Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Nadia, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Squarespace's Third Quarter 2022 Earnings Conference Call. [Operator Instructions] After the prepared remarks there will be a question-and-answer session. [Operator Instructions] Thank you.

the Investor to to Relations hand Sanders, host, begin. now of Head at will call your over Robert I Square Space Robert, ahead. please go

Robert Sanders

we is remarks, we Investor company will Thank open Sanders, to Anthony the joined will Casalena, morning. you the and joining in and Gooden, are My Good share your CEO, our Founder and who for call today They Head Nathan call some With Relations. name of then Squarespace me welcome opening on October. the us. questions. Robert CFO

both a Earlier today, of and results release we information results. be shareholder a GAAP letter metrics. with operating to call, website the issued related section and press Relations non-GAAP today's and our QX will On posted financial Investor to additional in we our referring

Relations find can our can of reconciliation press to You calculate we GAAP information found be superior These how considered be results. including isolation in of release, additional these from in to in a metrics, Investor or measures should non-GAAP section today's which our not measures website. GAAP on the

are XXXX, to We include, limited will pursuant to of Exchange the Private are and the but are statements our related Securities future defined and Securities make in financial further uncertainties statements to, that recent Reform to Act harbor statements risks provisions These not Litigation safe forward-looking with could subject the and of forward-looking which to risks performance. results our These materially. cause our differ actual Commission. filings most

to events, law. where this We or of this of statements as based that assumptions are undertake update day, except as future a statements X, forward-looking information make result November by on XXXX. new these required call Any we no obligation on

I'll the to over Now Anthony. turn call

Anthony Casalena

Gooden CFO enthusiasm team the as the of he his leadership X In Nathan new Amazon's pleased most into us will believe our technology Please on finding of organization business. our our his morning, first our in invigorating of have for influence Alexa I'm and CFO. financial with Welcome, in to weeks I'm decades me Nathan. across call. settles positive brings to as over recently and business new Tilles spread as welcoming working Nathan him Good everyone. together, join role. this sector, his

Nathan Gooden

forward Thank you, further with for be believe, transact online the I'm beautiful opportunity ahead and about entrepreneurs with millions and Squarespace. tremendous to the a their help with believe presence amazing will entrepreneurs team, build brand for by our an creates optimize we stand creative growth. our I with drives Anthony. vision business. inspired of portfolio can our business I say thrilled our opportunity brands out an impactful I'm customers enabling working to ideas that succeed. and I and the you amazing together for to excited with Squarespace accelerate mission, and

the hand third remarks, I'll for call take financial back quarter some Now results. to through our then opening us I'll Anthony

Anthony Casalena

Thank you, Nathan.

growing and quarter subscriptions Revenue at strong X% driven high constant our talk. currency, growth annually of the of business. third and the range, in reported commerce came highlight higher-value in end strength guidance retention, results Our in XX% as and durability customer our by

million strength subscriptions -- confidence us and and continued end to due of $XX.X is from of quarter exceeded fees the XX% $X.X cash mainly durable million, SaaS the across Unlevered high payments. of especially timing pleased by X.X extremely currency, Our was to XX% in range with reported our gives X% our further talk. gives increases legacy by this to growth us revenue achieved free in accelerate guidance coming constant XX% up our year-over-year subscriptions. we see This flow million We're success. unique year-over-year fueled from strength website in in QX. bookings as Bookings new growth price the

This we over that year. showcases and throughout XXX to we product features the new pleased refresh, fall, innovations that Squarespace introduced campaign announce annual our were

constantly selling sites platform customers our Our grown to evolving ways, the of our tools in has on of our kinds in can enhancements create exceptionally myriad platform. from improvements in a

Circle We we our also we This consulting community. on matter due to help clients. who there are for world hosted our to event many out professional Since there in their members build up Squarespace. these our on platform New uniquely of incredible community point setting how our starting professionals fantastic prefer our and design, they first was a live marketing. day exclusively from is on build when professionals for of Squarespace copy in from are to for the York use, No to site simple photography would our positioned emphasis sites make

we our ago, that move we are eliminate months as harder to to page platforms our continue Fluid platform complex Further, learn launched for with innovations to or it more professionals maintain. these custom new like code enhance to we system design a few Engine, need the

retention modeled. This began pricing increases impact base far introducing saw for of quarter, to also we response, minimal below existing and customer and we what to subscribers modest our originally had

