Prepared remarks
Welcome to GoDaddy's Second Quarter 2026 Earnings Call. Thank you for joining us. I'm Christie Masoner, Vice President of Investor Relations. 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'll 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, July 30, 2026. 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.
Good afternoon, and thank you for joining us. At GoDaddy, our purpose is to make opportunity more inclusive for all. Our strategy is to serve our customers' needs across the entrepreneur's wheel. AI is fundamentally changing how our customers create and grow their businesses and how we execute on our strategy. We have built and positioned Airo as an agentic operating system for small businesses. Airo is the centerpiece of GoDaddy's largest initiative, our AI transformation. The AI transformation will enable us to continue to build on our significant track record of delivering value for both our customers and shareholders. When we introduced Airo almost three years ago, it was an AI-powered experience that helped our customers discover, engage and adopt more of our products. Last quarter, Airo AI Builder took a significant step beyond that as a distinct agentic experience. Today, we have unified Airo and Airo AI Builder into a single platform as an agentic operating system for small businesses, simply called Airo.
Airo can build out the comprehensive experience of whatever a small business needs to operate—from storefronts and booking systems to client portals—and it helps our customers run their businesses day to day. Everything our customers relied on before lives inside the singular immersive AI experience. Airo for small businesses is our biggest focus and source of excitement. Customers are loving it. I work directly with Airo customers every week, and their response tells me we are building exactly what they need to succeed. Customers are choosing Airo at a rate that is exceeding our expectations. Annualized bookings run rate has increased fivefold to $50 million, versus the $10 million we shared just one quarter ago, and engagement continues to build among our high-intent customers. The momentum behind Airo is undeniable and, just as important, the quality has improved as we have scaled. Nearly all of this growth has been organic, demonstrating strong customer interest even before we have meaningfully leaned into marketing.
Customer satisfaction also remains high, giving us confidence heading into the second half of the year. We are actively testing Airo in the domains purchase path, which is a high bar since it is our largest funnel and one that has been optimized for conversion and attach with our existing products for years. With a number of enhancements already underway, we expect to scale marketing and deliver continued strong traction for Airo. The world is evolving quickly, and we are meeting the moment. Small businesses are engaging with technology in entirely new ways, and we are transforming our experience to meet them where they are going. That requires making deliberate choices about where we invest our time, talent and capital, recognizing that investments carry different return profiles. Our priority is to build the best end-to-end AI operating system for our customers. As part of that shift, we are deemphasizing a few products as stand-alone offerings and bringing their capabilities into Airo, simplifying the experience and enabling customers to build and manage increasingly sophisticated web experiences themselves.
More broadly, as AI reshapes how small businesses create and manage their online presence, we expect the need for traditional products like do-it-for-you services and template-based website builders to narrow and evolve over time. As the transformation unfolds, GoDaddy is well positioned with an earned right to win, grounded in a value creation strategy that remains consistent. Building a business online takes more than a layer of AI. It takes secure hosting, payments, customer engagement tools and dozens of other jobs. Most small businesses lack the time or expertise to stitch those pieces together themselves. We have built one of the most trusted brands in small businesses over nearly three decades, backed by more than 20 million customers, a strong distribution advantage, a broad set of solutions, deep technology expertise and a Care organization that knows our customers and the needs of small businesses better than anyone.
Our AI transformation is how we are putting those trends to work. Our vision for Airo is to deliver all of that as one integrated immersive experience, and that completeness is what differentiates GoDaddy. We remain focused on generating profitable growth by attracting high-intent customers who adopt more of our technology and in turn drive higher lifetime value. The mechanisms may evolve through AI or pricing or merchandising or other means, but the model remains remarkably durable. In addition to Airo, there are three other connected work streams in the AI transformation at GoDaddy, and I'm excited to briefly touch on these today. First, we are reinventing our own operations to be AI-native to improve customer outcomes and increase the speed of innovation. In Care, Airo continues to improve resolution rates across both chat and voice, with the 24-hour repeat contact rate for customers served by our voicebot dropping by over 16 percentage points in Q2.
