GoDaddy Inc.
Loading chart...
Item 1. Business
Overview
GoDaddy is a global leader serving a large market of entrepreneurs, developing and delivering easy-to-use solutions as a one-stop shop provider, backed by proactive, informed and personalized guidance. We serve small businesses, individuals, organizations, developers, designers and domain investors. Our vision is to radically shift the global economy toward life-fulfilling entrepreneurial ventures. Our mission is to empower entrepreneurs everywhere, making opportunity more inclusive for all. We are passionate about our mission and honored that entrepreneurs trust us with their ideas. Our 20.4 million customers are passionate and determined to transform their ideas into something meaningful. Our ability to evolve and build solutions and tools to handle our customers' fundamental jobs to be done uniquely positions us to help them navigate their individual journeys.
Each customer's journey is unique and they tend to be non-linear and iterative in nature. We design our solutions and tools to help our customers across all aspects of their businesses and to assist them in growing across what we call the "Entrepreneur's Wheel." The Entrepreneur's Wheel represents our customers' needs within three main focus areas: Identity, Presence and Commerce.
Our customers often start with the most intimate of brand considerations, their Identity, which includes their company name, domain name, logo and email address. Choosing a domain name is often an important initial step for customers as they start and grow their business. We provide the solutions they need to support the establishment of their brand with our domain services and our suite of AI-powered tools including GoDaddy Airo® (Airo), which can assist with searching for the perfect domain name, generating a unique logo, building a customized website, establishing a domain-specific email and more.
Our Identity solutions blend seamlessly into our Presence-based solutions to help our customers manage and grow their Presence online and offline. Our suite of Presence-based solutions, enhanced by Airo, enables our customers to market their products and services, connect with their own customers and syndicate their business across relevant third-party products and platforms. Our Presence solutions and tools include website building and hosting, social media, search engine visibility, security and other services.
Finally, our suite of Commerce solutions enables our customers to sell directly online, in-person and across multiple channels, such as marketplaces and social platforms, and to integrate dynamic information everywhere they engage with current and potential customers. These solutions include GoDaddy Payments, point-of-sale (POS) systems, Tap to Pay on Mobile, GoDaddy Capital, Instant Payout and inventory and order dashboards for easier business management for our customers and their businesses.
5
We believe our customers should have trusted technology and great support at every point of their journey on the Entrepreneur's Wheel. With customer centric assistance through our GoDaddy Guides and AI-powered experiences, and our agentic tools and solutions on the Airo platform, we can provide intelligent, proactive and personalized guidance for our customers. We help set our customers up for success with personalized guidance from our GoDaddy Guides via phone and digital experiences, thousands of daily conversations and our gathering of valuable feedback to enable us to continually evolve our products and solutions and respond to our customers' changing needs. In addition, we are transforming our AI-powered solutions into agentic tools and solutions on our Airo platform. Our AI-powered agents are designed to handle our customers' fundamental jobs to be done such as domain searches and naming, logo creation and website building. These agents are built to deliver tailored support based on each customer's unique business needs, as they learn to anticipate next steps across multiple jobs to proactively guide our customers through each interaction.
Our people and unique culture have been integral to our success. We live by the same principles that enable our customers' ideas to survive and thrive, including owning outcomes, building value, fusing forces, working courageously and living passionately. We take pride in delivering successful outcomes based on a culture of experimentation and data-driven decisions, which we believe help us drive our financial performance. We are also transforming the way we work. Our employees are identifying and deploying internal uses of AI to solidify gains in velocity and efficiency. From experimentation to Care, engineering and corporate functions, we are evolving beyond the value of generative AI and shifting focus on improvements driven by agents so that we can focus on our customers' jobs to be done.
