Squarespace, Inc. Class A

Q4 2022 Earnings Conference Call


spk_0: good morning at my name is alex on be a conference operate stay at this time i would like to welcome everyone to square spaces fourth quarter twenty twenty two and news conference cope or lines of in place or meet to prevent any background noise after the prepared remarks by will be a question and answer session issue i'd ask a question during this time simply press style food by the number one on the telephone keypad if you'd like to destroy your question please pesto to thank you on i had the cool ft a host a square space claire perry plant please go ahead
spk_1: good morning and thank you for joining square spaces fourth quarter and fiscal year twenty twenty two conference call and claire perry investor relations manager and with me today or anthony counseling a square spaces founder and ceo and nathan couldn't see us out after they're prepared remarks we will open call to your questions earlier today we posted a press release and shareholder letter to the investor relations section of our website on today's call will be referencing both gap and non gaap financial results and operating metrics you can find additional information on how we calculate these metrics including a reconciliation of gap to non gaap measures in today's press release and shareholder letter which can be found in the investor relations section of our website right these measures should not be considered in isolation from a substitute for our gap reporting we will make forward looking statements pursuant to the safe harbor provisions of the private securities litigation reform act of nineteen ninety five which include but are not limited to statements related to our future financial performance these forward looking statements are subject to risks and uncertainties that could cause our actual results to differ materially these risks are further defined in our most recent filings with the securities and exchange commission any forward looking statements that we'd make on this call are based on assumptions as of this day march seventh twenty twenty three we undertake no obligation to update me statements as a result of new information or future events except were required by law please also note that all comparison
spk_2: and are on a year over year basis unless specifically noted otherwise i will now turned the call over to anthony
spk_1: good morning and thank you for joining us today twenty twenty two with an extraordinary year for square space and i'm proud to announce very strong que for results alongside a positive outlook for twenty twenty three
spk_2: during queue for we choose record bookings of two hundred and thirty two million growing over eighteen percent year over year and constant currency gets growth speak to the enduring wave or products help our customers succeed online at a moment when digital presence is central to how entrepreneurs engage with their audiences commerce revenue grew to three your taker forty two percent bolstered by new commerce description got as you can hear to prioritize tools and figure for entrepreneurs everywhere the growth of commerce revenue continued to outpace or presents revenue growth our key for another three castle was more than triple the amount last year resulting an overall another free cash margin of nineteen percent for twenty twenty two we plan on continuing our disciplined approach to dancing cash flow growth and revenue growth and improving this margin and twenty twenty three by continuing to improve operations growing up product lines and continuing to invest both domestically and internationally
spk_1: or up getting results are a testament to the power of our products they are influenced by a rapid pace of innovation as we deliver new technology and drive improvements across the entire platform throughout the year
spk_2: in september when a discourses refresh our annual recap of product releases this year we highlighted more than one hundred improvements cross platform these religions including fluid engine and it is time to them for building pages on scores space which represents one the biggest changes we brought her content management system in a decade fluid and ginger of measurable usability improvements for our customers and pro communities while awesome spanning the number of designed our customers are able to create we've been consistently a being it's since launching over the summer because he received positive feedback from my customers we believe with the improvements we've made of the platform and twenty twenty two the we're both the easiest to you and most expressive content management system on the market last week fast company name square speech is one of the world's most innovative companies and twenty twenty three for our ecommerce improvements custom merchandise or print on demand service video hosting thing and arts banning payment tools provide digital first entrepreneurs have the technology they need to monetize content and create new revenue stream or decade plus investment in digital commerce helps customers retool their businesses with everything sell anything our product investments for service bay sellers have improved immensely and twenty twenty two and we're delighted by the recognition are grown that of products and corresponding investments in new go to market initiative can heated strengthen the underlying drivers of our business are complicated know these international expansion enterprise initiatives and are praise or community circle remake you to our future growth we need progress on advancing each throughout twenty twenty two are commerce revenue growth continues to be an important driver of our business commerce went to descriptions represent an increasing percentage of our total assets inscription next and the next shift the commerce is one of the main factors why average revenue per unique subscription increased by three percent year over year to two hundred and nine dollars and twenty twenty two this continued remix to higher value services will continue to do square spaces business and twenty twenty three and beyond talk or platform for managing hospitality in time for the businesses also had a standout year and process record levels of gmt on it's platform and tens of millions diners book reservations to talk and twenty twenty two matt tucker former president and ceo of olo joined at the end of the year to drive talk next stage of growth and i'm excited by the progress is