Katie Perry (00:00):
A bull run in this market for a web hosting service. That was one of the tweets I spotted after this company reported. Its Q2 earnings. The thing is, the reason for their runup is because this company is not just a web hosting service. We're talking about GoDaddy. You may know them for Domains or Danica Patrick, but they're building a full platform for entrepreneurs, including a super powerful AI product called Arrow, where you can do things like generate a logo, generate email templates, and even generate social media posts Here to chat with us about GoDaddy's Q2 earnings and their future plans is CFO Mark McCaffrey. Wow. Alright, everyone. GoDaddy, CFO, mark McCaffrey is here to talk about the impact of AI on small business as well as the company's recent Q2 earnings. Mark, welcome to after earnings.
Mark McCaffrey (00:48):
Great, thank you. Thank you for having me.
Katie Perry (00:50):
How are you doing over there this week? I know it's the week after earnings, feeling calm, feeling good about how things went.
Mark McCaffrey (00:57):
Yeah, it's always good coming off a good dialogue with the analysts and the investors. Obviously the markets are at interesting times these days, so we continue to monitor it, but at the end of the day, we're just executing on our story and our strategy. We're empowering entrepreneurs to live their dream and get out there and build businesses, so we're pretty excited about where we are on our journey right now.
Katie Perry (01:21):
Yeah, I'm eager to dive into that because I think if we're doing Ward Association, if you say GoDaddy, people think domains, Dan Kirkpatrick, but you're so much more than that. And so for people who haven't been closely following the expansion of your products and services for entrepreneurs, can you orient us around what GoDaddy is today, what you're selling, what do you stand for?
Mark McCaffrey (01:46):
And coming back to our mission and we really embrace our mission about our customers and empowering them to do their dream and empowering entrepreneurs, and we started as a domain business, like you said, years ago, but we've grown into so much more. We are a one-stop shop now for entrepreneurs. We obviously are still a domains company and we're one of the largest players in the domain space, but we also do their entire business for them. I always say two things you need in the tech industry. One is innovation, the other is customer relationships, and that's what we have. We have 21 million customers with us and we provide them services from the domain name to their email to their website, more recently commerce. And now we're taking that experience and putting it into our AI experience, what we call Arrow, which allows an entrepreneur or someone who is thinking about starting a business to come on, get a domain name and they can be up and running on a website, doing business within minutes with a logo, with a professional email, with a customized website arrow.
(02:53)
AI empowers them to do that quickly, effectively, and when you think about our customer base, it is the micro business. It is the mom and pop shop, it's the underdog. These are our people or individuals that don't have a lot of time to be worrying about managing five, six apps in the background. They want one place to go, and that's where our care organization comes in. We have one of the greatest care organizations in the world. People love our care organization and they help them across the platform to make sure they're doing what they love, which is engaging their customers. So we have grown Back when we started, we were about discovering the internet through a domain name, but now we're about empowering you to do business anywhere, any place and reach markets that maybe you couldn't reach before because you didn't have the capabilities or the IT background to do it.
Katie Perry (03:47):
And by the way, it's probably not a bad thing to have the brand equity around domains because I feel like that's the starting point for a lot of people starting businesses. The first thing they do is they say, okay, what domains can I get? And that's kind of the first step, right?
Mark McCaffrey (04:05):
That's right. It's still a large part of the top of our funnel and that's why our brand around domains is so powerful. It attracts people into our site, but once you're there, now you can instantly start to get to the next phase. Yes domain, I'm trying to think of a name. I think we all have gone through that experience that, oh my God, I need to get this domain name, I need to make sure I reserve it thinking about doing something. But think about it, you get the domain name, you click a button and it says, okay, do you want this website or do you want this logo? Or we think this is a great professional email for you. And within minutes now you're not only thinking about a domain name, you're thinking about, oh my god, I can start to do business immediately. And whether you're a brick and mortar trying to go online or you're online and you're trying to go to the flea market now on Sunday, all that capability sits there. Now we've even expanded it to commerce and we do payment facilitation. So you can start to transact with us immediately at fees that are more comparable for a micro business versus fees that are more comparable for a bigger business. And again, it's an exciting time for us. We've been going through this transformation for a few years now. We're starting to see the benefit of that. Our Q2 earnings we're just the beginning of the journey and that's why I think we're all very excited about where GoDaddy is going in our future.