At GoDaddy, we are focused on supporting the evolution of the open internet, including the emerging concept of an agentic open internet, in which software and AI-enabled agents may assist individuals and businesses in completing tasks online. For more than 30 years, the open internet has enabled entrepreneurs to establish an online presence and grow their businesses, and GoDaddy has served as a foundational partner by providing domain names, digital identity and related infrastructure. In addition, as the internet continues to evolve with the rapid and developing use of AI-enabled agents, we believe the same foundational elements and infrastructures that have historically supported participation on the open internet, such as identity, naming and trust, could become increasingly important in an agentic open internet. For example, we expect infrastructure to be required to ensure that AI-powered agents can discover one another, validate identities and establish trust across domains allowing these agents to collaborate and complete end-to-end tasks with speed and precision. In response to these developments, we launched Agent Name Service (ANS), an open architecture built on industry standards to serve as a trust layer for AI-powered agents. ANS is in production with registered agents operational since the end of 2025. Developers can register agents through GoDaddy's public API, and the public can confirm and verify agent registrations through our ANS Transparency Log, which is globally accessible. ANS is intended to extend GoDaddy's role in supporting the open internet, and over time may present opportunities to offer additional services and partnerships related to agent identity and management.
Our Customers and Solutions
GoDaddy is built to serve the needs of customers by providing easy-to-use products on an integrated technology platform wrapped with proactive, informed and personalized guidance.
Our Customers
We serve several customer populations: (i) Independents, (ii) WebPros, (iii) Domain Investors, and (iv) Domain Registrars, Third Party Registrars and Corporate Domain Portfolio owners. While these customer populations tend to utilize many of the same GoDaddy product offerings, there are meaningful differences in their journeys, what they value, their goals and how they communicate with their current and potential customers. We aim to establish and provide solutions that address these differences.
Our largest customer population, Independents, consists mostly of microbusinesses and non-commercial endeavors. Microbusiness owners have an entrepreneurial spirit, strong work ethic and, above all, passion for their ideas, yet their specific needs vary depending on their business and the phase of their journey. Independents range from individuals who have an initial business idea to established ventures that need help attracting customers, growing their sales, processing payments, managing their online presence or expanding their operations. Most Independents have fewer than five employees, and most self-identify as having little to no technology or design skills. These customers need our help to create a unique and secure identity and to build and grow their businesses with a branded website, social media and marketing content, commerce solutions to assist with payment processing and other productivity solutions, including email. Although our customers have differing degrees of resources and technical capabilities, they all share a desire to find tools to help them bring their ideas to life, enhance connections with their audience, sell their products and services and provide a seamless experience for both existing and new customers.
6
Our second largest customer population, WebPros, are website designers and developers who build websites on behalf of businesses and noncommercial organizations. WebPros are often freelancers, moonlighters or teams within website design agencies that often have website design as one of multiple streams of income. WebPros generally have more technical acumen and look for tools that provide greater flexibility, such as the WordPress content management system (CMS). Although WebPros have a need for technical depth and flexibility, they also benefit from our simplicity and guidance as tools to increase their throughput and maximize the use of their time. We offer these customers client management applications that aim to make it easier for them to manage their clients' websites on GoDaddy products such as Managed WordPress, or on another host. Our solutions are built to assist WebPros in managing their overall business with capabilities such as client billing, administrative access and shopping features, making it easier for them to buy and manage multiple products for their clients, as well as make use of enhanced technical support and discounts for reselling GoDaddy products. In addition, we support a variety of third-party control panels and content management tools favored by WebPros including cPanel, Plesk, Drupal, Joomla and more.
Our third largest customer population is Domain Investors. Domain Investors are individuals or organizations who typically manage a portfolio of registered domains for the purpose of selling such domains in secondary markets. These investors bring a unique and valuable resource to our business in the form of liquidity and the ability to help our other customer populations (Independents and WebPros) successfully find a domain name that fits their business and their needs.
