How Hosting Companies Make Money in 2026: Six Models Compared

Hosting is usually described as one industry, but the companies in it earn their money in very different ways. In the second quarter of 2026, IONOS took an average of €16.70 a month per customer. A slide in GoDaddy’s August 2026 company overview puts a customer who buys a domain, a website and commerce tools at 83 times the lifetime value of a domain-only customer. OVHcloud spent about a third of its revenue on capital investment in its last fiscal year, and team.blue counts about €300 million of revenue added through acquisitions since 2020.

This analysis sorts the industry into six business models, using mostly what the companies themselves publish: mass-market shared hosting, registrar-led platforms, premium managed WordPress, infrastructure and cloud, the software vendors that sell to hosts, and consolidators. The categories overlap. They describe different ways of earning across the industry’s value chain, not mutually exclusive types of company.

Key facts

• Hostinger’s Premium plan renews at 4.4 times its 48-month promotional price, while IONOS reports monthly churn of about 1% alongside rising revenue per customer.
• GoDaddy’s Applications & Commerce segment earned a 46.9% segment EBITDA margin in Q3 2026, against 32.9% for its domain-heavy Core Platform segment.
• Customers DigitalOcean classifies as AI customers accounted for about 21% of its $1.125 billion annual run-rate revenue in Q2 2026, and its top 25 customers brought about 20% of revenue.
• From December 16, a 300-account cPanel server costs $186.99 a month in list license fees, up from $167.99.

Mass-Market Hosting: A Cheap First Term, Then the Renewal

IONOS describes the model plainly in its 2025 annual report: “The cost-effective entry point is often a domain or website. Through targeted upselling and cross-selling, customers transition to more powerful e-commerce solutions, cloud infrastructures, and AI applications.” In the first half of 2026, IONOS reported revenue of €701.1 million, up 6.9%, and adjusted EBITDA of €245.2 million, a 35.0% margin against 36.1% a year earlier. It had 6.91 million customers, up from 6.47 million. Its Web Presence & Productivity division, which covers domains, hosting, website builders, email and e-commerce, brought in €581 million, or 83% of revenue.

Customers “generally pay in advance for a contractually fixed period,” and IONOS grants “time-limited promotional discounts” on hosting and domains when they sign, according to the annual report. Revenue per customer reached €16.70 a month in the second quarter, up from €16.30, with monthly churn of about 1%. IONOS attributes the rise in 2025 to “adjustments to the pricing structure for individual products, as well as shifts in the product mix.”

Hostinger grew faster from a smaller base. Its revenue rose 51% to €275.4 million in 2025, a year in which IONOS grew 5.5%, and its customers rose 35% to 4.6 million. The company passed 5 million customers in June 2026 and 10 million domains under management in October. Its results posts give no EBITDA for 2024 or 2025.

The pricing pages show how far the renewal price sits above the first term.

Plan	First term	Renewal	Ratio	Term
Hostinger Premium	$2.49/month	$10.99/month	4.4x	48 months, paid upfront
Hostinger Unlimited	$3.49/month	$16.99/month	4.9x	48 months, paid upfront
IONOS Essential (US)	$4/month	$8/month	2.0x	1 year
IONOS Starter (US)	$6/month	$10/month	1.7x	1 year

Prices were checked on October 29, 2026. Hostinger’s first-term prices were part of a Black Friday promotion at the time. The plans have different contract lengths and promotional conditions, so the ratios are not a like-for-like comparison.

Hosting Churn Starts Long Before the First Renewal

Registrar-Led Platforms: The Domain Opens the Account

About 94% of GoDaddy’s customers bought a domain from it, according to its 2025 annual report. In GoDaddy’s words, its Core Platform products “meet customers at a common starting place.”

