GoDaddy Inc. (GDDY) Earnings Call Transcript & Summary

[Audio Gap] Investor Day. Thank you for taking the time to listen in during these unprecedented times. We hope all of you who are staying safe and healthy as you join us from home offices and other remote locations across the country and the world. During today's presentations, we'll be referencing both GAAP and non-GAAP financial and operating metrics such as total bookings, unlevered free cash flow, normalized EBITDA, ARR, net debt and ARPU. A discussion of why we use non-GAAP financial measures and reconciliations of our non-GAAP financial measures to their GAAP equivalents may be found in the presentation posted to our investor relations website at investors.godaddy.net. The matters we'll be discussing today include forward-looking statements, which include those related to our future financial results, new product introductions and innovations, our ability to integrate recent acquisitions and achieve desired synergies and our ongoing operations. These forward-looking statements are subject to risks and uncertainties that are discussed on Slide 3 of today's presentation and in greater detail in our documents filed with the SEC. Actual results may differ materially from those contained in the forward-looking statements. Any forward-looking statements that we make during today's remarks are based on assumptions as of today, April 2, 2020, and we undertake no obligation to update these statements as a result of new information or future events. Data in today's presentation is from GoDaddy unless otherwise stated in footnotes. Presenting today from their own home offices will be our Chief Executive Officer, Aman Bhutani; our Chief Operating Officer, Andrew Low Ah Kee; our Chief Marketing Officer, Fara Howard; and our Chief Financial Officer, Ray Winborne. We will have a question-and-answer session with everyone following the presentations. Those who would like to submit questions may do so at any time via e-mail by sending questions to [email protected]. With that, I will turn it over to our Chief Executive Officer, Aman Bhutani.

Thank you, Mark, and thank you for joining us today. Unprecedented times, no doubt, and we truly appreciate the time you are spending with us today. I joined GoDaddy about 7 months ago and I have found here a fantastic company, a true global leader serving a massive market, an innovative customer-led company that has driven share gains across the customer journey. GoDaddy has also demonstrated the capability to invest capital aggressively and our company has a distinctive financial profile with profitable growth at scale. Last but not least, we have an experienced management team with a track record of success. Today, we are here to give you the 4-1-1 on GoDaddy, which is literally our target for 2022, $4 billion in revenue and $1.1 billion in unlevered free cash flow. These targets do not include the impact of unannounced M&A, all of which could provide potential upside to these numbers. Late last year, we made a number of changes to fully align our teams to a customer-led model. Being a customer-led company means creating customer value is the primary lens for trade-off and investment decisions. That execution is aligned to customer populations to optimize for existing customers and reaching new customers. Our teams are focused on building the best offering for our customers, whether we've built them, buy them or partner. And as we grow this surplus for our customers, pricing actions allow us to convert customer value into shareholder value in the form of ARPU growth. This alignment of customer value and shareholder value simplifies our operations and keeps our teams focused. Aligning to the needs of our customer starts with understanding their journey. And we have found that all entrepreneurs have a simple basic journey, and we wanted to show it to you. [Presentation]

That story has a special place in my heart. I grew up in India and my father was a small business owner as well. In fact, he did not want me to follow in his footsteps, and I also started my career in technology. This story perfectly follows the 4 phases we see in the entrepreneur's journey: dream, create, grow and manage. GoDaddy is focused on the first 3: dream, create and grow. And we look at our TAM and the customer base with this lens. With a TAM of over $180 billion, you can see in this chart that as a customer gets more value from our products and services, their lifetime value for us increases quickly. In fact, the top decile brings 81x of domain-only customer. In terms of ARR and churn, we see the same trend with churn going down to 1/3 if a customer has a website and a domain-based e-mail with us. Today, we will take you through all of this and much more. But first, I wanted to address COVID-19, which is likely top of mind for all of us. I am happy to share that our teams moved quickly and early, rising to the challenge of shelter in place. Almost all of our team members are now working from home, including 7,000-plus GoDaddy guides. We like to say that we now have 10,000 home offices for GoDaddy around the world. In terms of what is to come, none of us have a crystal ball, but we have carefully looked at the past to see what we can learn from it. The data shows that human creativity continues to drive entrepreneurship in good times and bad, and that businesses are formed and businesses close, but overall, the net is typically positive. When we looked carefully at the particularly difficult period of 2008, we found that the 2008 cohort of customers performed very similar to other cohorts in that period. In fact, the 2008 cohort has spent $1.5 billion with us over the last 12 years and the retention curve for them is no different from others. Ray will cover the specifics on COVID-19 in his section. Now let me bring you back to our customers. There are over 500 million everyday entrepreneurs in the world, and they have some secular trends driving them and their needs. The first is that being an entrepreneur is cool and lots of young people are starting their careers as entrepreneurs. Second, with online penetration and mobile, social and instant gratification, consumers want to access services everywhere. And third, technology is making it easier for SMBs to offer services to customers with new tools and capabilities. Let's take a moment on each of these. I mentioned that entrepreneurship is a trend, but everyday entrepreneurs are underserved and need guidance. Being an entrepreneur is a lonely job and they need the combination of humanity and technology to serve them. And we all know that consumer habits are shifting. In fact, consumers are all over this map and small businesses need to be present wherever consumers are. This is a big challenge and they need help with simplifying it. I also wanted to highlight 3 technology trends that are core to technology making it simpler for SMBs to get online. The first is that creating a website has never been easier. The chart on the left shows the continued decline of custom HTML websites as WordPress and captive CMS both take share. GoDaddy is the only company at scale to offer entrepreneurs both WordPress and a simple captive CMS in Websites + Marketing. The second trend is the continued share gains of e-commerce as a percentage of retail. Our data shows that a majority of SMBs globally do not participate in online commerce, but now it is easier than ever for our customers to add commerce to their online presence. And the third is the addition of AI to tools like Websites + Marketing. SMBs can now serve customers in a more personal manner in multiple channels. With an understanding of some of the secular trends, let's go one step deeper into the customer journey and where GoDaddy stands in each of these 3 phases. We are the global leader in the $5 billion dream phase. Our market share of .com domain registrations is comparable to the next 10 registrars. With 22% of all domains under management, we promise to continue to innovate in 3 areas. First, with the acquisition of Uniregistry, we have added industry-leading online tools and capabilities for complex use cases. Second, we will continue to innovate and help customers find the best names. At our scale, we have a data advantage, and the application of AI will improve this over time. And third, we will continue with what has been successful already. We are in many markets globally and we will enter more and increase our international share. Here is one example of us innovating, aligned with our new strategy. This image shows us selling bundles instead of products separately. This is live today for existing customers in the U.S. And with machine learning, these offers will be personalized to the customer. Shifting focus to the create phase. We have been rapidly gaining share here. We are already the #2 captive CMS provider in the U.S. and we are the biggest WordPress host. The bars in the chart on the left are captive CMS units and the line shows ARR. You can see how, over the last few years, we were able to fully offset the decline of our legacy website builder, and Websites + Marketing has grown aggressively, both in terms of units and driving ARR. In the create phase, our promise is to offer effortless creation anywhere to anyone. We will also continue to innovate with the WordPress community and support them. We will accelerate the design process for our customers and we are putting guidance, both human and AI, with them every step of the way. Here is a simple example of what a WordPress install looks like everywhere else versus at GoDaddy. Recently, we also launched the Go theme for WordPress that allows WordPress users, even outside of our hosting, to have similar capabilities. The grow phase has been our focus of attention over the last few months. With the inclusion of Sellbrite capabilities in Websites + Marketing, we have started with being able to connect to every major platform. Our promise here is to simplify marketing for our customers and allow them to transact and -- on all of those platforms. We will also offer our customers the ability to manage their customers across these multiple channels and platforms. There is a lot more to come in this area, but I wanted to show you a quick clip that gives a peek into some of our current capabilities. [Presentation]

With an understanding of our customers' journey, let's take a moment and talk about GoDaddy's competitive advantages. It all starts with our amazing brand. We have been investing in it for over 20 years and it is a huge asset. Sage guidance has been part of our ethos since the beginning. We have always done it and we will continue to do it. And building seamlessly intuitive experiences and unlocking the exponential power of our community are 2 areas that we're putting more energy into. Let's start with our brand. We have always been an innovator in brand marketing, and our Make Your Own Way campaign has delivered phenomenal results. Over the last few years, we have successfully guided our brand to a much more positive and valuable place with our customers. Our brand has grown and won the right to sell adjacent products to our customers, which is a critical asset as we broaden our offering to more customers. #humanfirst guidance is the killer app. We have always said it is our secret sauce and it has been part of us since the beginning. Here, I want to tell you about a customer who sent us this handwritten card, thanking one of our guides. Rob guided Mary to a new website experience that she wasn't sure she wanted, but with some help and reassurance, she not only feels that her website now represents her business, she can support it herself. A simple customer quote summed it up nicely for me. "Your support team is doing a great job of low-pressure cross-selling and upselling." Building seamlessly intuitive experiences is about reducing friction and increasing engagement. Higher engagement is a signal of growing customer value and that increased value results in adoption of adjacent offers. When we compare Websites + Marketing to our legacy website builder, we find it has 65% higher monthly active users. We have also created a metric that measures true customer value of a successful venture with us. That true value achieved from the customers' lens is a key metric, and our teams have been focusing on moving that metric. And we are able to improve it 16% year-over-year this year. The exponential power of our community comes from our large and happy customer base. Our customers want to support their peers and they want to support us as well. We also have complementary customer populations where designers, developers can offer services to our other customers. And we continue to be amongst the largest contributors to the WordPress community. A few days ago, we launched #OpenWeStand and it is a great example of the amplification that our community can give us. Let's start by watching a commercial we've built for #OpenWeStand that's quickly raised to over 1 million views in about 4 days. [Presentation]

I love that commercial. And clearly, a lot of other people love it as well. Fara will share a lot more about #OpenWeStand, and we are super excited about it. As I get near the end of my presentation here, I wanted to share our 2020 objectives and how we are internally measuring our progress against them. You will see here critical metrics for our customers and our brand, but also for our operations and making sure that we continue to invest in our platform. All of this brings us back to the 4-1-1 on GoDaddy. $4 billion in revenue, $1.1 billion in unlevered free cash flow in 2022, that is our target and our ambition continues to be greater. Next, I'm happy to introduce Andrew Low Ah Kee, our Chief Operating Officer, to dig deeper into our businesses.