We also serve Domain Registrars, Third Party Registrars and Corporate Domain Portfolio owners. Domain Registrars are organizations that have their own domain registration offerings, but who use our domain registration and management platform. These commercial arrangements provide for strategic relationships with many key platforms and enable further scale of our domain registration technology and insights. Third Party Registrars are served through GoDaddy Registry which provides wholesale generic top-level domains (gTLDs) and country-code top-level domains (ccTLDs) for registrars to sell to the end customer. These top-level domains (TLDs) provide alternatives to the .com domain that may more closely represent the names of our customers' ideas, businesses and brands. For registry operators, we provide a fully managed registry platform, including managing the full registry technology and operating stack at scale, with approximately 170 TLDs, including some of the largest brands in the world. We also serve corporate domain portfolio owners, organizations that maintain and manage a large portfolio of domain names, including general and international domains. These customers are looking for the most powerful, secure and intuitive technology to streamline their processes, unparalleled industry experience and expertise to navigate the complexities of managing a corporate portfolio, and a focused and dedicated team that can provide committed support with the highest levels of security, service and domain management.
Our Solutions and Experiences
We designed and developed an extensive set of easy-to-use technology solutions and seamless experiences to enable our customers' journeys along the Entrepreneur's Wheel and across multiple platforms and online marketplaces. We understand that no matter what our customers' needs are, or what stage of their business they are focusing on, they want solutions in a one-stop shop that meets them at every stage of their journey.
We manage and report our business in the following two segments:
•Applications and Commerce (A&C), which primarily consists of sales of products containing our proprietary software, notably our website building products, our proprietary commerce solutions and third-party email and productivity solutions, as well as sales of certain products when they are included in bundled offerings of our proprietary software products.
•Core Platform (Core), which primarily consists of sales of domain registrations and renewals, aftermarket domain sales, domain protection, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.
Applications and Commerce
Bringing an idea to life online, establishing and maintaining a presence and continuing to grow requires the right tools and products. Website building solutions, e-commerce tools, digital marketing capabilities, email and other productivity solutions within the A&C segment are designed to help our customers start, grow and scale their presence and their businesses. Our customers come to GoDaddy to build a professional website, attract customers, sell their products and services and accept payments online and in-person by engaging with our easy-to-use tools, managed in one place. During the years ended December
7
31, 2025, 2024 and 2023, we derived approximately 38%, 36% and 34% of our total revenue, respectively, from sales of our A&C products.
Applications Products
Our primary applications products include:
Websites + Marketing. Websites + Marketing is an easy-to-use, do-it-yourself, mobile-optimized online tool that enables our customers to build effective websites and e-commerce enabled online stores with minimal technical skill. We offer a variety of plans, with pricing based on business, marketing, commerce and other features. With each of these plans, customers gain access to our AI-powered tools and solutions, which include natural language, conversational chat interfaces, also known as vibe coding, that can build a customizable and editable site based on each customer's unique needs. Additionally, we offer a wide range of industry-targeted professional design templates, which can be further customized using our editor by adding intent-driven sections, photos, videos or text. We design our websites and tools to work seamlessly on mobile devices and we focus on site performance to help enable websites to appear in search engine rankings.
Managed WordPress. Managed WordPress is our streamlined, optimized website building experience that allows our customers to easily build and manage a WordPress site. Managed WordPress is designed for customers seeking greater flexibility and power than our Websites + Marketing solution. With our Managed WordPress site, we manage the administrative tasks for our customers, allowing them to spend more time building and growing their business. We offer a variety of plans, with pricing based on various features. In addition, our customers can efficiently build and modify their WordPress sites with our AI tools, including our natural language, conversational chat interfaces. These managed WordPress sites are built with automatic, regular backups and core updates, enhanced security, integrated Secure Sockets Layer (SSL), one-click migration tools, pre-installed extensions, plugins and themes, business email and backups and a staging site.