The higher margin sits in what gets attached to that domain. In the third quarter of 2026, Core Platform revenue grew 4% to $817.5 million at a 32.9% segment EBITDA margin. Applications & Commerce, which includes the website builder, email and productivity tools and GoDaddy Payments, grew 9% to $524.3 million at a 46.9% margin. GoDaddy had 20.5 million customers, 40,000 more than at the end of June, while average revenue per user over the trailing twelve months rose 6.8% to $253. More than half of its customers have at least two paid products, according to the company.

The same logic appears in GoDaddy’s investor materials. An undated slide in its August 2026 company overview puts a domain-only customer at 1x lifetime value, a customer adding a website or productivity tools at 17x, and one adding a website and commerce at 83x. The multiples compare groups of customers. They do not show how much lifetime value rises when an existing customer adds a product.

GoDaddy also names the pressure on the model. In its third-quarter remarks, it pointed to “sharper discounting across the industry on products like domains, along with freemium offers on hosting,” and it plans to test “new bundles with competitive offers” in 2027.

Below the retail layer, Tucows shows the wholesale version of the model. Tucows Domains “generates revenues primarily from the registration fees charged to resellers,” through a network of 32,000 resellers. In the second quarter, the segment earned $65.0 million in revenue, $19.3 million in gross profit and $11.9 million in adjusted EBITDA, margins of about 30% and 18% by our calculation. Domains under management fell by 2.7 million in a year to 21.3 million, which Tucows attributes to some resellers moving the management of their domains in-house.

One step up the chain, the registry earns differently again. Verisign receives a fee from registrars for every annual .com and .net registration, set under its agreements with ICANN. In the third quarter of 2026, it reported revenue of $443 million, up 5.7%, with operating income equal to 66.9% of revenue.

Premium Managed WordPress: Fewer Customers, Larger Bills

Premium managed WordPress providers sell capacity rather than an entry price. Their plans scale with the number of sites, monthly traffic and storage. WP Engine’s entry plan costs $35 a month and its Business plans start at $400 a month. Its plans page notes that “overages may apply” without listing rates. Kinsta also starts at $35 a month and publishes its overage rates, such as $0.50 per 1,000 visits above the plan. Pantheon charges a workspace fee, either $0 or $500 a month, plus a plan for each live site. At the enterprise end, WordPress VIP from Automattic sells annual contracts by quote, and its pricing page notes that it charges no overages.

Each of these companies runs a program for agencies, and they pay for the channel. WP Engine pays partners 8% to 12% recurring commission for up to 12 months. Kinsta’s affiliate program pays 10% for the life of the customer plus a one-time bonus of up to $500, and Automattic’s agency program offers bulk discounts of up to 70% on WordPress.com and Pressable hosting and Jetpack and Woo products. None of the companies publishes what share of revenue comes through agencies.

All of them are private, and current revenue figures are scarce. WP Engine last announced its annual recurring revenue in January 2019, at $132 million. In counterclaims filed in October 2025, Automattic alleged “on information and belief” that WP Engine’s annual recurring revenue had reached $400 million. Pantheon reports more than 700,000 websites hosted and more than 2,500 agency partners.

Hosting M&A in Q3 2026: The Roll-Ups Kept Buying. Two Big Disposals Ran Past Their Timelines.

Infrastructure and Cloud: Capital In, Usage Out

Infrastructure providers earn on servers and usage, and they spend heavily to supply them. OVHcloud’s fiscal 2026, which ended in August, brought revenue of €1,145.1 million, up 7.2% on a like-for-like basis. Private Cloud contributed €690.4 million (up 4.5%), Public Cloud €255.1 million (up 18.9%) and Webcloud, its domains, web hosting and telecom business, €199.7 million (up 3.2%). Adjusted EBITDA reached €480.5 million, a 42.0% margin.