already made in a short tenure acuity scheduling our product for customers managing calendar based businesses have had a fantastic year we recently welcome dan chandra who bring diversity years experience with time management software payment solutions to our team to eat acuity to it's next stage of growth and were said it's what's to come acuity benefit greatly from me integration with and funnel from the score this platform and we look forward to continuing buddies integration efforts as well as growing acuity the standalone brand many large customers may not use force base in their website provider and we want to make sure product line can grow independently of one another when we have that opportunity international remains greenfield opportunity for scorsese last year we expanded language support with three new languages and added you build your hosts multi lingual websites on our platform international customers represent about thirty percent of our total bookings throughout the year we developed tell him made marketing campaigns for key markets and we anticipate continue to scale investment meat markets where we saw opportunities to grow our professional partner community circle also had a great year and we hope that our first per user day and two thousand twenty two for a circle members over a thousand members present it in the event with one hundred fifty joining us live in new york we can you to invest in tools for this community as praises of always been important to our grow currently our circle community accounts for over nine percent of new sites created on our platform release as a fluid and not just started consumers are circle communities the same tool to to produce a wide variety of states or clients and we're delighted to hear their positive feedback twenty twenty two of the building your an enterprise we strengthened our team advanced or name of an asset and release new product features to sport enterprise clients we like to share template stuart new dashboard features which included additional functionality around permission and analytics and proof features related to single sign on used by many enterprise customers private swords worth be payments continues and we're still on track to launch our service in the back half twenty twenty three as we can see to move more payment volume onto our platform scores payments represents an important piece of the customer experience we ultimately want to deliver twenty twenty three is set up to be a fantastic year for a company and square space we see a future where everyone can be an odd your printer and we remain excited to continue to deliver exceptional products and help millions as they embark on that journey
spk_3: on alternative it over nathan to go through the financials
spk_4: thank you anthony today we reported a strong fourth quarter which culminated a strong here per square space both are full year two thousand twenty two and que for results exceeded our top line and and laboratory cash flow guidance as close to thousand twenty two with revenues of eight hundred and sixty seven million up eleven percent and fourteen percent on constant currency basis with a nineteen percent and levered free cash flow margin be the team's speak to score a solid financial profile we're driving growth and generating positive cash flow a combination that affords us the opportunity to deliver more to our customers and two thousand and twenty three and continuing to deliver for investors i can tell you after working with the team bees past five months leave me energy i'd buy the incredible opportunity ahead of us today i'm confident in division we have guiding square space one which prioritizes innovation for the benefit of customers and empowers their entrepreneurial aspirations with the tools they need to stand out and succeed cooper bookings of two hundred and thirty two million grew by fifteen percent as reported and eighteen percent and constant currency a sequential increase from the ten percent reported and forty percent constant currency booking growth in the third quarter of two thousand twenty two four year two thousand twenty two bookings of nine hundred and six million increase eleven percent as reported and fifteen percent and constant currency driven by growth and unique citizens and in our hospitality services through talk as well as the successful implementation of price increases for both new and existing customers we're delighted by the momentum we achieved in two thousand twenty two as bookings increase through the air revenue of two hundred twenty nine million exceeded the high end of our guidance of two hundred nineteen to two hundred and twenty four million in the fourth quarter which represents growth of fourteen percent and constant currency since providing guidance and november foreign currency fluctuations positively impacted our fourth quarter revenue by one point six million our cue for results were driven by strong customer attention and acquisition along with the continued success of legacy pricing initiative which we initiated for existing customers at the end up to three we continue to see better than expected retention from are stable base of over four point two million subscriptions as we methodically rollout that price increase these our product offering more powerful than ever before provides an essential service to our customers international revenue with two hundred and forty four million for the year representing two percent growth and comprise twenty eight percent of total revenue excluding the fx impact international revenue would have comprised thirty percent of total revenue and grown at fourteen percent on a constant currency basis from a product and partnership standpoint we're making consistent progress and our efforts to drive new international customers we are now supporting multilingual extensions and one hundred percent of our target markets we have localized payment mechanisms and we have added other localization features to fine tune our platform suitability to the needs of entrepreneurs globally
spk_5: though we are still in the early stages as we look forward international expansion will be a key growth driver for our business