This allows our Care teams to focus their expertise on more complex needs and on guiding customers as they build their businesses. We are also using Airo to power processes internally at GoDaddy, giving us the opportunity to test new capabilities and rapidly improve the product through everyday use. That same rigor extends to how we fund this work. Scaling Airo at this pace comes with investment and managing it carefully matters as does the innovation itself. We anticipated the rise in AI compute costs and took actions early to offset them, giving us room within our financial framework to support both greater AI usage and increased marketing behind Airo. We continuously test across multiple models to make sure we are creating the expected customer experience while using the most effective and efficient option for each job. That discipline gives us confidence in our ability to manage compute and token costs as Airo scales over the long term.
The second and newest workstream in the AI transformation is doubling down on GoDaddy APIs being better designed for consumption by agents, including large language models. This quarter, we launched the GoDaddy Developer Platform, a new generation of domain APIs that allow developers and AI systems to search, purchase, configure and manage domains directly within the tools where they are already working. Large language models are increasingly becoming a large surface for creating software and businesses, and this enables our platform to be equally accessible to both people and AI. This is our first step. Today, these APIs focus on the domain life cycle, but over time we see the opportunity to expand this approach across more of our platform, making it easier for AI systems to securely interact with a broader set of GoDaddy capabilities, including Hosting and Commerce. On ANS, our third workstream intended to help shape the infrastructure of the agentic web, we achieved strong new alliances this quarter.
Identity and discovery are essential layers of the open agentic web, and domains are the natural foundation for both as the web moves toward an agentic future. To that end, GoDaddy enhanced the Agent Name Service standard, launched it in production and this quarter announced our intent to contribute it to the Linux Foundation. On discovery, we co-developed the Agentic Resource Discovery specification, or ARD, alongside many of the world's leading technology and AI companies. ARD helps solve agent discovery, making it possible to locate tools, skills, agents and other resources instantly. Together, ANS and ARD point to the same conclusion: Domains are and will remain a trusted foundation for identity and discovery in an AI-driven Internet, and that trust enhances and extends the value and demand for domains well into the future. Our Q2 financial performance and the work we have shared today showcase a company executing on both the business we have today and the business we are building for the future.
We stay focused on the fundamentals and what we can control. Our core initiatives—pricing and bundling, seamless experience and Commerce—continue to perform well, strengthening our high-intent customer base and reinforcing the durability of our model. At the same time, the momentum in Airo is giving us greater confidence in the role GoDaddy will play as AI reshapes how small businesses are created and grown. We will host an Investor Night in December, which will give us the opportunity to connect the AI transformation work underway across the company with the value it can create for our customers and our shareholders. There is much more ahead, and we look forward to sharing it with you. Thank you.
Thanks, and good afternoon, everyone. We are advancing our AI transformation while maintaining the financial rigor that has long defined GoDaddy. Our second quarter results build on our track record of focused execution. We delivered revenue above the midpoint of our guide and expanded our normalized EBITDA margin by over 200 basis points. We generated strong free cash flow of $443 million with trailing 12-month free cash flow of $1.73 billion. We continued our responsible and prudent capital allocation program, repurchasing $852 million as of July 29, reducing our fully diluted shares outstanding by another 7% this year to 127 million shares. Total revenue for the quarter grew 7% to $1.3 billion, and ARR grew 6% to $4.4 billion. International revenue grew 8% to $427 million. Our Applications and Commerce segment grew revenue 11% to $515 million. Growth continued to be supported by customer adoption of our solutions.
