GoDaddy Inc.

Notes to Consolidated Financial Statements (unaudited)

1. Organization and Background

Description of Business

We deliver simple, easy-to-use cloud-based offerings and outcome-driven, personalized guidance to our customers. Our solutions, tools and services, including Airo®, our agentic operating system for small businesses, enable our customers to get their idea online, run their business day-to-day and grow through an integrated identity, presence and commerce experience.

Basis of Presentation

Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated.

Our interim financial statements are unaudited and, in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2026.

These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the 2025 Form 10-K).

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on our previously reported balance sheets, net income, net cash flows or total stockholders' equity.

Use of Estimates

GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ.

Segments

We report our operating results throughtwo reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 14.

2. Summary of Significant Accounting Policies

Equity Investments

We hold investments in privately held equity securities, which are recorded in other assets, with a carrying value of $56.9 million and $58.8 million as of September 30, 2026 and December 31, 2025, respectively.

Revenue Recognition

Disaggregated Revenue

Revenue by major product type was as follows:

No single customer represented over 10% of our total revenue for any period presented.

Revenue by geography is based on the customer's billing address and was as follows:

No country outside the U.S. represented more than 10% of total revenue in any period presented.

See Note 7 for information regarding our deferred revenue.

Assets Recognized from Contract Costs

Fees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the assets relate. Amortization expense of such assets was $220.3 million and $214.9 million for the three months ended September 30, 2026 and 2025, respectively, and was $644.3 million and $624.9 million for the nine months ended September 30, 2026 and 2025, respectively.

We have no other material capitalized contract costs.

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows:

Level 1— Observable inputs such as quoted prices for identical assets or liabilities in active markets;

Level 2— Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and

Level 3— Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions.

We hold certain assets and liabilities required to be measured at fair value on a recurring basis. These include time deposits and notice deposits, which we classify within Level 1 because we use quoted market prices to determine their fair value. Level 2 assets and liabilities include commercial paper and derivative financial instruments associated with hedging activity, as further discussed in Note 10. Derivative financial instruments are measured at fair value on the contract date and are subsequently remeasured each reporting period using inputs such as spot rates, discount rates and forward rates. There are no active markets for the commercial paper or hedge contracts themselves; however, the inputs used to calculate the fair value of the instruments are tied to active markets.

The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis:

We have no other material assets or liabilities measured at fair value on a recurring basis.

3. Goodwill and Intangible Assets

The following table summarizes changes in our goodwill balance by segment:

Intangible assets, net are summarized as follows:

Amortization expense was $2.7 million and $17.3 million for the three months ended September 30, 2026 and 2025, respectively, and $21.4 million and $55.4 million for the nine months ended September 30, 2026 and 2025, respectively. Based on the balance of finite-lived intangible assets as of September 30, 2026, expected future amortization expense is not material.

4. Stockholders' Equity

Share Repurchases

In April 2025, our board of directors approved the repurchase of up to $3.0 billion of our Class A common stock through the end of 2027. Shares may be repurchased in open market purchases, block transactions and privately negotiated transactions, in accordance with applicable federal securities laws. This authorization does not obligate us to make any repurchases and may be modified, suspended or terminated by us at any time without prior notice. During the nine months ended September 30, 2026, we repurchased a total of approximately 14.6 million shares of our Class A common stock, which were retired upon repurchase, for an aggregate purchase price of $1,311.0 million. As of September 30, 2026, we had $854.2 million remaining authorization available for share repurchases.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(1)Usage-based prepaid expenses include various cost of sales, marketing, rent and other prepaid commitments that are amortized as the related services are utilized.

6. Equity-Based Compensation Plans

Equity Plans

On June 3, 2026, our stockholders approved the adoption of the GoDaddy Inc. Amended and Restated 2024 Omnibus Incentive Plan (the Amended Plan) pursuant to which the number of authorized shares of Class A common stock issuable thereunder was increased by 3,116 shares. Our board of directors previously approved the Amended Plan, which became effective at the time of stockholder approval.