spk_4: as anthony said commerce continues to be a driver and focus at square space as we roll out more solutions to help our customers transact on line and engage with their audiences enabling the sale of merchandise time based services and content and que for commerce revenue with seventy two million growing twelve percent and for thirteen percent and constant currency commerce subscriptions talk and are scheduling product job growth in the quarter are commerce revenue includes contributions from gmp related revenue share resulting from the value of services merchandise and digital content gmb was one point six billion in the quarter down eleven percent do the lower transaction volume from our scheduling product and commerce website subscriptions this result is consistent with the guidance we provided during the last quarter any in line with our expectations scheduling showed particular strength and que forty thousand twenty one setting up to forty thousand twenty two for a tough comparison despite the slow down from scheduling in the quarter we saw strength from talk talk had it's highest court ever for gmb as more businesses to talk to help manage time based reservations and events we believe we have a significant opportunity to provide for their value for service based businesses selling to digital channels as we prioritize investments and talk and scheduling products and two thousand twenty three we're encouraged by the continuing trends we're seeing within our website subscriptions with a greater proportion of customers using are higher valued plans compared to prior years we believe this demonstrate a greater intent to sell as these offerings include fully integrated ecommerce options and other features that enabled digital sales i believe arpu who is a useful metric and evaluating our ability to sell higher high value plans add on subscriptions and hospitality services at the end of two thousand twenty two arpu was two hundred nine dollars representing an increase of three percent from two hundred three dollars and two thousand twenty one growth and arpu is due to an increased mix of higher tiered plans across our website sites cousins planned pricing increases and continued growth of our commerce offerings and attached products as well as the edition and subsequent growth of talk which began impacting revenue and que to two thousand twenty one following attack this isn't our model benefits from our ability to sell more to customers and also from new customers joining our platform unique subscription surpassed four point two million at the end of two thousand twenty two growing three percent we have noted softness impacting overall unique subsystem growth throughout the year from unfold our product that helps cut summers manage their social media presence unfolds assists and as essentially lower and dollar value than other citizens we offer unfold application has been impacted by increased competition in the app store and a greater evolution of trends on social media despite the slowdown we are excited about unfolds bios a product biocides or mobile first one page website with a biocide customers can create a simple web presence accept payments connect across social platforms and grow their audiences with one u r l full year adjusted even are grew to one hundred and forty seven million representing a seventeen percent margin a hundred and six basis points of improvement compared to the previous year and eighteen percent growth during by are operational disciplined as a result of our annual impairment analysis we incurred a two hundred and twenty five million non noncash goodwill impairment charge primarily due to market value deteriorating subsequent to our acquisition of talk in march of two thousand twenty one impairment charge impacted our operating expenses for the quarter and year moving beyond topline metrics we delivered non gaap gross margin of eighty four percent down approx a one hundred thirty basis points year over year as we prioritize faster and more scalable deployments through cloud first deliberate gross margins are also impacted by talks hospitality business on account of it's payments business in two thousand two need to we delivered a non gaap operating margin of seventeen percent which represent expansion of approximately four hundred thirty basis points compared to the previous year and exclude the impairment charge we incurred and queue for we improved non gaap operating efficiency as we reduce marketing and sales expenses throughout the year and part by focusing our investment in areas that drives subscriptions and continuously adjust for demand we drove efficiencies and are marking itself then throughout the year and delivered over six hundred basis points of year over year improvement on a non gaap bases and two thousand twenty two were non gaap marking cells represented a proxy thirty five percent of revenue additionally reduce g dna a expenses by seventy five basis points to eleven point five percent of revenue on a non got basis we realize this operating leverage while still investing in our future growth as we increased our our he spent twenty one percent of revenue on a non got basis of one hundred and twenty five basis points over two thousand twenty one and in line with the outlook we provided last year throughout the year we took a disciplined approach to our expenses with intent to drive improvements from are two thousand twenty one extent allocation in line with where we saw opportunity for future growth turning out to the balance sheet and cash flow statement we finished two thousand twenty two with cash and cash equivalents of one hundred ninety seven million and investments of thirty two million our total debt was five hundred and fourteen million i was forty one million his current our cash flow from operating activities grew thirty three percent to one hundred sixty four million and que for we generated strong and levered free cash flow of forty one point five million for the trailing three months or eighteen percent of total revenue a growth rate of two hundred and seventeen percent to surpass the high end of our guidance the our performance was due to higher bookings driven by strong customer retention associated with like the pricing increases and favorable fx rates combined with operational efficiencies we continued our share repurchase program authorized by our board of directors in may which underscores the confidence leadership has and our business and scorsese's opportunity for future growth as of december thirty first two thousand and twenty two returned over one hundred twenty million of cash to shareholders under the current authorization this represent purchases of a proxy five point five million shares at an average price per share