Segment EBITDA margin expanded roughly 250 basis points to 46.8%. Core Platform grew 4% to $783 million, on strength in primary domain registrations and renewals led by both .COM and higher-priced non-.COM TLDs, alongside a strong aftermarket quarter driven by higher volume. Segment EBITDA margin expanded to 33.4%. Total bookings grew 6% to $1.4 billion. Core Platform bookings grew 5%, representing acceleration from Q1 as we move past the peak of our promotional offer. Applications & Commerce bookings grew 7%. These are solid results against a dynamic environment, with AI driving rapid changes to customer expectations and engagement patterns. While our A&C bookings from traditional products are moderating during this period of transition, we are moving quickly to anticipate and meet these changing expectations. Moving forward, we expect Airo's scope to broaden, taking on capabilities that today live in separately priced products such as traditional do-it-for-you services and template-based website builders.
We view this as a deliberate trade-off as Airo, monetized through a mix of subscription and token usage, continues to scale. We are encouraged by what we are already seeing: higher engagement and stronger free-to-paid conversion rates on Airo. Over time, we expect this combined offering to be even more valuable than the separately priced products that our customers engage with today. Through this transformation, as always, we will remain disciplined in how we invest in growth, ensuring that we earn attractive returns as we drive growth. This approach positions us to continue generating strong free cash flow and shareholder value well into the future. Underpinning our transformation is the durability of our model where high-intent customers who adopt more of our solutions retain at higher rates and ultimately generate greater lifetime value. Our distribution network has long been a key advantage in engaging our customers.
Once customers are within the GoDaddy ecosystem, we can surface the best next product at the right moment, shortening the time it takes customers to engage, publish, and derive incremental value with more of the platform. These underlying fundamentals are continuing to strengthen alongside our transformation. More than 50% of our customers have at least two paid products with us, and that percentage continues to grow with the adoption of Airo. What's even more encouraging is that over 70% of our customers who have used Airo this year have two or more products, which is higher than our non-Airo cohorts. Retention continues to improve above an already enviable 85%. ARPU increased 9% to $250 and the number of customers spending more than $500 annually continues to become a larger part of our customer base. This is what a durable self-funding model looks like: expanding margins and strong cash conversion, funding our AI transformation while still returning capital to shareholders.
Normalized EBITDA grew 14% to $434 million, with margin expanding more than 200 basis points to 33.4%. Free cash flow grew 13% to $443 million, with normalized EBITDA continuing to convert to free cash flow at better than 1:1. Our strong free cash flow, low leverage and high liquidity provide us the flexibility to keep investing in our AI transformation while aggressively returning capital to shareholders. We ended the quarter with $1.2 billion in cash and total liquidity of $2.2 billion. Net debt was $2.7 billion, representing a net leverage of 1.4x on a trailing 12-month basis and well within our target range. During the second quarter, we repurchased 6.6 million shares for $554 million. Year-to-date, through July 29, we have repurchased almost 10 million shares for $852 million, reducing fully diluted shares outstanding by 7% since the beginning of the year. Turning to our outlook. We are narrowing our full year 2026 revenue guidance to a range of $5.215 billion to $5.255 billion, representing 6% growth at the midpoint.
As a reminder, the full year guide absorbs just over 200 basis points of cumulative impact from the .CO registry contract expiration and our consistent exclusion of high-value aftermarket transactions. For Q3, we are targeting total revenue within a range of $1.315 billion to $1.335 billion, representing 5% growth at the midpoint. The third quarter represents our toughest compare on strong aftermarket performance last year. For both the third 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. Absent any foreign exchange impact, we expect bookings and revenue growth rates to be at or above parity for the remainder of the year. We are projecting a normalized EBITDA margin of approximately 33% for Q3 and reaffirm our full year margin target of over 33%, reflecting continued operating leverage and AI-driven productivity alongside rising investments in AI products, platform, marketing and compute.
Q2 normalized EBITDA benefited from the timing shifts of certain costs, some of which we expect to be incurred in the second half of the year. We reaffirm our full year free cash flow target of approximately $1.8 billion with normalized EBITDA conversion greater than 1:1. On capital allocation, we operate within a disciplined returns-based framework and have deployed greater than 95% of our free cash flow over the last four years toward share repurchases. Our continued commitment to returning capital reflects our confidence in the strength of our cash flow and the long-term value we are creating. We remain focused on allocating capital to the highest value uses, with a priority on driving long-term shareholder returns. Taken together, the combination of our free cash flow with our approach to capital allocation puts us on track to deliver on our North Star of a three-year CAGR of over 25%, well ahead of the 20% target we set at our last Investor Day.