Measured by current EBITDA, a segment measure that differs from the group’s adjusted EBITDA, Private Cloud and Public Cloud earned similar margins, 41.6% and 42.6%, while Webcloud earned 32.5%. Capital intensity differed far more. By our calculation from the segment figures, capital expenditure equaled 45.8% of Private Cloud revenue, 29.8% of Public Cloud revenue and 15.1% of Webcloud revenue, figures that include components bought early for the next fiscal year. At group level, capital expenditure came to 36.9% of revenue, or 32.6% excluding €49.5 million of those early purchases. Levered free cash flow, as OVHcloud defines it, turned positive at €24.7 million for the first time since the company’s stock market listing. That figure leaves out the early purchases, which OVHcloud financed with dedicated debt. Including them, levered free cash flow was minus €24.8 million, by our calculation. Net revenue retention fell to 103% from 105%.

DigitalOcean is growing faster. Second-quarter revenue rose 29% to $281.2 million, annual run-rate revenue reached $1,125 million, and annual run-rate revenue from customers DigitalOcean classifies as AI customers rose 212% to $234 million, about 21% of the total. That figure includes core cloud services these customers buy, not only AI products. Adjusted EBITDA margin was 40%, against 41% a year earlier. The customer base is becoming more concentrated. DigitalOcean now counts 21,736 customers spending more than $500 a month. Customers spending less brought 33% of revenue, against 41% a year earlier, and the top 25 customers brought about 20%, up from 9%. The growth also needs equipment: DigitalOcean added $414.9 million of finance-leased equipment in the first half and signed an equipment finance facility of up to $725 million on September 10.

Pricing in this model tracks time and traffic. DigitalOcean bills by the second up to a monthly cap, includes at least 500 GiB of outbound transfer and charges $0.01 per GiB above it. OVHcloud sells Public Cloud by the hour or through Savings Plans with discounts of up to 30%. Hetzner raised prices twice in 2026. The April 1 round applied to existing and new servers, and the June 15 round applied to new orders and rescales. On the June 15 price list, its CX43 cloud server went from €11.99 to €15.99 a month.

Software Vendors: The License Bill Behind Shared Hosting

On servers that run commercial control panels, part of each hosting subscription flows to the companies that make the software. For cPanel, the price depends on the number of accounts on a server: $29.99 a month for one account, $35.99 for up to five, $53.99 for up to 30 and $69.99 for up to 100, then $0.49 for each additional account. From December 16, 2026, those prices rise to $32.99, $38.99, $58.99 and $76.99, and the per-account fee to $0.55. Per account, a server with 300 accounts pays $0.56 a month today and will pay $0.62.

In our example, the control panel is the largest part of the software bill. For a dedicated server with 300 cPanel accounts, we added list prices for CloudLinux at $18 a month for unlimited accounts, LiteSpeed Web Server’s Web Host Professional tier at $46 and Softaculous at $2.50. The stack costs $234.49 a month, or $0.78 per account, today and $253.49, or $0.85 per account, after the cPanel increase. The cPanel license accounts for 71.6% of the current total. These are list prices, and partner discounts of up to 38% at cPanel and up to 45% at Plesk lower them for partners.

The other WebPros products follow with increases of their own. From January 1, 2027, Plesk’s Web Admin edition rises from $16.99 to $18.99 a month and Web Pro from $29.99 to $33.99. WHMCS, which is priced per installation by the number of active clients, raises its tiers by 11.1% to 20.0% on the same date. WebPros, which CVC Fund VII agreed to buy from Oakley Capital in December 2019 with Oakley reinvesting as a minority partner, does not publish its revenue.

GoDaddy Averages 24 Million Domains Per Brand. team.blue Averages 163,000.

Consolidators: Buying Recurring Revenue, Then Selling More Into It

The consolidators buy hosting, domain, email and software businesses for their recurring revenue, fund the deals with private equity, debt or preferred equity, and grow through three channels: organic growth in the customer base, acquired revenue and cross-selling. None of the five examined here disclosed a price or a multiple for its 2025 or 2026 acquisitions, and none puts a figure on what integration saves.