of twenty one dollars and twenty eight cents on the open market a year and approximately eighty million remain available for repurchase the shares we purchased in two thousand twenty two had an anti deluded impact and more than offset our stock based compensation grants net a forfeitures and explorations turning to our guidance for que one and four year two thousand twenty three and que one two thousand twenty three we are targeting total revenue in a range of two hundred thirty two to two hundred and thirty four million this represents twelve percent growth at the midpoint we expect and levered free cash flow during que one to be in the range of sixty three to sixty five million which implies and unleveraged free cash flow margin of twenty seven percent at the midpoint of the range for the full year we expect total revenue to be in the range of nine hundred fifty five to nine hundred and seventy million representing growth of eleven percent at the midpoint of the reins unleveraged free cash flow is expected to grow throughout the year to the range of one hundred and eighty three to one hundred ninety eight million and implies and unleveraged free cash flow margin of twenty percent at the midpoint of the range this outlook has constructed from are stable recurring revenue model ninety two percent of revenue coming from subscription revenue and our continued commitment to operate our business with a focus on balancing profitability and investment and constructing are guidance we assume continued positive impact from our legacy price increases and a customer demand to directory which continue that a similar rate we also attempt at x rayed as at the end of february we look to sustain profitable growth our business and expect to maintain a two thousand twenty three don gap gross margin similar to the strong margin we delivered and twenty two we expect to see continued improvement in our marketing sales expense throughout the year we balance efficiency with increased or in expense as a percentage of revenue as we invest for growth we are always keeping an eye on the bottom line to rationalize spend and ensure our resources are aligned with strategic priorities operating through the lens scale of oil and possible growth remains true to square spaces core and as evidence through our financial results we believe we are in the early stages of addressing a large and growing global opportunity for our services and our technology has the ability to scale and empower millions more customers in the future our results demonstrate our customers commitment to our platform and our ability to deliver both topline growth and bottom line margin expansion were inspired by the opportunities available to us today and see those options is expanding over the year the head as we optimize our platform and large additional services for our customers are so singular focus on our customers as driven by the talented people who work at swear space
spk_0: i will now open the call for any questions thank you as a reminder if you like to ask a question you compress style one on the telephone keypad if you'd like to throw your question you may press start please ensure your unmated locally when asking a question
spk_6: first question for stay comes from much of a young or barclays present your lifestyle open please go ahead
spk_4: great thanks
spk_7: first for anthony where it were here in a lot about ai across internet and software and even some of the web tools players are looking at it for chat bought the compliment kind of self serve customer support the like as well as you know maybe generative ai for making product descriptions to go on web sites can you talk a little bit about your ambitions with ai is it something
spk_8: that you're looking at is that an opportunity is that something you wanna mean and on some investments there and then for needs and on the revenue guide implying a bit of a deceleration come later in the year is there something that you're seeing that informs why you think grows maybe slows from here versus the the one que guide or such as some conservatism given a macro uncertainty
spk_2: hmm thanks for the question and yellow were no stranger to ah ai and have been following developments related to add for probably
spk_8: eight or nine years now eight or nine years ago we had smaller competitors that you know tried to really differentiate by making essentially the get scorsese clone but starting with a i and i think what we sort of down through that process is that as that's used to augment tools like square space and and and and help with it in our case a lot of the initial setup not necessarily do the entire thing and pretended square to they swear they don't exist for instance in a chat gp t doesn't replace microsoft word you still need the talks even if they're going to pre populated with a really nice starting point in terms of alum initial contact so as a moat moved along you know it we've seen start up sit there down and reckoning sacred eight years ago now and two other competitors or integrating into their setup process and that's really what focus right now to take things like dolly chat cbt and help people with sort of what we call the content not ready problem so when you start a source this website biggest read my people on sign up his content ready so if it every time you presented with a blank text box or you're presented with a blank image field yeah if we didn't give you an ai solution for that and that is something we will absolutely i do and we're currently working on it you mentioned actually as a customer service chat bot i implementations while we actually have had a isis to chat bot for don't quote me on the exact amount of time now it i think over two or three years helping with customer support ah and and and that's a really successful for to in improving the efficiency and customer operate
spk_4: patients so yeah where it's nothing out with it's it's deputy not something you do as i think tools like odds are going to be in a fantastic position to capitalize on and what what's available on a ideas again you're gonna need a platform to run the business to edit the site make changes it can just be kind of up a i carter rick aggravated the nathan and good talk to you again via on revenue and it is reflected of of the price increases your call we did a like the price increase for the first time in cute three the and a few three and two thousand twenty two and and that rolled out that you see the effect of