Finally, I would like to formally invite you to our Investor Night on December 1, 2026, at our Tempe, Arizona headquarters. We will expand the programming of our typical Investor Dinner and use that evening to provide a more comprehensive view of our strategy, how the workstreams you heard about today come together and what they mean for our customers, our business and our shareholders. As the world is evolving, we are launching the experiences to match the moment as we transform the principles behind our strategy and model. Our focus on profitable growth compounding free cash flow and disciplined capital allocation are staying firmly in place. We look forward to seeing many of you there. With that, I'll turn it back to Christie for your questions.
Thanks, Mark. Our first question comes from the line of Vikram Kesavabhotla from Baird.
Questions and answers
My first one is on the Domains business. Aman and Mark, it'd be great to hear your perspective on your current competitive position within primary domains and specifically, when we think about the emergence of AI agents as part of the customer journey and some of the different strategies taking shape across the industry. I'm curious if you're seeing any changes in that business one way or another. And from a high level, it'd be great if you could talk about some of the steps you're taking to ensure that GoDaddy remains successful in primary domains as customer behavior and discovery patterns evolve. And then separate from that, I also wanted to ask about the A&C segment. You referenced in the prepared remarks that bookings from some of your traditional products are moderating as you go through this transition; can you help us understand the magnitude of some of the headwinds coming from those products? And going forward, when do you think the ramp in Airo monetization will reach the point of offsetting some of those headwinds?
Thanks, Vik. Let me start with Domains and then we'll come back to A&C. On the Domains business, for over a couple of decades, GoDaddy has been the leader in domains and many business models and changes in technology have happened during that time. We feel very good about GoDaddy's overall position. With AI and the advent of large language models, we're definitely seeing some changes in that business overall, and we are meeting the moment. As you probably saw, we relaunched GoDaddy's APIs in a new and renewed format. This addresses the changes we're seeing in the domains business today. With the new GoDaddy APIs, those APIs can work very well for LLMs and AI, just as they work for our partners today. That's going to allow us to handle some of the changes that are happening in the Domains business and put more competitive and innovative products in the market. GoDaddy has an advantage because we have so many of our own products that we can bundle together and put into the API. So we really think that's an area we can address. I think overall, Mark can comment a little bit on our overall positioning. We have continued to maintain a very healthy share in terms of overall primary domains. Obviously, Q2 was a strong quarter, but I'll leave the specifics to Mark.
Yes. On the domains element, our market share around domains is consistent with prior periods, and that includes all the TLDs, including non-.COM TLDs as well. Vik, regarding your A&C comment, no doubt we are in a dynamic environment. Our customers are broadening their use of AI. We couldn't be more excited about the transformation we're entering into with Airo and the strong early growth signs. We believe adoption will accelerate as we start to increase the purchase paths around Airo in the coming quarters. We're expecting bookings in Applications & Commerce to be in the high single digits for the remainder of the year. We'll have more information as we get further data throughout the year as to when those inflection points will happen, but we couldn't be more pleased with the growing adoption of Airo today.
Yes. Just to touch on the strategy behind the overall Applications & Commerce segment: our strategy has been to attach products across the entrepreneur's wheel for our customers. With Airo, we've greatly accelerated that strategy. What we thought of as a five- to seven-year strategic product roadmap can now be seen as a one- to three-year roadmap. We can use AI to very quickly integrate our products with Airo and Airo does a great job in terms of product discovery and attach; it beats our existing web-based attach funnels. The overall vision for Airo is to cover a majority of the jobs to be done for small businesses, effectively creating a competitive AI operating system for those small businesses, and our focus is to optimize it for our customers. Since we have so many products ourselves, we can bring them to Airo much faster than others. In the last four months, we put Airo AI Builder out there, added GoDaddy Payments, added customer communication and multiple other capabilities to Airo.
