Squarespace (SQSP) 7 May 242024 Q1 Earnings call transcript

Good morning. My name is Elisa, and I will be your operator today. At this time, I would like to welcome everyone to Squarespace's First Quarter 2024 Earnings Conference Call. [Operator Instructions] I will now hand the call over to your host at Square, Clare Perry. Clare, please go ahead.

you Call. Squarespace thank XXXX First and Conference Earnings morning, for 's joining Quarter Good Clare Head is This Perry, of Investor Relations. Anthony their will I'm Nathan your by Casalena, and Founder joined CEO, questions. Gooden, CFO. After the prepared open we remarks, call to Squarespace's and we and letter Earlier Investor posted to press our of section website. a the release today, shareholder Relations today's we will non-GAAP operating and results call, be and On metrics. financial referencing both GAAP

measures of in we how press You our can a GAAP these including letter. These to a information substitute non-GAAP be isolation shareholder find and calculate reconciliation not considered today's metrics, release on for should from reporting. additional measures GAAP in or

otherwise. all are new recent this now on these filings result Securities will Commission. Anthony. call that a by are materially. comparisons Exchange required and core our are results over forward-looking we pursuant I and future the that technology note assumptions of that could our call will cause to Litigation information defined platform. These Please forward-looking XXXX, strategies obligation as with Reform statements performance, differ forward-looking statements on harbor state risks but new statements we safe a basis to actual of our risks Private or future where ability XXXX. We events, limited this turn are to subject related to in on not law. except to We as and statements our of year-over-year uncertainties undertake financial These into to our our most the unless Securities of are provinces X, Act day, make update May Any no the make further integrate include, the statements which to based to

high one, the margin everyone. Thanks, a the XX% I'm share quarter strong up of further Squarespace's setting both metrics. cash good up year. Clare, morning, for flow our within us QX free our Unlevered XX%, on revenue XX% was beating bookings end up guidance a pleased with and that and to was fantastic

retention of building millions top attach us as registrars acquisition uptake funnel, Domain this have year pleased the strong flow of core the new focus as and our continued are on and and business we growth websites, we domains customer is all Domains of Google encouraged web we into small a strong are The in improvements complete Domains core today On migration was fiscal has domestically to primary our free positioned been performance, a in for Domains rate in well the a over track from new categories as raise the world, XXXX this the as and saw now Google of seeing the enroll is by in our quarter X momentum and strong showing we which Domains to specifically growth to tools The as summer. migrated, the strong globally. Squarespace outlook us especially Workspace. a platform. Already, as by of we're are one demand a as driven perspective. back the and e-mail. where business, organic are both the of constant complete cash critical revenue well big websites, XXXX we been businesses, Squarespace launch to positions leader that from Google migration

a to start, so their with feedbacks few domain score now our clicks move XXX% migration very existing in our where off retaining Stripe launched data. which from reached lets Google as rollout tool, the to United have accounts the nearly customers customer purchasing to Google. transaction reverify Workspace Squarespace their provider available is Squarespace of a a just to exclusive from history along domain XXX% partnership positive. We in Payments subscription and having been Workspace for any without acts also We States or customers their the have business of far space their side our payments great

Klarna to other features payments, adding. Klarna to Squarespace A payments many rather across for it. and with human in industry-leading replace pertains should ways introduced design adjusting confidence. the AI-driven generation as integration believe our introduced and introduced plans, excited we this to content be and we've for of sellers It focus attract alternative which sellers that it our will design as and a Intelligence history. We it X rate end mechanism be will will score-based by their pay, leave all not mark bundling current by with the critical plant also also creativity unlock our the at of announce are tools. Squarespace, multiple to product smaller primary unlock are selling than that to ours is will augment first of enabling us first called we X payment is have to SaaS getting our Squarespace. It recently started our combines on web now accommodated of that in take years. AI both first is year. We rooted plan just and our AI innovate proficiency empower will even principle rapidly more our our our of the types entrepreneurs I'm higher-value we is ability tiers larger a within is guidance. the new Design payments various of and This philosophy in through who the decades structure access

Nathan. for shaping like to at you over to Explore pace design clear how it is innovation applied all with in is and our AI squarespace.com/design of I'll And turn throughout current and While applications future to we as how websites. be time our extend continue should customers our supporters very a exciting huge a thank more AI offers customers, their to I'd that, endeavors XXXX. it team intelligence company. our said, will about products, into insights its feature intelligence. All our of