spk_9: the timing of that are bigots renewal period for right is in g one which we saw anger january february and and canoe continue to eat a strong customer retention of be had
spk_10: save and the end of jumped twenty two that causes exceed our guidance and so at that time he wrap that's just the absence of
spk_0: the right agree
spk_11: that's really helpful thank you both thank you all next question comes from and ten mom of oppenheimer ten a long time i open the please go ahead
spk_8: great that have picked up a anthony i wanted it to touch on talk you that talk to a record year be and that that was definitely a business that that searched your the pandemic you guys were able to pivot to where they still remains except for one at you can maybe this can i talk to some of those those pivot than and of what's been drive in the uplift woman fear and he also touched on the next stage of growth were talk with mother sent for kinda how how you envision that product evolving in and twenty three
spk_12: sure yeah as you mention it up talk was in an interesting position over the pandemic in the sense that you know they had the kind of rapidly shifting to talk to go and you know that let them kind of you know a help people remain in business and generate revenue during the pandemic period and over the past
spk_8: last year what you really seen it as the shift back to sort of that businesses normal sort of scenario you know we greatly expanded talk sales team and twenty twenty two we have a new leader there that talker who are just basically got started in december january he was the president of alone for about a decade and saw them to their ip oh so we're really we're really excited to cut be packing a business as normal kind of crowd of growth mode where we hope you know continued pivots are necessary so we're going to be the focus on the core product they're make improvements for the existing businesses we've got and and and and really updating our go to market and you know making sure that
spk_11: know that so people trained and up to speed but as web video happy with the performance and looking forward to twenty twenty three and where are we going to try and young probably closer to later twenty three so to activate on some of those cross out that i think her are going to be possible with square pants as we abstract some of our are taught that and make them available to talk customers so often i'm excited about
spk_4: got a fantastic thanks for the color and a nathan just a follow up law on github the solid or to performance here
spk_7: any any way to hope i can dissect what the what the impact from the mix is in terms of move and up to commerce versus the the the pricing no impact on that the directly initiated into three
spk_4: yeah think that a question of and yet we are thing continue to increase in our our food as
spk_13: from the price to as you mentioned a customer going to our guy you plan as we look forward and twenty three you know i think that the pricing and reads will have a year
spk_7: higher impact as we rolled out the end of two thousand twenty two so i would expect that to have a year
spk_0: more concrete and act and twenty three vs twenty two and the you know where in greetings how are your plans were doing increasing greeting the mix and to commerce on as we agree to be a tax rate of our existing products of and the scheduling product and other things are also help to increase our our boom
spk_14: back great thanks a lot fantastic forget thank you all next question comes from andrew boon of jpm securities andrea line is now open please go ahead
spk_8: thanks much for took my questions and good morning i'm i wanted to ask about two things he talked about the the slaughter me commerce as well as the opportunity with and services can you just double click on what you're seeing and services and and and were you guys are pushing and then nathan i think you mentioned more as and m sales marketing discipline as we think about twenty twenty three new just expand on that thanks so much sure hell are i'm plat rgb gp the the amount of payments for to the platform a mix between physical physical commerce which you know we all fall surge during the pandemic and has waned a bit we've been talking about that dynamic and multiple committed been talking about that dynamics for the past a couple quarters we've got services paid commerce so those are now people and services yeah those the point when they started flowing through acuity and then there's the hospitality and bookings v i area things which is flowing through talk our focus has been more on
spk_15: the orbited appointment based and you know a it that and booking fee
spk_2: area versus just focusing on physical commerce we have a ahmed tenure investment and physical commerce and so i think when you are referring to sort of softness in it a rod cmv number it's mostly from the from the physical side
spk_8: oh and also i'd like to say during twenty three we've got a lot of changes coming out
spk_2: that will be our product changes the benefits service base salaries and so those are federal out during the year and then of course later in the air
spk_16: we hope to have merchants on boarding a course space payments for the first time which is just yeah we're doing prime i mean obviously there's a dearth of a financial impact our to it's it's positive but is really ought to a customer experience impact at a very positive sell be heard that all those changes will
spk_13: continue to bolster our presence in that space
spk_7: good morning andrew on your question on the marquis de r i'm i that back a little bit at earth and say the and we are taking a very maniacal approach as we think about driving to profitability and and that thing and growth and marking it's certainly a key louder i'm back in two thousand twenty two we were constantly a said i think the return on american dollars to make sure that we were making a conscious decision that where we were investing and you know you saw in in the latter year we did pull back and continue to see i'm strong return our or thousand to three cube or we saw that acceleration our core business and then we looked at the i'm twenty three out
spk_17: fact that same discipline and similar ratios on the the are are marking himself and that we will keep an eye on
spk_0: the defender makes the that we are most efficient and getting the ice return of our spending
spk_18: great thank you so much