Katie Perry (05:28):
And let's double down on the AI and the Aero product because I was reading about it. It seems super powerful and I think just current conversations, a lot of it is, okay, what is the impact of these Gen AI tools? You guys have a million customers using this AI product already. Can you help us understand what it's actually doing? What are the specific things that you're able to do using AI within Aero that gets you up and running as a business quicker?
Mark McCaffrey (05:55):
Yeah, so again, starting with the journey, say you come in with an idea for domain name, depending on the domain name you get the AI engine kicks in and says, Hey, it sounds like you want to start a bike shop in your hometown in Arizona, and we think Arizona, you got Arizona bike.com, but here's a logo for a bike shop. And it starts presenting you options so you don't have to get into content creation. You can get samples of what you think it should be like. It'll give you samples of I think eight websites now that say, okay, here's examples of websites we can launch immediately for you, and if you're not ready, here's a coming soon website you can use that you can put out there with your domain name that you can start to get people prepared as you're trying to figure out your journey.
(06:47)
One of the great email we talked about design and email immediately for you and tell you, Hey, these are potential emails we think would be useful for you. In the past you had to kind of think through that yourselves, but now the AI engine is taking you on the journey and giving you those options. One of the great things that the AI experience does for us is social media as well. Now, when you think about a local store or local shop, social media is probably not something that they are intuitive about or even have the time to do. It's something they probably do at night. They have to go across multiple social platforms, they're probably getting inbound. They have to figure out how do they go outbound, what the timing of that is. The AI engine actually takes care of it all for you. It takes all the information that is coming in, it creates the responses for you and it puts it back out for you.
(07:40)
Now you can review it and you can edit it, but you can also just hit the send button and the AI engine will start reaching out to your customers and even set up calendar campaigns for you based on what you think the holidays are. So the ease of use on the one-stop shop just becomes a tremendous advantage. The person who is just trying to sell more and just trying to engage their customers in a different way and doesn't have the ability to hire people to do all these activities for 'em, and so that's where we're seeing that positive response. We are so excited that a million new customers have come in and discovered it already. We use the data point of 500,000 are engaged, which means we're well on our way to the monetization journey around it, but the value they're getting out of this already is really getting us excited about the journey Arrow is going to provide for us going forward. Hopefully you can hear the excitement in my voice
Katie Perry (08:36):
Around it. Yeah, I mean that was even broader than I had found in my research. So very, very cool applications. So the monetization, is it currently monetized or is it available to all GoDaddy users?
Mark McCaffrey (08:51):
So right now the Arrow experience is available to everyone. We launched it for new and existing customers now. So even if you own a domain name and you go in to take a look at that domain name on the dashboard, you'll get the Arrow experience, which will allow you to expand upon functionality around that. We are launching the whole Arrow experience in 90 countries going forward. That'll be coming soon. So we're very excited about the ability to get there, but we're really early stage, which is really getting us excited, what we're seeing early stages of monetization. When you talk about our numbers and the size of our company, like I said, I think we're at the beginning of this journey. It's something that we get excited about because our model works on conversion and attach and when we get customers to a second product, our retention rate, our retention rate's 85% overall, but it goes up significantly higher when we get to a second product.
(09:50)
If we get to a third product, we fundamentally have a customer for life, and the Arrow experience really makes that seamless intuitive attachment take place, which drives the LTV. In our model, one of the fortunate things we have is we have a strong balance sheet. It's a great model that keeps compounding on each other on itself, and that generation of free cashflow allows us also to invest in innovation and continue the journey to make sure our customers are getting value. We're in a great place and I think we're starting to see the, I would say, early stages of that compounding benefit that we talk about all the time
Katie Perry (10:29):
And you bring up free cashflow and I definitely want to dig into that. I have one more question on the Arrow product.
Mark McCaffrey (10:36):
Absolutely.
Katie Perry (10:37):
The interesting thing to me, and I'm curious what your thoughts are, is I feel like a lot of products are sort of built for people who are in tech or marketing and sort of already know their way around. And what seems really different about this to me is that you're really focusing on enabling people that are focused on the craft of what they're doing. And I feel like there are a lot of conversations around the opportunities and trades and sort of these jobs that I live in New York, you're on the west coast, we don't think about every day, but electricians, people fixing bikes. Is that sort of, you looked at your customer base and you were thinking a lot of these people, they aren't waking up and thinking about social media content. They're waking up and thinking about how they're going to make money, but also the craft. Was that an insight that went into some of these tools?