Good entrepreneurs strength delivered joining Anthony. we entered thank powerful across XXXX made you our year combination of from organic QX business, for all The investments elements pricing everyone, have We have on morning, ecosystem results packaging you, into international everywhere a the today. Google migration. strong and our with a in core our and and business. building XXXX catalysts, benefiting and us Thank our expansion of business, strength the optimization, momentum building in including both domains for in

top All XX% margin an expansion and and cash XXX of XX%, cash and catalysts long growth of over free will cash at flow our flow guidance, of to and unlevered free growth of improvement. term in drive flow these free revenue unlevered exceeded points revenue unlevered Squarespace. line with We over XXXX the continue basis

to drive continue recent. growth We meaningful revenue

core and website our seeing strong acquired are from assets. growth domain We our business come

never platform Our stronger, and has retention acquisition we encouraged are by been the new subscriptions. of and

our assets growth domain drive as acquired helped well. Our

domain XX% from million surpass our quarter, consist of single growth this Google million end originally $XXX continues to part of Domains. Renewal and customer guidance our domain the million of As base acquisition of acquired by a our as high exceeded assets reported expectations. first as represents Revenue in $XXX to reminder, our which $XXX subscriptions revenue the over of unique Google sold XX% the subscriptions business, rates acquisition of million quarter. growth, during our our with was our of new strength Outperformance acquisitions approximately the the or saw strong range from quarter. websites. Retention revenue we acquired core contributed $XX due where of domain in guidance of in currency. subscription constant in was associated growth XX% Organic primarily to and assets, excluding the XX%

growth from sold our quarter contributor was acquired with largest this $XX our revenue referred workspace the during approximately agreement. includes contributed our which acquisition we XX% amount domains exclusive growth through of to reseller revenue domain second representing assets, domains and quarter. This Google, The Domains, Google of from associated million,

positive We following Google continue see our Domains, referral to we acquisition a halo of robust Squarespace. traffic to where see effect

up QX base customer a $XXX period. see well XX, X%. represented over and representing March of XXX,XXX subscriptions of XX% growing subscriptions, unique websites As new Domain for includes domains. XXXX, in as strength million the demand as Squarespace as subscriptions was XXXX, unique ARPUs X.X strong increase XX-month net over This we our

Residual fact which our larger comparison and acquired a quarter-over-quarter subscriptions unique for quarter in not ARPU's lower rates revenue drove domain in QX, pricing Domain a XXXX point. Note constant The QX million. carry price subscriptions, the that ARPUs revenue growth assets. account do number were impact increases grew of currency new $XXX our In the presence reported unique and ARPU's and in quarter. subscriptions attachment commerce increased offerings to XXXX as for XX% reflects that certain from the

new solid recognized As and of from growth, unique retention revenue existing of primary business a the our continued presence acquisition and subscriptions were of growth. We in over XX% contributing Strength as our reminder, subscriptions domains saw plans. driver the our both associated is subscriptions of personal in revenue.

our from was represent important domain Another legacy growth driver acquired assets, revenue which Google customers. of domain renewals

some price to began we QX from rolling XXXX. customers continue in to we benefit see legacy Additionally, increases, our out which

million which from XX% events. benefits grew and customers' constant currency. $X our The presence increase and our fall business million. Many the represented Commerce time, approximately portfolio, revenue services, selling result our customers a under as commerce Squarespace are was revenue. of unique subscription XX% e-commerce needs, who and plan approximately content, hospitality of varied serving choose primarily reported or therefore, diversified sellers physical goods, to in in including $XX growth, commerce revenue

payment the historical underlying volume, are points to XXXX, seeing GPV, growth momentum with gross was GPV in can quarter, QX $X.X versus commerce. value. dynamic our of changed have this So of the or over XXXX, seasonal nomenclature that trends. Effective up metric from QX in merchandise GMV, Gross we for mask billion we XXX basis X% some breaking

refunds customers' million. value and the continue Domain period, We up GPV for impact commerce increases across driven our the website nomenclature in Increases we period. in drivers the at annual increased assets the our run definition. the occurring XXXX by subscription XX% billion, better with fraudulent of orders the Squarespace $XXX our notable payments represents acuity plans. $X.X were which or QX net of dollar platform our of end GPV orders. and scheduling primary saw processed with revenue the price several of calculation momentum unique XXXX. We on captures strength We exited or rate growth transactions QX have of of changed acquired plans subscriptions, through XXXX not new launched of the total from This and