Looking ahead, we will introduce a host of Commerce capabilities and get into features like business telephone numbers, IVRs and voice and video capabilities that will all work within the AI immersive Airo experience. I work with Airo customers all the time, and I'm amazed at what they can do themselves. That delight that they have with the product is the path to greater attach, greater Applications & Commerce revenue, and stronger lifetime value for GoDaddy.
Yes. To add to that, the trade-off is that we used to have separate SKUs for Commerce, but now many capabilities that were in separate SKUs will be built into Airo, and we'll see the transaction value related to that. That becomes a second or third attached product. When we get to second or third attached products with our customers, as we've said before, retention goes up, retention drives lifetime value, and the business becomes more valuable over time. So we believe this will be more valuable over time than our existing standalone products.
Our next question comes from the line of Ken Wong from Oppenheimer.
Thanks. I wanted to dig in a little more on the AI disruption angle. Aman, are you able to share perhaps where you're seeing some erosion? Is this by channel? Is it upmarket or downmarket? How does it impact the domain funnel, which you guys are highly dependent on? And then Mark, just on the guidance: it's good to see an acceleration in Q4, but considering you're lapping promotional comps and also the domain gTLD comp, I would have assumed a little more uptick. Would love any color on what type of conservatism is baked into that number.
On the domains funnel, we continue to see very healthy domain funnel economics, traffic and conversion. In Q2 we had a healthy rate overall. Things are dynamic and will evolve as new capabilities emerge. LLMs are playing a part and we see shifts in search traffic. We're continuously improving GoDaddy's services to work better with LLMs. Where we particularly see changes is in API-driven domains services—new business models and services are receiving attention. Over the last couple of decades we've seen similar shifts and we are evolving accordingly. We relaunched GoDaddy's APIs to address this, particularly in the domain space. You'll see us launch APIs for other products too because we want to make it straightforward for LLMs to consume GoDaddy offerings so we rank well with those systems and get traffic from them. We are actively adapting as the search-to-LLM shift happens so GoDaddy remains competitive short-, medium- and long-term.
Ken, on the guidance and the back half, keep in mind while we're lapping the $4.99 offer, the bookings impact is immediate but the revenue rolls out throughout the year. So we'll still have some headwinds related to revenue from the discount offered earlier in the year. Coupled with our standard practice of excluding high-value aftermarket transactions from guidance, that frames the range we provided.
Our next question comes from the line of Mark Zgutowicz from The Benchmark Company.
Aman and Mark, maybe a couple on Airo. You indicated that Airo will absorb capabilities currently sold under separately priced products while you're seeing your A&C bookings moderating. I'm curious how much of your existing bookings are attached to those products being deemphasized, and at what level Airo subscription and token revenue would be required to replace those economics. Also, what percentage of domain traffic is exposed to Airo today and what are you seeing in terms of initial conversion, product attach and bookings relative to legacy Websites + Marketing? Lastly, how much marketing actually occurred related to Airo in Q2 and what do you have planned for the second half? Trying to get a sense of how much of Q2's cost timing benefit reverses into Q3 and Q4?
I'll take the first part and Aman can speak to domains. When we look at the impacted products, there are a few capabilities moving into Airo. I won't enumerate the whole list, but examples include Commerce capabilities that were previously separate SKUs and our professional services or do-it-for-you offerings. Professional services used to be transactions around a couple thousand dollars; now customers are doing much of that work themselves with Airo or with guidance from Care, so the need for traditional professional services is narrowing. Quantifying each area specifically is premature; we're early in the process. At a high level, the transition headwind was roughly about one percentage point to total bookings this quarter. Adoption of Airo is early-stage but showing great traction; we still have work to do around purchase paths and attach, which we'll address in the second half of the year. We'll provide more detail as we gather data leading into December.