Thanks, Aman. I'm excited to talk to all of you about our TAM, about our position and our priorities for each of our businesses. The customer journey that Aman shared is a really critical one as we think about our business because it creates a frame for us to think about how our customers spend. There are many jobs that a customer does as they go through each stage. In dream, they imagine the possibilities. They conceive their brand. And one of the only purchases they make is locking up their name. In create, the biggest activity is actually setting up their offering. They design and develop their product or service. They incorporate. They source the supplies for it. They begin to establish and create their brand. Once they're there, they start to grow. They find customers. They go out. They do business. In a word, they market and sell. And then they manage. They fulfill. They run the back office. They keep their books. Now super important to call out, the #1 priority we've seen across customers of every segment is getting more customers. As we start to use this universal journey as a frame to think about our TAM, it's important before we jump in to say we're not going to show you everything an entrepreneur does in each of these stages. We're going to show you the TAM through the lens of the areas that we play. When we look at the TAM, we've built it bottoms-up. We took the 500 million entrepreneurs that Aman mentioned. We took global internet penetration market-by-market around the world to get to roughly 250 million entrepreneurs online. Then we looked at purchasing power to make sure we understood what our people in different markets able to spend. Now unfortunately for us, in dream and create, that spending power is pretty common across the world. As we start to get into grow and manage, we start to see more variability. Now so if we look at dream, the GoDaddy offering is really domains. A customer typically spends $15 a year. That puts the available TAM at about $5 billion. As we flip into create, for GoDaddy, that's really online presence and branded email. Customers tend to spend $100 to $250 a year, which leads to an additional incremental $45 billion of TAM or $50 billion cumulatively. And as we set to grow, which we consider to be marketing, commerce and consumer engagement, we see customers spending $600 to $1,000 per year, which adds an additional $130 billion to the TAM for a cumulative TAM of $180 billion. Now that's what we consider our immediately addressable TAM. And finally, there's manage. We see the customers in that space spend $1,000 or more per year, which adds another $170 billion to the TAM. But as Aman mentioned, that's 3 to 5 years out. So we really focus on that $180 billion. Importantly, the view of increasing spend as customer go along the journey isn't just something we see in our external research. We see it in our own customer base as well. Indexing off the customer value of a domain-only customer, you can see adding e-mail or a website increases customer lifetime value by 9 to 11x, 5x in the spend roughly and half-ing the churn. Adding both a website and e-mail improves revenue by 9x and cuts churn to nearly 1/3. And then there are our very best customers where we see that the top decile starts at 81x the value of a domain-only customer. Given these dramatic shifts in customer value, we're focused on driving the mix of customers, not just gaining the marginal domain customers. So let's take a look at where we stand. In Dream, we're the clear global leader. It's a historic point of strength for GoDaddy. In create, we built off of our strength in domains to establish a leading franchise. We're #1 in WordPress, and we're #2 in Websites + Marketing, where we're growing fast, and we're continuing to take share. In grow, we're still early. We started to see investments into that space, but our strength in create, that leading franchise that we've now build, has put us in a position to attack $130 billion of incremental TAM. And last, manage, that's future opportunity for us in 3 to 5 years, once we've built a leading franchise in grow. Let's dive into each of these businesses in a little bit more detail. In dream, Aman shared that we have a leading position with 22% of all domains under management. It's also important to contextualize that through a competitive lens. We're roughly the same size as the rest of the top 10 registrars combined. We've also significantly outgrown the industry through innovation in the space. We've grown domain revenue per domain under management well above the market rate as we help consumers find names that they're looking for, whether that's a massive selection of TLDs we offer using our big data to help find that perfect name or increasing the liquidity inside the aftermarket so that customers are able to find that name that perfectly matches their ID. We see plenty of opportunity to continue to grow our domain business above the market rate and extend our leadership position. Three core priorities as our focus areas. The first, adding intuitive tools and capabilities for customers. Uniregistry is a great example of that. We saw that Uniregistry had built a terrific set of tools for larger, more sophisticated customers, made it easier to manage a domain portfolio. Until we went out and 2 months ago, we acquired them, and we're excited to introduce that offering to the relevant GoDaddy customers. The second, we need to solve the stock-out problem with innovation. Consumer searches for domains are unavailable nearly 1 out of every 2 times. It's like going to the supermarket and seeing every other aisle empty, it's crazy. We believe we have the opportunity to help consumers find that perfect name by making the experience more seamless. We can apply our big data scale to help them find that perfect name, and we can continue other innovation around the aftermarket to create availability of name spaces. And finally, we have room to continue our global expansion. Well, we've got 37% share on COM. We're only at 6% share on ccTLDs, or country code TLDs, today. Now our share of new registrations on those ccTLDs is higher, but we still have runway to grow and our playbook of localizing our offer, adding care and then building our brand continues to have significant upside. Turning to create. We are now the clear #2 in the marketplace with this product. We have over 1 million subscriptions, growing 50% per year. We've been leaning in, and we're super excited about the gains that we have been seeing that are best illustrated by the chart on the right. What's been driving that? As we look into our product releases, there has been a consistent and repetitive drum around feature and capability enhancement. Aman shared with you the demo video that exposed just a sample of these features. Now critically important, it's not about the volume of features. It's about finding the ones that are most critical to the success of our customers. We believe there's plenty of room to continue to grow as well. Our goal is simple. We want to get to #1 from our current #2 position. We have 3 core priorities as we look at how we go about doing that. The first, more GoDaddy-powered ventures; the second, satisfying and retaining our users; and third, guiding them to the next step. Let's go and talk deeper on each. More GoDaddy-powered ventures, could be said more simply, as more people trying and buying our higher-value solutions. We see the dramatic increase in customer value from 9 to 27x when customers add e-mail or a website or both. So we're focused on making that experience as seamless and frictionless as possible. An example of that is what you see if you're an existing customer who searches for a domain today at GoDaddy. You're seeing us aggressively bundling our offers to help customers find a solution that's right -- just right for them, not going à la carte adding piece by piece by piece, but actually just dropping into a solution. If you're an existing GoDaddy customer, thank you for that. Go to the website and check out the experience. There's plenty of runway left for us to go. And it's not about what we do online-only either. Care has been a critical channel for us over time and has been a core contributor to building business applications into an over $0.5 billion revenue line. We believe that we continue to have opportunity within Care and more broadly to drive biz apps through increased penetration, additional seats and plan mix to grow in the years to come. But it's not enough to just have more customers try and buy our offering. We actually need them to love our offering, to see the value so that we retain them. It's a key to growing the ARR trend that Aman shared earlier. What do I mean when I say this? Well, one really simple example, we knew that publish rate was incredibly predictive of driving retention. So what do we do? We drove it up. We took our December '16 cohort, and went to work, and we improved publish rate from 63% for that cohort to 84% for the December '18 cohort, a 1.3x improvement. And what happened to retention, it also improved by 1.4x. We have so many opportunities to help our customers succeed and continue to drive that retention rate, which will turn into growing ARR. And last, it's about guiding our customers to the next step. What is that next step? Overwhelmingly, it's marketing. 57% of the people who build the site also intend to do marketing. That's why we bundled websites together with marketing and very clever, called it Websites + Marketing because our priority for create is actually help our customers grow because that's our customer's #1 job. So how do we think about grow? We see 3 core components to grow. The first is marketing, getting and keeping customers. The second, commerce, selling more. And the third, consumer engagement, how a business interacts with their customers before or after a sale. And we think all 3 of those things build on top of insight and guidance and the community and partners that we have. As we look getting and keeping customers, our M&A -- some of our product tuck-in M&A are great examples of where we've been seeding investment. Over is really about content creation and publishing it across the plethora of channels that our customers are facing. Right now, Over is on a run rate where over 100 million projects per year are exported to third-party channels including the Apple App of the Year and it's mobile-first because we know people are spending time on their phones. So a great example of making content creation, more frictionless and more seamless, and we're excited about integrating over further into the GoDaddy offering. A second is Main Street Hub, where we knew our customers needed to reach their customers or their prospective customers across their social media channels, really -- and it's a wonderful service-based offering. At Main Street Hub, when we brought it in, we had a thesis that there was demand for our customers. And that thesis has proved out. We doubled the sales productivity at Main Street Hub since we acquired that business. Shifting to sell more or commerce, two simple vectors for growth: number one, sell anywhere; number two, sell anything. Sell anywhere is pretty straightforward and pretty easy to imagine. We all know if someone wants to sell online, they should have their own site. But it's also important for a small business to show up where commerce is happening, be that on Amazon, eBay, Etsy or social channels like Facebook or Instagram, we want our customers to be able to sell their offering anywhere. It's also important to be able to sell anything, particularly in the current environment, where many businesses are having to rethink or reinvent their offering. We don't want to just be able to offer commerce for physical products, we're also pressing and currently able to support commerce for videos and digital content, appointments, classes, bookings, memberships, a wide range of things beyond just selling a physical good. We think that's more important now than ever. This has also been a place where we've leverage our balance sheet to accelerate our product efforts. When we acquired Sellbrite, we added more built-in integrations to third-party marketplaces than Shopify, Wix or Squarespace has. And last, we know our customers want to engage with their customers as their customers are on the journey, be it before shopping or after shopping. Two core areas that we're focused on here. The first is a one-stop shop to see all your customer interactions and engagements. Some might call that a CRM. Well, if you haven't logged in to Websites + Marketing recently, you can find it under the Connections tab where we are bringing that capability to less. The second, and this one is a little bit longer term, is enabling outbound one-to-one consumer interaction based on the customer's channel of choice. We know that our customers have a deep desire to engage with and interact with their customers. Now if we were to stop there, that'd be plenty, but we're not done. When we think about create and we think about what we just reviewed for Websites + Marketing, it's really about delivering the exactly right solution for our DIY customer, who may not have a ton of technical aptitude or capability. And by focusing on that simple, seamless and intuitive experience and adding guidance everywhere we can, you're seeing us take material share. But if that was all we focused on, we'd be ignoring a large part of the market. WordPress has 60% share in CMSs. It's by far the most powerful CMS on the market with over 8 million strong in its community today. It's a core focus of our partner efforts and just like we're excited about Websites + Marketing, we're every bit as excited about the progress we've seen in the WordPress. When we look at where GoDaddy stands inside of WordPress, a few points to highlight. The first, we have the broadest reach into the WordPress community of any company out there. We have 3 million partners that we'd estimate are on the GoDaddy platform today, and that the enrollments in our GoDaddy Pro program are growing over 40% per year. What's driving that? GoDaddy is the fastest innovator and a real champion inside the WordPress community. GoDaddy plug-ins have over 3 million active installs, and we're the developer of some of the fastest growing resources inside the community. All of that turns into GoDaddy as the #1 WordPress host globally, with 10% share of all WordPress sites. Now Aman showed you a side by side image. What WordPress looks like how -- in the wild for most people and what WordPress looks like at GoDaddy. It's a little hard to feel -- get a real good sense to the feel of that if you're not familiar with what WordPress looks like. So let me show you a product demo that compares GoDaddy versus another leading player. And we picked the leading player, just as a reference. It looks pretty similar no matter where you go. [Presentation]

