Squarespace, Inc.

Good morning. My name is Tamia, and I will be your conference operator today. At this time, I would like to welcome everyone to Squarespace's fourth 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 would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I will now hand the call over to your host at Squarespace, Claire Perry. Claire, please go ahead.

Good morning, and thank you for joining Squarespace's fourth 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 will 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 GAAP 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 make on this call are based on assumptions as of this day, February 28, 2024. 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 we state otherwise. I will now turn the call over to Anthony.

Thank you, Claire, and good morning, everyone. 2023 was a strong year for Squarespace, both strategically and financially. We crossed $1 billion in revenue for the first time, growing 17% for the year. Our unlevered free cash flow margin expanded to 24%. This top and bottom line performance put us in Rule 40 territory for the year. Q4 was an excellent finish to 2023, with faster bookings and revenue growth than we saw for the full year, also aided by the addition of our customers coming over from Google domains. Last year was also an important year for laying the foundation for accelerating multi-year growth. We began rolling out Scores-based payments in Q4, a key strategic initiative supporting our commerce aspirations. And I'm delighted to share today that Payments is now fully rolled out to new customers in the United States. We invested significantly in our domains business as we welcome customers over from Google domains and establish ourselves further in this space. We also launched dozens of new products and features in 2023 to make it easier than ever for entrepreneurs to launch their businesses and stand out online by leveraging the most distinctive design capabilities anywhere in our industry. The main drivers of our business moving forward into 2024 are, first, enabling small business, which is inclusive of the essential services an entrepreneur needs to get started, namely a domain, website, and email. Second, commerce, where we offer powerful tools to enable customers to engage and transact via their online presence. And finally, third, international, where we're making great progress in expanding our brand and presence in both existing key markets and new ones. With respect to enabling small businesses, two key highlights this year were the build-out of our domains business and the launch of Squarespace Blueprint. Squarespace Domains is now the fourth largest registrar in the world. Renewals from migrating Google customers are going better than expected, and we're now poised to grow adoption of our broader offerings as we capitalize on a wider customer funnel and larger customer base. Major updates to our platform's interface are launching as soon as next week. And when our customers want to build a website, many are onboarding using Squarespace Blueprint, also available in select international markets. Blueprint's guided, interactive design experience enhances our users' ability to rapidly create a distinct, personalized website, and it acts as a natural place for us to inject an array of generative AI features that help guide customers through setup. We'll be releasing these improvements throughout the year under the banner of Design Intelligence, which you'll find at home on our front site. Turning to commerce, we're now offering a comprehensive set of tools that enable our customers to transact and engage with their customers through selling digital content, physical goods, and services. Acuity scheduling has proven to be an important driver of GMV growth and underscores our increasing focus on services sellers, where we believe we will offer meaningful product differentiation. Top closed out the year with a record Q4, its best revenue quarter ever, and we saw an uplift in seasonal GMV. We believe that the product enhancements, new integrations, and an improved iOS app further separate talk as the leading hospitality solution for restaurants and diners alike. Our larger scores-based payments in Q4 serves as a cornerstone of our commerce capabilities. Enabling merchants to collect money directly through our native solution will be central to enhancing the power of our platform by growing GMV and driving customer growth and retention. With payments now 100% rolled out in the U.S., we're turning our attention to key international markets. Payments is getting great early feedback from customers and we look forward to building payments discount for our current customers into our broader plan offering as we move throughout the year, marking the first time we will have the ability to do that. Finally, we are excited to the efforts we have put into expanding our international offering are showing up in our performance. Our largest international markets continue to grow and we've seen double digit subscription growth across all key markets. In 2023, we added 18 new currencies, enabling more customers to pay in the ways most convenient for them. As we enter our third decade, Squarespace is in a better position than ever to empower more entrepreneurs online. We're looking forward to even more strong product releases in 2024 as we continue to refine the go-to-market for much of what we were able to release in 2023. Today, we're also announcing that we'll be holding an investor day at our offices in New York City on May 15th, where Nathan and I and key Squarespace leaders will dive deeper into our market positioning, growth drivers, and opportunities for the future. Thank you all for your support, and now I'll turn it over to Nathan.