run quarter markets revenue in calculation XX by quarterly generated new normalize multiplied each by a to is most than as key total of to International we associated our in monthly $XX fees revenue subscription multiplied of area results clear and for calculating figure XX% in design representing bring strong represent XX% the annual the updated revenue. the focus conjunction our market ecosystem quarter. International We from we rate revenue with growing into rate the X fees and off fit. rather have our and period based run currency product million, revenue revenue recent of and where business constant XX% was the for see with synergies of last

domains XXXX. new languages in footprint expands growing and now reach Our the launch XX XX to languages, more further XX currencies, looking months last XX adding our support internationally. We in

Turning to our margin profile.

approximately Our profit gross XXXX. non-GAAP was XX% in QX margin

called year comparisons As reflect out to fees of higher profit cost our we with the prior previously, to gross margin domain due associated have assets. of domain primarily acquired registration revenue

to or of we, approximately was Non-GAAP revenue. points spend and R&D pattern. Non-GAAP X% strongest QX ratably of basis As the the Historically, points. pay registry represents from of this the our of our legacy marketing operating associated expenses ratio each XX% which improvement. for a trough quarter while quarter year. Non-GAAP and revenue, domain subscription. as million of through revenue is we represents $XX QX X% sales decline dollars the and grew marketing improvement expenses more domain XXXX of customers, in sales expect than quarter renew million approximately and into to recognizing course XX% revenue. XXX demand over QX customers over XX% fees of subscriptions, building more million, grew margin, their basis This Google we we gross profit new only the is upfront, therefore, demand $XXX XXXX XXX in the $XXX by or progress

to attribution our marketing the direct model channels. continues efficiently of Our spend across marketing marketing our mix

over and points EBITDA quarter, $XX the higher of revenue, on EBITDA the XXX non-GAAP business. In million more of XX% in impact strong basis percentage advertising domain year. softened EBITDA or million total last continue though strength EBITDA expenses basis, basis we same were on to optimize seasonality. of and through a our our investments deliver demonstrates as of favorable absolute from adjusted to to benefit the our revenue, our a Adjusted saw We to Finally, registration of leverage the an increased our from adjusted our core or business operating profitable fluctuate our improved The full revenue. Overall, adjusted revenue year to we operations XXXX can of fees. On dollar expense total percentage from as due continue dollar scale improvement. across G&A basis $XX at invest a we G&A quarter-to-quarter revenue approach first Squarespace's growth points and expenses were anticipate as solid decline as scale. of was X% higher, to revenue. ability XXX expenses disciplined than growth scale we execution as by period

our free cash longer-term assets. year of in bookings. million return with in and profit was maintained million, QX of subscriptions. intend of ago year-over-year flow to $XX timing related end over balance statement, fall of outperformance [Audio acquisition and In in and the $XXX to flow bookings, our cash temporary are was and surpassing million high flow debt offerings. We our quarter. website We levels our $XXX available strength and in $XX and strong in of fluctuate fell profitability cash net margin to borrowing. shareholder cash may a comfortable current. margin XXXX. Timing basis debt one higher payments I a due renewals another primarily with which and $XX despite of We driving of gross the due stronger approximately guidance. The points will free prioritizing QX the equivalents driving any XX% Total of to primarily healthy profitability by was our of approximately sheet remain growing increase in acquired million also cash continue and margin reflects which XXX million, investment unlevered QX, by is Gap] QX driven headwind the our representing tax domain The a to XX% of

share to cash free levels repurchases our to seeds opportunities repurchase long-term February of innovate to our $XXX allocation value consistent value to see positive we customers shareholders program. In strategy. an to stock Our our and through our and integral opportunities million products the for us develop new unlevered repurchase authorized of part flow plant more a afford share We return capital Directors Board and of growth as where program. XXXX, view provide

an the million open XXXX, current $XX XX, approximately XXX,XXX March per weighted of price over As we average returned of authorization, representing to on shareholders share at shares under $XX.XX the market.

and of of targeting Now XX% million, quarter represents $XXX turning million full to XXXX. the growth second midpoint at our to year the guidance are which the we the total for the $XXX XXXX, in QX revenue of approximately In range range.