Pretty different, right? Now that's -- the underlying drumbeat that's led to our success inside of Websites + Marketing, of constantly shipping new features and capabilities that matter to our customers is the same thing that's happened inside of the GoDaddy WordPress environment. When we look back over time, we've had a real drumbeat over the last couple of years of improving the product experience, which is why the experience is so differentiated today. And we believe there is significant opportunity to continue to grow. We have 2 core priorities for our partners business, really around driving WordPress. The first is being the most efficient way to create spectacular WordPress websites. And the second is being the most efficient place for our partner to maintain multiple websites. This is another place where you've seen us use our balance sheet to add product capability that accelerates our offering. CoBlocks is a great example of how we're making it easier to work inside Gutenberg and securing and managed WP are great examples of how we're making it better to manage multiple sites at GoDaddy than anywhere else. A core part of our offering here at GoDaddy has always been guidance. And you heard Aman talk about 7,300 people who are now working from home, that used to sit in 22 sites around the world, do 50,000 interactions per day and drive roughly 15% (sic) [ 16% ] of bookings. Now as we've moved 7,300 people to work from home, that's been a huge amount of innovation and kudos to the team for doing it. But we haven't rested on our laurels. We've also been innovating proactively, not just reactively. We continue to innovate on our care experiencing, leveraging the ever-increasing customer insight that we have by virtue of the millions of interactions actions we do each month. An example of that, we are not able to predict in real time the yield of the call. And based on that yield, which really equates to the complexity, we're able to take different actions associated with it. For higher complexity calls, which also are typically have higher sales rates, we guide those to our best guides. Our customers get the benefit of our most experienced guides. Guides have the chance to earn more money, and GoDaddy receives higher sales productivity. It's a trifecta of wins. On the other hand, for lower complexity calls, we're enabling channel of choice with support-focused teams, again, trifecta of wins. Customers get to engage wherever and however they'd like. It enables a career track for our guides who might not love to sell, and it helps GoDaddy realize a lower cost to serve. We're also taking what has historically been a secret sauce inside of care. We're bringing it everywhere across our experience. Sidekick, as an example, brings guidance directly into our products. On the right-hand side, you can see a screen shot of our Websites + Marketing editor with Sidekick right in line. It helps our customers take advantage of live and digital care to understand how to use features, how to get more out of the product. We're seeing terrific engagement with it. And last, it also gives us the opportunity to deploy our scale again. 30% of the questions are answered by bots, and that gives us a wonderful feedback to continue to drive product enhancement and innovation. As our offering from Domains to Websites + Marketing to WordPress continues to evolve, we also are focused on how our go-to-market engine continues to deploy spend. We think about spend and return on spend over 2 different time horizons, short and long. On the short-term time horizon, we really govern our investment by looking for it to breakeven within 18 months. On longer durations, the outcome of this turns into terrific returns. Using the cohort lines that Aman showed you earlier, you can see that the 2010 cohort, after 10 years, has delivered roughly $1.6 billion. Just like the 2008 cohort did, except it took -- 2008 -- 12 years to do that. If you take these bookings and just as a shortcut, take our gross margin and care cost off the face of our P&L, we've realized over $800 million in contribution to date from the 2010 cohort. Compare that to the $86 million in spend to acquire the cohort, and we've already received nearly 10x of our original investment. And best of all, that return continues to grow as the cohort continues to spend money with GoDaddy in a very consistent and predictable way. Given these return dynamics, and as we look at spend, we're very focused on deploying dollars. Over the course of 2019, we shared with you several times that our annual cohort is also our largest ever -- our 2019 cohort, excuse me, is our largest ever. That's true, as you can see from the chart here. Measured 1 month post acquisition, the 2019 cohort is our largest ever. Just as important, the ARR of our customers has been expanding versus that initial month of value. So we expect our 2019 cohort ARR measured 12 months post acquisition to be materially higher than any before. So to wrap, GoDaddy has been a clear leader inside of the dream space with our domain business. It's a historic point of strength that we believe we can continue to extend our leadership in. That position has been leveraged to build a leading franchise inside of create. We're #1 in WordPress. We're #2 in Websites + Marketing. We're growing quickly and taking share. And now that we've built a leading franchise inside of create, we have the opportunity to attack the $130 billion of incremental TAM inside of grow, which is our customer's #1 trial. Now with that, let me turn it to Fara to talk to you about how we're stretching our brands to cover this entire journey.

Aman, Andrew, thanks. I'm privileged to be here today to talk to you about our customers and our brand. As you've heard, GoDaddy is focused on the entirety of the entrepreneurial journey. And we have a long-standing history in this space, particularly because the dream phase starts with the name. And our experience in Domains means that we are starting the entrepreneurial journey with millions of customers around the world. That enables us to have even more meaningful conversations about create, grow and manage. So our brand strategy, in short, is shifting from being a value-based brand focused on more domain-centric message to really being a values-based brand, where we're focused on supporting a broader customer goal, again that full entrepreneurial journey. And the way that we will do that is by ensuring that the customer is at the center of everything we do, and all of the stories that we tell on their behalf are about them. So I think this first spot that I'd like to show you, which is a snapshot of our 2019 communication, is a good representation of how we're celebrating our customers and how inspired we are by them. So let's play that. [Presentation]

Hopefully, what you just saw aligns to the 2 tenets that I'm going to talk to you about next. At a macro level, we are aligned around 6 key tenets globally, and those tenets guide all of our communication. What you just saw in that spot is a great example of how we showcase our customers. And an additional critical tenet for us, as you've heard throughout the course of the day, is guidance, our unique ability to guide customers, both through our products, our guides and everything that we do. In September 2019, we ran a customer event, in which Sarah Small, who you've seen on several slides throughout today, she attended this event, along with many other customers. And hearing her perspective on how we help and guide her is something that's incredibly humbling to hear. So I'd like you to hear directly from her. [Presentation]

Two additional tenets that are important to us is empowering our customers. Now we know that the entrepreneurial journey also has highs and lows. And for us, we're very focused on ensuring that we're supporting them during the highs and celebrating their joys and their success. In the beginning of this year, we ran a spot in the U.K. for a London-based business that was celebrating success. And I think this ad is a great example of these tenets coming together in action. [Presentation]

Lastly, specific to tenets. When we are aligned with our customers' values, the way we communicate with them has much more impact. And when we do that well, we become badge-worthy. And what badge-worthy ultimately means is GoDaddy is synonymous with being an entrepreneur. The image that you see on the right there is a laptop that a member of our team saw in the MIT Library, snapped a photo because they were so inspired that a GoDaddy Sticker was out in the wild because this person aspire to be an entrepreneur and thus, associated themselves with us and vice versa. Being badge-worthy is our aspiration, and we do that when we showcase our customers and we showcase their values. GoDaddy is about what our customers are about. And this last video I'd like to share with you, I think, is a great representation of how our values are aligned. [Presentation]

Now I just showed you a lot of creative and a lot of content that we have out in the world. But to be very clear, our brand is much more than just our advertising alone. It's our product, it's every call that a customer has with the guide, it's our website, it's our advertising and everything in between. And our brand transformation is absolutely moving in the right direction. In fact, when our values are aligned and we bring our efforts together, you start to see relevance also shift up or brand affinity. At GoDaddy, we called out for people like me, meaning a customer or a prospect feels like GoDaddy is a good fit for them. That line, too, is moving up and to the right and shows us that we're on the right path. Now as you've heard throughout the day, and of course, are aware because we're all managing our way through it, we are dealing with unprecedented times. And our values are aligned with our customers. And so we knew it was imperative that we spend more time with them. We listen, we respond, and we react in kind. And that is how OpenWeStand was ultimately born, by listening and then knowing what to do. This led us to develop, OpenWeStand. You've heard about it this morning. Hopefully, you've had exposure to it. But OpenWeStand is really a rallying cry to bring entrepreneurs around the world together and for us and other brands who support them. Now OpenWeStand is also a platform. It is, of course, communicated often to customers and will be by the advertising we put in-market that you saw earlier. But it is also an experience where we're bringing GoDaddy content, offers and partner content and offers together in a place where small business can have a community to get all the support and help that they need. And we know they need our help now more than ever. So we are putting a sizable amount of our focus across our entire company behind OpenWeStand. Now our aspiration is that OpenWeStand becomes a movement, and we have an indication that we're off to a great start. We communicated out via organic channels to the customers that we communicate with often that we're creating OpenWeStand. We've pushed content out and within several days, we saw over 1,000 reposts of OpenWeStand. We saw printouts in customers' windows. We saw OpenWeStand as a mark on customers' websites. And our hope is that OpenWeStand becomes a movement, that when our doors are closed, small business can remain open. And when we do that, we're reflecting customers' values, and our brand continues to grow as our customers are able to be successful even when times are tough. We're pleased with the progress we've been making on our brand, and we're committed to the tenets that I just walked you through today to continue to do so. With that said, I'd like to introduce you to our Chief Financial Officer, Ray Winborne. Thanks.