Of the five, team.blue publishes the most. In 2025, it reported revenue of €784 million, up from €616 million, annual recurring revenue of €866 million and organic growth of 11%. By our calculation, reported revenue rose 27%. It counts about €300 million of acquired revenue since 2020. Internet infrastructure accounted for 73% of revenue and 75% of EBITDA. “For team.blue, M&A is product expansion, rather than financial engineering,” according to its 2025 review, and acquired founders get access to shared service centers. The company plans to sell software products to about 2.7 million infrastructure customers. In 2026, it extended €1.1 billion of its €1.35 billion term loan to July 2032.

At group.one, in which Cinven and Ontario Teachers’ invested in 2022, pro forma revenue topped €400 million in the year to September 2025, with more than 2 million customers and more than 20 brands. Its 2025 deals included SocialPilot, GTmetrix and the Estonian host Veebimajutus.ee. Your.Online reports more than 1.3 million customers and more than 60 acquisitions since 2017. Its news section lists five deals in 2025 and eight so far in 2026, by our count. Its parent, Your.World, raised €800 million in preferred equity from Ares credit funds and Carlyle in January 2025.

The groups differ most in how far they integrate what they buy. Your.Online’s release on UK2 Group promised “no integration into other group platforms.” Hosting.com, an Oakley Capital company, went the other way, combining Webcentral and World Host Group in 2024 and moving toward a single brand. Newfold Digital, backed by Clearlake and Siris, took a $100 million investment in December 2025, sold MarkMonitor and now describes about 6 million customers served through two groups, Bluehost and Network Solutions.

For an owner weighing a sale, the buyers’ own descriptions show what they look for: a recurring customer base that can take more products. According to team.blue, more than 90% of acquired founders stay beyond their earn-out.

Six Models Side by Side

Model	Main revenue source	Main growth lever	Disclosed margin example
Mass-market shared hosting	Prepaid hosting and domains, then upsell	Renewal at list price, price-list changes	IONOS adjusted EBITDA 35.0% (H1 2026)
Registrar-led platform	Domains plus attached apps and commerce	Bundles and revenue per customer	GoDaddy segment EBITDA 32.9% Core, 46.9% Applications & Commerce (Q3 2026)
Premium managed WordPress	Capacity-based plans, overages, add-ons	Traffic and site tiers, agency channel	Not disclosed
Infrastructure and cloud	Servers and metered usage	Usage pricing and price rounds	OVHcloud adjusted EBITDA 42.0% (FY2026), DigitalOcean 40% (Q2 2026)
Software vendors to hosts	Per-server and per-account licenses	Annual list price increases	Not disclosed
Consolidator	Acquired recurring revenue plus cross-sell	Acquisitions and cross-selling	team.blue EBITDA 42% (FY2025, pro forma and IFRS 16-adjusted, no amount given)

The margins are not directly comparable. They mix group and segment figures, adjusted measures that each company defines itself, and accounts prepared under IFRS and US GAAP.

Final Thoughts

Revenue growth means different things across these models. For shared hosts and registrars, it rests on renewals and on selling more to each customer. GoDaddy added 40,000 customers in the third quarter, and its trailing twelve-month revenue per user rose 6.8%. For infrastructure providers, the test is what remains after capital spending. OVHcloud’s adjusted EBITDA was €480.5 million, its levered free cash flow €24.7 million, or minus €24.8 million including early component purchases. For consolidators, the question is how much growth is acquired. At team.blue, revenue rose 27% in 2025, against organic growth of 11%. For owners thinking about a sale, these are the figures the larger buyers publish about themselves: recurring revenue, revenue per customer and products per customer.

About the Data

Figures come from company annual and quarterly reports, investor releases, SEC filings, official pricing pages, company websites and, for WP Engine, a court filing, attributed to the party that made the claim. Periods differ: OVHcloud’s fiscal year ends in August, IONOS reports through June 2026, and GoDaddy and Verisign through September. Margins are as each company defines them. Prices were checked on October 29, 2026, are list prices before tax and partner discounts, and include promotions where noted. Per-account license costs and segment capital intensity are our calculations. No figures were averaged across companies.