GoDaddy Inc. (NYSE:GDDY) Q2 2023 Earnings Call Transcript

We we’re telling you today, and we’ll show it to you live with testing with customers. We’ll show you live in November in Tempe. How — when a customer buys a domain, how they behave differently instead of just a domain, you give them a website and get them started. Because the friction for a customer to make another decision and then create content and then do another thing is pretty difficult. But of course, technology has made this easier and easier over time and now generative AI allows our industry to take the next step in terms of reducing the effort that customers have to do to get started. So, I think you’re going to continue to see the momentum. Of course, there are secular trends underneath of entrepreneurship, population, people coming to the Internet.

But what how quickly they’re able to adopt the tools on the Internet and get a presence up and running, I think you’ll continue to see good momentum in that because technology and generative AI now are going to make a real difference.

Ygal Arounian : Thank you so much.

Christie Masoner: Our next question comes from Chris Kentaro from Morgan Stanley. Chris, please go ahead.

Unidentified Analyst: This is Christian Kentaro on for the listed quarter. I wanted to ask around the macro and kind of how it’s changed Q2 versus Q1. And then the second question would be around the digital guide. Are these capabilities kind of like table six for the industry? Or how do you think about your ability to drive your differentiation in AI against your web-building competitors? Thank you.

Aman Bhutani : No, I can’t believe you said table stakes for a digital guide, but let me take your first question first. You surprise me with that. Let’s start with the macro. There are a few items that sort of we look at on our dashboard or the leaders in our organization look at when we look at macro and I’ll try to touch on a couple of them to give you a bit of color. One of them that we look at is sort of nonbrand demand that’s coming to Google as a representation of demand. And are people going out and searching for things? And they’re not searching for a particular company, they’re just searching for a website, they’re just searching for a domain and how is that trending? And what we saw in that data is that there are a few markets in the world and actually the English-speaking markets where we are strong, the U.K. being one of them, we see a good lift in nonbrand demand for the terms that we track.

And that’s a positive sign for those markets. That means we expect better demand. We expect to spend more money there. And generally, the customer, the everyday entrepreneur is feeling better and wants to engage and buy a domain, start a business or build their business, or so on. The second group geographically I’ll talk about is the markets that are not big English-speaking markets, but what we call the rest of the world. And there, what we see is sort of more similar or flattish behavior in terms of nonbrand searches, those — as you can see, the international market does really well for us. So, that’s been phenomenal. GoDaddy has done a lot to take share globally on those. But in terms of raw demand or macro, what we see is much, much more time sort of behavior.

And the U.S. is somewhere a little bit in the middle. I won’t comment sort of broad macro on the U.S. of you understand it better than I probably do. But Rod, if I talk about demand on the terms that we track to, there’s some good news, but not as good as a couple of the other markets. And the second data point to look at is customer — consumer confidence, and we track that for all of our main markets. And what we see there, again, is sort of an expectation for many of that confidence would go down, and it was probably trending down in some of those markets, but over the last two months, three months, a little bit of a reversal. So, maybe instead of going down towards, we see more flat. But in some markets, and again, I’ll mention the U.K., you actually see it coming off, which I think you didn’t expect if you’re just sort of a macro person.