GoDaddy Inc. (GDDY)

CIK: 0001609711. SIC: 7373 Services-Computer Integrated Systems Design. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Services > Business Services > SIC 7373 Services-Computer Integrated Systems Design

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1609711. Latest filing source: 0001609711-26-000010.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001609711.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

Item 7. 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 "Financial Statements and Supplementary Data." 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.

This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of 2023 items and comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the year ended December 31, 2024.

(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, and our proprietary commerce solutions, as well as 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.

We have developed a stable and durable business model driven by strong brand recognition, seamless technology, scale of our business and customer care. We generate bookings and revenue, which help us measure the success of our efforts, from the sales of our products. We monitor total bookings as we believe it is an indicator of the expected growth in our revenue and is a supplemental measure of the operating performance of our business. Total bookings and revenue derived from both of our product segments have increased in each of the last three years, with many of our non-domains products growing faster in recent periods.

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The primary factors driving growth in our business are our seamless technology experience, cost optimization and retention of high intent customers, pricing and bundling, and commerce. Our key priorities, developments and highlights in these areas include:

Seamless Technology and Airo. Our seamless experience initiative is focused on delivering improved customer conversion, product engagement and renewal through enhancements to all parts of the customer journey, from initial onboarding through to the purchase path. In tandem, we also continue to expand our AI-powered experiences, including Airo, and incorporate generative and agentic AI innovations into our products and services and throughout our operations to make use of efficiencies and increase productivity. We remain focused on expanding our solutions and operations to stay up to date with these developments in order to maintain and grow our business.

Cost Optimization and Profitability. During the year ended December 31, 2025, we engaged in cost optimization initiatives, including decreases in rent and utilities expenses, and reductions in costs associated with data center and systems infrastructure as we continue to migrate to a cloud-based infrastructure. These cost optimization initiatives have resulted in increased NEBITDA margins.

Pricing and Bundling. Our pricing and bundling initiative is focused on giving customers greater value and choice through tailored bundles that simplify their decision making and deepen engagement across our platform. During the year ended December 31, 2025, this initiative continued to deliver results across both segments of our business. We aim to continue to experiment and utilize various pricing strategies and price points for our solutions. In addition, as we continue to incorporate AI innovations into our solutions, monetization trends could be affected.

Commerce. We continue to grow our commerce offerings with tailored OmniCommerce solutions, POS systems, financial tools such as GoDaddy Capital and Instant Payouts and SaaS plans with premium features and discounted transaction fees to merchants. We also continue to enhance our offerings with new agentic AI-powered features that simplify operations for our customers. Our commerce platform works in tandem with our web building capabilities, allowing our customers to set up their online store with a full integrated cart experience, including inventory and order management.

Customer Composition. Strong customer retention continues to drive our business. We aim to attract high-intent customers that attach more at the outset of our relationship and over time. Our onboarding paths and seamless technology are designed to help customers more easily navigate the solutions for their one-stop shop experience through an integrated platform. We have focused our efforts here because we know through our long history and vast amount of data that customers with a greater number of products with us retain at higher rates and produce higher lifetime value. In each of the five years ended December 31, 2025, our customer retention rate was approximately 85%, with the exception of the year ended December 31, 2024 when the retention rate was approximately 84% due to divestitures, migrations and end of life of certain products as part of our efforts to streamline brands outside of the GoDaddy platform. In addition, the retention rate for our customers who had been with us for over three years as of December 31, 2025 was approximately 90%. Greater than 89% of our total revenue for the year ended December 31, 2025 was generated by customers who were also customers in the prior year.

In each of the five years ended December 31, 2025, greater than 85% of our total revenue was generated by customers who were also customers in the prior year. To track our growth and the stability of our customer base, we monitor, among other things, revenue and retention rates generated by our annual customer cohorts over time, as well as corresponding marketing and advertising spend. We define an annual customer cohort to include each customer who first became a customer during a calendar year. For example, in 2017, we acquired approximately 5.0 million gross customers, who we collectively refer to as our 2017 cohort, and we invested $253.2 million in marketing and advertising expenses. By the end of 2025, the 2017 cohort had generated an aggregate of approximately $3.0 billion of total bookings. We expect this cohort to continue to generate bookings and ultimately revenue in the future. For the seven years ended December 31, 2025, the average annual revenue retention rate of the 2017 cohort was more than 91%, which is calculated by averaging the ratio of the cohort's annual revenue for each of the seven years to its annual revenue for each respective preceding year. We selected the 2017 cohort as an example for this analysis, as we believe it illustrates the long-term value of our customers.