Mark McCaffrey (11:27):
Yeah, absolutely. One thing we know about GoDaddy and our mission is we focus on the entrepreneur that is our sweet spot and that is what we're geared to do. Our care organization is about helping people engaging, having that relationship with them because as you said it, they don't wake up thinking about the technology part of their business. They wake up thinking about how they're going to serve their clients and how they're going to go out to their customers and do better and how do they expand the markets they're reaching in and they don't want to be dealing with multiple tools or multiple customer service providers. One-stop shop care organization that cares technology, that's simple, intuitive, easy to use, they can get to where they need to go with the technology in minutes. And again, when you're talking about someone who's an entrepreneur or maybe this is a side hustle, maybe this is a supplemental income to them, these are things that they just want to be able to do and not worry about and we take care of that for 'em.
(12:32)
And it's been a journey coming from a domains company to a one-stop shop on a technology platform and becoming the OS for the micro business. But we love that we've been able to get there and we love that our customers are just engaging in it and coming back and saying, this is working. One of the great things about being at GoDaddy for me is going out and even meeting the customers and hearing their experiences and hearing how they're engaging around some of the technology and what's working and even to the level that their kids are getting involved in the business and now engaging around how to use some of this technology. It's just fabulous. It's inspiring. I absolutely love it.
Katie Perry (13:17):
And you use the word customers a lot and I actually did a quick audit of your earnings call. That was the word you mentioned most or your team mentioned most on the call was customers. I think there was 51 references and I think Arrow the hero AI product was 30. So I thought that was really interesting too. I mean you hear a lot of people hyping ai, hyping ai, but it seems like you're framing that in the context of the customer benefit at what it means for customer growth going forward.
Mark McCaffrey (13:45):
Yeah, that's right. And I hadn't done accounts, so thank you for that metric, but it doesn't surprise me because our passion, our culture is really around focusing how do we make the customer's journey better when they get value, we get value, and that's our approach to how we look at everything. It's about engaging the customer where they're at, engaging them on their journey, making their life more intuitive, easier. So Arrow as a tool to help our customers do that better. And we've always looked at it as a tool that will help that customer base that we really are passionate about, be able to do better. So now you're going to have me count customer and the mention of Arrow on every earnings, but I love the fact that you picked up on we customers so much because it is really our rally cry, our inspiration, what we do.
Katie Perry (14:46):
Yeah, I mean it's interesting looking at it through the lens of a investor preparing for the show obviously, but there's a lot of power in looking for the story underneath kind of the surface, and so I always like to kind of see what phrases are popping up and things like that. Let's get into earnings. So you guys reported Q2 earnings August 1st. If anyone's listening to this after we're recording it on August 8th, beat Revenue Estimates, BEPS, raised guidance. What was really working for you guys this last quarter?
Mark McCaffrey (15:21):
It is the cumulation of I think our transformation that we started several years ago. And to give you a background, we had to create the consolidated technology stack that provided that seamless experience to our customers and over the past few years we've been working on integrating all that technology into one platform so we could have access and create that experience for our customer. It's where Arrow ultimately sits last year that was a big part of doing the integrations, doing fine tuning the technology. And when you think about the metrics we have around our customers, we have 21 million customers, we have 14 million interactions with our customer each year through our care organization. We get 1.2 billion signals from our customers daily. That data within that platform is powerful for us because it really gives us insights into our customers and allows us to look at what they value and when we see them getting value, it allows us to create an environment that obviously we get value and what you're seeing is the momentum around that.
(16:30)
A couple of years ago we launched Commerce and as we launched commerce, we're a payback. We've built the entire platform around being able to accept payments, so it's integrated into that tech stack and that has now started to come into full swing. Our customers love our commerce platform. They love the insights they get out of it. So that momentum coming into this year has started to hit. We launched a bundling and pricing initiative which bundles certain products together that we think our customers are going to value more. Obviously it allows us a different price point that is coming to fruition. Arrow we just launched this year, not even in our numbers right now. It will be an addition to that as time goes on, but you're seeing the momentum of the transformation to the one-stop shop and engaging our customers is exactly where we said we were going to engage 'em and that all starting to take effect and have the momentum and that's what we're seeing coming into this year.