XX% benefit continue pricing base quarter on the of subscriptions. introduced our over to the in third subscriptions as up renewal quarters the new for We with annual entire come annual coming from approximately customer

quarter market on who previously, pricing the existing of existing our customers. customers. we've below for well received As rates customers, prices we've Accordingly, our new never noted remain this new raised many current

the ones. with subscriptions drivers line some for customers this retained grew the in we websites growth of quarter quarter. in of new expectations Unique throughout as acquired our existing unpack To and

are impacting softness in flat macro dollar a other roughly leading However, subscriptions from our unfold than substantially being growth, subscriptions we value Unfold offer. perspective. saw lower to number overall subscription the business

and that are are rapidly unfold create by new features, continue profiles to innovate websites which adopted biosites, We to including for rapidly. being social launching easy

is for year-over-year helping outpace to and In to constant and as Talk also but in and continues XX% at growth revenue and platform in creators numbers currency. sellers. turn use our currency. subscription entries integrated greater Commerce presence simple revenue QX drive reported powerful grew services constant as Commerce and XX% Commerce reported year-over-year segment. as our XXXX, XX% X% grew presence in

This Our mix manage tasting audiences. thrive, reservations our possible slotted of campaigns addition annually. wine international tailored directly Within growth localize which winery ARPU X% it on the international talk the expansion for we offerings. ambassadors to growing while contributed time partners excited growth all-in-one a about its brand of well makes driver as International as top to $XXX I'm to subscriptions Commerce of we core to and new our the climbing and to remains to to geo-specific as appeal hospitality helps and our some subsequent businesses shop. continuing talk, sell launched consumers platform.

over progress recently our and payments a team. Squarespace making with driver forward. President we're We moving decade payments will believe have Vice of of business to a new be and important experience Further, our who payments an brings hired

speak over taking I'll to to financials Nathan questions. hand the your to it before

Nathan Gooden

Thank you, Anthony.

me some quarter. Let of guidance was third Revenue of range. in million the by begin end highlighting top our spots $XXX the at bright the

business. outpace new As said, Increases retention commerce was higher-value customer and growth our Anthony talk with continue introduce growth in which subscriptions our subscriptions, in underpinned in pricing presence growth to strong as customers. existing by we

pointed its success. out, our Anthony business future us confidence and these As further signs in give

our our year-over-year generate cash cash XX.X% flow, flow billion and efficient to demonstrating unlevered macroeconomic GMV line we delivered are spending discretionary environment in. giving performance, Total free drive due to In free addition unlevered our dwindled grew model us and margin ability $XX profits. of and in X% a scalable $X.X growth top to million as

million $XXX a authorized Directors repurchase this of of quarter second Board our in share Recall, the program year.

retired under and the third million we As of shares, quarter, dilution end program repurchased at stock-based during of Approximately September available remained the million compensation. XXth, million shares third including $XXX.X this quarter. related X.XX X.XX have to offsetting the

to revenue year whereas represented of mix as and clarify XX% of of revenue international want revenue U.S. headwinds. do This prior current XX% was a reported reported, FX year-over-year, revenue of year-over-year. and revenue I as reclassifications grew total declined reflection year our our and XX% is which XX%

quarter $X.X the revenue first previously, quarter XXXX, XXXX U.S. As in reclassified of out and international. we third noted we of and the million second of into

rates of XXXX, When taking and this of been and international million revenue U.S. XX% have would headwinds third the account effect quarter and into mix international with versus in and currency and first quarters year-over-year. of levels two both considering the the of our U.S. XX% reclassification $X.X consistent When year. the adjustments, which this is XX%, grew respectively, two these of impact in

growth, R&D expenses investment revenue, as increase We XXX approximately XXXX, relative a percent and operating and our from increasing sales non-GAAP future to free while XXXX we are reduced cash basis unlevered the flow. executing approach expenses. delivering for at to is G&A against same fuels strong time, while our points levels our expected in XXXX. margin also This balanced of our as marketing Full-year expectations non-GAAP

me to up for before guidance turn Let opening Q&A.

be quarter $XX.X range the in the million year-over-year cash range fourth anticipate of free versus of flow of expect the X% XXXX. unlevered For a million. rate XXXX, $XXX revenue to million growth X% in to representing $XXX range QX million, to We we $XX.X to of

ranges flow benefits million net of million, to $X.X million. $XX.X cash capital $XX.X million tax and $X.X free $X.X unlevered Our expenditures to million expenses operating of flow of and guidance interest paid $X.X for cash cash comprises million from between of activities associated

X% representing $XXX.X to range For We XX%. to to be expect million, anticipate range free in flow full-year XXXX, of the we a growth cash the million revenue in million. million range year-over-year $XXX.X to of of the rate $XXX unlevered $XXX

million unlevered cash activities in $XXX.X of cash free to Our the operating from range $XXX.X million. assumes XXXX flow flow guidance

paid million. of tax $XX.X million expenditures $XX.X to and benefits between for of cash $XX.X net and million million Capital interest $XX.X expenses, associated

a We transacting at for the as the $X.X our fourth X.X% are XXXX platform more on full-year in to midpoint or reducing conservative outlook GMV the million outlook quarter. we revenue by take our related