Digital Marketing. We offer a range of marketing tools and services designed to help businesses acquire and engage customers and create content. These capabilities are available in an integrated offering with our website and commerce tools, or as a stand-alone offering for customers using other website content-management systems. The tools are designed for busy customers who may lack experience with online marketing, focusing on ease of use, mobile experience and delivering business results. Our digital marketing services include email marketing, reputation management and development of brand guides with personalized logos, fonts and more. Our digital marketing plans include access to AI-generated content through Airo, which assists customers in creating marketing campaigns, including customized social media posts, and provides dashboards that offer insights into site traffic, sales and orders. We also offer content creation through GoDaddy Studio, which helps our customers grow their brands by easily creating impactful visual content for almost any online platform, and Search Engine Optimization (SEO) tools to help our customers get their websites found on major search sites.
Email and Productivity Solutions
Our customers want to spend their time on what matters most to them, selling their products and services or helping their customers do the same. We provide them with productivity tools designed to help them more easily run their ventures, such as domain-specific email and productivity applications.
Our primary email and productivity solutions products include:
Microsoft 365 Email and Productivity Solutions. We offer fully-supported Microsoft 365 accounts that are easy to set up and use with our customers' domains. We offer Microsoft 365 through various plans, including email with calendar and contacts connected to a full suite of productivity tools, as well as file sharing and full desktop versions of Microsoft productivity applications, such as Outlook, Teams, Word, Excel and PowerPoint. For customers wanting to protect their email data, we provide email add on services, such as email backup services, encryption services (in partnership with ProofPoint), archiving services (in partnership with Barracuda) and other advanced e-mail security. Our customers can also make use of Microsoft Copilot through chat enabled features, or can purchase Microsoft 365 Copilot as an integrated solution for Microsoft Office apps. We help make Microsoft 365 and Microsoft 365 Copilot installation easy, allowing customers to be up and running quickly, including "do-it-for-me" migration services to move customers' existing email data to Microsoft 365 accounts.
Other Email Accounts. We also offer email service plans through our partnerships with Titan email and Open Xchange email with multi-feature web interfaces that connect to our customers' domains. The pricing of these plans depends on the customer's desire for additional features, including increased email storage, AI-based tools, appointment booking, advanced email
8
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included in this Quarterly Report as well as our audited financial statements and related notes and the discussions and analysis in the section titled "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategies for our business, includes forward-looking statements involving significant risks and uncertainties. As a result of many factors, such as those set forth in "Risk Factors," actual results may differ materially from the results described in, or implied by, these forward-looking statements.
(Throughout the tables and this discussion and analysis, dollars are in millions, excluding average revenue per user (ARPU), and shares are in thousands.)
Overview
We serve a large market of entrepreneurs through the development and delivery of easy-to-use products in a one-stop shop solution backed by trusted, proactive, informed and personalized guidance. We serve small businesses, individuals, organizations, developers, designers and domain investors. We manage and report our business in the following two segments:
•Applications and Commerce (A&C), which primarily consists of sales of products containing our proprietary software, notably our website building products, as well as our proprietary commerce solutions and third-party email and productivity solutions and sales of certain products when they are included in bundled offerings of our proprietary software products.
•Core Platform (Core), which primarily consists of sales of domain registrations and renewals, aftermarket domain sales, domain protection, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.
Consolidated First Quarter Financial Highlights
Below are our key consolidated financial highlights for the three months ended March 31, 2026, with comparisons to the three months ended March 31, 2025.
•Total revenue of $1,266.9 million, an increase of 6.1%, or approximately 5.6% on a constant currency basis(1).
•International revenue of $415.9 million, an increase of 7.0%, or approximately 5.5% on a constant currency basis(1).
•Total bookings of $1,455.3 million, an increase of 2.7%, or 1.7% on a constant currency basis(1).
•Operating income of $310.5 million, an increase of 25.6%.
•Net income of $214.6 million, a decrease of 2.2%(2).
•Normalized EBITDA(3) of $413.5 million, an increase of 13.5%.