Thanks, Fara. Aman laid out the vision and strategy to capture our opportunity in a massive immediately addressable market. Andrew outlined how we'll engage customers during the journey, including leveraging care and guidance as key points of differentiation. And Fara just spoke to how we're evolving the GoDaddy brand to be the champion of everyday entrepreneurs around the globe. And now I'm going to wrap it up with the financial outcomes we expect. I've got 3 points I want to touch on today: one, the durability of the business model; two, our scale and how to think about the growth algorithm; and three, our liquidity position, cash generation and capital allocation priorities. We have a resilient business model. You know these times are unprecedented, GoDaddy's weathered storms before. And the business has tailwinds, including a large addressable market and a secular shift to digital as well as defensive characteristics like strong customer retention. The fact our services aren't discretionary spend, customers don't turn off GoDaddy unless the idea dies and often not even then. And it's a low cost of ownership. At only $158 a year on average, it makes it easier to absorb than other spend in a downturn. Over the last 5 years, we've had good balanced growth in customers and ARPU, driving double-digit top line. We have a diverse global customer base with nearly half of our customers located outside the U.S., yet they share many common needs. They can be served with a horizontal set of capabilities, driving strong incremental returns even in smaller international markets. The steady increase in ARPU over time is a proof point, but successfully have achieved by engaging customers, adding new capabilities and increasing customers' willingness to pay. 2019 revenue caught in at nearly $3 billion, putting GoDaddy in an exclusive group of software and Internet companies. Consistent execution over the last 5 years has produced remarkably consistent growth at scale. Steady revenue growth, combined with solid operating leverage, has equated to exceptional growth and unlevered free cash flow. We've delivered that growth while steadily improving margins to nearly 25% in 2019. And the quantum of cash we generate opens up more opportunities to use the balance sheet as a lever to grow. 90-plus percent of revenue in any given year comes from the existing customers in our base. We track and measure our customer base by cohort, and we've got data going back over 20 years. We have an enviable annual customer retention rate of over 85%, and our experience has been that we grow with them, whether that's buying new products or upgrading existing ones, leading to even better revenue retention. The graph on this slide illustrates revenue from individual customer cohorts near the $2 billion, $3 billion and $4 billion milestones. The 19-plus million existing customers at the end of 2019 generate $3 billion in annual revenue. Aman and Andrew showed you the incredibly consistent performance of a couple of customer cohorts over a 10-plus year period. To frame the future potential of that highly predictable performance, existing cohorts will generate nearly $25 billion of revenue over the next 8 years. That's nearly 2.5x our current market cap. Turning to liquidity. GoDaddy has a great business model. We're extremely well capitalized, and our capital structure is solid, with less than 2x net leverage, no near-end debt maturities, full access to the revolver capacity, and we're carrying a lot of cash. This affords us both a margin of safety in uncertain times, but also the opportunity to be aggressive, both organically and inorganically. COVID-19 and its impacts are obviously in a lot of minds. Let me start by saying that while COVID-19 has created significant uncertainty in the short run, it hasn't changed our view of the strength and resiliency of the business model over the longer term. In fact, this crisis has already created additional awareness of the need for a digital presence as many local businesses with exclusively physical storefronts have been forced to pivot to digital sales to keep their virtual doors open. That said, I do want to take a couple of minutes to outline what we've seen to date and how COVID-19 has impacted, how we're managing 2020. First, in the core of what we do, we continue to see stable demand trends and renewal rates. While it's early and we need more than 6 weeks to determine the extent of the impact from COVID-19, it's clear that the durability of the business model is proving out. However, we do see potential for financial impact in 2 areas of our business. First, in certain of our higher-priced services and aftermarket offerings, we're seeing the natural effect of price consciousness the business is having in uncertain times. Second, as you all know, our care teams are highly skilled at helping customers identify incremental solutions that meet their needs. As Andrew discussed, over the course of 2 weeks, we migrated over 7,000 GoDaddy guys from high energy team-based environments to working out of their living rooms and spare bedrooms. While we've seen a nice rebound in service levels, work from home has had a predictable impact on new sales productivity of those guys. Based on our view today, we believe these headwinds will likely create a $25 million to $30 million gap in our Q2 revenue results and an even greater impact on bookings. How we manage the business is adapting to COVID-19? It has a clear set of tenets: a human-first approach to our teams, supporting our customers in this period of volatility and stewarding the business well. We're encountering new decisions on a daily basis, many of which are opportunities for us to go on offense. As prudent operators, you'll see us exercise judgment against those opportunities with an eye towards returns to shareholders that come from increasing the value we provide to customers. Given the fluidity of COVID-19 and the downstream economic impacts, we're removing our financial guidance for the full year 2020. You all know us for a proven track record of calling it like we see it. And as soon as we have the visibility to reinstate point estimates for 2020, we will update this group. I want to reinforce that we have a high degree of confidence in the durability of this business. And I, for one, am frankly glad to be here right now. As I mentioned earlier, at our size and scale, we're in an exclusive set of companies. You're looking at a scatter plot of public software and Internet companies with revenue greater than $2.5 billion. The median valuation for the group is roughly 20x 2020 consensus free cash flow. Plotting revenue growth and free cash flow margin, you can see GoDaddy sits just above the median of the group on both metrics, illustrating growth at scale. On this slide, you'll see what you should expect from the business over the next few years. From a financial point of view, scale and unit economics are what makes GoDaddy truly distinctive relative to what's a very fragmented competitive set. We're projecting double-digit top line growth fueled by the strategy we laid out today, while allowing us to expand margins on both normalized EBITDA and unlevered free cash flow. In that, strategic M&A provides the ability to accelerate top line growth. We expect gross margins to stay roughly flat due to growth in subscriptions of Websites + Marketing and Managed WordPress, offset by more labor-intensive services offerings and faster-growing partner products like O365. We expect to continue investing in tech and dev as we aggressively pursue product innovation to match customer needs. We'll also continue investing marketing dollars, although that will largely be governed by the return on those dollars. We will invest more when the incremental returns are attractive, even if that means a slightly longer payback period. We spent the last 20 years building a culture that focuses on guidance. We've scaled care in a way not at all possible. We're now looking to take that to the next level. We should see leverage as innovation allows us to expand human guidance to digital channels, optimize routing of high-value calls to the most qualified guys and meet customers in their channel of choice, whether that's in product discovery, messaging or voice, while still delivering a wow experience. And finally, you should see operating leverage in G&A as we further scale an already large business. This slide illustrates the growth progression of our different product lines over the last 5 years and our guide out to 2022. Historically, we've outgrown the market in domains, and we expect that to continue. As we look forward, we expect lower unit growth, but continued improvement in average selling price, as the increasing scarcity for the right domain name creates more opportunity for aftermarket and alternate TLDs. Within Hosting and Presence, we'll continue to gain share and create phase and drive growth in subscriptions and a higher SKU mix. We've created a $500 million fast-growing business in biz apps, and we'll continue driving growth in domain-based e-mail and business productivity suites through our partnership with Microsoft, selling O365. We've deployed 120% of the unlevered free cash flow we generated over the last 5 years. We've made a series of technology, product and talent acquisitions, but also larger geographic expansions like HEG in Europe. We've been disciplined in the sequence, fit and valuation, and you can expect us to continue to do so as we deploy capital in the future. We've also repurchased our own shares when valuations were attractive relative to other actionable opportunities. Importantly, as noted earlier, the long-term guidance doesn't assume M&A beyond what we've already announced. As you can see on this slide, we have plenty of financial capacity to continue acquiring product tuck-ins, consolidate what's a very fragmented market or drive transformative growth in the business. We have a robust plan for capital allocation, with the primary objective of driving growth and levered free cash flow per share. We're committing to deploy 80% of available cumulative cash, whether through M&A or buybacks through 2022. Keep in mind, uses of cash aren't going to be linear or neatly timed out, which is us approaching capital deployment in a measured way and in good returns. On that note, we've gotten off to a fast start in 2020 with the acquisitions of Over and Uniregistry. In demonstrating our confidence in the long-term health of this business since the sell-down on our shares amidst COVID-19, we've repurchased 8 million shares or nearly 5% of our equity at an average price under $55 a share. Simply put, a 10% free cash flow yield is something we just couldn't pass up. As you know, we've been prudent stewards of capital over time. Given our proven track record, expect us to be more aggressive if we see opportunity or more conservative if the market environment is up being more challenging than expected. The takeaway is, we're well positioned to both weather storms and take advantage of opportunity. Moving on to taxes. GoDaddy is structured as an Up-C, which means the company as a partnership that sits downstream from a public company. This structure allows us some unique tax advantages for us and our shareholders. In practice, when our pre-IPO holders sell, they first convert partnership units into Class A shares that can be sold to the public. This conversion creates a step-up in tax basis. That step-up is amortized over approximately 15 years, lowering our taxable income over that period. So this is a tax-advantaged structure for GoDaddy. As part of the Up-C structure, we entered into what's known as a tax receivable agreement, or TRA, which requires us to share the tax savings with pre-IPO holders. The result is our cash outflows for taxes are lower than if we were a C-corp. TRAs are a somewhat novel concept, but in practice, they act similar to the net operating loss carryforwards. And then as we generate taxable income, the TRA attributes are simultaneously amortized in future periods. We currently expect sufficient taxable income to trigger TRA payments in 2023. For modeling purposes, you should use roughly 15% of normalized EBITDA in 2023 to approximate the cash payment. Over the longer term, we expect our all-in effective rate for cash taxes to approximate the statutory rates in effect at the time. This slide highlights some changes to our guidance in terms of both types and cadence. In addition to revenue and unlevered free cash flow, we'll begin providing growth ranges for the 3 product categories shown on the P&L. We'll also begin to provide qualitative guidance for both bookings and normalized EBITDA to close information gaps in your models. And last, we'll disclose customer count, retention and ARPU on an annual cadence. We outlined the growth strategy today, which solves for customer success and drives higher lifetime value. The customer-led lens will lead to trade-offs period-to-period as we step customers into higher end solutions. This will manifest itself in the growth illustrated on the revenue product category slide I shared a few minutes ago. Inevitably, expectations of a specific quantum of customer adds on a quarterly basis could create misalignment with objectives to drive LTV. Consequently, we'll provide this metric only on an annual basis. We've covered a lot of ground in the last couple of hours, but to reinforce what you've heard today, we're a leading player in our space, serving a massive market with a huge immediately addressable TAM. We've transitioned to a customer-led software company that will accelerate innovation, whether organic or inorganic. We have a terrific brand, backed by a strong ethos of guidance. We've got a long track record of generating strong returns, both organic investment in the business and deploying excess capital. This is a great business that's generated predictable results over a long period of time and possesses many defensive characteristics that should reduce exposure in down cycles. And finally, this is a team that has successfully navigated challenging situations in the past. So that's the 4-1-1 on GoDaddy in its many powerful advantages. We hope you found today's presentation informative and useful.