GMV periods the for Historically, year, uncertainty other quarter GMV around expectations quarter, we're spending, in slightly. this levels our with taking relative during we the of -- to down consumer year, fourth increased higher fourth the processed during

million factoring offered guidance also in We full-year July. are $X.X headwinds in since currency we additional an

$XX primarily free to the unlevered timing the expectations to $XXX receivables. million, midpoint uncertainty $XXX midpoint representing the XXXX for to and our of million of and a guidance reducing margin to full-year Turning at cash by a at flow, tax range lowered XX.X% million revenue account

strong. I In fundamentals our remains believe summary, business the of

profit gross profitable base. have strong margin of a and We growth, long operating customer loyal a a history

delivers continue platform refresh for entrepreneurs experience to an Our growth. will fuel that future exceptional

a in coming front team weeks look cannot more and to meeting forward investors in opportunity I be the for have us. be excited of our the analysts to Squarespace we part the of and and

speaking fielding our on Given my to short Anthony your tenure, I and fourth will questions look call. today, you with be forward quarter

your the would to like open questions. line to Now we

Operator

first Thank of Young you. question And Barclays. Trevor Instructions] Trevor, [Operator to goes go please our today ahead.

open. Your is line

Trevor Young

may. I if Two, thanks. Great,

free unlevered the on cash flow. Nathan, one, First

million mentioned, You $X came lowering but by quarter, midpoint. about full-year $XX in just as over the you in ahead at the million

stronger also some mentioned ad think about you're but I the years some XQ. I had that tax think I events also you prepay of in think cash item reversed in timing but on you XQ? flow Maybe something ahead tax to, receivables, spend XQ, referring that's prior

So on that would that's the a basically here on of is bit Just going the XQ be that little appreciated. of color reversal that trend? dynamic a any

Anthony Casalena

research for that that majority Trevor, filed of from on haven't tax the in tax receivables a your XXXX credit relating but paid have overpayment one, that that a from XXXX. to far tax received you, XXXX. million was we or tax you two year and can represents question. That as see pushed to XXXX, $XX received, Thank the we are in things: The Q development for

in the As remarks basis improving is margin you my operating the as look flow year-over-year. in said at XXX I points, margin cash that the

Trevor Young

helpful. really That’s

Nathan Gooden

company free add to fundamental not -- around. payments how I I'll cash the moving some in mean timing the of generating it's that difference like flow. just yes things -- reflective is the It's a is

Trevor Young

year. it. trying that's And on earlier price, to I'm which I bit in get comments what Anthony, Yes, Got I the taking run a started your at. think

much how versus discount. out and I not the churn price are? think mentioned impact a Because You increases list a subs an you on existing just Can remind mentioned initially. of having subs us discount still existing price to you rolling significant

So initiative is this like of a to parity. maybe multiyear closer to kind get

Anthony Casalena

that. highlighting is it be a multiyear for initiative. will Thanks Good. Yes. -- It

like and we want they ago So find have basically, could plan something to price on be like station because XX% anyone's level we like Square like by on a went been -- in didn't increase, or XX-years to plan tried that.

on -- around of lot XX% like a it, the I take average. the by, to to XX%, guess like, let's up biggest around we XX% So -- wanted call people

people of that bring saw. kind like And -- so we you're just of to But move kind there's subsequent correct to price. more as what that everyone in we slowly bring one assuming up have years not we call us difference in list would room

markets, how which we'll depending doing room is move addition, international of point, right, new our as In on this. to a more even establish in we a price all go, price kind for prerequisite tests new have intro

part it's something of talking like is you're you and like again, just this. other mean, what time about, -- doing I The were the first this

anyway. no So like it's up is precedent. pull would much be leave right, And what a that how far we coming because yes, just -- we're which know ideal, which again, was churn below of there's The modeled, in ended to we don't great. going forward,

of it rollout the who fact is of just wouldn't pleased I'm the using are prices very, this. with look, with able and seeing. think, this. still people, of be the me a we remains really in how out important of Otherwise, it the reaction competitive to the and that And to to And get underscores the lot product my kind do value view. this I very So they intra we're

I done think anything here. was it just outrageous much better so platform don't we've is I the than all ago. think So years at And

this think over I for a the So has highlight been us quarter.

