GoDaddy Inc. (GDDY): what the price assumes

boothcheck covers GoDaddy Inc. (GDDY) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-26.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/GDDY

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 8% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.2%); the inversion above states its own rate.

Per-Model Detail (n=13)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• The two growth rates do not match, and the gap is the story: March-quarter revenue rose 6.1 percent while operating income rose 25.6 percent, lifting the operating margin to 24.5 percent from 20.7 percent.
• The unit base behind that revenue is shrinking, not growing: paying customers ended 2025 at 20,422 thousand against 20,511 a year earlier and 21,026 in 2023, and the 10-K puts the domain side at "approximately 81 million domains under management as of December 31, 2025.", down from 83,554 thousand two years earlier.
• Free cash flow is the number management steers by and the one to watch, targeted at approximately 1.8 billion dollars for 2026 against 1.6 billion generated in 2025.

Bull Case

The oddest number in these accounts is not a number at all. It is a gap between two of them. In the March quarter revenue grew 6.1 percent and operating income grew 25.6 percent, taking the operating margin to 24.5 percent from 20.7 percent a year earlier. Fiscal 2025 did the same thing: revenue up 8.3 percent, operating profit up 26.2 percent. A company whose profit compounds four times faster than its sales for two years running is not riding a cycle. Something in the shape of the business is changing.

The mechanism is mix, and it is almost boringly simple. Applications and Commerce revenue grew 11.6 percent in the quarter to 498.2 million dollars, while Core Platform grew 2.8 percent to 768.7 million. The faster-growing half also earns more: segment EBITDA margin ran 45.2 percent in Applications and Commerce against 33.0 percent in Core Platform. Nobody has to execute brilliantly for the blended margin to rise. It rises because the profitable half keeps getting bigger relative to the other half, quarter after quarter.

None of which would work without the domain business underneath it, which remains the largest single revenue line in the company and the reason anyone shows up in the first place. The 10-K states it plainly: "We are the global leader in domain name registration, with approximately 81 million domains under management as of December 31, 2025." The economics of that product are unusually clean, and the filing describes them precisely: "For each domain registration or renewal, we have one performance obligation consisting of two promises to ensure: (1) the customer has exclusive use of the domain during the applicable registration term and (2) the domain is accessible and appropriately directed to its underlying content." Somebody who has printed a web address on a business card renews it. The company puts the resulting stickiness on the record: "We have 20.4 million paying customers and a customer retention rate of over 85% for the year ended December 31, 2025."

What the company does with that captive audience is sell it more. Average revenue per user reached $246 in the March quarter against $225 a year earlier, up 9.3 percent, and annualised recurring revenue reached 4,288.4 million dollars. A small business that already buys a domain, and then buys email, and then buys a store, is a customer whose value rises without any acquisition spending attached to it. That is why the margin can expand while the marketing line does not.

The cash arriving at the bottom is what makes the whole thing tangible. Operating activities produced 471.5 million dollars in the March quarter, up 16.5 percent, and management reaffirmed a full-year free cash flow target of approximately 1.8 billion dollars against 1.6 billion generated in 2025. Set that against a market value near 12.5 billion dollars and the yield is substantial. In the quarter alone the company bought back 3.0 million shares for 279.7 million dollars, comfortably more than the stock compensation issued over the same stretch, so the count is genuinely falling rather than treading water.

Among the peers whose figures can be read on the same basis, the profitability stands out. AKAM runs a 12.3 percent operating margin on trailing revenue of 4,266.6 million dollars growing 6.2 percent, and NET runs a negative operating margin on 2,328.6 million growing 31.6 percent. GoDaddy's trailing operating margin sits near 23.7 percent on comparable revenue growth to AKAM. It is the rare mature software business that converted maturity into margin rather than into decline.

Bear Case

The moat here was never the software, and the software was never hard to copy. The moat was twenty million small businesses that had already put an address on a business card, and the mild annual inconvenience of moving. That base has stopped growing and begun to shrink. Paying customers finished 2025 at 20,422 thousand, against 20,511 at the end of 2024 and 21,026 at the end of 2023. Domains under management went from 83,554 thousand to 81,013 to 80,793 across the same three year-ends. Two consecutive years of decline on both counts, disclosed in the company's own MD&A table. Revenue rose regardless, because average revenue per user went from $203 to $220 to $242. Strip the pricing away and the business is smaller than it was.