We believe we are able to build strong relationships with our customers through the breadth and depth of our solutions, the intelligent and proactive AI-powered experiences and the high quality and responsiveness of our customer care team, all of which are key to our high level of customer retention. To that end, we continue to monitor our customer cohorts to ensure growth and stability of our customer base. We track revenue and retention rates generated by our annual customer cohorts over time, as well as corresponding marketing and advertising spend.

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Financial Highlights

Below are our key consolidated financial highlights for the year ended December 31, 2025, with comparisons to the year ended December 31, 2024.

•Total revenue of $4,951.1 million, an increase of 8.3%, or approximately 8.4% on a constant currency basis(1).

•International revenue of $1,626.8 million, an increase of 11.4%, or approximately 11.8% on a constant currency basis(1).

•Total bookings of $5,400.0 million, an increase of 7.2%, on a reported and constant currency basis(1).

•Operating income of $1,127.3 million, an increase of 26.2%.(2)

•Net income of $875.0 million, a decrease of 6.6%.(2) (3)

•Normalized EBITDA(4) of $1,585.9 million, an increase of 13.6%.

•Net cash provided by operating activities of $1,599.4 million, an increase of 24.2%.

(1) Discussion of constant currency is set forth in "Quantitative and Qualitative Disclosures about Market Risk" below.

(2) Our operating results for the years ended December 31, 2025 and December 31, 2024 included $11.1 million and $39.4 million, respectively, in restructuring and other charges, as further discussed in Note 13 to our financial statements.

(3) Net income for the year ended December 31, 2025 included a one-time benefit for the recognition of an uncertain tax position of $34.6 million. Net income for the year ended December 31, 2024 included a non-routine, non-cash benefit to income taxes of $267.4 million related to the conversion of GoDaddy's Desert Newco, LLC (Desert Newco) subsidiary from a partnership to a disregarded entity for U.S. income tax purposes.

(4) A reconciliation of Normalized EBITDA to net income, its most directly comparable GAAP financial measure, is set forth in "Reconciliation of NEBITDA" below.

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Results of Operations

The following table sets forth our 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.

Year Ended December 31,

2025

2024

2023

$

% of Total Revenue

$

% of Total Revenue

$

% of Total Revenue

Revenue:

Applications and Commerce

$

1,889.0 

38.2 

%

$

1,653.0 

36.1 

%

$

1,430.4 

33.6 

%

Core Platform

3,062.1 

61.8 

%

2,920.2 

63.9 

%

2,823.7 

66.4 

%

Total revenue

4,951.1 

100.0 

%

4,573.2 

100.0 

%

4,254.1 

100.0 

%

Costs and operating expenses:

Cost of revenue (excluding depreciation and amortization)

1,801.5 

36.4 

%

1,652.0 

36.1 

%

1,573.6 

37.0 

%

Technology and development

841.5 

17.0 

%

814.4 

17.8 

%

839.6 

19.7 

%

Marketing and advertising

375.1 

7.6 

%

356.9 

7.8 

%

352.9 

8.3 

%

Customer care

289.1 

5.8 

%

287.5 

6.3 

%

304.5 

7.2 

%

General and administrative

388.9 

7.9 

%

394.2 

8.6 

%

374.0 

8.9 

%

Restructuring and other

11.1 

0.2 

%

39.4 

0.9 

%

90.8 

2.1 

%

Depreciation and amortization

116.6 

2.3 

%

135.3 

3.0 

%

171.3 

3.9 

%

Total costs and operating expenses

3,823.8 

77.2 

%

3,679.7 

80.5 

%

3,706.7 

87.1 

%

Operating income

1,127.3 

22.8 

%

893.5 

19.5 

%

547.4 

12.9 

%

Interest expense

(151.0)

(3.1)

%

(158.3)

(3.5)

%

(179.0)

(4.2)