Mark's points tie into the domain-related aspects. We tested Airo in the Domains path in Q2 and it performed quite well. Websites + Marketing is deeply integrated into our attach funnels, so Airo needs to provide not just website building but all attach capabilities. We still feel good about being able to replace Websites + Marketing within our expected timeline—what we previously discussed as roughly a year to enable new capabilities to replace it. We're doing new tests in Q3 as well. Adding Airo to the Domains path is an important gate because it allows us to meaningfully scale marketing; we did a small amount of marketing in Q2 and saw a strong result in new customer engagement. Our marketing approach remains disciplined and returns-based. We will continue to look for pockets where we can spend dollars and get strong returns, and we see great opportunity, especially once Airo is added to the Domains path in the next few months.
And to follow up, we called out that some costs moved from Q2 into the second half of the year and marketing is an example of those costs.
Our next question comes from the line of Elizabeth Porter from Morgan Stanley.
Great. It was impressive to see Airo's bookings run rate increase from $10 million to $50 million in one quarter. Could you help unpack the bigger drivers of that growth—factors like new paying customer additions, higher ARPU with attach, and incremental token consumption? Within the cohorts, where are you seeing the bigger momentum—new customers or existing GoDaddy customers?
Thanks, Elizabeth. We have only about four months of data. For the first two and a half to three months, most of the users engaging with Airo were existing customers. As we started allocating even a small amount of marketing and surfaced Airo more on GoDaddy landing pages, we began to see new customers sign up as well. So we're seeing strong sign-up rates from completely new GoDaddy customers. Regarding economics, we feel very confident about Airo's unit economics. Our approach balances delivering an excellent outcome for customers with a profitable product by controlling acquisition costs, optimizing AI model choices and adding attach within the Airo experience. Customers engage with Airo and a meaningful subset become highly engaged, purchasing tokens and building sophisticated web applications themselves.
I'll add that we're seeing better free-to-paid conversion with Airo than we were seeing prior to Airo.
Thanks. You previously discussed pausing pricing and bundling contributions while Websites + Marketing transitions. Where are you on that transition? When do you think pricing and bundling can resume contributing to ARPU and bookings? Does pricing resume immediately once Websites + Marketing reaches parity, or is there a lag while you validate unit economics and retention?
Pricing and bundling continues to contribute to growth in our underlying products even as we make this transition. We paused certain Websites + Marketing actions earlier, and now we're building those capabilities directly into Airo. Bundling and pricing remain active and will evolve as we determine which capabilities are included in Airo versus attached products. We'll provide more information as we gather data throughout the year, but pricing and bundling remain a contributing lever to growth.
Our next question comes from the line of Arjun Bhatia from William Blair.
I'm Willow on for Arjun. I have a pricing question: given the dynamic environment, are you offering more promotional pricing now versus previously? For example, when I visit your website I can see a free trial for the higher tier of the website builder and a pop-up for the $5 one-year domain promo. Can you clarify your promotional pricing strategy?
The only change to pricing or promotions you're seeing on the homepage is related to Airo. Because it's a new product, we're giving 50 free credits for people to come in and try it. There's no new broad promotional pricing program. Over the years we have reduced viral promotions and continue to maintain a low level of promotional pricing. The two core promotional items to note are the $4.99 offer—one per customer—and the Airo trial credits for new customers.
And that trial is for new customers.
Our next question comes from the line of Alexei Gogolev from JPMorgan.
Two questions. Historically you said pricing and bundling was the largest lever to forward revenue growth. As you look ahead, what do you think will be the largest lever—Airo, partnerships, or something else? And do you see your customer composition changing as you build out agentic web offerings—will you sell to larger SMBs or enterprises?
We feel very positive about Airo. The way Airo is growing, customer engagement and free-to-paid conversion indicate a large opportunity. Airo enables customers to create and publish much more sophisticated experiences than before. Pricing and bundling will continue to evolve given our large portfolio and customer base, but Airo will be a major lever. Regarding partnerships, we see that as a great opportunity as well. Airo is an operating system that allows us to integrate partnerships more deeply going forward, and we expect that to contribute to growth in Applications & Commerce and other areas. On customer composition, we remain focused on small businesses where there is still significant TAM and opportunity. We'll keep you informed as things evolve.