The forward guidance says this continues. Full-year 2026 revenue is guided to a range of 5.195 to 5.275 billion dollars, roughly 6 percent growth at the midpoint, with Applications and Commerce in the low double digits and Core Platform, the larger half, in the low single digits. More telling is the leading indicator. Bookings grew 2.7 percent in the March quarter against reported revenue growth of 6.1 percent. For a subscription business, bookings are what revenue becomes; a bookings line running at less than half the revenue line is the recognition of past pricing catching up with a present that is slower.

Competition is arriving from a direction the company cannot buy its way out of. Its own risk factors are titled "We face significant competition for our products, which we expect will continue to intensify, and we may not be able to maintain or improve our competitive position or market share." and note that "In addition, we and our competitors continue to invest in AI and integrate AI capabilities into products, services and internal operations." The bundle GoDaddy sells a microbusiness, a site plus email plus a payment page, is precisely what a general-purpose assistant now assembles on request. Management's answer is Airo AI Builder, which it describes as reaching a multi-million-dollar annualised bookings run rate within weeks of its beta launch. Held against quarterly bookings of 1,455.3 million dollars, that is not yet a business.

Then there is the question of what the cash flow actually means, which is the crux of the valuation rather than a footnote to it. Capitalise the reported free cash flow at a required return and the calculation comfortably clears the current quote. Subtract the roughly 310 million dollars a year of stock-based compensation that the free cash flow measure does not charge against itself, and the price sits about 19 percent above the same calculation. Those are not two views. They are the same arithmetic run on two definitions of what the owner receives, and the whole case turns on which one is honest.

The balance sheet leaves less room than the cash generation implies. The company reported total cash and cash equivalents of 1.3 billion dollars, total debt of 3.8 billion and net debt of 2.6 billion as of March 31, 2026. Book equity is close to nothing, because a decade of repurchases has consumed it, which means there is no asset cushion under the shares at all. Trailing operating profit covers the financing cost several times over and none of this is distress. But it does mean that if free cash flow disappoints, the buyback is the first thing that has to give, and the buyback is currently doing a meaningful share of the work in per-share growth.

Valuation

Rebuilt from the filed income statements, the twelve months through March 31, 2026 produced about 1.19 billion dollars of operating profit on 5.02 billion of revenue, an operating margin near 23.7 percent. Work the current quote backwards and the market is priced for operating profit growth of roughly -3.2% a year across a five-year stage. That is the striking part. The quote embeds a business whose profit slowly shrinks, at a moment when operating profit grew 26.2 percent in fiscal 2025 and 25.6 percent in the March quarter.

Not one family of method finds the shares expensive, but the families are not equally trustworthy here. Anything built off book value per share is unusable, because a decade of repurchases has left almost no book equity to divide by, and calculations anchored on it swing wildly in both directions. Peer multiples land well above the quote, though they get there using generic technology-sector reference multiples rather than anything drawn from domain registrars, which flatters the reading. The forward cash-flow work also lands above the quote, one method holding today's earnings multiple where it stands out to a six-year horizon, compressing it in the bear scenario and expanding it in the bull. The no-growth earnings-power calculation is the one dissenter of substance: averaging five years of operating income and crediting no growth at all, it lands far under the quote, which is what happens when a company's recent profit is much larger than its five-year average.

The decisive question is narrower than the method spread suggests. It is what free cash flow means. Capitalise the reported figure at a required return and the result sits above where the shares change hands. Subtract the roughly 310 million dollars a year of stock-based compensation, and the price sits about 19 percent above the same calculation. Against that, the company repurchased 3.0 million shares for 279.7 million dollars in the March quarter, more than covering the compensation issued, so the dilution is being paid for in cash rather than tolerated.

The obligations are visible and manageable. The company reported total cash and cash equivalents of 1.3 billion dollars, total debt of 3.8 billion and net debt of 2.6 billion as of March 31, 2026. Against roughly 1.19 billion dollars of trailing operating profit and a reaffirmed 2026 free cash flow target near 1.8 billion, servicing that is not in question. What it does constrain is optionality: with no asset cushion under the equity, the buyback is the shock absorber, and it is the first thing to be cut if the cash target slips.

Placed against the peers that can be read on the same basis, GoDaddy converts a similar growth rate into roughly double the profit. AKAM earns a 12.3 percent operating margin on trailing revenue of 4,266.6 million dollars growing 6.2 percent. GoDaddy's near 23.7 percent comes on comparable growth, and on the multiple applied to operating income the shares sit in the lower half of that peer range. The market is pricing a gradual erosion of the profit line while the accounts are recording a sharp expansion of it. The customer table, not the margin table, is where that argument gets settled.