%

Gain (loss) on debt extinguishment

1.4 

— 

%

(4.6)

(0.1)

%

(1.5)

— 

%

Other income (expense), net

42.3 

0.9 

%

34.8 

0.8 

%

36.9 

0.8 

%

Income before income taxes

1,020.0 

20.6 

%

765.4 

16.7 

%

403.8 

9.5 

%

Benefit (provision) for income taxes

(145.0)

(2.9)

%

171.5 

3.8 

%

971.8 

22.8 

%

Net Income

875.0 

17.7 

%

936.9 

20.5 

%

1,375.6 

32.3 

%

Less: net income attributable to non-controlling interests

— 

— 

%

— 

— 

%

0.8 

— 

%

Net income attributable to GoDaddy Inc.

$

875.0 

17.7 

%

$

936.9 

20.5 

%

$

1,374.8 

32.3 

%

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:

Year Ended December 31,

2025

2024

2023

Normalized EBITDA

$

1,585.9 

$

1,395.9 

$

1,134.5 

Annualized recurring revenue

$

4,336.2 

$

4,042.6 

$

3,729.3 

Total bookings

$

5,400.0 

$

5,038.8 

$

4,603.1 

Total customers at period end (in thousands)

20,422 

20,511 

21,026 

ARPU

$

242 

$

220 

$

203 

Domains under management (in thousands)

80,793 

81,013 

83,554 

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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.

Reconciliation of NEBITDA

The following table reconciles NEBITDA to net income, its most directly comparable GAAP financial measure:

Year Ended December 31,

2025

2024

2023

Net Income

$

875.0 

$

936.9 

$

1,375.6 

Depreciation and amortization

116.6 

135.3 

171.3 

Equity-based compensation expense

317.8 

299.1 

294.0 

Interest expense, net of interest income

114.2 

130.4 

155.4 

Restructuring and other(1)

17.3 

65.7 

110.0 

Provision (benefit) for income taxes

145.0 

(171.5)

(971.8)

NEBITDA

$

1,585.9 

$

1,395.9 

$

1,134.5 

_________________________________

(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, adjustments to the fair value of our equity investments, expenses incurred in relation to the refinancing of our long-term debt, acquisition-related expenses, and incremental expenses associated with certain professional services.

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Constant Currency

The following table provides a reconciliation of constant currency:

Year Ended

December 31, 2025

Revenue

$

4,951.1 

Constant currency adjustment

5.6 

Constant currency revenue

$

4,956.7 

Year-Over-Year Comparison

Revenue

We generate the majority of our revenue from sales of product subscriptions, as described in Note 2 to our financial statements. 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.

The following table presents our revenue for the periods indicated:

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Applications and commerce

$

1,889.0 

$

1,653.0 

$

1,430.4 

$

236.0 

14.3 

%

$

222.6 

15.6 

%

Core platform

3,062.1 

2,920.2 

2,823.7 

141.9 

4.9 

%

96.5 

3.4 

%

Total revenue

$

4,951.1 

$

4,573.2 

$

4,254.1 

$

377.9 

8.3 

%

$

319.1 

7.5 

%

Total revenue increased 8.3%, due to the increases in our A&C and Core revenues, as described below:

A&C. The $236.0 million, or 14.3%, increase in A&C revenue for the year ended December 31, 2025 was due to continued customer adoption of our subscription-based products.

Core. The $141.9 million, or 4.9%, increase in Core revenue for the year ended December 31, 2025 was driven by $104.6 million growth in domain registration and add-on revenues and $53.2 million growth in aftermarket revenue. This increase was partially offset by a shift in sales mix as well as an $11.9 million decrease in hosting revenues related to end-of-life migrations away from certain products and the disposition of certain hosting assets in 2024.

Bookings

The following table presents our total bookings for the periods indicated:

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Total bookings

$

5,400.0 

$

5,038.8 

$

4,603.1 

$

361.2 

7.2 

%

$

435.7 

9.5 

%

The $361.2 million, or 7.2%, increase in total bookings for the year ended December 31, 2025 was driven by strength in domains and aftermarket and continued customer adoption of our subscription-based A&C products. These increases were partially offset by a decrease in hosting bookings related to end-of-life migrations away from certain products and the disposition of certain hosting assets in 2024.