Katie Perry (17:29):
And the current revenue breakdown looks like about two thirds the kind of core domain business people know and then a third these other applications. Do you expect that mix to evolve over time as things like Arrow Commerce products, those types of things take hold in a greater way?
Mark McCaffrey (17:48):
Yeah, absolutely. We think the growth engine is the A NC segment for us. It is also our more profitable segment because it's really the software and the applications we provide our customers. So when you think about the customer journey, you think about the core platform. Our traditional business domains application and commerce really represents most of the time the second and third product attached those customers are going into. And that is where we're growing and is becoming a bigger part of what we do for our customers and where we've focused our innovation efforts. So our expectation is our A NC segment will grow at a faster rate than our traditional core platform business, and with that it will be a tailwind to our profitability because it comes at a better profitability point and we're starting to see that slowly move in that direction. I talked about IT investor day in March that over the next few years we expect that to be the biggest tailwind to our cashflow and our profitability going forward.
Katie Perry (18:49):
We've talked about attach rate a lot on this show. I think it's a metric that a lot of retail investors are starting to understand and look for and would love to break down the benefit of having a healthy attach rate. Can you explain why attach rate is so important in the context of you have one way to grow the business, which is acquiring new customers, and the second way of doing that is organically through existing customers cross-selling and upselling them. Can you give a little color on attach rate at GoDaddy and what investors might want to know about that at your company
Mark McCaffrey (19:22):
To give an illustrative idea of where the value really gets driven from attach. When you think about a one product being sold into a customer, say a domain, and that's a one XL tv, if we get a customer to attach an email, to attach a website and then to attach commerce, that LTV goes to 83 times as much as just being a domain name. So the long-term value we drive over, attach over the customer life is tremendous and that is why attach really drives value within our model. New customers are extremely important, but high retention is achieved through product attach and also gives our customers better experiences. And obviously the more they're attaching, the more value they're getting from us, the more value they're getting from their customers. And it becomes, I would say that continued momentum that we see going forward. So whether you look at it from a LTV driving higher retention, customer life goes up, it really creates a momentum that the more you attach, the more you go forward. Now reminder, our ARPU is a $210, so our value we're providing our customers incrementally as we continue to attach and see it in the ARPU number that continues to increase is not levels that are, when you think about our customer base and entrepreneurs that tremendous, we're not doubling our ARPU with our customer by raising prices. We are providing incremental value that's driving that number over a period of time. And when you're at that level and you're mission critical to your customers, they continue to get the value and drive those metrics up.
Katie Perry (21:12):
And that average revenue per user of you said two 10, what was it like a year ago just for context, how is that trending?
Mark McCaffrey (21:21):
It's trending up now. I always say ARPU is the trailing indicator of all our indicators and that's because we're largely a subscription business. We do have transactional revenue, but we're largely a subscription business and bookings represent the upfront cash we get by the time we'll recognize the revenue over a period of time. That's when it starts to show up in arpu and then you're taking that on a trailing 12 month basis anyway. So again, you have the lagging indicators of the lagging indicator. We've seen a healthy increase over time. It depends on when you want to pinpoint it, but every quarter we've seen growth in our rpu and two things are driving that or several things are driving that. One, our new customers coming in and attaching to a second product much faster than they did four years ago, which is allowing us to get to that higher RPU 0.2, we've been very transparent that we have looked at our entire technology portfolio last year and in places where we didn't think we had customers that had intent to do something with their domains or other products, they weren't growing a business, we were okay disposing of those platforms and moving another direction.
(22:35)
And while that provided some, I would say headwind on our customer count, you start to see the benefit of the customers we're keeping are the ones that are really attaching to the second product and driving the ARPU numbers. So that continues to just provide momentum for us going into the future that says, Hey, number one, it's a journey. Number two, it's going in the right direction because we're executing on the strategy that we've been talking about now for several years.
Katie Perry (23:02):
That would seem like a strong signal. I can't think of a ton of companies who would be proactively divesting parts of their business or customers in order to get in a better foundation to unlock more potential down the road. I feel like usually companies are hanging on for dear life of every email in their system, so that's interesting.
Mark McCaffrey (23:24):
Yeah, I call it relentless prioritization, right? We know we can do more attracting customers that are passionate about what they're doing and wanting to expand their businesses and come in with intent and those are the customers we want and we know over time those will be the customers that grow more retention rates go up, are coming in and just going to have that interaction with our care organization and have that experience. So this has been part of our transformation. This is part of where we're going as one analyst said in their reports, either just doing what they said they were going to do and that's exactly what we're doing. We're executing on what we think is a great vision and we're staying laser focused on our customers and our customer base, which is that niche of the micro business and the entrepreneur.