I'll add that partnerships have been successful for us and Airo will allow deeper integrations with partners, which we view as an additional contributor to growth.
Our next question comes from the line of Robert Coolbrith from Evercore.
Can you contextualize how the quarter went versus your expectations? It seems core did well from a bookings perspective. Was there a rapid shift in customer behavior where more customers are coming just for domain-only purchases, or was it more about the pause on pricing and bundling and Websites + Marketing? Was the quarter largely in line with expectations?
There are always puts and takes in any quarter. This quarter, the biggest shift we saw was customers engaging with Airo faster and more than we anticipated, and the recognition that they wanted a simple, one-platform experience. That shifted dynamics around Websites + Marketing becoming a capability inside Airo. Despite the dynamics, we were pleased: free cash flow per share growth was strong, normalized EBITDA margin reached about 33%, conversion of EBITDA to free cash flow was greater than 1:1, bookings accelerated from Q1 to Q2, and revenue was above the midpoint of the guide. Overall, the quarter was largely in line with our expectations, even with different moving parts.
On the ramp for Airo ARR: was there any change in placement of Airo in the funnel, or was it organic adoption where customers see both the traditional Websites + Marketing path and the Airo path and more customers than expected are choosing Airo? Any more color would be helpful.
We placed Airo organically on landing pages and SEO channels, and the majority of adoption has been organic. We did some limited testing on the domains path for a defined period to gather data, but the large majority of adoption has been customers finding Airo organically and choosing it. That organic demand is what excites us most: customers coming to GoDaddy, discovering Airo and loving the product.
Last quick one on API endpoint distribution: can you talk about the MCP integration with Anthropic, how you broaden access to other LLMs, and how you think LLMs will be incentivized to use your endpoints versus others?
We've optimized against LLMs and rethought our API strategy because LLMs use APIs and people are building apps using LLMs. The rebuild for domains makes our products natively consumable by LLMs and app developers. We announced the updated domain APIs this quarter and will bring other products online soon. These APIs provide LLMs the key information they need to automatically consume those products, which is a step up from our prior approach. It's early, but we're excited and expect to have more to report in a quarter or two.
Our next question comes from the line of Kishan Patel on for Josh Beck at Raymond James. Kishan, we'll put you on mute for now. Our next question comes from the line of Naved Khan.
I'm trying to unpack the slowdown in A&C bookings. You mentioned some items shifting into Airo—does that represent about 100 basis points of impact? Given that you had an easier comp, we saw a 200 basis point deceleration year over year. What are the components of that slowdown?
Thanks, Naved. We're not listing every capability moving into Airo, but the biggest examples are professional services (do-it-for-you) and Websites + Marketing. Professional services were higher-priced, one-time transactions for complex websites; as customers do more themselves with Airo and Care support, that pipeline narrows. Websites + Marketing capabilities have also been moved into Airo. Those two examples are the key drivers of the moderation you referenced. To clarify, the roughly 100 basis point impact referenced earlier was to our total bookings number, not specific to A&C. As we ramp Airo and improve purchase paths, Airo will become a bigger growth contributor; right now we expect A&C bookings to be in the high single digits for the remainder of the year.
Is the $150 million ARR growth in App Builder counted in A&C? And should we view Airo as potentially deflationary since do-it-for-you was a higher-priced product while Airo is subscription plus token-based?
Regarding do-it-for-you, those were typically multi-thousand-dollar bookings when GoDaddy built for customers. Airo is subscription plus token-based and generally lower per-transaction, but much easier for customers to use themselves. That accessibility and the improved attach path are what we think will ultimately drive broader adoption and lifetime value.
To confirm, Airo is counted within the Applications & Commerce segment.
