The following is a summary of the GoDaddy, Inc. (GDDY) Q3 2024 Earnings Call Transcript:

Financial Performance:

• GoDaddy Inc. delivered strong Q3 results, driven by meaningful growth in free cash flow, increasing 29% year-over-year.

• Total third-quarter revenue grew to $1.15 billion, marking a 7% increase on both a reported and constant currency basis.

• A&C (Applications & Commerce) segment revenue increased by 16%, demonstrating sustained double-digit growth, while bookings surged by 20%.

• Core Platform revenue growth was 3%, aligning with guided expectations, with an increase in primary domains but offset by hosting divestitures.

• Notable growth in normalized EBITDA, expanding to 32%, driven by operational efficiencies and successful execution of strategic initiatives.

• Unlevered free cash flow grew by 25% to $399 million, with free cash flow increasing 29% to $363 million.

• Capital expenditures saw a reduction of approximately 46%, primarily due to data center divestitures.

• Share repurchases totaled $668 million for the year, with a significant reduction in gross shares outstanding by 23% since January 2022.

Business Progress:

• Introduced new AI-powered features enhancing the commerce experience for merchants, including Point-Of-Sale Plus and Invoicing Plus plans showing positive adoption since rollout.

• Launched the GoDaddy Digital Marketing Suite, an all-in-one product designed to assist customers in growing and marketing their businesses effectively.

• Enhancement of Managed WordPress through security improvements and AI-powered features, simplifying the build and management of websites.

• Ongoing efforts in cost optimization such as the implementation of a generative AI-powered conversational bot in 20 international markets, improving customer self-service significantly.

• GoDaddy Airo, an instrumental platform aiming to transform customer interactions, marks significant advances in being user-friendly and broadening the customer funnel, available in over 180 countries globally.

Opportunities:

• Continued expansion of the A&C segment with AI-enhanced features, driving higher bookings, revenue growth, and customer engagement.

• Plans to roll out Airo to customers starting with a website purchase, potentially expanding the customer base and engagement across diverse digital products.

• Intensified focus on customers registering domains through Airo, suggesting new growth avenues for online marketing products tied to domains.

• Progressive investments in marketing initiatives intended to bolster the broader launch of Airo-supported solutions.

Risks:

• Decline in aftermarket growth, acknowledged during the Q&A, revealing sensitivity to market conditions and fluctuations in this segment.

• Ongoing strategic shifts like pricing and bundling could introduce volatility in customer adoption and revenue mix especially in the core platform as efforts expand beyond productivity solutions.

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