Katie Perry (24:15):
Yeah, and you referenced this earlier, but free cashflow. I kind of wish my co-host Austin was here because I refer to him as a big free cash flow guy. He gets so excited. But you guys talk about maximizing free cash flow as a north star. Can you add some color to that? Why should investors look at this metric in the context of your business and businesses overall, and how are you all using that free cash flow to grow the business moving forward?
Mark McCaffrey (24:43):
Yeah, we've been generating free cash flow for a number of years and now we're continuing to focus on that. And yet, yes, it is absolutely our north store because when you talk about free cash flow, it's really the balance between revenue growth and profitability that generates that free cash flow number. So it's the balance and optimizing for both, and we believe that's very important, right? You can't over index to one metric versus the other. At the end of the day, absolute help is driven by free cash flow. How much can you drive and can you drive a 20% CAGR and free cashflow and the components that get you there, it's your job to balance 'em to maximize that. And you look at a capital allocation strategy share buybacks, you're really going to that north star of the cashflow per share and the CAGR around 20% growth.
(25:36)
And that's something that we continue to focus on is when we say North Star, everything we do is driven by how do we maximize to that? And to us, that allows us options to create shareholder value. Now whether it's looking at share buybacks which have high ROI for us or strengthening our balance sheet over time, that allows us options down the road to look at what we do with that to continue on the strategic journey. We're there innovation's very important to us? So doing this and driving this free cashflow while innovating, while getting new customers in the funnel, but yet still being able to have the options down the road to look at our capital allocation strategy and make great decisions around LTV is exactly where we want to be.
Katie Perry (26:24):
Yeah, it would seem like having that slush fund for innovation is really important. You have a lot of competition, obviously you got your Wix, your Squarespace, Shopify to some degree, and so that free cashflow, is it safe to say you're really using that to kind of think 1, 5, 10 years down the line and make sure you're going to be differentiated for the customers you serve both today and into the future?
Mark McCaffrey (26:50):
Yeah, absolutely. We believe we're in a great position because we're not chasing the free cash flow, we're growing the free cash flow. And while you mentioned some competitors, when you look across the entire technology platform, whether it's domains, whether it's websites, whether it's emails, whether it's payments, we have multiple different competitors, but we're the only one who has the entire technology stack that brings that together and then having the ability to innovate on top of that. And I always say the two things a technology company needs, I'll repeat it many, many times, innovation and owning the customer relationship, we know that and we know having that ability to continue to innovate is a key to our maintaining our, I would say, competitive advantage over the entire technology stack versus just looking at one area of competition right down the road. Listen, as a CFO, I love having a strong balance sheet and I love the options it creates for us and our ability to look at different opportunities down the road based on our balance sheet.
Katie Perry (27:58):
Great explanation. Now I want to turn to leadership because I read that you are sort of on the circuit, you speak to a lot of young people about leadership and organizational culture, colleges, universities. I'm curious sort of what are the types of questions you get from that crowd or what are the places where young people are really looking to learn these days?
Mark McCaffrey (28:22):
Leadership is an emotional experience and I try when I engage a lot within the universities, within young professionals coming up is to stress the point that titles do not create great leaders. Great leaders are created by inspiring people around you. By a term I've used over the years is going into their there, understanding what they want to accomplish, what drives them, being connected to them and then creating an environment of, hey, it's okay if we have a goal, we're driving an outcome, but we have to iterate. It's okay to fail, alright, it's okay to fail and recognize that your mistakes will drive greatness down the road. Everything isn't just I started one day and I was successful. You have to approach everything around that iterative process of learning, applying, making sure you're reviewing all the data without bias, and that's a very important point I made to people coming out of school is sometimes we try to base decisions on biases of what we want versus understanding all the data, but having that framework of how you go into great decision making, how you engage teams, how you them to greatness, how do you even use diverse teams to create different points of views that allow you to be better?