Thank you for being with us, and we hope you're able to find these prepared presentations helpful. We acknowledge right off the bat, there were some technical issues with getting the slides to advance in sync with the speakers. We're in the process of getting the slides posted to our investor website right now, so you'll have those available to you very shortly. As a reminder to folks that are joining us for the Q&A live session now, if you'd like to submit questions at any time, you can do so by submitting them via e-mail to [email protected]. With that, we've got a list of questions that have already been submitted, so we're going to go ahead and get right into those.

So the first question is for Aman on strategy. Aman, it sounds like the focus is on creating product suites and adding features, either organically or through M&A, and then raising price over time. When you look at the products now, where do you see holes in the offering that you think you'll need to fill in the next year or so?

Yes. Thank you for that question. What we've done is we have built amazing relationships with over 19 million customers. And with our customer-led model, we have aligned execution to the needs of those customer populations. So for me, when we look at our products, it isn't about what holes we need to fill. What it becomes about is a team of people looking at a customer population and seeing what is their next most important need and then filling that need through product, whether we build, whether we buy or we partner for it. In fact, Over is a great example of exactly this. We have seen with our customers that they have the need to create content, not just to publish on their own sites because new content, fresh content is always fantastic, but also to post across the platforms. And we started with a partnership view to Over. But we quickly realized that we wanted that asset internally, and we brought them in, and we're quickly integrating it into Websites + Marketing. From the strategy perspective, our goal is to absolutely create customer value and allow them to create surplus for their consumers and create surplus for themselves. And yes, over time, what we're offering is suites of products so that they can move up in those tiers as we help them be more and more successful, as we've shown with a number of the metrics.

Thank you. The next one for Aman and Andrew. You laid out the differences between domain-only customers and customers that have higher attach of other products. What are you doing now to drive more attach and engagement with customers? And when do you think we'll start to see that show up in the metrics?

So all of this goes back to guidance, and we have been great at guidance in our care centers since the beginning. And what that looks like, I showed you with the story with Mary and Rob. A customer calls in, we have a good idea of what their needs are. We have a good idea of where they need support, and we guide them to the right products. What we've done over the last year or so is that we've brought guidance online. And as you look at our sales path, one of the screenshots I shared, is that existing customers that understand the brand, know the brand, land into an experience where, instead of seeing separate products that they have to bundle together and think about what they need, they see existing bundles that they can take. That works perfectly for attach. And it works perfectly for our customers because they are looking for that guidance to know what is it -- what phase of the life cycle are they in and, hence, which bundle do they need. Now I'll turn it to Andrew for a bit more.

Yes. And to the second part of that question, I think you are absolutely seeing it show up, and it's a core part of the 4-1-1 that both Ray and Aman talked to as we look to grow in the years to come. The dynamics that we shared around how the value of a customer changes with increasing product penetration is really remarkable, right? When you think about a customer who has a website versus just a domain, their revenue of that customer is 5x higher per year and the churn goes down by more than half. And so those dynamics, which lead to growing ARR, which was on the page that Aman shared, boy, that's a core part of getting to the 4-1-1 in the years to come.

Thank you. Next one top of mind for a lot of folks in the inbox today. For Aman, when you think about your employees and the impact from COVID-19, guides have historically been a good contributor to bookings. Can you talk a little bit more about the impact on productivity as those guides work from home? Do you have the infrastructure and technology in place to make that strategy work for the near to midterm?

Yes. Our first principle is what we call human first. And that meant that a few weeks ago, as we saw things developing across the world, we started a program to get all our guides home. I'm super happy to share that we acted early and we acted quickly. And today, we have over 7,000 guides working from home, and we absolutely have the infrastructure and the technology to be doing that. Furthermore, I can also share that over the last week, we've seen our guides not only work from home but be able to take calls in a manner very similar to how they were taking that in -- taking the calls in the office. So our average speed to answer is at really good numbers given the circumstances. If you give us a call, you'll find we're answering the phone really quickly. Now in terms of productivity of sales, as Ray mentioned, our guides are used to the high energy environment of our offices. So that's an area we're still working on. We do expect some challenges in terms of sales, but we feel every day we're working hard to make that better. And looking at the long term, we see our people getting to the same level of productivity as they come back into the office.

And I'd just jump in to underscore. It's a pretty Herculean task to take 10,000 people, 7,000 of whom jobs are designed to be in an office and now have 7,000 new home GoDaddy offices around the world, like the experience of doing that when many others who operate contact centers around the world, whatever vertical or business they may be in. We're in a unique position that we're answering the phone and now starting to try and build up that sales muscle again from home. But that will take some time, and we'll see where we land.

Thanks. Ray, given the uncertainty and with the suspension of the full year guide today, what gives you confidence in your assessment of the impact to Q2 revenue? And what gives you confidence in the longer-term view or the 4-1-1 that you laid out today?

Yes. Andrew covered this a little bit. But guys, we've got teams monitoring demand metrics daily. We're comparing those metrics against our historical trending data, sensitizing it for what's happening in the operating environment, like folks being at home, and then projecting out the expected impact over the short run. But right now, we're seeing very stable demand trends and renewal rates in the core business. Just want to make sure I pointed that out in my prepared comments and now. We do expect some near-term headwinds as we see those impacts of the transition to work from home. The impact of Q1 is going to be minimal. But we expect COVID-19 to create a $25 million to $30 million headwind to revenue in second quarter. We pulled back the full year guidance until we get better line of sight into the timing of when things are going to return to a new normal. And a lot of that will be getting those 7,000 folks back into their normal environment. We're going to provide you guys updates as we progress through the year. Regarding the second question around -- based on what we know today, COVID hasn't materially changed our long-term view of the business. Our confidence is derived from the consistent cohort performance over long periods of time. And if you look at the massive TAM that both Aman and Andrew talked about, we're running against that. If you look at the success we've already achieved in the dream and create phases, it gives us a lot of confidence. And our scale is going to give us competitive advantage there when you look at a really long tail on that TAM. COVID is very unique, unusual. It could actually accelerate the secular shift to digital, though. We don't know the whole impacts to the global economy at this point. So any prolonged disruption there could create some differences between what our expectations are today and what they will be, but we'll keep you in the loop as we know more.

Great. Thank you. For Aman and Fara, we appreciate the color around #OpenWeStand and what you're doing to support small business during these times. But can you give us a sense of how much this initiative will cost the company? Is it temporary or permanent? And aside from customer goodwill, what does GoDaddy get out of it?

Yes. Quite a few items in that question. Let me see if I can just hit all of them quickly. #OpenWeStand is a movement that we feel is totally in tune with the times. What we see in the world is small businesses need help right here, right now. And what we see is companies, including GoDaddy, putting out amazing offers for those companies. So we created a commercial that we think pierces through the noise and gets to the needs of the small business owner, gets their attention. And you see that with today over 2 million views on YouTube with very little spend against it. Now with that commercial, we want to funnel all that traffic to our website called openwestand.org, where we're publishing offers from GoDaddy, but also from our partners. So that all of those offers are categorized, filterable for GoDaddy customers and small businesses in general. And it becomes a resource for them in terms of what to do in this difficult time. In terms of costs, we do not expect anything out of line in terms of cost for #OpenWeStand, and we will continue to support this program until it makes sense. And in terms of return, we think this is absolutely the right thing to do in the economy right now, but we also think it will attract a lot of customers to GoDaddy and our services. With that, I'll turn it to Fara.

Thanks, Aman. To Aman's point, #OpenWeStand truly is a movement, and it is a response to what customers are telling us they need. A few important points to highlight, we'll continue this effort as long as it's providing value to customers. And we're doing this because we believe that our customers need support. And that support will come from us, but it will also come from other partners that we bring to #OpenWeStand. So we're actively engaging in partner conversations, bringing more of their content and context to our customers because we know that they need support, and our intent is to make it easy for them. One other important initiative within #OpenWeStand is helping customers and prospects find a community by showcasing customer stories of what it means to be open when your doors are closed and having customers inspire other customers for what good looks like in these unprecedented times. So #OpenWeStand, to Aman's point, yes, a commercial is drawing attention to it because we have the desire to get more and more small businesses, new resources to be successful. And we're really enthusiastic about the progress to date, and it will be an ongoing effort across the company, not just from a brand and marketing standpoint.

Thank you. For Ray and Andrew, you mentioned that you expect $25 billion in revenue over the next 8 years from the customers you have right now. Can you talk about the assumptions that go into that and why you're confident enough to put that metric out there for the first time today?

Yes, I could start and hand it over to Andrew. Thanks for the question number one. You saw the slide because it was a little behind the dog track as we're going through that. Look, this is a relatively easy thing for us to predict. We've got cohort data going back over 20 years. So we know how customers behave over time. Andrew flashed up a slide that showed the performance of multiple cohorts over a 10-year period, and the net revenue retention is over 100%. That history gives us a lot of confidence with respect to what those cohorts are going to do and how they're going to behave as they go forward and, therefore, confidence in that $25 billion number.

Yes. And I'd just -- I'd add to that, that really importantly, as customers stay with us and do more with us, the longer they stay, right? And what that means is churn inside of a cohort isn't stable, kind of constant year to year to year. It actually decreases as customers stay with us longer. And so churn comes down and any churn that we have in the base is actually offset by customers who are increasing the value of their relationship with us, which is what the underlying dynamic that leads to that near 100% revenue retention each year which gets you to the $25 billion, which is a big number.

Thanks. This is probably best for Ray. What does the 4-1-1 guide for 2022 assume in terms of impact from COVID or coronavirus?

When you think about COVID today, it hasn't changed our long-term view of the business. If there is a prolonged impact to the global economy, we'll have to go back and revisit. But today, it's -- our views are based off of our confidence in the cohort performance and what we see going forward in executing the strategy.

Next one, we're seeing registrars in China growing faster. Does GoDaddy have had a strategy to catch up there? Or is that an area of focus?

