Squarespace, Inc.

Good morning, my name is Ellen and I'll be your conference operator for today. At this time, I'd like to welcome everyone to Squarespace's second quarter 2023 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 change your mind and would like to withdraw your question, please press star followed by two on your telephone keypad. Thank you. I'll now like to call over to your host at Squarespace, Claire Perry. Claire, please go ahead whenever you're ready.

Good morning, and thank you for joining Squarespace's second quarter 2023 earnings conference call. This is Claire Perry, head of investor relations. I'm joined by 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. 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, our strategies, and our ability to integrate new technology into our core platform. 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 Security and Exchange Commission. Any forward-looking statements that we will make on this call are based on assumptions as of this day, August 8, 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.

Hello, everyone. I'm pleased to announce another solid quarter of strong financial performance for Squarespace. Revenue grew more than 16%, and we achieved a 22% unlevered free cash flow margin, putting us within striking distance of the rule of 40%. The positive trends that we saw in Q1 continued this quarter, highlighting the strength of our core business and customer enthusiasm for our products and services. For the second consecutive quarter, website trials in our core products set an all-time high. We attribute this to a variety of factors, including the new Squarespace Blueprint onboarding flows, changes to our advertising mix based on updated internal marketing attribution models, strong international performance, and favorable macro elements. We have a number of exciting product launches set to go live through the end of this year to enable more functionality for service-based sellers in classes and courses and for payments. Stay tuned for our Squarespace Refresh product event coming in early October for more product updates and a roundup of everything we've accomplished this year. In June, we announced our intent to acquire Google Domains assets, which includes up to approximately 10 million domains. Domains are a critical part of web infrastructure and essential to an entrepreneur's online presence. We're using this unprecedented opportunity to also invest in and relaunch Squarespace domains, which we are operating as an independent domain registrar. Squarespace is already a leading and trusted domain registrar, relied on by millions of domains customers. At this point, we've been perfecting our domains offering now for nearly a decade. As a Google Domains customer myself, I'm personally committed to making sure this transition is seamless for all of us. Some might wonder why I was a Google Domains customer when we had a domain offering at Squarespace. The answer is that the domain offering from Squarespace was historically very website-centric, and I had many domains accumulated over the years that were simply parked or used for email. The Squarespace domains product that we are investing in will cater to these types of customers, as well as the ones that have domains centered around a website. Whether you use Squarespace products or not, we want to be the easiest and most straightforward way for you to manage your domains. We'll be building on Google's infrastructure as a foundation for our Scorespace domain service, and customers can expect the same level of reliability as we move along with the migration to Scorespace. We're thrilled to be working with Google on the management of these domains and looking forward to deepening our relationship. We're already one of the largest resellers of Google Workspace in the world and have been reselling it for close to a decade. As part of this deal, for a minimum of up to three years, we will also be acting as the exclusive domain provider when customers purchase domains through Google Workspace. This quarter, we introduced Squarespace Blueprint in five new languages. With the introduction of Squarespace Blueprint earlier this year, we integrated a modular design experience at customer onboarding. With Blueprint, users can now begin their journey without having to navigate the template store during onboarding, making each website at the end of the Blueprint setup process unique. We think this, along with our curated template store, represent the best setup experiences we've ever offered on our platform. And these continue to contribute to our expanding market share as more and more customers choose ScoreSpace. During the quarter, we continued integrating generative AI technology into our CMS in areas where customers are presented with text they need to generate or edit. This new integration, alongside our leading CMS and dominance in design, helps our customers get set up faster than ever before. Expect further developments coming soon that will integrate copilot-like experiences into our support interface, which already includes AI-powered recommendations trained on our knowledge base. We're currently in the process of rolling out a new homepage and brand identity for Acuity Scheduling. Acuity Scheduling is an important part of our product portfolio. It can be used as an extension of our website product via deep integrations or completely standalone if you're a larger enterprise or have your website hosted elsewhere. We will continue to invest in this standalone channel as we grow Acuity over the next few years, and we'll be expanding the Acuity team significantly in line with the opportunity we see in the market. Finally, I'm also excited to note that we processed our first payment through Squarespace Payments on production infrastructure as part of our alpha test program. We are on track to deliver Squarespace Payments to new customers in Q4 of this year, and I'm looking forward to sharing more when we finally launch. We have an incredible set of releases lined up for the second half of 2023, and I remain incredibly encouraged by our strong financial performance, which brings us very close to the rule of 40 this year. Beyond our performance, I'm delighted to serve our millions of customers across so many different endeavors as we continue to power entrepreneurship everywhere. With that, I'll turn it over to Nathan to review the financials.