Following a competitive rebid in the second quarter of 2025, we no longer operate as the registry service provider for the .CO top-level domain after October 3, 2025. This transition did not have a material impact to our financial results during the year ended December 31, 2025, and we will continue to offer .CO to customers in our capacity as an accredited registrar.

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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 of revenue 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 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.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Cost of revenue

$

1,801.5 

$

1,652.0 

$

1,573.6 

$

149.5 

9.0 

%

$

78.4 

5.0 

%

The $149.5 million, or 9.0%, increase in cost of revenue for the year ended December 31, 2025 was driven by the increases in revenue described above.

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 in future periods following a period of investment in product development and migration toward a unified infrastructure platform.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Technology and development

$

841.5 

$

814.4 

$

839.6 

$

27.1 

3.3 

%

$

(25.2)

(3.0)

%

The $27.1 million, or 3.3%, increase in technology and development expenses for the year ended December 31, 2025, was attributable to a $19.7 million increase in personnel costs associated with our continued investment in product development.

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 depending on both the mix of internal and external marketing resources used, the size and scope of our future campaigns and the level of discretionary investments we make in marketing to drive future sales.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Marketing and advertising

$

375.1 

$

356.9 

$

352.9 

$

18.2 

5.1 

%

$

4.0 

1.1 

%

The $18.2 million, or 5.1%, increase in marketing and advertising expenses for the year ended December 31, 2025 was attributable to an increase in discretionary advertising spend in support of our strategic initiatives, including building broader awareness of our GoDaddy Airo experience.

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

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personnel required to support our business.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Customer care

$

289.1 

$

287.5 

$

304.5 

$

1.6 

0.6 

%

$

(17.0)

(5.6)

%

There was no material change in customer care expenses for the year ended December 31, 2025.

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.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

General and administrative

$

388.9 

$

394.2 

$

374.0 

$

(5.3)

(1.3)

%

$

20.2 

5.4 

%

There was no material change in general and administrative expenses for the year ended December 31, 2025.

Restructuring and other

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Restructuring and other

$

11.1 

$

39.4 

$

90.8 

$

(28.3)

(71.8)

%

$

(51.4)

(56.6)

%

The $28.3 million, or 71.8%, decrease in restructuring and other expenses for the year ended December 31, 2025 was attributable to an $8.0 million decrease in severance, employee benefits and equity-based compensation pursuant to restructuring activities. The remaining decrease was attributable to individually immaterial amounts resulting from non-cash impairment charges and abandonment of certain operating leases during the year ended December 31, 2024.

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.

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Depreciation and amortization

$

116.6 

$

135.3 

$

171.3 

$

(18.7)

(13.8)

%

$

(36.0)

(21.0)

%

The $18.7 million, or 13.8%, decrease in depreciation and amortization expense for the year ended December 31, 2025 was attributable to an $11.8 million reduction in depreciation from fully depreciated assets in 2024 and accelerated depreciation related to 2024 office closures.

Interest expense

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Interest expense

$

151.0 

$

158.3 

$

179.0 

$

(7.3)

(4.6)

%

$

(20.7)

(11.6)

%

There was no material change in interest expense for the year ended December 31, 2025.

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Other income (expense), net

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Other income (expense), net

$

42.3 

$

34.8 

$

36.9 

$

7.5 

21.6 

%

$

(2.1)

(5.7)

%

There was no material change in other income (expense), net for the year ended December 31, 2025.

Benefit (provision) for income taxes

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

% change

$ change

% change

Benefit (provision) for income taxes

$

(145.0)

$

171.5 

$

971.8 

$

(316.5)

(184.5)

%

$

(800.3)

(82.4)

%

The $316.5 million, or 184.5%, change in benefit (provision) for income taxes was primarily due to the completion of the DNC Restructure, as defined and further discussed in Note 15 to our financial statements, which resulted in the conversion of Desert Newco from a partnership to a disregarded entity for U.S. income tax purposes, and resulted in a one-time non-cash income tax benefit in the first quarter of 2024 of $267.4 million. Additionally, income before income taxes increased $254.6 million year over year, contributing to a higher income tax provision in the current period. This increase was partially offset by a $34.6 million income tax benefit recognized during the first quarter of 2025 related to the recognition of an uncertain tax position in a foreign jurisdiction as a result of a favorable tax court ruling.

