Squarespace, Inc.

Good morning, my name is Alex and I'll be your conference operator today. At this time, I would like to welcome everyone to Squarespace's fourth quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star too. Thank you. I'll now hand the call over to your host of Squarespace, Claire Perry. Claire, please go ahead.

Good morning, and thank you for joining Squarespace's fourth quarter and fiscal year 2022 conference call. I'm Claire Perry, Investor Relations Manager, and with me today are Anthony Casalena, Squarespace's founder and CEO, and Nathan Gooden, CFO. After their prepared remarks, we will open the 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, we'll be referencing both GAAP and non-GAAP financial results and operating metrics. You can find additional information on how we calculate these metrics, including a reconciliation of GAAP to non-GAAP measures in today's press release and shareholder letter, which can be found in the investor relations section of our website. These measures should not be considered in isolation from nor 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 1995, which include, but are not limited to, statements related to our future financial performance. These forward-looking statements are subject to risk 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 make on this call are based on assumptions as of this day, March 7th, 2023. We undertake no obligation to update these statements as a result of new information or future events except where required by law. Please also note that all comparisons are on a year-over-year basis unless specifically noted otherwise. I will now turn the call over to Anthony.

Good morning, and thank you for joining us today. 2022 was an extraordinary year for Squarespace, and I'm proud to announce very strong Q4 results alongside a positive outlook for 2023. During Q4, we achieved record bookings of 232 million, growing over 18% year-over-year in constant currency. This growth speaks to the enduring ways our products help our customers succeed online at a moment when digital presence is central to how entrepreneurs engage with their audiences. Commerce revenue grew at a three-year CAGR of 42%, bolstered by new commerce subscription growth as we continue to prioritize tools and features for entrepreneurs everywhere. The growth in our commerce revenue continues to outpace our presence revenue growth. Our key for unlevered free cash flow was more than triple the amount last year, resulting in an overall unlevered free cash flow margin of 19% for 2022. We plan on continuing our disciplined approach to balancing cash flow growth and revenue growth and improving this margin in 2023 by continuing to improve operations, growing our product lines, and continuing to invest both domestically and internationally. Our outstanding results are a testament to the power of our products. They are influenced by our rapid pace of innovation as we delivered new technology and drove improvements across our entire platform throughout the year. In September, we introduced Squarespace Refresh, our annual recap of product releases. This year, we highlighted more than 100 improvements across the platform. These releases included Fluid Engine, a new design system for building pages on Squarespace, which represents one of the biggest changes that we've brought to our content management system in a decade. Fluid Engine drove measurable usability improvements for our customers and pro communities, while also expanding the number of designs our customers are able to create. We've been consistently updating it since launching over the summer and continue to receive positive feedback from our customers. We believe, with the improvements we've made to the platform in 2022, that we are both the easiest to use and most expressive content management system on the market. Last week, Fast Company named Squarespace as one of the world's most innovative companies in 2023 for our e-commerce improvements. Custom merchandise, our print-on-demand service, video hosting, and our expanding payment tools provide digital-first entrepreneurs with the technology they need to monetize content and create new revenue streams. Our decade-plus investment in digital commerce helps customers retool their businesses with everything to sell anything. Our product investments for service-based sellers have improved immensely in 2022, and we're delighted by the recognition. Our growing set of products and corresponding investments in new go-to-market initiatives continue to strengthen the underlying drivers of our business. Our commerce capabilities, international expansion, enterprise initiatives, and our pro-user community circle remain key to our future growth. We made progress on advancing each throughout 2022. Our commerce revenue growth continues to be an important driver of our business. Commerce website subscriptions represent an increasing percentage of our total website subscription mix, And this mixed shift to commerce is one of the main factors why average revenue per unique subscription increased by 3% year over year to $209 in 2022. This continued remix to higher value services will continue to boost Squarespace's business in 2023 and beyond. TOC, our platform for managing hospitality and time-slotted businesses, also had a standout year. It processed record levels of GMV on its platform and tens of millions of diners booked reservations through TOC in 2022. Matt Tucker, former president and COO of OLO, joined at the end of the year to drive TOC's next stage of growth, and I'm excited by the progress he's already made in his short tenure. Acuity Scheduling, our product for customers managing calendar-based businesses, also had a fantastic year. We recently welcomed Dan Chandra, who brings over 15 years' experience with time management software and payment solutions, to our team to lead Acuity to its next stage of growth, and we're excited for what's to come. Acuity benefits greatly from the integration with and funnel from the Squarespace platform, and we look forward to continuing both these integration efforts as well as growing Acuity as a standalone brand. Many large customers may not use Squarespace as their website provider, and we want to make sure our product lines can grow independently of one another when we have that opportunity. International remains a greenfield opportunity for Squarespace. Last year, we expanded language support with three new languages and added the ability to host multilingual websites on our platform. International customers represented about 30% of our total bookings. Throughout the year, we developed tailor-made marketing campaigns for key markets, and we anticipate continuing to scale investment in these markets where we saw opportunities to grow. Our professional partner community, Circle, also had a great year, and we hosted our first Pro User Day in 2022 for our Circle members. Over 1,000 members participated in the event, with 150 joining us live in New York. We continue to invest in tools for this community, as pro users have always been important to our growth. Currently, our Circle community accounts for over 9% of new sites created on our platform. Releases like Fluid Engine do not just target consumers. Our Circle community uses this same tool to produce a wide variety of sites for clients, and we're delighted to hear their positive feedback. 2022 was a building year in enterprise. We strengthened our team, advanced our sales enablement assets, and released new product features to support enterprise clients. We launched a shared template store, new dashboard features, which included additional functionality around permissioning and analytics and improved features related to single sign-on used by many enterprise customers. Progress towards Squarespace Payments continues, and we're still on track to launch our service in the back half of 2023. As we continue to move more payment volume onto our platform, Squarespace Payments represents an important piece of the customer experience we ultimately want to deliver. 2023 is set up to be a fantastic year for our company. At Squarespace, we see a future where everyone can be an entrepreneur, and we remain excited to continue to deliver exceptional products that help millions as they embark on that journey. I'll now turn it over to Nathan to go through the financials.