Equity Plan Activity

We have granted restricted stock awards (RSUs) which vest solely upon the continued service of the recipient and performance-based awards (PSUs) which vest based on our relative total stockholder return (TSR) as compared to an index of public internet companies.

Prior to 2020, we granted stock options as part of our compensation plan. As of September 30, 2026, there were 309 unexercised options outstanding.

The following table summarizes stock award activity:

(1)The balance of outstanding awards consisted of the following:

As of September 30, 2026, total unrecognized compensation expense related to non-vested equity grants was$343.2 million with an expected remaining weighted-average recognition period of 2.1 years.

7. Deferred Revenue

Deferred revenue consisted of the following:

The increase in deferred revenue was primarily driven by payments received in advance of satisfying our performance obligations, offset by $533.0 million and $2,185.7 million of revenue recognized during the three and nine months ended September 30, 2026 that was included in the deferred revenue balance as of December 31, 2025. Deferred revenue as of September 30, 2026 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are expected to be satisfied, as follows:

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

9. Long-Term Debt

Long-term debt consisted of the following:

(1)Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method.

Credit Facility

As described in our 2025 Form 10-K, our secured credit agreement (the Credit Facility) includestwo tranches of term loans (the 2029 Term Loans and the 2031 Term Loans). A portion of the term loans is hedged by interest rate swap agreements, as discussed in Note 10.

In July 2026, we increased the borrowing capacity under our revolving credit facility (the Revolver) from $1.0 billion to $1.2 billion and extended its maturity to July 2031. As of September 30, 2026, we had $1.2 billion available for borrowing under the Revolver, net of outstanding letters of credit.

Senior Notes

As described in our 2025 Form 10-K, we have completedtwo offerings of senior notes (the Senior Notes), the 2027 Senior Notes due in 2027 and the 2029 Senior Notes due in 2029.

Fair Value

The estimated fair values of our long-term debt instruments are based on observable market prices for these instruments, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of September 30, 2026:

Future Debt Maturities

Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of September 30, 2026 were as follows:

10. Derivatives and Hedging

We utilize the following derivative instruments designated as cash flow hedges:

•foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currencies;

•cross-currency swaps used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and

•pay-fixed rate, receive-floating rate interest rate swaps to effectively convert portions of our variable-rate debt to fixed.

We also utilize cross-currency swaps designated as net investment hedges to mitigate the risk associated with exchange rate fluctuations on our net investment in certain foreign operations.

The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments:

(1)The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.13 and 1.17 as of September 30, 2026 and December 31, 2025, respectively.

(2)In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets and all derivative liabilities are recorded within accrued expenses and other current liabilities.

The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI):

(1)Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.

The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships:

(1)The amounts reflected in other income (expense), net include $(4.7) million and $(3.1) million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the three months ended September 30, 2026 and 2025, respectively.

(1)The amounts reflected in other income (expense), net include $(21.4) million and $68.5 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the nine months ended September 30, 2026 and 2025, respectively.

As of September 30, 2026, we estimate that $46.3 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing.

Risk Management Strategies

There have been no material changes in the risk management strategies associated with our derivatives from those disclosed in the 2025 Form 10-K.

11. Commitments and Contingencies

From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigations, other proceedings and consent decrees in the ordinary course of business, including intellectual property claims, putative and certified class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable.

On November 7, 2025, a jury in the U.S. District Court for the District of Delaware returned a verdict finding that we infringedtwo web technology patents owned by Express Mobile, Inc. We challenged the verdict through post-trial motions, and on May 14, 2026, the District Court upheld the jury's infringement verdict and its rejection of our invalidity defenses, granted the Plaintiff’s motion for prejudgment and post-judgment interest, reversed the jury's willfulness finding and denied the Plaintiff’s motion for enhanced damages. On June 15, 2026, we filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit. We continue to believe we have valid arguments challenging the verdict and intend to vigorously pursue appellate remedies. Because proceedings remain ongoing and no final, non-appealable decision has been issued, we determined that a loss is not probable, and therefore, no liability was recognized as of September 30, 2026. While the outcome is uncertain, we currently estimate that it is reasonably possible that our loss exposure in this matter could range from zero to $170.0 million, exclusive of interest. An adverse judgment or negotiated resolution in this matter could have a material adverse impact on our financial position, cash flows or liquidity, or results of operations.