Segment Results of Operations

Our two operating segments, A&C and Core, reflect the way we manage and evaluate the performance of our business. Our chief operating decision maker evaluates segment performance based upon several factors, of which the primary financial measures are revenue and Segment EBITDA, our segment measure of profitability. See Note 17 to our financial statements for a reconciliation of Segment EBITDA to net income, its most directly comparable GAAP financial measure.

Applications and Commerce

The following table presents the results for our A&C segment for the periods indicated:

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

%/bps change

$ change

%/bps change

Revenue

$

1,889.0 

$

1,653.0 

$

1,430.4 

$

236.0 

14.3 

%

$

222.6 

15.6 

%

Segment EBITDA

$

856.9 

$

739.3 

$

594.2 

$

117.6 

15.9 

%

$

145.1 

24.4 

%

Segment EBITDA Margin

45.4 

%

44.7 

%

41.5 

%

n/a

70 bps

n/a

320 bps

The $117.6 million, or 15.9%, increase in A&C Segment EBITDA for the year ended December 31, 2025 was attributed to a $236.0 million increase in revenue as described above. This increase was partially offset by a $118.4 million increase in other segment items driven by higher cost of revenue attributable to the increase in revenue and increased operating expenses (excluding acquisition-related costs, equity-based compensation expense and depreciation and amortization expense) attributable to technology and development and marketing costs.

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Core

The following table presents the results for our Core segment for the periods indicated:

Year Ended December 31,

2025 to 2024

2024 to 2023

2025

2024

2023

$ change

%/bps change

$ change

%/bps change

Revenue

$

3,062.1 

$

2,920.2 

$

2,823.7 

$

141.9 

4.9 

%

$

96.5 

3.4 

%

Segment EBITDA

$

1,010.3 

$

931.7 

$

816.4 

$

78.6 

8.4 

%

$

115.3 

14.1 

%

Segment EBITDA Margin

33.0 

%

31.9 

%

28.9 

%

n/a

110 bps

n/a

300 bps

The $78.6 million, or 8.4%, increase in Core Segment EBITDA for the year ended December 31, 2025 was attributed to a $141.9 million increase in revenue as described above. This increase was partially offset by a $63.3 million increase in other segment items driven by higher cost of revenue attributable to the increase in revenue.

Liquidity and Capital Resources

Overview

Our principal sources of liquidity have been cash flow generated from operations and long-term debt borrowings. Our principal uses of cash have been to fund operations and capital expenditures, to make mandatory principal and interest payments on our long-term debt and to effectuate our share repurchase program. Our liquidity position also benefits from U.S. and state deferred tax assets (DTAs) such that we have not historically paid a significant amount of U.S. federal or state income taxes.

In general, we seek to deploy our capital by focusing on requirements for our operations, growth investments and stockholder returns. Our strategy is to deploy capital, whether debt, equity or internally generated cash, depending on the adequacy and availability of the source of capital and which source may be used most efficiently and at the lowest cost at such time. Therefore, while cash from operations is our primary source of operating liquidity and we believe our internally-generated cash flows are sufficient to support our day-to-day operations, we may use a variety of capital sources to fund our needs for less predictable investment decisions such as strategic acquisitions and share repurchases.

We believe our existing cash and cash equivalents and cash generated by operating activities will be sufficient to meet our anticipated operating cash needs for at least the next 12 months. However, our future capital requirements will depend on many factors, including our growth rate, macroeconomic activity, the timing and extent of spending to support domestic and international development efforts, continued brand development and advertising spend, the level of customer care and general and administrative activities, the introduction of new and enhanced product offerings, the costs to support new and replacement capital equipment, the completion of strategic acquisitions or share repurchases. Should we pursue additional strategic acquisitions or share repurchases, we may need to raise additional capital, which may be in the form of long-term debt or equity financings.