spk_19: thank you all next question comes from eke out a reunion from sissy your line is now open please go ahead
spk_20: in one go
spk_7: we just the
spk_20: album the commons made on the on the part than a third modeling this year
spk_21: than a that will benefit the through the sellers getting talk about a really strong or i blended with you want one of the never had a new to this then we'll will that on on what's to come on met new broadly but the glee the following up on that
spk_8: comedy
spk_2: share so we were named one of that companies most innovative companies in in retail any commerce in twenty twenty two was there for twenty twenty three ah which she talked about in the i'm in the really not really highlights
spk_8: the attention we get for a number that things to be announced during square three refreshed so a lot of improvements to the existing platform when you look forward into twenty twenty three without getting caught it too much away there is improvements to the appointment system
spk_22: it within acuity were reinvesting that as a standalone black brand we've got giant investments in classes and courses and a lot of updates coming there were looking at project base salary so you know somebody on the as course they say with a contact form maybe they're at a wedding photographer negative inbound lead how do we help them with that inbound the
spk_20: coming in from young product proposal to yell initial charge to finally sending the invoice to them to collect payment so lot less happening there and then finally square feet payments which were making great progress on and expect to have put into the air which will further improve that whole and and experience for people are selling
spk_18: services on the platform
spk_23: think than i'm you got beaucoup talk about the enterprise and the blood will appear
spk_24: epoch a little bit more about that that may be on holiday and applied represents right now
spk_23: from her and i'm looking to a new and
spk_20: yeah
spk_8: the factory the you look the admitted that didn't
spk_2: to grow from of my now
spk_8: surprise the still small for us it doesn't represent a large portion of our bookings at all on and were really think about it in three kind of areas because we have three product lines right now where quote unquote i may be a fourth were quote unquote enterprise applies to and you gotta him to then scored based i talked about on previous calls mostly volume sellers or people needing single sign on are multi account management and and we actually had a lot of releases last year i enter the areas which i think kind of puts us on better footing to achieve progress there are you that enterprise within acuity i'd with under invest
spk_25: in that up to this point but it remains a big opportunity very natural up sell their if you got a very large business probably i a in some ways conceptually equal to or or greater than the square space side of things because you're a lot of the larger customers using acuity don't use force base their website because you don't have
spk_0: what they built on of the i like platform which totally fine with us and why we're investing in acuity as a standalone brand and then you've got park and hospitality experience which is really all enterprise right now there's no the i watch out and the opportunity is actually kind of that of of course to continue that because the their customer base need
spk_26: that but then also move to of i why model starting hopefully with events so i'm yeah that kind of an overview of the landscape but right now that is not a large large percentage of our of them
spk_4: the album that you thank you all next question comes from up my smile from william blair match your line is now open please go ahead
spk_8: a great thanks wanted to ask on the transaction volume the quarry he called out some softness around scheduling or or at least difficult comps there maybe just help us understand what was going on there and and as a sort of a one time issue yeah thanks for the question the it i'm so scheduling had an outsize impact and to than twenty one two comparing quarter over quarter ah and is an anomaly of you well i'm scared to get overall if you look at two thousand twenty two had a very good year we did see strong growth what i was calling out there to become parents comparison your every year and bigger to what happened to your twenty one as they could just added i think we see the volume opportunity there as just a job at the volume is just a giant opportunity for us a most score spaces revenue is still coming from
spk_26: sas and subscription so when we see fluctuations in the platform volume were still sort of getting used to the scale and odyssey can be so many multiple and seventy multiple larger that i said it doesn't
spk_8: allie it's not that concerned it out when it is it's i the downplay the up does considering the am that the new seasonality that we're getting used to with it got it and and then on unfold and he update to you're thinking on strategy they're paid planned to move forward with with that business for sure i think that the strategy there can be summarized and basically that were focusing on biocides so unfolded a great product you know it's been in market for a number of years now lot of competition that space nothing really new need to my dialogue there but what's really exciting and you don't see it in any the numbers description them as we have to he's not necessarily paid subscriptions yet but there has been over hundreds of thousands of biodiversity been created we read huntley lost the ability to create a bio site from the web is in it in addition to being able to create one in the unfold app
spk_26: and we see just a huge amount of opportunity there for monetization i mean considering our numbers and blue the hundreds of thousands of sight created and spreading by really with very very little marketing spend in nature the product
spk_0: i'm really excited about teaching modernization are opportunities there and that telltales very nicely with things were doing the future and squirt the payments up sell to the main prize outsell to you know perhaps a larger website everything we're doing for services base salary so that's really the crux of where we see the future within that product in addition to continue to invest me