Yes. I think -- look, I'm happy to take that one. In China, there's a whole bunch of submarkets. And as we very clearly showed, it's not for us about chasing the marginal domain name and inside of the China market there are a number of Chinese registrars who are providing great offerings for the Chinese customer base. That's not our top priority when we think about growing internationally. We think there's huge opportunity for us when we think about international to continue to finish the swing and, frankly, run up the score in markets where we're already #1, markets like Canada, Australia, the U.K., India, we have opportunity to continue to grow there. Equally, there's a set of large markets inside of Europe, where our position is relatively small today. We're seeing those markets performing incredibly well even through the current COVID circumstance. And then there's a set of emerging markets, places like the Middle East and North Africa, MENA, where we believe and we're enthusiastic about, frankly, a whole generation of people coming online and that driving tailwind and growth and us having an opportunity to continue to have bigger business there.

You mentioned being #2 in captive CMS. Can you talk about the competitive landscape, how that's evolved over time and how you expect it to evolve in the future?

Yes. We're super excited about Websites + Marketing. That product is custom-built from the ground up for our customer segment. And it's done really well. We shared with you the growth rates and adoption in terms of units and ARR. As we look into the future, we are taking share now as we speak. And as those rates continue to stay in terms of growth rates, we're going to be super excited about what that's going to bring.

Thanks. For Aman and Andrew, in manage, you talk about a future opportunity in 3 to 5 years from now, and it's not a near-term focus for you. What needs to happen to make this a reality? Said another way, how can we track progress there?

Yes. I'm a big believer that brands have to earn the right to sell products to customers. I think in the past, I've talked about pick your favorite technology player and imagine what products you will sell -- you will accept from them. And then think of a different brand, and you'll get the answer pretty quickly that you're likely not willing to accept a certain product from a different company. At GoDaddy, we've done a fantastic job of truly demonstrating leadership in the dream phase, and we were able to take that and turn it into a huge advantage as we went into the create phase, and we're a big player in the create phase today. As we look forward, we're taking that advantage and going into the adjacency of the grow phase. And no doubt, as we do the right things to grow our customers' businesses, our business will grow, and our brand will win the right to go further and get into new things.

And I'd just add to that. When we think about the kind of our brand earning the right, that also means -- that's when we get great marketing return, right? When we're doing things that are adjacent, they make sense to a customer because it's just the next thing they're trying to do. The same way that we talked about marketing and growth as really the next step for almost everyone who wants to build a website, right? 57% of people who build a website also want to go do that. That actually helps our marketing returns as we go to market. And in terms of sharing that performance, I'd say we're -- and the same -- and we're starting to seed that and the investment in Over is a great example of us seeding that. The investment in Sellbrite is a great example of that. Some of our organic capability, great examples of that. We'll share those with you, but we're early. And much the same way we've shared progress with you today about the franchise we've built inside of create, as we have milestones that we hit, we'll come back to you, sure.

Thank you. To Ray and Andrew on the 4-1-1 guidance. In the past, GoDaddy has talked about $5 billion in revs in 2023 and 25 million subscribers. What's the difference between the 2 forecasts and views? Is it -- is there a contribution from acquisitions that are not included in the 2022 guides? Or can you talk about maybe the number of customers needed to hit those targets?

Quick clarification on the question to begin with. The last multiyear outlook that we shared was an expectation of double-digit growth. And that was about 2 years ago. You can see with the 4-1-1 we've put up today that we continue to expect great organic growth over the next few years as well. And of course, we do see a clear path of being able to scale up the financials through acquisitions. So M&A is a key piece of this strategy. When you look at the balance sheet and the capacity we have today as well as what we'll develop over the next couple of years, there's a lot of room and opportunity there.

Yes. And I'd just add, in terms of the algo, it's really not dependent on the absolute customer quantum. As Ray shares, he actually gave an outlook on revenue growth for our different lines of business and different product areas. And that -- as we drive towards those higher value customers that we've talked about, where if you own a domain and email, you're 9x the life time value. If you own a domain plus a website, you're 11x the value. And if you own both those things, you're 27x the value. It's more dependent on us successfully driving that customer value than it is the quantum of absolute customers.

Thank you. Next question to you, Andrew, to achieve that 4-1-1 on you laid out today, can you provide examples of improvements in merchandising over the past 6 months or so that can help you get to that higher engagement and the multiple in revs when subs adopt Websites + Marketing versus just domains?

Yes. Sure. I think 2 things, and one of them is about merchandising them and one of them has nothing to do with merchandising at all and actually has to do with customers receiving value. Merchandising, really simple example, if you're a GoDaddy customer today, go to the website, godaddy.com, search for a name, you're most likely going to see a solution set offer. That's a solution as opposed to a bunch of à la carte decisions and choices you need to make. That's a really simple example of us trying to have more people try and buy our offerings. Now that's one part of it. But satisfying and retaining those users and having them love the experience matters just as much as getting someone to try it, right? Because at the end of the day, having someone try it and then churn out because they weren't happy or satisfied, like that's just empty calories. And so we have every bit as much focus and effort on identifying those points of customer value and making sure our customer -- relentless about our customers being successful in achieving them, right? One example of that was publish rate, right? We knew publish rate was incredibly predictive of retention. And we weren't very happy that only 63% of our customers will get successful with publishing. And the product teams went to work and they took the friction out of the experience. They understood where the blockers were, and they drove that up to 84%, 1.3x improvement. That turned into a 1.4x gain in retention. And that retention gain shows up every bit as much inside of growing revenue as the incremental new sale does.

Thank you. Andrew, you talked about -- and Aman as well talked about pro enrollment being up 40%. Can you talk about what's driving this increase in pro? And how you think -- how are you thinking about do it yourself versus do it for me?

Yes. At the end of the day, our customers who are pros, they are looking for a set of products and tools that allow them to do -- to manage their business better, actually grow their business better. And GoDaddy with its offering of Managed WordPress has made it simpler and simpler for them to be able to work with their customers. We're also providing tools for them that allow them to manage more accounts quickly. And that -- those set of new products and more visibility to the program has led to more people joining the pro program.

Yes. Totally agree. That offering, improving the WordPress experience and demos we showed you, which are so different than what you get anywhere else, are a big part of it. And again, not that I'm plugging traffic to our site, but totally I'm plugging traffic to our site, if you go to godaddy.com today, you're probably going to see on the top there a little tab that says Designers and Developers. And when you go there and you see that, we're now exposing that offering as we've unlocked and had it improved as Aman talked to.

Thank you. Aman, you talked about being a clear leader in dream and gaining share rapidly in create. Can you rank order how you're specifically planning to pursue the grow opportunity?

Yes, definitely. And we talked about the GoDaddy promise in the grow opportunity. And I would draw your attention to that slide and just say, first and foremost, we have to simplify marketing for our customers. Our customers today have to reach their consumers across so many platforms. And for them to be able to create content easily and publish it and track all of that, that is the #1 area that our customers just need help today. And you see us with our capabilities in Websites + Marketing with Sellbrite, with now Over coming in, we're simplifying that marketing flow for them. Second, we are going to offer them commerce at every turn, whether that's on our website or our partner sites. And in over the last 3 to 6 months, we've announced partnerships with major platforms that allow our customers to do commerce there. I think those are two of the biggest promises we're making, and we expect to be able to see progress in them over the next year or so.

Thank you. Next one, Aman. What's the biggest upside surprise since you've joined?

I guess the biggest upside surprise has been how quickly the team has handled a huge unprecedented pandemic. We have at GoDaddy, been working all hours of day and night. And the way that GoDaddy value of joining forces has come forward has blown me away. People have come forward and supported their peers, people have come forward and come up with super creative solutions to many, many customer problems and many, many company problems. So a huge thank you to all of them, and it's just been amazing to see the reaction from the company.

Thank you for that. Ray, coming back to COVID here, what financial assumptions have you embedded for COVID overhang at this point?

What we've embedded at this point is what we're seeing. It's difficult to have the visibility beyond second quarter, and so that's what we've provided you guys at this point. A lot of it is being impacted by sending those 7,000 guides at home and work from home and the productivity impacts around that. I also highlighted some of our higher price point products where price consciousness from businesses that we serve is going to be evident in the next 90 days or so.

Thank you. And then Aman or Andrew, from a technology standpoint, can you update us on the move to AWS? What stage are you in? When do you think that will be "done"?

Yes. We continue to be very happy with our progress with AWS and our relationship there. As we've shared in the past, we have moved a number of our applications to AWS, and they are working well. There's a natural organic course of other applications at the right point in their life cycle to be able to consume the services for AWS. Having said that, we also continue to have significant infrastructure internally, for example, our hosting systems, where we have highly optimized systems for our customers for the use cases that we support, and those continue to be on-prem and doing well as well.

Thank you. Next one is for Fara and Andrew. How are you thinking about the potential impact to marketing or other expenses given the impact from COVID-19?

I'll start by saying that we're leaning in from a marketing standpoint. Our customers need our help right now, and so you can expect to hear more from us in the short term. Customers have told us that they want our guidance, they want our products and they need our support. And so we want them to know that we are ready to support them, which is where #OpenWeStand comes in. So yes, the times are uncertain, but we believe that it's imperative to build loyalty and continue the relationships with our existing and future customers, and now is the time.

And I'd just add that we shared how we think about marketing return. That idea of there's a short-term constraint around payback and time to breakeven and then how that turns into long-term value over time, we're super aware that, that dynamic exists, right? Think about the math we shared that says, our 2010 cohort has delivered 10x already, right? The 2008 cohort look great as well. We think that our position, the financial strength that we have that Ray spoke to gives us an opportunity to, frankly, be there when others might -- other's voices might be quieter. Certainly, back in 2008, we saw all kinds of advertisers pulling out of all kinds of deals left, right and center, and it was a great time for our company that actually had capacity to invest to be in the market. So we're watching that carefully using the same return measures that we always do.

Thank you. Next one is for Ray. Ray, should we assume that Q1 came in roughly in line with guidance?

Yes, there's a minimal impact. We're going to start seeing the impacts of COVID-19 towards later in the quarter. So we'll land within $5 million of our prior guidance of $795 million for the first quarter.

Thank you. Back to Aman, can you talk about how bundling has increased over time? How much higher do you think that can go as a percentage of the product mix?