Given Airo's acceleration and planned marketing spend, why shouldn't we expect a pickup in A&C bookings in the back half?
We view this as a transformational period as we engage customers through different channels. Airo is new to the market and we're still gathering data as we introduce it into more purchase paths. For the remainder of the year, we expect A&C bookings in the high single digits while we continue to evaluate channel dynamics. We'll provide more detail as we gather data and at our December Investor Night.
Our next question comes from the line of Ygal Arounian from Wedbush Securities.
I want to better understand the LLM traffic shift. What's happening—are people going to LLMs or coding directly in platforms like Anthropic and OpenAI and bypassing GoDaddy? How does that change your approach to product development, including the Websites + Marketing upgrade you were planning? Follow-up: how does this impact margins given compute costs?
The LLM comment pertains to APIs and new models where LLMs can consume domain services directly—lower-cost providers have emerged on the domain side. We're updating our APIs to be competitive and offer better bundles and integrations for LLMs. Regarding Websites + Marketing, we tested an updated product and found that Airo can encompass those capabilities. In recent weeks we've launched stronger editor and templating capabilities within Airo and will continue to strengthen them. We're seeing convergence: Airo can build websites, handle customer communications, payments, Commerce and more, serving both customers directly and developers.
On API functionality: does that mean LLMs are building websites in the way GoDaddy would traditionally enable? On margins, with other companies experiencing margin pressure while launching AI capabilities, how do you balance compute costs and maintain margin guidance?
We feel good about our margin positioning. We've anticipated higher compute and token costs and taken actions early to offset them. We remain disciplined about return-based investing. We're realizing productivity gains across the organization—Care, T&D and G&A benefits—which help offset new costs. Headcount and headcount costs are largely remaining flat while we drive productivity improvements. This allows us to continue expanding margins while investing in Airo and other AI initiatives. We'll share more detail at Investor Night about 2027 plans, but we feel confident in our ability to manage costs and preserve profitability.
Our next question comes from the line of John Byun on for Brent Thill at Jefferies.
Two questions: first, for the transition to Airo, are you thinking this is a two- to three-quarter transition, or could it last more than a year into 2027? Second, regarding the WordPress community and professional web developers and partners, how are you thinking about the impact of Airo on that constituency?
We're not putting a strict timetable on the full transition. We've provided guidance for the rest of the year and will update as we gather more data points. We're excited by Airo's growth and the $50 million run rate. We're still rolling it into the Domains purchase path and connecting more attach opportunities, so more data will inform timing. We'll share more at our December 1 event.
On WordPress, we do have Airo for WordPress and it's gaining traction with that audience. That ecosystem is also evolving, and we're seeing adoption there. Our focus remains on creating an operating system for small businesses that can be used directly by customers or through developers; the distribution mechanism shouldn't matter to us as long as customers derive value.
Our next question comes from the line of Chris Zhang from UBS.
International revenue continued to outpace the company on a constant currency basis. Can you unpack drivers across segments and how much of that is durable? Also, what are you expecting for Core Platform bookings growth for the second half?
On international, we saw solid performance and an 8% increase; nothing region-specific to flag—it's performing well in our focus markets. We're happy with international performance. Regarding Core Platform bookings, on a long-term basis we expect low single-digit bookings growth, and you may see it lean toward mid-single digits for the remainder of the year as we lap the $4.99 promotional impact in the back half.
So roughly stable versus Q2?
Yes.
We'll try again for Kishan Patel on for Josh Beck at Raymond James. Kishan, are you there?
Hey...
Kishan, we can't hear you. All right. I am going to hand it over to Aman to close this out. Please go ahead.
Thank you. Thank you all for joining. A few takeaways: we are very excited about Airo—its fast growth, the customer feedback and engagement we're seeing. On the AI transformation, our strategy, our financial discipline and our approach to investment remain unchanged. We're focused on meeting small businesses where they are and offering them a broad set of services. A huge thank you to all GoDaddy employees, and thanks again for joining.