spk_27: unfold product to make sure we're updating it but there's not really a world i see where we have some macro strategy that triple the amount of unfold subscribers or top or anything like that so it's a great the point that it's a great product a solid sound revenue stream for it and it really really great deployment mechanism for by a site got it thank you for she had it
spk_28: thank you all next question comes from debris and a borgias from goldman sachs gabriella yolanda so open the please go ahead
spk_8: come morning combat on the corner of more work for our are you on any marker on impact on okay because obama also improving called armor public cloud once upon for what the given unique london
spk_2: sort one thing in town hall
spk_8: so we can pay to see thread the crop our product lines i think you know i'm one of the questions that were kind of always getting as around you know if they can have a economy goes to more of a decline of this recession you know what what happens to squirt space and we've run some internal analysis and also lived through a patch recession somewhat smaller the time but it would seem to have that ah we still have some correlation the small business formation that is not as strong as it was
spk_4: pre pandemic for for whatever reason maybe these diversity services or a move towards the creator on me so we think we're we're we're well positioned there i think you know if you look at even though the results from the price increase i really think it shows the power the product me importance of the product even on the even and in in times of uncertainty right
spk_27: turn was much lower than we expected it would definitely put forward and churn as opposed to the out a lot of that new and so at we we think it's well positioned i think unless able to comment on things like what was brought in the prior question around gm v and macro flows related to e commerce is cyclicality at or you know what's happening with our service based dollars which are sort of just getting started so but for the core business the out i think i think it's well positioned in a downturn and and yeah don't think we'd be of the show a lot of what we showed a queue for a team in the queue on of that that wasn't true hopefully gabriella i might just add to that the yard core business is seeing strength as we as i said you drink you pour restarting the tv acceleration so even in that environment we are performing well as anthony said our pricing increase we saw i'm strong customer retention continue to see that am and que one so with ninety two percent of our revenue coming from that side of the business i would say
spk_29: we report fairly strong about our twenty three guidance
spk_4: yeah yeah i'm i'm thinking and nathan the followup you on i'm a common hung up on my to that new and sleep
spk_16: are you talking about impact from the think crazy how that flip through the air you to talk about expecting customer months remaining and what level if we karma up together if you're able to continue to have bookings grow in the middle
spk_4: hi teams rains are there any other reason why you wouldn't be upon us and that kind of number quite and percent of for year understanding that quality of the yeah
spk_7: visibility than it's so as you know we rolled out the acute three it or the pricing and que three of last year and so
spk_30: a via the bookings and agreed that we saw and twenty two that theory and and reflected and the revenue growth and twenty three i do think it a step back though
spk_0: have we look at the growth of did business we're you know the core area that isn't as country me see strong growth and the talk business had a very strong to you for which flows into our i'm twenty three guidance and scheduling performed well so i do feel good that we as i look forward beyond twenty three even as we and
spk_31: read the attach raid of our existing services and grow the various other services would be being such a small part of our business today and lodging payments at the end of this year and beyond twenty three i think i'd go very good about strong growth our revenue
spk_8: thank you for the com frankie
spk_32: all next question comes from a city panic raul he from a zoo her your line is now open please go ahead
spk_33: thank you ah thanks for taking my question and great dog kastler generation and congress and to me and nathan ah so we're wanted to ask you are on the task law and i two hundred bits expands on how sustainable is that and also was thinking about what are you thinking about capital allocation
spk_8: from here and a buyback should be is over a part about as a consistent part of your capital allocation prem kumar so with the got the margin sustainability think it it's incredibly sustainable and it's my
spk_31: goal to continue to improve free cash for margin to ah well into the mid an upper twenties or over the next couple of years so that's that's absolutely a goal of the company my second by the question again
spk_8: ah capital alcohol that had a mother that had by the monotony yeah yeah yeah i mean look we we re evaluate our stance on word toward allocate capital really i mean every every every single month and so i think that there will always be some room for an authorized by that program whether or not we're executing on that's going to depend on other opportunities we see in the market so i'm you know as we move into the this year depending on we see from in amman a friend we may decide to allocated there but i yeah i mean we're believe it's me equity the business and so insofar as we can return capital a shareholder that is one way will continue to do it
spk_34: okay great and then one full of that i'm i'm getting question today your yeah except gives an odd as only grew forty forty four thousand and and new talked about that were weakness and on for so i think it'll be helpful to unpack got in know my what was your grass increase
spk_8: and maybe help us like what an don't that jordan was in a how much of that on for maybe it'll be helpful and has to be think about this unique such schools and growth in twenty twenty three
spk_16: so you know as you met as he as you noted not all unique subscriptions and that number created equal we got in top subscriptions and there that have tens of thousands of thousand ltd you got unfold subscriptions and there which are you know more like a domain name to i think hundred dollar year
spk_4: types of scripts and so i'm in i was i mentioned the previous quiet and one the previous answers you know there's some things we can do to change the unfold term but not yet you know it's not going to be like in a macro way corruptible and some giant sand somewhere where really focusing on our bias as a bit a bit more there