Yes. As we shared with 1 or 2 data points, bundling or attaching has worked very well for us with us sharing with you the new bundles that we just put forward in the U.S. that existing customers are seeing. As we roll that out globally as we test that for new customers, we continue to have a ramp to grow the capability of bundling. But what I'd really sort of bring you back to is that our strategy is not just about bundling, it's about creating this intuitive experience because we know that intuitive experiences lead to higher engagement, higher engagement leads to customers getting more value because that's what they're doing when they're engaging. And when customers get more value from the product, their adoption of other products grows, which gives us the opportunity to grow ARPU, gives us the opportunity to move them to a higher tier of the product. So that's the core strategy that we're looking at.

Thank you. Back to Ray, will your capital allocation between organic growth, M&A and shareholder returns change materially during the pandemic?

It's early to get any of these specific impacts of COVID-19 on our capital allocation. But obviously, we're putting money to work. I mentioned earlier that since the fourth quarter earnings, we bought 8 million of our shares back. So it's almost 5% of our fully diluted equity. Our priorities are not changing with respect to organic investment or M&A. And in fact, you heard Fara talk about earlier, we're going to lean in around organic because we've seen opportunities already where that secular shift to digital is likely going to accelerate.

Thank you. And then back to Aman, how confident are you in the 2022 outlook, given that 2020 was just suspended?

Yes. None of us have the crystal ball to see what COVID-19 will do. But as we look out to 2022, we feel confident that the pace of our business is very, very strong, and we'll continue to see the growth that we're projecting here. When we look at the scenarios for recovery, it could be more of a U-shaped or sort of more V-shaped or it may be even slower than a U shape. But in all of those circumstances, we do believe that we offer a great product at huge value to the consumer, and we have an opportunity here to continue to invest in marketing, to continue to attract new customers to our sites and offer them more and more services.

Thank you. Next one is for Ray and Andrew. You mentioned you've doubled the sales productivity at Main Street Hub. Is that enough to get the target ROI on the acquisition? How do you plan to scale the offering? And where are you in that journey?

Yes. From a financial return perspective, it's gotten us where we targeted when we looked at the Main Street Hub acquisition. I will note that we have seen a lot of peripheral benefits along the way as we have integrated that business into GoDaddy and the learnings that we've taken of sharing those product experiences, customer experiences, and applications across the business.

And I'd just say, in terms of scaling, notwithstanding the current impact to that business, which runs at a higher price point than many of our offerings. As Ray mentioned earlier, we continue to see service as a huge opportunity. We know that many times, people want to employ someone else to help them, whether it's with the create or the grow phase. And so we think there is an opportunity to continue to provide services, both on our own, but also through the power of community. We have the largest -- one of the largest populations of WordPress developers as customers in our base. And we have one of the largest populations of everyday entrepreneurs in our base. And so for us, when we think about longer run, the power of community that Aman often talks about, boy, that's a real opportunity there as well.

Thank you. Back to Ray, what's your appetite to increase leverage in the current environment?

No. When you look at the Street, there's balance sheet as well as the cash flows we generate, very comfortable continuing to be able to lever up. Our leverage ratio -- our range hasn't changed from 2 to 4, very comfortable with it given our debt service obligations.

Next one is for Aman and Fara. We're interested in more Managed WordPress and Websites + Marketing tangibles, including respective go-to-market strategies. What's worked? What hasn't? And how product and customer acquisition strategy may evolve over the next 3-plus years? So Aman, we'll start with you and then go to Fara.

Sure. As we think about go-to-market strategies, I think if you look at the last couple of years, we are absolutely the #1 company customers think about when they think about the dream or create phase. It's inbound coming to us, whether it's to our website or into care. They're expecting for us to be able to offer those services and be the best in them. So I think those categories, we've done really well. In terms of how we evolve and take that intent and shift it into grow and help our customers with marketing, those are some of the areas that we're working on. Those are some of the areas that we continue to see more and more excitement from our customers. Now I'll turn it to Fara.

Thanks, Aman. Yes, to your point, we'll continue to talk about the create phase. And even seeing some of the advertising that I shared with you today, we're talking a lot about how customers can be successful making the world that they want through the website and marketing products that we bring to market. And I think it's really important, Andrew noted, Websites + Marketing, they go together. And we'll be talking more and more about marketing in our ongoing communication, making it easier through all the product innovation that we're bringing forward in the guidance that is endemic and who we are. And by continuing to talk about it top of funnel, that awareness of GoDaddy being known as the company that provides marketing solutions is what you can expect from us in the coming years.

Thank you. Next for Aman and Andrew, how have attach rates been trending for Managed WordPress and what primary factors have driven the trajectory up or down? Is it branding versus customer acquisition versus product initiatives? And can you provide some more color there?

Yes. I think on the Managed WordPress side, we have a long runway in front of us. The initial focus for us has been to improve the product capabilities so that what we're offering the designers and developers is significantly better than anything that they can get anywhere else. And we have delivered on that promise to them. So you see the increase in terms of customer designers and developers coming to us and using more and more of that product. In terms of go-to-market over the next little while, we're putting more energy into reaching out to these customer populations and truly understanding their specific needs beyond just being able to do the website for their customers, and we're excited about the plans we have there.

Yes. And I'd just add, the question was phrased as an or between brand, customer acquisition and product, and it really should be an and, right? We often talk about those things as sides of the same coin, right? At the end of the day, if your brand doesn't cover the product space, no matter what you do in customer acquisition or product, not going to matter very much. And then equally, when we think about customer acquisition and product, boy, what you're able to go spend to achieve the breakeven constraints that we put on our team really depends an awful lot on retention, which really is about the product. And so we don't view those as independent things. We actually view them as together. And inside of GoDaddy, we're super focused in that customer-led model that Aman talked about at the outset about pushing product and go-to-market teams together so that we get that synergy in that route.

Thank you. Quick one for Ray. Any plans to draw down the revolver at this point?

No. Given the cash liquidity position that we're in today, we have not drawn down the revolver. I don't foresee any issues in the banking system at this point because like it's pretty well backstopped by the treasury. This business is extremely durable. We're weathering the storm as we would have expected to, and we're fully prepared.

Thank you. To Andrew, have customers asked for deferrals on hosting fees or any other fees due in general?

We have a set of programs out there for customers who need relief to afford them relief. Our premise inside of care and with our customers has always been do right by our customers because we believe that's the right outcome for our business over the long run. So we've always had programs available to provide relief to distressed customers. At the same time, for Ray's comments earlier, we've seen kind of our renewal rates in core business holding up really well so far.

Thanks. To Aman, do you see a future where Websites + Marketing can be a tool that is utilized by your professional partners as well?

Yes. When we think about our 2 suites, Websites + Marketing and Managed WordPress, we have lined them up to our customer populations. For the group that does it themselves and may not be technically sophisticated that truly need the capabilities of Websites + Marketing where there's guidance all along the way, both human guidance and technological guidance to help them build their site, to take the next step in marketing. We have a product within Websites + Marketing that is insight that literally tells them, here's the next step that you should do. What we find with our more professional customers, designers and developers is that what they're looking for is a bit different. What they're looking for is a set of tools and services that have more functionality, that can support more complex use cases. And our view is that we should maintain the product suites to the needs of the customer populations. We feel if we complicate Websites + Marketing, it may take away for what the do-it-yourself people need. And in terms of Managed WordPress, we have to make it easy, but we have to provide the full capability of WordPress, which is very, very powerful in the world. And having that capability available to designers and developers makes a ton of sense to us.

Thank you. Following on that same theme, for Managed WordPress, can you help investors understand the workflow for professionals when using GoDaddy or choosing GoDaddy over another WordPress tool? We've heard from professionals and agencies that templated tools can sometimes take away the flexibility, which is the ultimate benefit of WordPress. How do you reconcile that point with what GoDaddy is bringing to the table? And that's for Aman and Andrew.

Yes. I think if you look at, for example, our acquisition of CoBlocks, we really took that and built it into our Managed WordPress offering. And I'll do the commercial to go to the site now, as Andrew has done in the past. If you go to our site and you go to Manage WordPress, it literally gives you 3 options, right? It allows you to go into the simpler template side of things, but it also allows you to go totally vanilla and have as much power as you need. And keep in mind, we are the biggest WordPress host in the world. So lots of people host WordPress with us, which gives them the full capability of customization that they need. But like any other customer population, designers and developers are also a spectrum. And when we look at the subsegments, there is the need within the WordPress community for something simple, something quicker, which can then be enhanced to be something more complicated. And there is the need on the other end for people who just need to start with a super complicated use case because that's what their need is. I'll turn it to Andrew for more.

All right. I got nothing more on that.

Thanks. Back to Ray. Does the environment today create more opportunities to take bigger swings in M&A versus tuck-ins? If so, what are the areas you think you can make bigger swings in?

Yes. I think times of crisis always create opportunity. We're looking at both organic opportunities as well as inorganic. And I think the place you'll see us lean in are the ones that Aman and Andrew highlighted earlier in the websites and marketing, how can we help our customers find more customers?

Okay. Coming back to COVID-19. For Aman and Andrew, why do you think your demand trend for new customers is holding up as well as it is, given the environment with COVID-19?

Yes. A couple of things. One, I think the product and services we offer are critical and often the last thing our customers are going to let go of. Your website, your domain name, those are core, core parts, foundation of your marketing efforts. So I think naturally, we have fewer people that would be sort of -- we would have lesser impact to our demand. The second thing is that today, more than ever, as foot traffic is not there, our customers need to move online, and that's what you see in the #OpenWeStand commercial as well, that the encouragement we're offering, the positive framing we're offering that says, even if your doors are closed, you can be open. And towards that end, we are putting a number of offers forward for our customers so that they can adopt online services quickly. And just in the last couple of days, we've offered more functionality in terms of delivery and order services that our customers can use.

Yes. And I'd just add 2 super tactical items to that broader frame. One is the overwhelming majority of our business is done online. And so for us, we're not a brick-and-mortar operation where that goes away and kind of your primary go-to-market motion disappears. We have the virtue of being a digitally native business. One, on the new business side. On the renewal side, we sell on average over a year in term, right? Which means if you think about renewals, those are actually happening spaced out over the course of the year. And so that also insulates us from any kind of near-term track. Now Ray alluded to the fact, even amongst those groups that are up for expiration or renewal that we're seeing those rates hold for now. So we continue to watch both of those, but both that dynamic of being primarily an online business for ourselves and there's just the spacing of renewals and the relatively low price point that we occupy for most customers today are insulators.