•Net cash provided by operating activities of $471.5 million, an increase of 16.5%.
(1) Discussion of constant currency is set forth in "Quantitative and Qualitative Disclosures about Market Risk".
(2) Net income for the three months ended March 31, 2025 included a one-time benefit for the recognition of an uncertain tax position of $34.6 million.
(3) A reconciliation of Normalized EBITDA to net income, its most directly comparable GAAP financial measure, is set forth in "Reconciliation of NEBITDA" below.
21
Consolidated Results of Operations
The following table sets forth our consolidated results of operations for the periods presented and as a percentage of our total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||
| $ | % of Total Revenue | $ | % of Total Revenue | ||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||
| Applications and Commerce | $ | 498.2 | 39.3 | % | $ | 446.4 | 37.4 | % | |||||||||||||||||||||||||||||||
| Core Platform | 768.7 | 60.7 | % | 747.9 | 62.6 | % | |||||||||||||||||||||||||||||||||
| Total revenue | 1,266.9 | 100.0 | % | 1,194.3 | 100.0 | % | |||||||||||||||||||||||||||||||||
| Costs and operating expenses: | |||||||||||||||||||||||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | 459.1 | 36.2 | % | 440.5 | 36.9 | % | |||||||||||||||||||||||||||||||||
| Technology and development | 213.2 | 16.8 | % | 205.3 | 17.2 | % | |||||||||||||||||||||||||||||||||
| Marketing and advertising | 92.3 | 7.3 | % | 100.1 | 8.4 | % | |||||||||||||||||||||||||||||||||
| Customer care | 74.4 | 5.9 | % | 71.1 | 5.9 | % | |||||||||||||||||||||||||||||||||
| General and administrative | 91.0 | 7.2 | % | 97.1 | 8.1 | % | |||||||||||||||||||||||||||||||||
| Restructuring and other | 2.2 | 0.2 | % | 2.1 | 0.2 | % | |||||||||||||||||||||||||||||||||
| Depreciation and amortization | 24.2 | 1.9 | % | 30.8 | 2.6 | % | |||||||||||||||||||||||||||||||||
| Total costs and operating expenses | 956.4 | 75.5 | % | 947.0 | 79.3 | % | |||||||||||||||||||||||||||||||||
| Operating income | 310.5 | 24.5 | % | 247.3 | 20.7 | % | |||||||||||||||||||||||||||||||||
| Interest expense | (37.8) | (3.0) | % | (37.2) | (3.1) | % | |||||||||||||||||||||||||||||||||
| Other income (expense), net | 9.2 | 0.8 | % | 9.9 | 0.8 | % | |||||||||||||||||||||||||||||||||
| Income before income taxes | 281.9 | 22.3 | % | 220.0 | 18.4 | % | |||||||||||||||||||||||||||||||||
| Provision for income taxes | (67.3) | (5.4) | % | (0.5) | — | % | |||||||||||||||||||||||||||||||||
| Net income | $ | 214.6 | 16.9 | % | $ | 219.5 | 18.4 | % | |||||||||||||||||||||||||||||||
22
Non-GAAP Financial Measures, Operating Metrics and Business Metrics
In addition to our results determined in accordance with GAAP, we believe that the following non-GAAP financial measures, operating metrics and business metrics may be useful as supplements in evaluating our ongoing operational performance:
Three Months Ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Normalized EBITDA | $ | 413.5 | $ | 364.4 | |||||||||||||||
| Annualized recurring revenue | $ | 4,288.4 | $ | 4,053.8 | |||||||||||||||
| Total bookings | $ | 1,455.3 | $ | 1,417.0 | |||||||||||||||
| ARPU | $ | 246 | $ | 225 | |||||||||||||||
| March 31, 2026 | December 31, 2025 | |||||||||
| Total customers at period end (in thousands) | 20,435 | 20,422 | ||||||||
| Domains under management (in thousands) | 81,391 | 80,793 | ||||||||
Normalized EBITDA (NEBITDA). NEBITDA is a supplemental measure of our operating performance used by management to evaluate our business. We calculate NEBITDA as net income excluding depreciation and amortization, interest expense (net), provision or benefit for income taxes, equity-based compensation expense, acquisition-related costs, restructuring-related expenses and certain other items. We believe that the inclusion or exclusion of certain recurring and non-recurring items provides a supplementary measure of our core operating results and permits useful alternative period-over-period comparisons of our operations. NEBITDA should not be viewed as a substitute for comparable GAAP measures.