(29:49)
Those are things I just love speaking about and love explaining. I worry at times that in the world of virtual, now that we are not focusing enough on those core leadership skills that will allow us to have great opportunities down the road, move into great leadership roles that may come that we're more in that things have become a little bit more task oriented than inspiration oriented and I love mentoring people in that regard. I would say the three principles I always try to end with when I am talking to people, what I'm trying to mentor is number one, it's okay to be uncomfortable. If you're not uncomfortable in what you're doing, you're not pushing yourself to the limit and you learn from being uncomfortable. If you are uncomfortable, take that as a sign, you are heading in the right direction because you are pushing yourselves into new areas and you're learning through to control your narrative.
(30:53)
There are so many people in this world that try to control your narrative for you, whether it's family at times, whether it's other professionals, whether it's the company you work for, you control your narrative, you're responsible for that. You have to take ownership of your narrative, what you want to do, what value you bring, how do you show yourself to the world around you, that's your responsibility. And number three, find the passion that drives you. There are a lot of things that weigh you down in life. Find the passion that drives you. What do you want to do? What do you want to push? What makes you get up in the morning thinking about this is what I want to do today. I found those at GoDaddy when I came here. Those were the three criteria that I looked for when I was choosing to come to GoDaddy.
(31:44)
It was an uncomfortable move for me. I was a first time CFO, it was an interesting time in the world and I didn't know where this was all going to go. I was confident in myself, but I was definitely very uncomfortable making the shift. I was controlling my narrative. I wanted to do something other than what I had done before and I wanted to move into being a CFO and I wanted to transform a company and do it with a CEO that would inspire me. So very much looking at this is the narrative I want to go and I found the passion in our customers and coming back and bringing that full circle is I've never seen an organization so passionate about their customers and seeing that and seeing the culture that drove those were the three things that hit me when I came here and really reinforced that if you can find all three of those and if you can do that, you're going to be moving in the right direction for your career. So it's probably a long-winded answer, but it's something I'm very passionate about and I love talking about and that's why I love going out and speaking about it in all the universities and all the forums that will have me.
Katie Perry (32:52):
That was great. I am ready to run through a wall if Morning Brew will sue me
Mark McCaffrey (32:55):
For it. So
Katie Perry (32:57):
Thank you for that. It's a quick follow up on mentorship. I agree with you. I feel like organic mentorship is so hard when you're remote. I look back at my career and there was one moment where I messed something up, I was like 23 years old, but I was in the office and I was like, I just got to go own up to it. And I marched to the CEO's office and he sat down and gave me this amazing speech about taking responsibility and next time you mess up own it, but offer solutions. And I just feel like those moments are sort of lost when we're remote and you almost have to really make an effort to create those moments. So do you think that kind of mentorship is still possible if you're fully remote and you're mostly slacking with people, how do you sort of recreate that kind of situation for young people?
Mark McCaffrey (33:47):
It is a great question and something that worries me in that where it naturally used to happen, even your experience that you were talking about, you were able to walk into the CEO's office and I'm sure you didn't set up a meeting with the CEO or you didn't have an hour to prepare a PowerPoint presentation to go through all this stuff. You had something on your mind who was weighing you down, you walked in, you had a great CEO who responded absolutely the right way and made it a learning and a teaching moment. It's hard to plan for those when they come up, you're in it. You're in that moment of this is going to be a great learning moment for the team, but you can't plan for 'em, you can't schedule 'em and therefore in the virtual world you really have to go out of your way to create that environment and make sure that you know that it's not going to happen naturally.
(34:47)
You know, have to reach out to people. I think when we all were virtual for a period of time, I learned that I had to set up a couple hours that I didn't know who I was going to ping and get on the phone with, but I knew I had to go reach out to people individually at that time and check in and create that environment. And in turn, people started to realize that it was just okay to whether call or whatever channel you're using to communicate, just send a message. Can I spend five minutes with you and send out a link and get on and talk? You have to consciously do that. Now I as an example was on with one of my team members who's in Germany and they were feeling disconnected and I reminded them, I'm here every day. You don't have to schedule a meeting, you don't have to call my assistant, just ping me and I'm happy to get you're having a bad day. Just ping me. It's fine. We don't have to go through this whole rigamarole. I'm not going to act like this is an annoyance to me. We need those moments and we need to check in on each other and we need to make sure we have that emotional connection even through a virtual ward. It is much harder, it takes more deliberation and more effort, but you have to do it and people need that.