Trevor Young

just That's price part the on dovetail of you potentially that carte update higher bundles la some that. point? where at were And And older maybe a to we into subs bring us with to stand helpful. of bundling new that really kind Can efforts? as on

Anthony Casalena

the like still So a more the part plans. lot in the efforts idea doing to engineering are for give and and that base the the behind that, functionality of work of bundling level supercharge the are we're basically power features

point And to just price point maybe able get also mid-bundle price so later intro speak to I think us a that higher being will on. to and

we'll excited QX. But yes, see some think start enter remain test a of stuff to So I still into that that. more in phase about

Trevor Young

Anthony. Thanks, Great.

Operator

you. to the next goes Josh Beck Thank KeyBanc question And -- from

Anthony Casalena

to bookings a just I quarter, saw to reacceleration we thing see. one very add because all we're this want pleased there which

getting also is the lot that again, negative price in Some -- related but of a the subscribers. to of the the new is masked unfold subscribers, increase, story which, negative the website just that by is offset

out. So I just want to that point

Operator

go ahead. Josh to of KeyBanc. And the next Beck Josh, question goes please

Your line is open.

Josh Beck

pricing of call, one sensitivity out is very little a is future really of to a going on have where pricing to you're comments like the back churn. data question. make months something much you be around handle embedded go taking the to play Certainly, so at you there? in I Or many awaiting able for at good okay, that have through handle around to the on be you Thank we point. quarters? that more the model, least into related you churn had wanted obviously to, your so a pretty end year bit to kind the the feel the this Anthony, good may like, you there how have of experience Do

Anthony Casalena

data I to good enough handle it. a we we think have say have around

planning and on rolled as hundreds this. a you new soon controlled of set that X But area -- I more we in story think I your related annual don't way. The to it's us, not I talking you again, until where cancel surprises the happens as out know would full price, for this. to were and we think, is And site no, leaving didn't and a it data have of think impact just anticipate positive of it the saw you I renew you -- I won't But think we're like would what thousands about will mean renewals. if for it points. it's

Josh Beck

Okay. breaking mentioned really that kind quarter. been just topic That's or GMV those that's of out periods? up but I'm hear. kind were some GMV. from model. this ask on of stood kind the Obviously, a we great just to you with are? how should of Obviously, follow-up what double some of ways come many discretionary kind we've ground I growth times, the you companies this curious obviously your it's of also future into commerce-oriented new slow, theme in to curious, some bleed heard many a that drivers maybe of verticals click kind Any and that that's on forward drivers if resilient, were what on and wanted

Anthony Casalena

Yes.

surprises past again, and no softness there. of e-commerce So all We've quarter U.S. in seen months and the last that. over couple

too a be of much surprise. shouldn't it So

about thing GMV is that it's interesting really the think I multidimensional. our

bookings So it's commerce, commerce, talk. not reservations just would it's physical It's services-based appointments. it's and

of to little move which services-based than little it think it with or to of I we a again, the you're as and Shopify like was what where that's see a just will commerce a to if talk be in going bit But maybe Squarespace's physical going different look kind So forward, between showed GMV difference bit bit resilience to compare you cause Amazon sees. weakened.

Josh Beck

helpful. Super Anthony. you, Thank

Anthony Casalena

Thanks.

Operator

please the you. Oppenheimer. goes go ahead. Thank question Wong next to Ken, Ken And of

Your line open. is

Ken Wong

unfold. was quarter on Fantastic. how Great. weakness on that the an color not that update as Anthony, mentioned That or we saw Any did. stabilized, worsened? you piece in Would business last well. whether something of love

Anthony Casalena

Yes.

and I'll in I we're what little So there I'm bit. looking a really break enthusiastic at -- kind about down what of remain unfold,

side from business, the what by much it's Squarespace. And So low-priced unfold the domains, of is a global high one than rest of our subscription, more is a also, a and very -- but of way, lowest volume them. very there's

and South like situation of So disproportionate Europe, talking in the America. as as things quarters Asia a actually were a I in impact couple in way, think we Unfold about ago that events when well

the is evolution a and factors One you really App what's in place two Store it, that there's just the is will. of of kind batter is if two So on it's media. social happening trends where competition unfold in

So three the you people ago, alongside and as last and or stories doing with aren't looks the they and years media do how are the ago changing years use five on same ago even what how it especially or year, social trends years how use usage Instagram, two pandemic.

being said, we're social And managed Unfold That which biosites, on spot is presence have them within bright the actually there. media still that we and real starting are their yet. belief monetizing people of then fully a the introduction not huge out

there's that like space, you it, the at little routing a like -- on and on called that's seen kind there. you've all -- a could site if notion I'm what's there's sure that So It's Bio see competitors different you're couple bio Lincoln of somebody's train links click looking station a out. Instagram, of you

thousands hundreds of and accelerating. them of of pace biosite have We the deployed is created being

accelerate within a really So I think positive we the to opportunities we're just that here. and going well create products like story great so unfold. see lot of something organically within as as to spread to stories a have product, Again, deployed from that it's

launching being to brand In homegrown developed addition it and new launched a that in-house. we we're

there, more I'm out. story with but really got foothold how that come happy So and we've that played has to