So quick interjection, the slides should be available on the investor website now for those who want to get those and download them. But given some of the technical issues we had during your presentation, Ray, we've been asked if you could go over again what the expense lines, where we should see leverage through 2022? And where it would be contributing to faster growth in unlevered free cash flow, please?

Yes. And I'll be glad to go back through those again. From a leverage perspective, our core focus areas are G&A and care. G&A is likely intuitive to all of you on the phone. Care is an area where we've got a big opportunity. Andrew outlined a lot of what we're looking at. And it's a [ trajectile ]. We can get great customer experience for our customers through their channel of choice, which a lot of cases today is messaging. We can tactically route our highest value calls to the right guy. And then we can get better experiences by using those skill sets. All of that together creates some financial leverage for us to drive efficiencies. Tech and dev and marketing are areas where we don't necessarily want to drive leverage. The value propositions that we laid out today are real, and there are areas where we're innovating and where we want to invest to drive top line growth. So we're going to step on the gas there where any places where we see opportunity and deploy that spend wherein customers are looking for that help. And then when you look at CapEx, that will be a source of leverage for us over time.

Thank you. Again, there is a slide outlining all of those by line in the presentation. And again, those are available now in the Investor site. Ray, if the current environment lasts longer than expected, what actions could you take to protect the bottom line?

Yes. We're obviously looking at all discretionary spend today and being prudent in the short term as we look at executing the business model. But there are hard dollar cost in our P&L that fall away with revenue. Domain cost, partner cost in O365. Marketing is a discretionary spend and it's highly variable. And then elements of our care spend on the P&L were also based off performance of bookings. So roughly 45% of our P&L is variable cost, and we would look at those to the extent we had to protect the bottom line.

Thanks. And then a follow-up back to you, Ray. With regards to the current debt stack, do you anticipate further debt issuance in the next year to mitigate against the impact of COVID? Over time, are you expecting to prepay the term loan and move to fully unsecured structure?

Nothing would -- that COVID would impact with respect to our debt structure. Very happy with the term loans. They give us a lot of flexibility, incredibly cheap right now. Over time, we would like to move more to unsecured, just to give us capacity in the secured level.

Great. Thank you. Next for Aman and Andrew. How do you think about the risks and opportunities for GoDaddy in the competitive landscape when you look at other players like Shopify? Can you talk about the opportunity for GoDaddy to continue to improve the product offering through integration and collaboration versus competition maybe with some other folks in the industry?

The way we think about it is that the TAM and the growth phase is massive as we shared, and there's a ton of opportunity out there. And as we make it more specific to our customers, a ton of our customers, are service customers and offering them marketing capabilities, both with content and with commerce, are significantly untapped. There is a ton of resources out there, and we have an opportunity to go in and make it easier and easier for our customers. So the way I like to think about it is that the opportunity is large. We have some specific tools and capability targeted to a specific segment, which is fantastic.

Yes. And I'd just add to that point, this isn't a zero-sum game where for one player to have a great outcome, someone else has to lose. At the end of the day, the tailwinds that we have going for us, right? Growing entrepreneurship, more people coming online and increasingly seeing tools, like WordPress or like Websites + Marketing taking share from custom HTML or other things, those all create tailwind to the market overall.

How should we think about impacts to bookings and customer growth if we enter a steep recession in 2020? For the new cohorts, what's the incremental dollar that a website builder customer spends on ancillary products or in other words, if core subscription is $200 million a year, how much is spent on all the other products?

I can take the first piece of that, then Andrew can maybe take the second piece on the new cohorts. As we look at bookings growth and customer growth in 2020, we've given you what we see today, right? We're seeing a headwind of $25 million to $30 million in the second quarter. As we get more visibility and what the impacts are going to be around COVID, particularly as to the health aspects of this, get our teams back in the office and productive, then we can give you a good update on what we see in the rest of the year.

And then I think in terms of how customer spending pattern goes, that chart that we shared that is based on customer, it's not exclusive to just only owning a domain plus e-mail or a domain plus a website. So you can actually see, and we've broken out for you on that page, which I think is Page 36, if you're looking at it now off-line, how a domain only customer versus a customer who owns a domain plus e-mail and they may own other products, not a website, because we've got domain plus website and domain plus website plus e-mail. And that's actually at a customer level. You can see how both the ARR changes with each of those groups and also how the churn improves, which matters a lot.

Thank you. As it relates -- this is for Aman. As it relates to the e-commerce, you've talked about having partnerships with Amazon, eBay, Etsy and others. Can you also address the competitive dynamics of some of the other e-commerce players like Shopify, given you're both heavily focused on SMBs?

Yes. I think I'd go back to some of the comments we just made around just the large opportunity out there. Our data suggests that a very small percentage of SMBs have a material online presence. So to us, it's about having the right products, having them focused to the right customer segment and the opportunity continues to be really, really large.

Thank you. Ray, this one's for you. I heard Ray mention aggressive capital investments and investments in tech and dev. Can you give some specific examples of the areas of investments you're focused on?

Yes. We've got a couple of primary areas of investment in the tech and dev line. First, we're investing in broad enablement of the platform to increase the pace of experimentation, which Aman has talked about, a lot is to come in, flexibility for our customers and just the overall robustness of the experiences that we're trying to bring to market. Secondly, we're investing heavily at the product level within both the website platforms as well as in the marketing and grow areas that we talked about a lot today. We're doing great innovation and work around that, that it is showing up in a bunch of different areas. We aspire to continue to push that growth and then even further into the Managed TAM as we invest beyond there.

Thank you. We've got a couple more questions in the queue, so we'll go through those before I turn it over to Aman for some closing remarks at the end of the day. So next question is for Andrew. Can you talk about how you're merchandising Websites + Marketing at this time? Is it primarily bundled with domains? Or is there also significant stand-alone adoption? How does that 1 million-plus subscribers translate into revenue and bookings?

So -- but to the first part of that question, look, right, like we absolutely merchandise those solutions inside of the domain path, which is awesome. We also let you start for free with just the site builder product. And both of those are actually powerful on-ramps for us, and we're enthusiastic about the growth that we've seen on both of those pathways. And they're different, their user intents are different. But boy, being able to take our strength in domains that has been such a historic strength for this business and translate that into the create space and our great position there is awesome. And as we've built up that create strength, now we're absolutely seeing that, "Hey, I want to just start with your site building product come to life as well, which is really nice to see and which Fara and the team are putting a ton of effort behind as well. In terms of how it shows up in the numbers, it absolutely is kind of embedded into the 4-1-1 that Ray and Aman shared. And again, inside of the presentation, which is now posted online, Ray shared with you an outlook over the next several years of how different areas evolve and that's embedded there.

And then last one before closing remarks here. On international for Aman and Andrew, what are your top priorities over the next 3 years? How are these similar or dissimilar to the past 3? And what are your relative advantages across specific non-English and emerging markets?

Yes. So to the first part of that question, we actually have laid out nicely the priorities for each of the phases for us going over the next 3 years. You'll find them in the slides as you go through them. They're detailed out quite well. One difference that I would love to mention in terms of the previous 3 years versus now, number one, we are approaching all of our execution through a customer-led lens. That means that instead of having people running around saying, I have this product, let's sell it to a customer we have, the core execution is centered around people running around and saying we have this customer subsegment or population, what is the best product for them? And there, our teams are focused on creating the best offering for our customers. What that allows us to do is that, in the past, we were creating -- we were at a stage where we had to create Websites + Marketing. We had to start at the beginning again. But now we have these amazing platforms, whether it's our ability to have Websites + Marketing or what we're doing with WordPress or any of our platforms. We have the capability now to build on it. And given our strong balance sheet and our ability to do M&A and integrate companies, we can continue to add more and more capabilities, which is different from what we were focused on in the last 3 years.

I agree. That customer-led model cascades everywhere around the world. And as we think about what we're trying to do, when we think about being customer-led for different markets around the world, we have a set of markets where we've been investing in for longer, where we are the #1 player, markets like Canada, Australia, India, the U.K., that we still have an opportunity to continue to, frankly, run up the score and continue to grow the businesses there. There's also a set of more developed economies in Europe, where our share position today is relatively small, and we think running the playbook that we know works, which is localize the offering, introduce and provide care and then invest behind our brand continues to show gains and opportunity and runway. And then the third is for emerging economies, where we believe that we're going to see significant people coming -- a significant number of people coming online. Boy, that customer-led model that Aman talks about where you're going to pull the right product for those customers as we have them really matters because some of that we may have in our core offering today, and some we may not have. And historically, the ability to ingest some of those types of products, that hasn't been as much part of our playbook. But this customer-led model that Aman is talking about, boy, it really unlocks that. And so we're excited about the trajectory that's ahead there.

Yes. And maybe one more quick comment on that. One thing that has been a pleasant piece of information that we received. Our research clearly shows that there are lots of markets that we're in, but in many markets where we have not spent a dollar in marketing, our brand is actually known and loved, and awareness is high, and people want to work with us, right? They will go to a different country's website and buy our products with us. Even if we don't offer care in their language, they'll still buy our products. And we have a history of being able to internationalize our experience. We have a history of being able to internationalize care. We've actually done very well at that. So in terms of the specific question on incremental investment, our investments are based on the frameworks that Andrew talked about. But the opportunity here is clear, and I think we have plenty of room to invest and grow our brand in these markets.

Thank you. Ladies and gentlemen, we have reached the end of a long list of great questions. With that, we will turn it over to our CEO, Aman Bhutani, for closing remarks.

Thank you, Mark. Hopefully, all of that information helped you out a lot. I know we had some technical issues, but the slides are posted, and we're happy to sort of work through them with you. As I look at the next 3 years, we think a huge amount is going to change, and we are going to do a lot. But the thing that's not going to change is that a massive opportunity exists, and businesses are created every year through good times and bad times. And GoDaddy has a set of offerings that are uniquely available to customers all over the world. That's what gives us the confidence in the 4-1-1, that's what allows us to say $4 billion in revenue in 2022 and $1.1 billion in free cash flow, and we still have room for M&A to grow even faster. Our targets are good, but our ambition continues to be greater. So thank you very much.