fluctuations assets. of The million, the timing at may $XX The tax during healthy us from combined metric manage a we expect our we any To is guidance to with a billion, an domain such one traction of the XXXX, confidence we migration increase full year $XXX cash strength to in revenue profitability our and up to we $XXX today. In year margin expect the the QX $X.XXX from margin growth, million million. flow, represents be primarily and flow quarter I the $XX reflects million free strong as our range. estimate represents total be billion QX. second previous moment the We free between billion. of The a a our our top to saw payments midpoint to range growth. of cash in raise of ago. Because of reach Unlevered in had for our fueling XXXX $XXX We the approximately saw range. This at $X.XXX million margin. to to to and our full QX solid timing in by billion that XX% QX, cause midpoint Google expectations noted of XX% implies payment, of margin which gives implied QX, $XXX XX% relative early business, unlevered of to range our of represents supported range to great corporate QX the core of quarter, from momentum cash summarize, the updated range expected $X.XXX midpoint of to million line the in $X.XXX flow previous the

you existing the Q&A with success. engaging to at drive customers of our Investor growth commitment to the look their I our for gain Our the priority for to grow strategic Thank we line continues next customers' as our Day many call. long-term make with business please while new portion that, profitable to against continuing continued week. employees to operator, to of With and open forward achieving progress growth scale. at our leverage, you

[Operator Instructions]

first Vikram line Kesavabhotla, question of comes The with from the Baird.

My unique number. year-over-year. that the on XX% It first one looks subscriptions up is was like

XX% I in think to X prior X% and that quarters. the compares

wondering if help How seeing on platform? thoughts much is metric. that offer you understand the the on on second is reflection the us the that the the if you're versus behind should of question of how through just that growth you So of guidance. from the comparisons tailwinds can metric some And balance drivers a this the year? And of easier about work of that acceleration then maybe some can think we my in

fiscal the expectations for could clarify I'll Google you 'XX? it the to there. And contribution your for Domains' if quarter revenue wondering Just leave ranges and second

that unique domains acquisition, even can had -- Domains domains the I a A platform. the of on We of millions domain is lot by now. Great. decade driven Google had we've to everyone, part on subscribers sold -- of were for a new they subscribers. get started remind before Squarespace the

the to of set first subscription are new platform seen of traffic for really us. in that domain increased coming Domains type a and on the So exactly website said, new That first. post we've greatly domains it's closure, not Google a being

a transaction and So between that's year. last this Google-based to difference everyone officially the closed Getting huge time now September. in remind

We're was entirely attach being encouraged factors ecosystem, touch the I But inbound of in the of domains. unique we're to different over it the And an that to a rate on that's to those that turn world our primary the beneficiary lot year, core And contributing a can traffic. there's on encouraged really than So subscriptions but we new can we're the last of higher. by lot driver guidance. which and the by really of that. it's products on Nathan it later,

Yes.

one, to continue the we're from Vikram, X I our mall able raise channels to say the as and of But not for guide guidance, out for all to will that called a year. Tribeca to business raise we did us and break are Domains in domain would I the And full going the we QX. strength website continued what we contribution were say -- caused Google On year guidance. from it for the Anthony seeing e-mail. full those the

saw Google to will say you'll recognize So to would see this #X for Domains we -- the And business gain months, was that same throughout we revenue the I revenue remains over continuing driver maintain continue that as XXXX. the strength is momentum year. a organic -- part do XX the throughout reminder, bookings quarter. that of we the as Google

domain happy to So through. that we the come very business are see overall

The next from the with JMP Boone of question comes Securities. Andrew line

marketing acceleration to seen that? marketing forward? as help you going then that Can And down as ex FX XX% sustainability Natan, efficiency understand understand efficiency. of strong going to can us improvement growth. you Can 'XX question, drivers basis XQ, the a point in the international? last us XXX break XX% in back XQ help well you you from of talked that about the We've

think subscriber to we the the Or else there anything number? international about highlight opportunity? as Is is that

driving did continued or is direct I marketing the line. non-GAAP marketing expense see right the I'll XXX impact marketing top attribution say basis. We from would take basis I'll our model. I a a just Yes, investing that. healthy say we're we improvement. spend and and channel, points on shifting like there, to it maintain as that coming attribution expect model would and the that is spend the that's through the -- to see in very say right we we to efficient and comes continue inefficient as marketing healthy do when spend on this margins channels

you I'd rolling the out, a other the especially The point of thing PPA transaction GAAP see on from amortization through do Gold the basis, that.