Ken Wong

Where we rolling? getting product TBD. still Trevor's fantastic. activate then to of of, on on then think go-to-market away? on of that following kind the And put the bundling, to maybe the are side, where campaign. process the is once of efforts your Got And piece direct and to the aware? kind question of guys it, out product you like up point this initiative that you side sounds first, up ready squared efforts, Should But the get it get terms is bundling I are kind to in we sales the we noticed education the customers partner as are guys refresh

Anthony Casalena

but the these part has enough I -- are subscription. over and the And than launched is so can bundles. itself into separate courses the we classes campaigns. actually situation, with of mean, Squarespace found they're or they behind do There's on things and put we years more the that in platform, many e-mail things

those like needing I just the are things of us re-architecture have bundles. accessed mean, plenty really is of a heavy a we the in create for it's lot the work dependent So the features how lift, new it's upon is -- platform. -- to It's bundling just not

of kind of date, at be the for new So again, of us of refresh, a the gets been stuff We what's year, our a which essentially that's -- think to going what's the brand release. during branding it's of combination is annual a some and launched future launches roundup on. not lost, event, rebrand product actually going and I that's because a press it level ton of a

so And XXX a different an to past in ways say, us like take improved let's opportunity This product gives wait, over look. year. the hey, refresh

Let's relook at Fluid Engine.

on and look we're personalities the work Let's at the brands that platform. with various are doing

is to Another previous I love fun have call, of part unlocked really and out, would to more, Fluid thing refresh was you sites the after a that to Engine customers to ability about putting talked which but manipulate a it's us that can then our in them. fashion do would it's kind work really, for and for no-code forward-thinking admire, just of, something talk not

launched Icons, part of sort like will, we've this like further showcase in of dream so we you analogy. always for fall refresh, a a if And to the templates, season spring just of which fashion lets had as us

for where (ph) and out usable there, it's -- first system portfolio can site in work templates engine can with just it then not [Biorco] something that. put it make here we collaborated with that as consulting customers, those ones and or completely finally garde we for thing. and do a fluid actually They design we it that section-based by take of a avant a the they like our or and And do way are one

hope gives color I with I'm got So that there. intersection But bundling. me, that some coming been refreshing the we've has on long a time for it and happy yes,

Ken Wong

Thanks details. the for Great.

Anthony Casalena

Wong. Thanks,

Operator

Chris, of please goes Zhang Thank And question go Credit next the ahead. you. to Chris Suisse.

Your open. line is

Chris Zhang

the subscribers. and in time, very from subscriptions. helpful Unfold at has the for provided, same had question growth on the Thanks question. around I impact the I taking my unique know website especially of a morning. color details good been continued Hi, and a lot

unique in comments appreciated. to the given of any they can overall unpack the think segments of follow-up, on here, And subscriptions how would if year-on-year a may. commerce versus growth sense question parts you had the growth directional the these compare presence two moving I the and maybe a I be I or So growth?

Anthony Casalena

Sure.

a that here and I to bookings we revenue grow revenue at and continue above is positive have. subscriptions story the Again, of continue new lower-value revenue the number a -- to in see fact the out website think it's that more we subscriptions was underscoring masking why higher strong. pace higher-value we you subscriptions, get a that number that that

tools just just about specific more sophisticated -- we're just at think more subscriptions, the provide infrastructure I more sub to subs that. be and help we to getting of, think that to, growing because trend just business of X% commerce higher-value at growing their To more is those as part Look, the about and that to you it, nature. and evolve become versus towards continue presence more grow system -- and entrepreneurs in it's naturally kind a more use more businesses, it's oriented going X%,

considering especially a kinds to right there. more now revenue time of that the our churn that great keep do services-based courses. businesses then but which too. It's overlay to cash XX% serve, businesses, unlocking we our and just coming from retention And SaaS there. And payments, lot and be classes from once business, resiliency we'll to that recurring properties, trending the just is standpoint, in businesses, is, fees Again, stream with improvements a more hospitality, and again, going of we slotted

Chris Zhang

I really Thanks, Anthony it. appreciate great for the details.

the timing your question second us The give on the some payment payments. on the offering? in-house and you is of update Can progress maybe

Anthony Casalena

to had I do acts Vice First update on about make I Schaundra] going we've will a It's reality. new today, forth is this undertaking, just day business, and for (ph), more a talk who Yes. far But down with I it. updates and a back can who's President, company. really road later. The the update. an also a -- wish and which this welcomed us been just joining I new Acuity We're yes, be and and the team to it's the try focusing big have our we muscle it's that of making [Dan heavy

a takes it minute. So

Chris Zhang

I’ll Yes, Thank the the that’s you. update to to hear Alright. jump leadrship. on the back great queue.