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Cash Flows

The following table summarizes our cash flows for the periods indicated:

Year Ended December 31,

2025

2024

2023

Net cash provided by operating activities

$

1,599.4 

$

1,287.7 

$

1,047.6 

Net cash provided by (used in) investing activities

(25.1)

21.5 

(102.4)

Net cash used in financing activities

(1,587.1)

(677.4)

(1,261.7)

Effect of exchange rate changes on cash and cash equivalents

4.7 

(1.6)

1.3 

Net increase (decrease) in cash and cash equivalents

$

(8.1)

$

630.2 

$

(315.2)

Operating Activities

Our primary source of cash from operating activities has been cash collections from our customers. Our primary uses of cash from operating activities have been for domain registration costs paid to registries, software licensing fees related to third-party productivity solutions, personnel costs, discretionary marketing and advertising costs, technology and development costs and interest payments. We expect cash outflows from operating activities to be affected by the timing of payments we make to registries and other operating costs as we continue to grow our business.

Net cash provided by operating activities increased $311.7 million driven by the growth in total bookings. The increase was also driven by lower restructuring related payments.

Investing Activities

Our investing activities generally consist of strategic investments, dispositions and purchases of property and equipment to support the overall growth of our business. We expect our investing cash flows to be affected by the timing of payments we make for capital expenditures.

Net cash used in investing activities increased $46.6 million due to maturities of short-term investments of $40.0 million as well as proceeds from dispositions of certain assets and liabilities of our hosting business in the year ended December 31, 2024.

Financing Activities

Our financing activities generally consist of long-term debt borrowings, the repayment of principal on long-term debt, stock option exercises, employee stock purchase plan proceeds and share repurchases.

Net cash used in financing activities increased $909.7 million driven by a $925.4 million increase in share repurchases.

Deferred Revenue

See Note 7 to our financial statements for details regarding the expected future recognition of deferred revenue.

Off-Balance Sheet Arrangements

As of December 31, 2025 and 2024, we had no off-balance sheet arrangements that had, or which are reasonably likely to have, a material effect on our financial statements.

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Material Cash Requirements and Uses of Cash

Credit Facility and Senior Notes

Our long-term debt consists of our Credit Facility, which includes two tranches of term loans and a revolving credit facility (Revolver), and our Senior Notes. See Note 9 to our financial statements for additional information regarding our long-term debt, including the Credit Facility and Senior Notes.

Our long-term debt agreements contain covenants restricting, among other things, our ability, or the ability of our subsidiaries, to incur indebtedness, issue certain types of equity, incur liens, enter into fundamental changes including mergers and consolidations, sell assets, make restricted payments including dividends, distributions and investments, prepay junior indebtedness and engage in operations other than in connection with acting as a holding company, subject to customary exceptions. As of December 31, 2025, we were in compliance with all such covenants and had $998.6 million available for borrowing under the Revolver.

As discussed in Note 10 to our financial statements, we have hedged a portion of our long-term debt through the use of cross-currency and interest rate swap derivative instruments. These instruments help us manage and mitigate our risk of exposure to changes in foreign currency exchange rates and interest rates. See "Quantitative and Qualitative Disclosures About Market Risk" for additional discussion of our hedging activities.

Share Repurchases

As discussed in Note 4 to our financial statements, our board of directors authorized a stock repurchase program, which commenced in May 2021, and subsequently, in January 2022 and August 2023, our board of directors increased authorization for an aggregate of up to $4.0 billion of our Class A common stock through 2025. During the three months ended March 31, 2025, we executed two accelerated share repurchase agreements (ASRs) totaling $767.4 million in upfront payments, fully utilizing the amount remaining under this authorization. These ASRs were fully settled in April 2025 with the delivery of approximately 4.4 million shares at a weighted average price of $176.02 per share. In April 2025, our board of directors approved the repurchase of up to an additional $3.0 billion of our Class A common stock through the end of 2027.

Additionally, we repurchased a total of approximately 5.9 million shares of our Class A common stock, which were retired upon repurchase, for an aggregate purchase price of $834.8 million during the year ended December 31, 2025. As of December 31, 2025, we had $2,165.2 million of remaining authorization available for share repurchases.