Annualized recurring revenue (ARR). ARR is an operating metric defined as annualized quarterly recurring GAAP revenue, net of refunds, from new and renewed subscription-based services. ARR is exclusive of any revenue that is non-recurring, including, without limitation, domain aftermarket, domain transfers, one-time set-up or migration fees and non-recurring professional website services fees. We believe ARR helps illustrate the scale of certain of our products and facilitates comparisons to other companies in our industry.
Total bookings. Total bookings is an operating metric representing the total value of customer contracts entered into during the period, excluding refunds. We believe total bookings provides additional insight into the performance of our business and the effectiveness of our marketing efforts since we typically collect payment at the inception of a customer contract but recognize revenue ratably over the term of the contract.
Total customers. We define a customer as an individual or entity, each with a unique account and paid transactions in the trailing twelve months or with paid subscriptions as of the end of the period. Total customers is one way we measure the scale of our business and can be a contributing factor to our ability to increase our revenue base.
Average revenue per user (ARPU). We calculate ARPU as total revenue during the preceding 12 month period divided by the average of the number of total customers at the beginning and end of the period. ARPU is one measure that provides insight into our ability to sell additional products to our customers.
Domains under management (DUM). DUM is a business metric representing the total number of domains that are registered through GoDaddy and its affiliated registrars.
23
Reconciliation of NEBITDA
The following table reconciles NEBITDA to net income, its most directly comparable GAAP financial measure:
| Three Months Ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| Net income | $ | 214.6 | $ | 219.5 | |||||||||||||||
| Depreciation and amortization | 24.2 | 30.8 | |||||||||||||||||
| Equity-based compensation expense | 75.3 | 80.4 | |||||||||||||||||
| Interest expense, net of interest income | 28.2 | 27.6 | |||||||||||||||||
Restructuring and other(1) | 3.9 | 5.6 | |||||||||||||||||
| Provision for income taxes | 67.3 | 0.5 | |||||||||||||||||
| NEBITDA | $ | 413.5 | $ | 364.4 | |||||||||||||||
(1)In addition to the restructuring and other in our statements of operations, other charges are primarily composed of lease-related expenses associated with closed facilities, charges related to certain legal matters, expenses incurred in relation to the refinancing of our long-term debt, acquisition-related expenses, and incremental expenses associated with certain professional services.
Constant Currency
The following table provides a reconciliation of constant currency:
| Three Months Ended March 31, 2026 | |||||||||||||||||
| Revenue | $ | 1,266.9 | |||||||||||||||
| Constant currency adjustment | (5.8) | ||||||||||||||||
| Constant currency revenue | $ | 1,261.1 | |||||||||||||||
Revenue
We generate the majority of our revenue from sales of product subscriptions, as described in our 2025 Form 10-K. Our subscriptions can range from monthly terms to multi-annual terms of up to ten years, depending on the product. Revenue is presented net of refunds, and we maintain a reserve to provide for refunds granted to customers.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Applications and Commerce | $ | 498.2 | $ | 446.4 | $ | 51.8 | 11.6 | % | ||||||||||||||||||||||||||||||
| Core Platform | 768.7 | 747.9 | 20.8 | 2.8 | ||||||||||||||||||||||||||||||||||
| Total revenue | $ | 1,266.9 | $ | 1,194.3 | $ | 72.6 | 6.1 | % | ||||||||||||||||||||||||||||||
Total revenue increased 6.1% for the three months ended March 31, 2026 due to the increases in our A&C and Core revenues, as described below:
A&C
The $51.8 million, or 11.6%, increase in A&C revenue for the three months ended March 31, 2026 was due to continued customer adoption of our subscription-based products.
