Squarespace, Inc.

Good morning. My name is Alyssa and I will be your operator today. At this time, I would like to welcome everyone to Squarespace's first quarter 2024 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 first quarter 2024 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 gap reporting. We will make forward-looking statements pursuant to the safe harbor provisions of the Private Security 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 platforms. 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 make on this call are based on assumptions as of this day, May 7, 2024. We undertake no obligation to update these statements as a result of new information or future events except were required by law. Please note that all comparisons are on a year-over-year basis unless we state otherwise. I will now turn the call over to Anthony.

Thanks, Claire, and good morning, everyone. I'm pleased to share that Squarespace's Q1 was a strong one, with our revenue up 19% and bookings up 23%. beating the high end of our guidance on both metrics. Unlevered free cash flow margin within the quarter was 32%, further setting us up for a fantastic year. On the back of this strong performance, we're pleased to raise our fiscal year 2024 outlook today from both the revenue and free cash flow perspective. The quarter was driven by continued organic growth momentum in the core business, specifically websites, where we saw strong retention and new customer growth domestically and globally. Squarespace is now positioned as the leader in three primary categories that are critical to all small businesses, websites, domains, and email. Squarespace domains has been a big focus for us in 2024 as we complete the migration of domains from Google, as well as launch constant improvements to our domains platform. Already, millions of domains from Google have been migrated, and we are on track to complete this migration over the summer. The acquisition of Google domains positions us as one of the top registrars in the world, And we are especially encouraged by the new domain business we are seeing, a funnel which is showing a strong attach rate into our core web building tools, as well as a strong uptake of Google Workspace. We have nearly reached 100% rollout of our partnership from the Google Workspace side, where Squarespace acts as the exclusive domain provider for any customer purchasing a domain along with their Workspace subscription from Google. Squarespace Payments is also off to a great start, now available to 100% of customers in the United States and feedback so far has been very positive. We launched our migration tool, which lets our existing Stripe customers move their accounts to ScoreSpace payments in just a few clicks while retaining their transaction history and without having to re-verify their business data. We also introduced Klarna to ScoreSpace payments, the first of many other ways to pay we will be adding. Klarna is the first alternative payment mechanism we introduced in three years, and our ability to rapidly innovate on our payments product will unlock multiple new features through the end of the year. A primary focus of ours is enabling selling across all of our plan types at Squarespace. And Squarespace payments is a critical unlock for us, as we will be bundling it within our various SaaS tiers and adjusting our take rate for higher value plans, which is a first in our history. We believe this will attract both larger sellers that are not accommodated by our current plan structure and smaller sellers who are just getting started and now have access to even more of our tools. I'm also excited to announce that we've recently introduced our AI philosophy as it pertains to web design called Design Intelligence by Squarespace. It is rooted in the principle that AI should augment human creativity rather than replace it. It combines two decades of industry-leading design proficiency with AI-driven content generation and guidance. This integration will empower entrepreneurs to leave their mark with confidence. While AI will feature in all of our products, Design Intelligence offers customers clear insights into how its application should be applied to their websites. Explore more about how AI is shaping our current and future endeavors at squarespace.com slash design intelligence. All said, it is a very exciting time for our company. I'd like to extend a huge thank you to our customers, team, and supporters as we continue our pace of innovation throughout 2024. And with that, I'll turn it over to Nathan.