supporting it anymore and are reallocating resources. It didn't have a material impact on bookings and only a slight impact on churn within that customer group. We'll continue to evaluate the portfolio to optimize for higher-value offerings and make choices where lower-value offerings no longer provide the returns we expect.
Our next question comes from the line of Kishan Patel on for Josh Beck at Raymond James.
As chatbots, AI mode and other AI-native discovery surfaces continue to gain scale, have you observed any notable changes in top-of-funnel traffic patterns, customer acquisition behavior or conversion paths? And how are you thinking about GoDaddy's positioning if more customer journeys begin inside AI interfaces rather than traditional search?
On top-of-funnel traffic, consistent with prior quarters, we saw some impact to search traffic due to the move to AI mode, but we've offset that by improving conversion. That relationship has held steady; we haven't seen further change beyond prior quarters. Regarding customer journeys that begin inside AI interfaces, we're focused on providing value wherever customers start their journey. If agents or AI interfaces begin performing actions on behalf of customers, we want to ensure we have the APIs and offerings so those agents can interact with GoDaddy as effectively as with others. This is the new normal to compete in; we've competed for decades across many business models, and we are organizing our teams to compete effectively in an AI-first world.
Our next question comes from the line of Elizabeth Porter from Morgan Stanley.
This is Katie Keyser for Elizabeth. With Airo Care rolled out to multiple markets and languages and noting improved resolution in non-English markets, does this change your international growth opportunity? Broadly, how does AI-enabled multilingual Care change or accelerate the approach to entering markets that previously were less attractive because of support or localization costs?
Care is core to our competitive differentiation and critical to our customers. We provide support through voice and chat across many markets and languages today. Airo Care natively enhances our ability to scale support. The initial data point showing near-equal performance globally is great news; it's challenging and costly to provide high levels of localized service and NPS in smaller markets. If Airo Care can deliver consistent high-quality service across languages, we can be more aggressive in those markets. This is an exciting international opportunity for us going forward.
I'll turn the call back over to Aman for closing remarks.
Thank you, Christie. Thank you all for joining. Super excited to be where we are and a great journey in front of us. A big thank you to all GoDaddy employees for a great quarter, and I'll see you next quarter.