24
Core
The $20.8 million, or 2.8%, increase in Core revenue for the three months ended March 31, 2026 was driven by $22.9 million growth in primary domain registrations and add-on revenues.
Bookings
The following table presents our total bookings for the periods indicated:
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Total bookings | $ | 1,455.3 | $ | 1,417.0 | $ | 38.3 | 2.7 | % | ||||||||||||||||||||||||||||||
The $38.3 million, or 2.7%, increase in total bookings for the three months ended March 31, 2026 was driven by continued customer adoption of our subscription-based A&C products.
Costs and Operating Expenses
Cost of revenue
Cost of revenue is primarily the direct costs we incur in connection with selling an incremental product to our customers. Substantially all cost primarily relates to domain registration fees, fees for third-party productivity applications, third-party commissions and payment processing fees. Similar to our billing practices, we pay domain costs at the time of purchase for the life of each subscription but recognize the costs of service ratably over the term of our customer contracts. The terms for domain costs are established by agreements between registries and registrars and can vary significantly depending on the top-level domain (TLD). We expect cost of revenue to increase in absolute dollars in future periods due to increased sales of domains and third-party productivity applications. However, cost of revenue may fluctuate as a percentage of total revenue, depending on the mix of products sold in a particular period.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Cost of revenue (excluding depreciation and amortization) | $ | 459.1 | $ | 440.5 | $ | 18.6 | 4.2 | % | ||||||||||||||||||||||||||||||
The $18.6 million, or 4.2%, increase in cost of revenue for the three months ended March 31, 2026 was driven by the increases in revenue described above.
25
Technology and development
Technology and development expenses represent the costs associated with the creation, development and distribution of our products and services. These expenses primarily consist of personnel costs associated with the design, development, deployment, testing, operation and enhancement of our products, as well as costs associated with the operation of our data centers and systems infrastructure supporting those products, excluding depreciation expense. We expect technology and development expenses to decrease as a percentage of revenue following a period of investment in product development and migration toward a unified infrastructure platform.
| Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||
| Technology and development | $ | 213.2 | $ | 205.3 | $ | 7.9 | 3.8 | % | |||||||||||||||||||||||||||
The $7.9 million, or 3.8%, increase in technology and development expenses for the three months ended March 31, 2026, was primarily attributable to a $4.5 million increase in public cloud cost as we continue to migrate to a cloud-based infrastructure.
Marketing and advertising
Marketing and advertising expenses represent the costs associated with attracting and acquiring customers, primarily consisting of fees paid to third parties for marketing and advertising campaigns across a variety of channels. These expenses also include personnel costs and affiliate program commissions. We expect marketing and advertising expenses to fluctuate in the future depending on both the mix of internal and external marketing resources used, the size and scope of our campaigns and the level of discretionary investments we make in marketing to drive sales and to promote awareness of our AI-native solutions, including Airo.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Marketing and advertising | $ | 92.3 | $ | 100.1 | $ | (7.8) | (7.8) | % | ||||||||||||||||||||||||||||||
The $7.8 million, or 7.8%, decrease in marketing and advertising expenses for the three months ended March 31, 2026, was attributable to the timing of discretionary advertising spend.
Customer care
Customer care expenses represent the costs to guide and service our customers, primarily consisting of personnel costs. We expect customer care expenses to fluctuate depending on the methods of customer interaction utilized as well as the level of personnel required to support our business.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Customer care | $ | 74.4 | $ | 71.1 | $ | 3.3 | 4.6 | % | ||||||||||||||||||||||||||||||
There was no material change in customer care expenses for the three months ended March 31, 2026.