why as a improvement it's Okay. on impactful not So that's GAAP basis, --

-- revenue, ones in currencies. are seeing see to we're that on in we're investments healthy momentum currency I'd And seeing lots the So continuing we're XX off. We a saw that momentum say that continuing indicator. trailing increased of XX really by very trials -- the is there we to international. revenue year-over-year to QX, -- international pay the currencies, The

excited talk expect we we're off there will Day the to as year. so pay at our next international investments making to going growth Investor we're the of But drivers And the week that one forward. about we're I throughout say key seeing very

question The from Oppenheimer. the comes next line Wong of with Ken

an The up you you Is be opt-in? a Design how for How default Anthony. that roll guys potentially this over time? will first one of out engage with this kind with Intelligence, Will envision brought upon interacting that does Squarespace? do you, customers interface? When

Sure.

roundup can on just of our So is tools. real look as in head our how the of a a AI take It's letter, from design to our see efforts go we linked actually side. mentioned front and squarespace.com/design-intelligence the people applying

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customer mentioned the operations. chatbot that. our form focused learning. here. already appeared had background and Gap] really quality image trained calls, on something As We're the We like [Audio knowledge or our on the previous else AI on of an machine results It's in in

put people in unimpressive AI very think are to of a on many lot in front ways, the site. And think -- very, I scramble something frankly. their I sort just results are of mad on a

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So they're provide important in what and them tools can have control into place. experiences over that it's visual so to very people those see then AI and for interfaces getting us manipulate

but to to we're going so these that into sort integrating visual AI-enabled path technologies continue first pursue And through of our products.

And Fantastic. it. follow-up. then, quick Got Nathan, a just

tailwinds new way then versus come to now work And think come we starting that that seasonal is mentioned payments? guys already its launched above of how there's sales? trends. above have additional same-store number? Squarespace Or is that You perhaps Like in much should seasonal that to into that GTB you

here. Yes. Great question

So we our GBV. acceleration seeing in are great

also double-digit growth. some here perspective a that growth, are steps we and for said, saw SaaS of that courses, the 'XX flowing invoicing growth memberships GPV, I and launched in like there's in newer As from we GBV. acuity, multiple streams And of with double-digit

starting so to numbers. through see flow that you're And the

from pure break the the where service dollar standpoint the lower usually than that's starting made flow So just to you're it's QX. a Again, QX that trend is momentum. sellers, see historical in through. excited like all we And investments to

And at we're to to roll through this start we But half of start in as platform. the talked plans, and like of latter all bit start Squarespace out rearchitecture going you really -- little to Squarespace payments, Squarespace customers, our our a mean, payments. see more I the And the year. probably mentioned, just our the going of about payments that's to of the GPV accelerate as you'll

on add just trend there the I'll encouraging it GPV was direction. positive Yes. in that brake see and to a move seasonal

that any sellers plan. enable X a how things. One, required, low we've score there. a two, is Just platform invoicing, is composed SaaS don't tightly the end, rate are looking One commerce classes because and offering. plans our gate option many things. on there's physical donations, to many, courses, X GPV rate types once have can different are sellers, different see And selling have products, comments many, the in today what of to across tickets, better customer service move rates there we of does is we've on more there's integrated negotiation of That with GPV. There's a the high and the on And without have access are people platform is us there's space there take architected variable unlocks take tools as we'll who kind that more end, of all addition more up payment in our to us SaaS experience tiers. these the the take -- for this for discounted a for take in rate people out the and entire of it access our them

a extremely for So we've the that of launched both things unlock belief are good, of many huge those have I'm that many, well. us. not but commercialized are we

who And Day, too, product tissue speaking offers we're that the to on the looks and so what of connective side, next week you'll you at like and some between tools you to when see plan to that just Investor you of use go what available every out when what words have check at and applies you in what is the you to step you front way.

being across the when amazing other real SaaS part things the rates unlock XXX% ways amazing. complete of the available transact integrate platform. to payments and core I into and these is talking the about everyone process obviously, to U.S. so was do commercialization tiers -- until the So But for take the is we

The next line Beck from question Josh of James. the comes with Raymond

or was that of in having I either a head you the you Yes. years website component. in where larger subscription comment kind of in workspace What is about first where adds, of think around it the adoption maybe and terms are domain could tracking today maybe terms unique the curious certainly of forward.

Sure.

So the website our the ecosystem If many, right? you start path through are with

reminder, will [Audio about a as Gap] Which we this I talked say, last quarter.