Restructuring and Other

As discussed in Note 13 to our financial statements, we undertook restructuring activities in the year ended December 31, 2025. Cash payments of $6.9 million were made in the year ended December 31, 2025, and approximately $4.4 million remains to be paid in 2026. We expect to make substantially all remaining restructuring payments pursuant to these activities by the end of the second quarter of 2026.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with GAAP, and in doing so, we make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances, and we evaluate these estimates, assumptions and judgments on an ongoing basis. Different assumptions and judgments could change the estimates used in the preparation of our financial statements, which, in turn, could change our results from those reported. We refer to estimates, assumptions and judgments of this type as our critical accounting policies and estimates, which we discuss further below. We review our critical accounting policies and estimates with the Audit Committee of our board of directors on an annual basis.

Of our significant accounting policies, which are described in Note 2 to our financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and operating results.

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Revenue Recognition

Revenue is recognized when control of a promised good or service (product) is transferred to the customer, in an amount reflecting the consideration we expect to be entitled to in exchange for such product. Revenue is recognized net of allowances for returns and applicable transaction taxes collected from customers. Refunds are estimated at contract inception using the expected value method based upon historical refund experience. Domain registration and renewal revenue is recognized ratably over the registration period as the customer simultaneously receives and consumes the benefits over the contract term. 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. After the contract term expires, unless renewed, the customer can no longer access or use the domain. We have determined these promises are not distinct within our contracts as they are highly interdependent and interrelated and are inputs to a combined benefit. Accordingly, we concluded that each domain registration or renewal represents one product offering and is a single performance obligation.

We sell our products directly to customers and also through a network of resellers. In certain cases, we act as a reseller of products fulfilled by others. We record revenue on a gross basis when we are the principal in the arrangement and on a net basis when we are an agent. The determination of whether we are a principal or an agent is dependent on whether we control the specific good or service before it is transferred to the customer, including whether we have primary fulfillment responsibility and obligation to perform the services being sold to the customer, whether we have inventory risk and whether we have latitude in establishing pricing. Revenue associated with sales of certain third party solutions, including Microsoft 365, where we act as a reseller of products provided by others is recorded on a gross basis as we have determined that we control the product before transferring it to our end customers. Revenue associated with aftermarket domain sales, excluding certain immaterial reseller arrangements, is recorded on a gross basis as we have determined that we take control of the domain before transferring it to our end customers. The determination of gross or net revenue recognition is reviewed on a product-by-product basis.

See Notes 2 and 7 to our financial statements for additional information regarding revenue recognition and deferred revenue.

Indefinite-Lived Intangible Assets

We make estimates, assumptions and judgments when valuing indefinite-lived intangible assets in connection with the initial purchase price allocations of business acquisitions, as well as when evaluating the recoverability of our indefinite-lived intangible assets on an ongoing basis. We assess our indefinite-lived intangible assets for impairment at least annually during the fourth quarter. We will also perform an assessment at other times if and when events or changes in circumstances indicate the carrying value of these assets may not be recoverable.

We perform our impairment assessment based on qualitative analysis, which includes considering various factors including macroeconomic conditions, industry and market conditions and our historical and projected operating results. If, based on our qualitative analysis, we were to determine it is more-likely-than-not that the indefinite-lived intangible asset is impaired, a quantitative impairment test would be performed to determine if an impairment loss should be recorded.

See Notes 2 and 3 to our financial statements for additional information regarding indefinite-lived intangible assets.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of DTAs and deferred tax liabilities (DTLs) for the expected future tax consequences of events included in our financial statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period in which the enactment date occurs.

We recognize DTAs to the extent we believe these assets are more-likely-than-not to be realized. In evaluating our ability to realize our DTAs, in full or in part, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, prudent and feasible tax planning strategies and recent results of operations. The assumptions utilized in determining future taxable income require judgment and are consistent with the plans and estimates we use to manage our business. Actual operating results in future years could differ from our current assumptions, judgments and estimates, which could have a material impact on the amount of DTAs we ultimately realize. We

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continue to maintain a valuation allowance against the DTAs for which we have concluded it is more-likely-than-not they will not be realized due to certain limitations on character or carryforward period.

We recognize tax benefits from uncertain tax positions only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized from such positions are measured based on the largest benefit having a greater than 50% likelihood of being realized.

See Notes 2 and 15 to our financial statements for additional information regarding income taxes.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 2 to our financial statements.