Katie Perry (36:12):
Such great advice. I think it goes back to your other point about owning your own narrative and a lesson I learned early on is no one's waking up every day and thinking about you. You have to reach out, take control. You can't just sit there and wait for things to come to you. And I think that's so much more relevant today when we're all on our slacks and our emails and our zooms. So I love that advice for young people.
Mark McCaffrey (36:39):
Well, like I said, I think we're in an interesting time. We were coming out of an environment that it really takes, this needs to be at the forefront of many more conversations And listen, it's something I love and I've seen it in my kids that they've grown. My kids are all professionals now. They're in their twenties, they're coming up and the ability to share that is just something that I take a lot of value in.
Katie Perry (37:07):
Alright, I got one more for you only because you're just knowledge right now, but I read about you speaking about the importance of self-awareness and it was even a moment earlier of humility where you're like, Hey, I was never a CFO before, but screw it. I'm going in. I think a lot of young people wonder how do you balance humility with making sure people respect you and how do you inspire people and build confidence, but also be very open with the fact that you don't know everything?
Mark McCaffrey (37:39):
Yeah, vulnerability is important and I always say if you're not vulnerable then you're probably not being your true self. We all have a bit of vulnerability in us and admitting that is the first thing and showing it is a powerful tool to teams around you. So I don't know everything. I came into being a CFO role and I had a learn a few things as I was going. I had the fortunate benefit of having a great team around me who understood my vulnerabilities and helped me work through them. But it's okay to acknowledge being vulnerable. I always say I probably make more mistakes before lunch than most people ever realize. It's okay. We learn from our mistakes, we iterate, we go forward. And I think once people start to see even great leaders have vulnerabilities, they're not perfect, they make mistakes, but they evaluate those mistakes and apply going forward.
(38:40)
Again, that inspires people to understand that it's okay you walking into the office saying, I made a mistake, I own it, and I think the advice you got was the perfect advice. Just don't come in, own it, that's perfect, but come in with, hey, here's some solutions around it. And again, that is showing a leader as a leader, showing that you have that vulnerability actually helps to inspire those around you. When I came in, acknowledging I had vulnerabilities and letting the team step in and really help me get through those I think was a key aspect to my success today, it's key aspect of the GoDaddy team right now. We absolutely work together in that environment knowing that we have to make sure that we're all working for each other and our customers and make sure that we're all heading in the same direction. The building of trust around it is just such an important element of being a great emotional leader and bringing it full circle. That's why I always say leadership isn't about titles. Leadership is about emotionally connecting with people and making sure you understand that they see you for who you are and your vulnerabilities and that you go into their there and understand where they need help. And when you're in that emotional leadership stage, again, you don't even have to have the title, you don't have to be a designated leader, you become the defacto leader because you are mentoring everyone around you, you're helping them and you're making them better. That's true Leadership at the end.
Katie Perry (40:19):
Excellent advice for life and career on the back of amazing conversations around GoDaddy. So Mark, this was so fun. Really appreciate you taking the time to talk to us today and congrats on everything you guys are doing at GoDaddy.
Mark McCaffrey (40:35):
No, thank you. This was great. Thank you for having me on the show. Loved it.
Katie Perry (40:40):
Awesome. We'll see you soon. You got to come back.
Mark McCaffrey (40:43):
Absolutely.
Katie Perry (40:44):
Wow. And that was Mark McCaffrey, the CFO of GoDaddy. What a great conversation. We talked about their Q2 earnings. They beat on revenue, beat on EPS, raise guidance, no complaints from them there. But also really talked about how their business is evolving. A lot of people think of GoDaddy as domains that is still two thirds of their revenue, but the other third and growing is now their applications and commerce side. They can facilitate payments, build websites, all of the things you need to do after you buy that domain. And that's why they believe they have an advantage because people are going to them at the domain stage, which for a lot of people these days is the first step they take when they're going to start their business. Mark also walked us through their north star of free cash flow and why that is so important to the company as they face increasing competition from the likes of Wix, Squarespace, even Shopify.
(41:35)
And finally, I really love the life and career advice Mark was dropping at the end of this show. I think there are a lot of great actionable things to take away, owning your own narrative, being proactive and also reaching out for mentorship opportunities in situations where you might be remote or hybrid. Alright, that'll do it for today. My name is Katie Perry. This is After earnings, the show that brings you up close and personal with the people behind the companies you care about. If you like what you're hearing, please like, please subscribe, send to your friends and we'll see you next time.