Other than as noted above, there have been no material changes outside of the ordinary course of business to our known commitments and contingencies, which were included in Note 12 of Item 8 of our 2025 Form 10-K.

12. Income Taxes

Our effective tax rate for the nine months ended September 30, 2026 is 23.1%, which differs from the U.S. federal statutory rate primarily due to state income taxes and nondeductible executive compensation, partially offset by benefits from U.S. research and development tax credits.

We monitor the realizability of our deferred tax assets (DTAs) considering all relevant factors at each reporting period. As of September 30, 2026, based on the relevant weight of positive and negative evidence, including our ability to forecast future operating results, historical tax losses and our ability to utilize DTAs within the requisite carryforward periods, we do not maintain a valuation allowance on the majority of our U.S. federal and state DTAs. We maintain valuation allowances on certain U.S., state and foreign carry forwards as we concluded they are not more likely than not to be realized.

Uncertain Tax Positions

The total amount of gross unrecognized tax benefits was $181.5 million as of September 30, 2026, of which $116.6 million, if fully recognized, would decrease our effective tax rate. Although we believe the amounts reflected in our tax returns substantially comply with applicable U.S. federal and state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision or benefit for income taxes in the period in which a final determination is made.

13. Income Per Share

Basic income per share is computed by dividing net income by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted income per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per share is as follows:

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income per share because the effect of including such shares would have been antidilutive:

14. Segment Information

We report our operating results throughtwo reportable segments: A&C and Core.

Our chief operating decision maker (CODM), which, as of September 30, 2026, was our Chief Executive Officer, evaluates the performance of and allocates resources to our segments based on each segment's revenue and earnings before interest, taxes, depreciation and amortization (Segment EBITDA). Segment EBITDA is evaluated on a monthly basis by the CODM by monitoring actual results versus the annual plan. This comparison is performed to make strategic decisions regarding segment profitability, resource allocation, pricing strategies and cost optimization. Segment EBITDA is defined as segment revenues less costs and operating expenses, 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 Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segments' performance on a consistent basis.

Our CODM does not use assets by segment to evaluate performance or allocate resources; therefore, we do not provide disclosure of assets by segment. See Note 2 for revenue disaggregated by geography.

The A&C and Core segments provide a view into the product-focused organization of our business and generate revenue as follows:

•A&C primarily consists of sales of products containing proprietary software, notably our website building products, as well as our commerce products 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 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.

There are no internal revenue transactions between our reportable segments.

Corporate overhead primarily includes general and administrative expenses and items not allocated to either segment as well as those costs specifically excluded from Segment EBITDA, our segment measure of profitability, such as depreciation and amortization, interest expense and income and provision or benefit for income taxes.

The following table presents our segment information for the periods indicated:

(1)Other segment items in A&C are primarily composed of product license fees used in our third-party email and productivity solutions, payment processing fees, personnel costs excluding equity-based compensation, data center and systems infrastructure costs excluding depreciation, customer care and marketing costs. The CODM uses consolidated expense information to manage operations and is not regularly provided disaggregated other segment items.

(2)Other segment items in Core are primarily composed of domain registration fees, payment processing fees, costs associated with sales of aftermarket domains, hosting and security license fees, personnel costs excluding equity-based compensation, data center and systems infrastructure costs excluding depreciation, customer care and marketing costs. The CODM uses consolidated expense information to manage operations and is not regularly provided disaggregated other segment items.

(3)In addition to restructuring and other in our statements of operations, other charges included 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 and incremental expenses associated with certain professional services.

15. Accumulated Other Comprehensive Income (Loss)

The following table presents AOCI activity in equity:

(1)Amounts shown for our foreign exchange forward contracts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI. See Note 10 for the effect on net income of amounts reclassified from AOCI related to our hedging relationships.