Anthony Casalena

Yes.

Operator

you. to William the of please question Matt, ahead. Blair. next And Thank go goes Pfau Matt

open. Your line is

Matt Pfau

the taking of the and for I a on things? the or Hey, the more. in commentary ask impact Are into of my first even great. little questions. you of macro side on dig macro churn top wanted or funnel to any sub Thanks terms bit seeing conversion activity from the

Anthony Casalena

No.

if at All business going drivers of you're the to of be that remains and strong, main looking especially website particular, the in which bookings one is of revenue.

Matt Pfau

pull are a a back bit. it. were do if we see weaken areas you weaker there Okay. to And where year, if then And heading are demand think into might macro Got we on expenses? next how you all about certain your managing

Anthony Casalena

to keep to move to regarding in And going and profitability hiring a years perspective, put number eye headcount continue that's forward Squarespace, been year. things company that proud the whole flow things for changed and saw think cash, cautious this of operated it of internally, Yes. the with I'm with this very our I story massively before year, our like of breakeven always over is and been right? as I cash kind very we one of into on So public. in flipping we mean to earlier the changing year, company XX-years the that of our we before we've when plans

into kind of to quarter. see almost you actions under sure us We're grow. our spend, looking that making every those and And remains control those further ratio we results continue marketing and as managed for

So to of, it's left not sort like going some, turn. be a making Squarespace is like

these So We all have biosites, or Unfold these different diversity or business just We've that Squarespace or all not or entrepreneurs. ways websites of helping a talk different got and we're it's businesses, lines scheduling. right?

the so pandemic, appointments something tailwinds. quarter, and And forward which a what certain headwinds which it right? had have interesting these time with uncertain websites like businesses massive into Our to headwinds will an business talk. be on given is other see tailwinds It's during we any and macroeconomic suffered we have saw as of move same

just the business SaaS that revenue. is one, to things: XX% Two underscore of

are main a that Squarespace's worry are That don't like I there affecting further is But those should aspect think much if even you So the It of big opportunity for driver about growth. us. fluctuations remains business. that. -- GMV current in too not for that

a what The time last equal. back be recessions up the two Squarespace will happening then? ended second created are because in and time this interesting, no XXXX. existed thing And was like And this

And laid sort up numbers, jobs because different we of adapt. again, cetera, evolve, have They they it or business, off sit and we recession was what It's home put just won't portfolio actually tend recession, They switch try I my and there say, and to yes, different not have online. that to countercyclical I start to such get people or won't to evolve. I'd give et go a see. were and don't oh, give just up.

a people time want positive a to situation, businesses to some that but And adapt we're frankly, this their own of we to be new So hope I well in come positioned out of frame. help could to not have push for certain people change. them that in it with and

And well see, a yes, lives. critical but people's component in we think we're we're hopefully, we'll So infrastructure I remain -- positioned.

Nathan Gooden

here weeks you necessary. expenses flow in line very do has and company our adjustments the Matt. our that here, can would make and layer I year-over-year manage discipline the in This is strong And on cash this, we I my top improvement healthy that to operating profit think that Nathan just our a see few margin. the

Matt Pfau

Thank you. helpful. very Perfect,

Operator

go the please of ahead. Goldman Thank Sachs. Gabriela you. And to question Gabriela, goes next Borges

open. is line Your

Gabriela Borges

you, have Thank planning a if morning. that the think normalized Anthony, assumptions, you I would of do specifically share do little color today? rate bit you you visibility accelerate this you what more Good on your love medium-term on about XXXX, And think could as noted based the you of can XXXX is? on growth business think

Anthony Casalena

constant bookings you. currency Well, to the of year-over-year today Well, this one of the the highlights basis. and -- call talking is of about one XX% on thank acceleration highlights XX% a

that. preserving not that with still like. We falsely cash always while do would margins that that, never We're we think So number. burning a encouraging I to balance. inflate We've operated that's just really

with I of rate. I many, payments, levers this along our highlight to along ones. business two many, are bundling, with -- that, additional can think accelerate there along with kind many pricing, growth there has

One really the the thinking ways not right we're portfolio business brand. and -- of about the one thinking about brand We're is now of everything falling just on that the under building brands. Squarespace having

that schedule internally part of brand. I able number biosites, we've with see think this. to areas as of number that people the of pushed huge a our Yes, like we've the Squarespace that one of structure part be platform, a that that large appear of that do because for aren't want appointments appointments enough changed want -- us things do You But to Talks, to and but people using there's It's Acuity as to subscription. do their don't there's the that where will website.