Investor We have that year in of do material from that not our week at future a and guide. any included next We about we benefit, as view domains these upsell will our talk cross-sell, more contribution Day.

super customers, a adoption new a the always customer kind is it's base. on is renewal existing seems about insertion open. customers. for the available helpful. curve it point, That's obviously, right, door natural just always to we Squarespace And of with Okay. like then When It certainly payments, the like think seems

what are move as noting to could frame quickly on existing out? you to out? we is base journey? thinking multiyear Just these some tier-based rolled how Is over doing how start are that Squarespace or platform? the something time So it to that And the payments of of happen plans pricing are you should strategically, about what that frame kind fairly

Sure.

that yes, what this. absolutely pushing that we dealing is we fact retaining before of in Stripe no you your clicks into people one port entire that's the said, right going to it's you're Everything reentering your can product better from into that Squarespace X launch now, it's journey, being to multiyear payments telling Squarespace that and without no with a other and But were do vendor. information, transaction be people and history. And place, go actually So than incentive a with have course. us doing order one in And customer experience.

of you the that that. And that see do To over we something and so frankly, So payments have will again, have benefit incentive made then addition to over is process no financial tiers payments SaaS because into else incredible. a it's as moving nice integration. this driver to real Squarespace our that. easy be organically to to will said, People when doing any you integrated the financial -- moving from we've people to in

all for that's of going it's market a it transition move you're sales, Squarespace that's the to us. be course, we "Hey, X it, above to of click And point. And payments. and So that once then here real here's one say, win of can, amount [indiscernible] and

looking really to we're able that. being to So forward do

comes with The next Barclays. Young from Trevor of line question the

Great.

countries that you in is the Could you like help, one, little and just to the I site bit international. that stakes table strength? a but also vis-a-vis win? localizing currency offerings understand are feels to platform First enabling even on what, And just driving certainly expand back languages what particular, competitors.

So that seem me to it else would you win? is something helping

table it's those methods. and things stakes payment Well, combination. just It a is different

I out we test Yes. right are to with -- internationally think now. PayPal is

Google continuing to the as certain introduced localization. So Frankly, was markets. We our to languages out start in we imagine. which a support language respect kick supported currency year. Squarespace can in maybe or with and is us more and to currency just way PayPal great even coverage domains, the had of worldwide, we refine We're you XX% on check for a Google SEPA because so, last launched as as

process. markets European say, then as I it's market certain markets mostly, in that the non-U.S. think the it a then sounding everything English-speaking doubling want. but conversion is we -- there like NXX. like out later really going to through and Asia, there's Asian I is And know it's our generic of arrive call in And next of we're just well. Look, the of then let's the answer, a at markets, this select strong. The the just we're kind U.S. sort we We very were year, a way just stepping are can't be rates bam, approach maybe

Google circle you response, more any always direct bigger local initially to tactical, we and at using things, bigger marketing then like So worldwide time. can local-type with can really our do community, just move you start meet-ups, and

hundreds be lot languages just a to not currencies many of -- of languages and and a like things language, combination of many, like of It's successful really markets. but of these hundreds hundreds in

markets. in So again, it's that PayPal we well, say, a time with is testing time and thing. functionality get certain thing, to a table we're along now But as say, it's long checkout "Oh, feature a in a effort and it even a

we coverage have today. even like not complete it's So

decade-long for be. So yes, but continue and effort will us to

I million a kind And going of be what not XQ. $XX helpful, to million number quarter disclosing here? on is the that to just Google full the That's domains. from year, for it's $XX model quick appreciate good Anthony. last Nathan, a still follow-up to in But you're in

do that beginning Trevor, maintain forecasted rates at say, of we I year. the the mean renewal I will the strong we have

guide model. to X raised of the continuing all that's those. the year focus But again, like So full for was

domains So from of side websites we the are seeing e-mail and goodness the business.

The next line Sitikantha question from of comes the Panigrahi with Mizuho.

think pricing This how this And uplift should drove us quarter? Can $X guidance? we your about the understand from the included 'XX increase help you what pricing is Phil on million in Siti. for FY the better contribution

customers through the QX million $X in the legacy QX we The increase Yes. of is that 'XX. came that did in of

those QX So you're annual in here. through it the 'XX, impact seeing flowing of QX and that's still received QX that of in

for the those material QX customers a year year forward, latter We half you'll where a for you see, of impact price going the legacy have impact included just increase immaterial the price the like following. this previously, of increases very in from is in in saw

expect price material would would legacy our in increases more customers. a 'XX we for than for So 'XX impact we for

add In were I'd price move -- successfully slightly and just up one we list the business we the did above. to able thing. in quarter, plans

roughly is now kind again, And roughly to "legacy. And of now. later yes, what year XXX% are think in legacy expect the we it to guided with to rolled to that's opportunity as XX% gives X more to do " contemplate so out us prices, every that X% I people there. And what just years, we've

Arounian The the comes line of Ygal from next with Citigroup. question

mid-single part funnel, build incremental seeing say, still and XX% is should the a back from growth But I'm it think understanding we subscriber that website here. What the are you here that split domains the strength the And on XX%, 'XX, you number of the over if -- to little about what the bit incremental just wanted that was pre-Google side from strength we're goal pre the -- back up lift that from a How subscriptions from are being up looking of domain rate? let's we -- run website? to look beginning to the I more, but the kind digits, all if domain XX%. of average, we're funnel. dive of was seeing of -- into coming driven was some the people coming directly

of the a So just no, factor a starts the websites. high, attaching mean first answer result is, -- it's website are that's I but trial too. domains not at all-time an

funnel. not that's Domains the So

dealing line easy things than between just effect than were did domain like referral -- draw a website. so they a a of halo not did is very, they the You're around it's Google with very straight they to big. And lot a here,

and not in case. strong. And just to decide You X, lot the remaining million product is that there's here the being move better landscape Domains be people got to imagine like Whether at in wouldn't month new X, transact the are it's leading to driving or to not addition strength different macro over month than that they point core. people will it's international totally buy it's other business really just in ever, X month as I a of from strengthen because addition factors -- a website play But XX, month just to XX, Google, Squarespace a to customers.

Yes.

history QX, highest a in year We trials quarter, Let me and record record was of at company. 'XX layer every the trial the reported this all. in again, on that

So that momentum business of the before transaction. Google started our core

continuing maintaining and rates. just strong to those through it's So we're flow

on Okay. questions That's We're helpful. Great. that of already. investors getting from a lot

doing to for just out? think into the optimization. there is the know talking clarification we're more there Day, roll And to when Investor this the guessing? is well? stuff hear that more as We'll time So I'm you're how we about line should higher about at important. start going payments and I second fee is think integrating SaaS tier, I a kind on then about packaging And of pricing

lot a there. contemplating we're There's

the one, showing is that the fee think up. just I transaction biggest

important giant alongside transaction that fee. up, a which now, the a also the of actual to that by the note That's in The removal it's it's particularly all enabling change, don't plans, is functionality commerce is frankly, of we'll right fee almost showing think the in fee the it. plan, be business differentiated I change. adjustment think just another I giant market of

there's that. So

more be those I with think to there's plans as feature our in minor. play

later In putting or terms definitely time necessarily. year mean it in yes, development frame I it right of out. this think this all year now. it's of testing impact under it year, don't But something I --

that new a The a -- under not thing it's packaging from development now, we're really domains by perspective, but from funnel. although perspective, really we really, have other right a pricing encouraged

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checkout We on. flow to have in that no-brainer of somebody's results pretty catch have things dramatic the lot a could do if

like that, bundling more kind of But So at. that's too. what things is than on it we're we're working that's yes, pricing. Again, looking

from the Khan B. The next of question Naved with comes line Riley.

this markets Are you planning to more launch year.

subscribers anything versus that of mix has a the kind annuals, little on more about talk you I already for monthly new Or support if market And I and mentioned just then says, bit? the in mix a think changed I support just Nathan any maybe and these just trend are of Are bit. you color adding think of you more terms languages. markets? there

Yes.

mentioned now prior anticipating to needed We're misquote not the countless to going with this base latter. in that global languages and are moving customer currencies So -- I'm like domains, I'm and support -- in Google It's the in over. customers. XX the it's I closing like it of those currencies interface

we the of end hopefully, support terms primary In enter language markets a to the for Asian the couple year. by under needed development markets, this new products, of have and of select

there, let be will the I'll Nathan... new that change and So

previously on to been from mixing that we not XX% XX% not that monthly, mix at the mix annual some on it's new we XX% talked previously moving it's but subscriptions, the Total there's monthly. number sub XX%, are We've new total but active about active reported. still