Catalysts

The last full read arrived on April 30, 2026 and it was a strong one. March-quarter revenue of 1,266.9 million dollars rose 6.1 percent, Applications and Commerce revenue rose 11.6 percent to 498.2 million, and operating income of 310.5 million rose 25.6 percent, widening the operating margin by 380 basis points to 24.5 percent. Operating cash flow reached 471.5 million dollars, up 16.5 percent. Guidance for the June quarter puts revenue between 1.285 and 1.305 billion dollars, and the full-year range was reaffirmed at 5.195 to 5.275 billion, both around 6 percent growth at the midpoint.

The product news is where the next few quarters get decided. Management reported that Airo AI Builder, the company's internally built AI-native site creation experience, reached a multi-million-dollar annualised bookings run rate within weeks of its beta launch. In April the company announced partnerships with LegalZoom and Cloudflare to advance its Agent Name Service, which extends the domain-identity franchise into machine-to-machine use, and said non-GoDaddy agents registered on that service now number in the thousands. Whether either becomes material revenue rather than an announcement is the open question, and the bookings line is where it would show first.

Two financial markers frame the rest of the year. The full-year free cash flow target of approximately 1.8 billion dollars was reaffirmed against 1.6 billion generated in 2025, as was a full-year normalised margin commitment above 33 percent. Repurchases ran at 3.0 million shares for 279.7 million dollars in the March quarter. Those three items move together: the cash target funds the buyback, and the margin commitment is what makes the cash target credible.

Peer Cohorts (Per Segment, With Filing Citations)

Applications and Commerce (A&C) (reported)

• WIX (Wix.com Ltd.)
• FY2025 20-F: …prices or take other steps that may materially adversely impact our results of operations. If we do not or cannot maintain the compatibility of our platform and solutions with changes and developments in third-party applications, or if the third-party applications that we offer fail to keep pace with competitors'…
• FY2025 20-F: …manage their operations; • our ability to optimize our marketing strategies and to execute successful marketing and sales activities, including those aimed at attracting and retaining partners, such as our partners' revenue sharing programs; • pricing decisions we implement for our solutions, including the pricing of…
• SHOP (Shopify Inc.)
• FY2025 10-K: …in one or more markets to gain a competitive advantage against us in areas where we operate by, among other things: integrating competing platforms, applications or features into products they control; making acquisitions; or making access to our platform more difficult including by changing the terms of service…
• FY2025 10-K: …our growth; 13 Table of Contents • Our use of AI and machine learning, including associated risks and the developing regulatory environment; • Changes to technologies used in our platform or technologies through which merchants and their buyers interface with our platform; Risks Related to Laws and Regulations •…
• GLBE (Global-E Online Ltd.)
• FY2025 20-F: …increase our costs, disrupt supply chains, and impact the affordability of products for consumers as merchants may increase the price of their products, changes in trade policies may also create an opportunity and increased demand for our services as trade complexities arise. Military hostilities in certain regions…
• FY2025 20-F: …cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider. We face competition from other companies in our industry in relation to the development and deployment of artificial intelligence and machine learning…

Core Platform (reported)

• WIX (Wix.com Ltd.)
• FY2025 20-F: …apps in minutes using natural language. From personal productivity tools and internal workflows to customer portals and enterprise-grade products, Base44 turns ideas into ready-to-use applications with no integrations required. HourOne Hour One is a pioneer in generative AI media creation. It develops technology that…
• FY2025 20-F: …service interruptions. This highly scalable multi-tenant technology infrastructure enables us to serve all of our users simultaneously and consistently, and scales based on overall traffic and capacity. As a result, our platform is not affected or slowed down by growth in the number of users whose data is stored in…
• AKAM (AKAMAI TECHNOLOGIES, INC.)
• FY2025 10-K: …to power and protect business online by offering security, compute, delivery and AI infrastructure services with the industry-leading reliability, scale and expertise our customers need to grow their business with confidence. Our Solutions We provide solutions in three core offerings: security, cloud computing and…
• FY2025 10-K: …Cloud Infrastructure Services, including support for a new enterprise cloud computing customer and our new AIC. With the build out of our compute platform, we are experiencing a significant increase in server and memory costs due to market dynamics driven by hyperscalers. These cost increases will increase our future…
• NET (Cloudflare Inc)
• FY2025 10-K: …our customers and maintain the performance of our network could be negatively impacted, which could cause our business, results of operations and financial condition to suffer. As of December 31, 2025, we hosted our global network and served our customers from co-location and Internet Service Provider (ISP) partner…
• FY2025 10-K: ; terrorism; and other catastrophic events. For example, in November 2023, our control plane and analytics services experienced an outage triggered by a power failure at one of our core data centers in the greater Portland, Oregon area, which impacted certain customers' access to some of our products and services for…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.