the we these lot at a from and that us the launched we've difference a is, big other grow categories win websites. all ways that of of a and we're to kind brands. that good And We invest of doing. bigger just year one set to we've or And those pursuing so frankly, competitive pace lot can really so of what the that mean added path Scores in right so acquired I than that's think in our mean, either set that more now. skill internal brands can continue we is I agency apply of what the can is year. I last really

Gabriela Borges

Anthony, of do how -- five with pricing, strategy to next you magnitude, the think consistency years, algorithm? can the the contribute -- and you order that about three do have that if pricing the much you you to think growth think

Anthony Casalena

that which the gives Well, able a price push able leverage the bit. to us positive -- lot. to I highlight up highlight the is mean, and we that were customers, another that from way, increased increase positive little to started existing for were to a by year we successfully and this entire new for the a again, customers, quarter throughout we really

there. there's all I to think And want I but on. huge potential -- not rely it's

new able side we business. like is in LTV and of we've higher subscription. areas do level with we see within a of acuity, to much, it those we're one to kind what bundling because like introducing And product pursue portfolio really base on to Acuity, as Talk. I in grow lines what pricing see real addition, much, have the scratched opportunity a mean to happens features talk bundling, of But have just a across customers we're much with and interested surface what then What within I of pricing am the with happens there.

quarter. just I in So moving we're past directions mean, lot saw in, can you a and there's I of the see right? move them, we --

Gabriela Borges

Thanks for the color.

Operator

Logan, Thank the please go next Markets. Logan to you. goes ahead. RBC And Capital Reach question of

is open. line Your

Logan Reach

the goo morning. question. Hey, for taking Thanks

growth, sequential guys to flat lot your what But to or to return you for were approximately back on that soft. Just sub guys the of being was to this Obviously, the A quarter. related needs you happen sub flat growth? unfold

Anthony Casalena

we're at has because -- single range, of of look dollars I generate that like has at from tens Talk and And find a hard like I somewhere subs that raw if versus that think within hundreds subscriber that and we're reasons. But ARPUs show I thousands reporting positive digit that what the number, is millions of number the you're low thousands mean just personally to challenging trying to set. subs revenue. Unfold that number dynamic that in to it's it. of of looking of of millions generates

what's billion. X.X, to happening so need I So although necessarily, that to X.X%, that's important. be is go focus go But my it's to It X.X see in that number not would go $X should to great.

and on make focusing have and story. And quarter, why was website positive so the of subs. emphasizing want I the one bookings the we that Acuity highlight within And number, subscription strong again, a we're this. sub, sure high-value is driver business the to growth The core of a which

I'd like that means that the underlying that's to Like I like store, guess to so for In by there's subtype subtype, take growth. to how so driver organic those yes, and is spreading it much and that related in and our right? about force question have number. talk nuanced the virally almost answer a way, of mean, growing And that what I you it's have talk app to sales unfold

So I hope it's not too misleading.

Logan Reach

sense. makes But really I Got it. color. Yes, appreciate totally the

Anthony Casalena

problem. No Yes.

Operator

next goes the Panagrihi you. Please ahead. Thank to City. question go of And Misuho Siti

Your line is open.

Siti Panagrihi

Thanks you team, for taking my questions. Anthony, about couple I years which think of talked a started last back. year, enterprise you

traction Just larger wondering customer, enterprise give of you you that? kind the seeing a on customer? update what if And could on are an

Anthony Casalena

made suddenly us. that you it's again, It updates the if separate because actually we've now product, a and natural lot Thanks kind gives a a space wasn't brand giant a was It past a such some had over about on because customer Yes. scheduling many still improvements inside is they're as you angle. unlock but added couple of through that, Squarespace a the came somebody portfolio definitely quarters, for of the we of that the that big if separate Acuity, the really opportunity that Squarespace share enterprise question. scheduling it. as as enterprise got seen of on focus. And for and in brands, that small a too right with really we of website interest part it's bit don't the is think a business being of

force-driven more in already getting we're that square yet. but business to not a I it we're sales like grow but that breakdown that mid-market space be Again, So way. a how It's segment-by-segment muscle give going grows there, clarify is to think footing able kind and of significant talk, doing we're word, trying for of driver instance, at we as maybe I enterprise. has that and still just in but more broadly, acuity to point, the enterprise in look a -- revenue right of