26
General and administrative
General and administrative expenses primarily consist of personnel costs for our administrative functions, professional service fees, office rent for all locations, acquisition-related expenses and other general costs. We expect general and administrative expenses to fluctuate depending on the level of personnel and other administrative costs required to support our business as well as the significance of any strategic acquisitions we choose to pursue.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| General and administrative | $ | 91.0 | $ | 97.1 | $ | (6.1) | (6.3) | % | ||||||||||||||||||||||||||||||
There was no material change in general and administrative expenses for the three months ended March 31, 2026.
Depreciation and amortization
Depreciation and amortization expenses consist of charges relating to the depreciation of the property and equipment used in our operations and the amortization of acquired intangible assets. These expenses may increase or decrease in absolute dollars in future periods depending on our future level of capital investments in hardware and other equipment as well as the significance of any future acquisitions.
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 24.2 | $ | 30.8 | $ | (6.6) | (21.4) | % | ||||||||||||||||||||||||||||||
There was no material change in depreciation and amortization expenses for the three months ended March 31, 2026.
Interest expense
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Interest expense | $ | 37.8 | $ | 37.2 | $ | 0.6 | 1.6 | % | ||||||||||||||||||||||||||||||
There was no material change in interest expense for the three months ended March 31, 2026.
Other income (expense), net
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
| Other income (expense), net | $ | 9.2 | $ | 9.9 | $ | (0.7) | (7.1) | % | ||||||||||||||||||||||||||||||
There was no material change in other income (expense), net for the three months ended March 31, 2026.
27
Provision for income taxes
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||
Provision for income taxes | $ | (67.3) | $ | |||||||||||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-08 | McCaffrey Mark | Chief Financial Officer | Sell | -3,500 | $82.92 | -$290,220 |
| 2026-06-02 | Sine Jared F. | Chief Strategy & Legal Officer | Sell | -1,188 | $89.86 | -$106,754 |
| 2026-06-02 | Bhutani Amanpal Singh | Chief Executive Officer | Sell | -8,373 | $89.86 | -$752,398 |
| 2026-06-02 | McCaffrey Mark | Chief Financial Officer | Sell | -3,958 | $89.86 | -$355,666 |
| 2026-06-02 | Palitwanon Phontip | Chief Accounting Officer | Sell | -542 | $89.86 | -$48,704 |
| 2026-06-01 | Zarmi Sigal | Director | Sell | -350 | $87.84 | -$30,744 |
| 2026-05-18 | McCaffrey Mark | Chief Financial Officer | Sell | -16 | $89.15 | -$1,426 |
| 2026-05-18 | Palitwanon Phontip | Chief Accounting Officer | Sell | -12 | $89.15 | -$1,070 |
| 2026-05-18 | Sine Jared F. | Chief Strategy & Legal Officer | Sell | -13 | $89.15 | -$1,159 |
| 2026-04-02 | Sine Jared F. | Chief Strategy & Legal Officer | Sell | -7,793 | $80.71 | -$628,973 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-07 10-Q expected by 2026-08-14 (in 53 days)
- ~2026-10-30 10-Q expected by 2026-11-06 (in 137 days)
- ~2027-02-24 10-K expected by 2027-03-03 (in 254 days)
- ~2027-04-30 10-Q expected by 2027-05-07 (in 319 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-05 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-05-01 10-Q Quarterly Report
- 2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-24 DEF 14A Proxy Statement
- 2026-02-25 10-K Annual Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-31 10-Q Quarterly Report
- 2025-10-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-08 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-02 10-Q Quarterly Report
- 2025-05-01 8-K Earnings Release; Financial Statements and Exhibits
- 2025-02-20 10-K Annual Report
- 2025-02-13 8-K Earnings Release; Financial Statements and Exhibits
- 2024-12-16 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits