2Q26 Results: Airo Transformation: Long-Term Gain, Near-Term Pain

Research evidence excerpt

2Q26 Results: Airo Transformation: Long-Term Gain, Near-Term Pain

UpdateMa marketing ramp expected through 2H.

The offset is that GoDaddy is de-emphasizing separately priced products—including

higher-ASP do-it-for-you services and Websites + Marketing—and consolidating

those capabilities into Airo. Management estimated this transition reduced total-

company bookings growth by approximately 1 point in 2Q on a net basis.

Management also noted a shift in traffic from search toward LLMs and the

emergence of low-cost, API-first domain providers, implying increased competition

and prompting GoDaddy to rebuild its APIs for native LLM consumption. A&C

bookings consequently slowed to 7% YoY from 9% in 1Q despite an approximately

2-point easier comparison, and management now expects high-single-digit A&C

bookings growth through 2H, with no firm timetable for an inflection as Airo scales.

This pressures our prior expectation for double-digit A&C revenue growth in FY27

and leaves the durability of the segment’s growth profile as the core debate coming

out of earnings.

Bottom line, Airo’s traction improves confidence in the product narrative, but

slowing A&C bookings, near-term product cannibalization and an evolving LLM-

driven distribution landscape increase execution risk. With limited estimate

upside and uncertainty around the timing at which Airo offsets pressure on

traditional products, we remain EW.

What We're Watching: 1) LLM Shift: Domain share, traffic and conversion remain

healthy, but discovery is shifting toward LLMs and API-first providers. GoDaddy is

rebuilding its APIs for native LLM consumption, with plans to extend the approach

into Hosting and Commerce, aiming to improve visibility within LLM results and