Siti Panigrahi

As joined, And about further you why and to investing. you much and And this strength TAM think -- understand what Great. -- part talked a terms help us Campen much this do that it where about of are do some improve the the you of and ties did Nathan, that? think you're pretty is things profitability can -- joined investing the ties mention things to you and and the about business. opportunity how like like. you you your of Maybe growth that large you're business pretty thinking given in How how about such you

Nathan Gooden

for Thanks Yes. question. the

what evaluated that XX grow grow was business like entrepreneurial CEO me, Anthony. with to I I'll the the partnering can business. and key He right a that be very forward-looking want a of as could of CEO we say attractive the is the to times. type do Squarespace world the So very driven, we I factors personally, can drive And tinker,nd that one opportunity, to was product with a partner

entrepreneurs that for can spaces years how to will adjacent looks and we holistic our that of that's Squarespace even Secondly, the of in referred Squarespace. I would we that that like five thinking to and deliver say, the the what approach the of drive with portfolio have the and three Anthony about think the foundation to at brands start entrepreneur And to, for premium we go entrepreneurial world. more years an both deliver just that brand the I can monetization

the Lastly, this, of the and I very Squarespace to healthy. is refer profile think did financial -- I

cash flow very margin. We strong have a

returns allows are margin We to the drive and that to I how operating where also but be think this times. about we're business laying very our good investment a of have going is think shareholders. we to us to And land that, growth strong grow also to growth XX give going that

Siti Panigrahi

Thank you. then and welcome. Nath

Looking forward to working with you.

Nathan Gooden

[indiscernible] you. Thank

Operator

you. Jeffries goes Clarke Clark, question go our Thank please final ahead. And Piper to Sandler. today of

is open. line Your

Clarke Jeffries

Hello? taking you questions for Thank

Clarke Jeffries

commerce talk mix could half stood account the would at off-line was sorted software scheduling point in what what talk look the And be potentially that even wondering shareholder of if -- you letter like or offline. your scheduling functionality does within I about to in the businesses? out scheduling today have for to was or functionality me that but of broadly more the ambition payment sale, time GMV. thing and attach the One product of

Anthony Casalena

of the service are point of So but focus at this at not of rendering. booking, huge business. especially the huge, is the A us, transactions Acuity within the point huge for a happening amount

as So a of now about for a And Invoicing part was that, team focus about about it workflows. just think the it's to big is big right invoicing, of think announced us. think refresh. focus

to that. Tap all within Pay complete the it that to not with phones of that app and innovations want of on means people we're further, we the payment enable and And to if that hardware things facilitate like end-to-end are mobile to with kind solutions help that, that happening on reliant that

it's services-based And pursuing we that It's commerce, of again, there. excited push commerce, it's events, these physical approach, very not portfolio-based on. So can all just reservations, is things excited right? it's

when And going just about, not portfolio a look, think it's brands, I of to be you one. hey, think

a can we you think platform to is fade it like, okay, talk kind reservations winning Acuity prominent have a into thing of we'll path becomes when darkness, to of in affords sure the scheduling make that How ways. can but they that of a a well, You see in people's platforms. doesn't as number minds

there. So there's just much so opportunity

billions we it's and that acuity, those they people to platforms looks providing there because everything and us think so the solutions an appointment and us to just like have be think, customer, like door around because participate want especially from those happening they to ecosystem. that what's want like have invoice of consistent. billions that I touch branded front the And analysis booking with the like point, Our I see we're with permission, in just we

how of kind oriented. that's we're So

Clarke Jeffries

customer you in changing? and lot like the the Absolutely. this last and to back funnel call, I've really quarters, few the follow-up that's spend, It the marketing think might growth during think sales been been the this increasing question rather functionality the a related because loyalty funnel, it businesses services of on time to consider marketing had you Is specific flatted of I place characterization a ROI customer products level environment, of look around have sales may commentary Does you new investments? certainly the been in around where pulling the we've there's that and new seems than subscription do got a today? is

Anthony Casalena

where need holding grow, a focusing of flat. these sort how adding it. they think nuanced pretty And think we're where and been think approach when I you on different take we're to about I to it we've businesses rightsizing we're to and trying

that You've we throughout ratio the in range. kind seen through keep a certain year, of that to try EDR us

ratio there I mean heavily. we're thinking up sustainable certainly about we it really keep to that think But now. I if growth. not was So lean more focusing right would really from something we into taking on

of kind And so been our model. that's

Clarke Jeffries

Thank right. you very much. Al

Anthony Casalena

you right. for All Thank joining today.

in We at December. will New month this be York Conference all, and at presenting later Conference Thank your the the in Tuesday. Barclays RBC and you enjoy

Operator

Thank much call. you. so This for Thank now today's you joining. concludes

disconnect now lines. You your may

Squarespace (SQSP) 8 Nov 222022 Q3 Earnings call transcript