Zhang of The Chris with next the from UBS. line question comes

base? would of Or bigger a kind website to one, think tiered potential questions customers? say thinking just seems have some the up market on getting remains perspective, all just guess, to you of I customers. focus lot I capabilities the and going just guess, you the for what about your maybe existing So be, plans, potentially from increased same And But pricing still different there great an also, larger the target incrementality of going across the I of just investment are been customer -- answered. after kind

get plan X.X% a not enable differentiate commerce but take it's statement particularly of need need say that is our all across from into you to And current unlock there, business And with a out. blunt consumer. do integrated via commercialization tiers get would what we rate And we is the sub is selling while do does and we rate is get I payments don't current commerce plan visas what it personal take products have payments up if compelling planned now a commerce wrong. our automatically. have to The The commerce a you're then functionality. doesn't fees not functionality. to

automatic we select customers, can't SaaS based not for on Now here. do but it's that your

on So into One high rate the on by it does payments X things. one adding the low the take end. SaaS tiers, end and actually the

a pay all use On functionality the higher the us it. and you low now slightly fee end, can doing commerce for

that. currently you feeling lower negotiate On get not fee to with without the anyone. and if high tiers customers large to probably that are have at our having correct my for anything SaaS me. that an I a your And going upgrade It's think looking finally SaaS you'll tier, we end, opportunity

And get exciting. pay And to you it we're out, it out. that's low out, look, works you started try more have end don't here say, if great, to for commerce, the exciting So with you with it's when on then trying to something you, grow.

pockets like still verticals very industries, pandemic? is kind see you Or this to recovery? macro. just Do it there or some quick like normal feel do segments does different a you right. are think follow-up All new you guess where you or on I or different That's of can post the feel improvement helpful. some the --

that who vertical-by-vertical a macro I and to possibly macro anything now, not detrimental. right the for as So again, wouldn't say commentary about you, basis. be can't it would any I seems have on doesn't know predict somebody

will, great normal for people I it you me don't to, pandemics I great it positive, know, anything like to to was of normal. I Certainly, a call that -- it's feels it's don't our hard which seeing the that call -- huge just where I a point is things like results start and see there environment. countercyclical, But we're tailwind lot be Squarespace guess, the and think and to would end. We adapt. they to specific normal if is if feels from proven a headwind. a financial they home, what in recessions go because out businesses has what

what that strong has But So always boon sort been right sort performance of would I like of in it's call us. a to normal now, macro environment.

with from The line JPMorgan. Alexei comes Gogolev Mihaylovich question of next the

This is for Eli Smith on Lexiogalav.

subs So quarter first, you a there. or of the big driver via Domains coming is growth. you to so second unique reacceleration customers that posted referral organically Square I And these a Are said and Anthony, space from hoping Google link was and Google? sorry, typically --

Yes, great it's question. a

because Squarespace. ecosystem People referral to it discrete, will So giant transfer who are they going to will right? they previously domain be Squarespace. very have a to go link within Google is there, If change, hard domains, if a be is you model the Google

things, blah, for find customer, not Google. accounts, is an space log might their looking If to things, account you they these can SEO on transferred, Squarespace instead Square they're have If core sign they of from you're saying, is e-mail will into up block.

of a that period part of a be for ecosystem it some we'll seismic So direct yes, link, a time. change but absorbing is it's

really organic also coming in like in market. good -- lower-than-expected and us haven't funnel just we to and the customers position to such sustained over even churn see But strong growth it's the to have just be a begun to for --

it's days for early thing, but Google like encouraging. the So highly

Got clear, you. And would be this one think Very I it. Anthony. Nathan, next for

is? lower much for CapEx remind guidance Can printed us in you the So that XXXX. in than is XXXX what you why

had that Google we software outsized the an had impact. developed of in XXXX Because internally transaction,

normal in you see more XXXX state. come to a So that down

call. back I This like of remarks. concludes the any for would final hand question-and-answer today's to the now Anthony call portion to

of builders platform to X world. great one the questions. largest at some pleasure next top top just Investor modern you is world, Thank a just really website main of registrars feel lot we've to I of had. position. I really one and joining Workspace I see Yes. be one position the ever this of the the it's world in for of those in you have in our strong week a the And for just resellers -- of us real obviously, hopefully, best is positioning Squarespace a of all is in the Google the we all what quarter. think one the Day. in We'll mean And

everyone thoughtful So thanks thank for and you the to Speak all. questions... soon,

for This concludes today's call. Thank you joining.

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