spk_35: but look at him over all of the charm properties of business are stable to
spk_0: yeah they remain really really positive again as the pricing increase it's first time we've ever affected something like that and we were in a
spk_7: very pleasantly surprised with the with with what we saw from return standpoint yeah the i would just lay around their be it we are thing strong retention of our of ours stable customer base and though we don't disclose beyond the breakdown of the four point to them
spk_8: yeah i can tell you that the core business did the acceleration que three and you for which that does blow through to are twenty three guidance i'm are turn levels are lower than are twenty twenty level so we go very good about where the core businesses in relative tar subscriber base thank you frankie omics crack question comes from what chris zine of credit suisse crystalline yes i'll open please go ahead extra ticket our past in we've highlighted higher putting and let's turn than anticipated from the lack of the price increase we understand that you try to keep the increases nothing twenty percent to not give customers a assad but at the same time there seem to be like to customers that are you playing well below the list despise the my question is are you planning on continue to raise their prices each and every year they we knew until the and a ticket bring their prices to the list price or are you planning on a pop at some point and i could have to give us is that raw sense of the arm
spk_4: the portion of the logistics six descriptions that be very helpful and or happen quicker fall off
spk_8: yeah it's actually a fantastic question so it our current price increases were targeted at us the customers only so we didn't look the international
spk_36: any and anything internationally and as you mentioned corrupt characters a number of customers
spk_7: hundreds of thousands of customers that are still on their list price and some substantially sell i mean when you raise frightened for a decade you know we've we've gotten you know we had planted a long time hurt a dollars a month
spk_4: and so yeah we read when these a little bit it's given us some confidence to understand the dynamics of what happens when we do that
spk_36: the and yeah i think there's no yeah i don't know the exact you
spk_0: frequency at which it's either going to be reasonable to do those raises but yeah they're two hundred thousand still below list price in us dollars so we want to raise it we want to get everyone to lift overtime but i don't want to yell unduly
spk_37: and hit them to the city cent price increase or something crazy like that which would make any sense yeah cause we will take a longer term holistic approach to deprive thing as we think about it is the growth that of our business in addition to the the core business we also have never rates pricing on talk or and scheduling so we will look at all different areas of the business as we think about pricing strategy and we have a number of new higher starting this year it's with the a developer of a more sophisticated pricing discipline especially considering how many different product lines we have of and how many different brands are gonna be supporting i think you anthony mason book the for the gray color and on my all up his dog for nathan last quarter you mention there's a point seven million that packs we found that was not in the fourth quarter died but pushed to twenty twenty three could you come from doubtless what that's realizing the for clearing away
spk_8: or is that as doing plane twenty three guy didn't know whether that's enough for it first quarter that's the case yeah thanks credit of you have a they tax and upload advocated up and down and couldn't take that we have built into the twenty three guide and beer what i referenced and november call and we do expect to receive in two thousand and twenty three it was not received and que for twenty two but thank you very much thank you all next question comes from at deepak metallic and from move research the pack your line is i'll open that please go ahead great out thanks for taking the questions a couple of ones from us support on the marketing for on are you seeing him broader done from sort of the marketplace getting more efficient because a lot of the competitors are also pulling back marketing back currently know the customer acquisition cost coming down or is it kind of your more optimization that's dry having are good leverage currently and then now are anthony wanted to ask about dog
spk_4: locked a margins you report to not regard margin reaching midnight when he did that sort of the right way to think about long term targets can you provide your updated thoughts on know how to think about that derby great thanks so much
spk_38: sherwood effective marketing efficiency would certainly not trying to bed to to indicate that you know on a on a quarter to quarter basis it's getting cheaper to acquire customer
spk_8: but that being said a lot of what you're seeing a shift is two things one a movement of brands band to pre pandemic level but after the benefit of having done that browns fan so you know you got more people typing and square space then how to build a website and so you know that that the to continue rent their young even with done that task and he did to to benefit us and the other thing you're going to see is more of a remix of that span to international markets as opposed to just focusing in the us which electronically will cause a own it dilute the efficiency the we do have in the us
spk_2: yeah and the and and also in the past quarter we detected some strategic changes and how we've gone about
spk_8: just certain methods that we were we were we were pursuing in the company and week is wanted to change course on and so yeah lots of changes under the hood by
spk_39: yeah i wouldn't i would hate cheaper to hire consent is right now than before but we do look at it by specific product line with and the business and we do have strong attribution model that help as drive the right spend across each of those channels to make sure that we are the most efficient and getting the returned we want and we do consistently
spk_0: chip dollars as we see the attribution model out but yeah that that's a good point we did launch a new attribution model in august

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