Revenue Increased 18% in the Fourth Quarter
and 17% for the Full Year 2023, Topping $1
Billion
Squarespace to Host Investor Day on
May 15, 2024
NEW
YORK, Feb. 28, 2024 /PRNewswire/
-- Squarespace, Inc. (NYSE: SQSP), the design-driven platform
helping entrepreneurs build brands and businesses online, today
announced results for the fourth quarter and year ended
December 31, 2023.
"Squarespace surpassed $1 billion
in revenue for the first time in its 20-year history in 2023,
driven by new customer growth across markets and strong retention,
which speaks to our robust product offering," said Anthony Casalena, Founder & CEO of
Squarespace. "During 2023 we also made important strides in
enhancing the foundation of our long-term growth through our
acquisition of Google Domains, the launch of Squarespace Payments,
and key product and feature introductions including new AI
capabilities that expand our ecosystem and broaden accessibility to
entrepreneurs wherever they are on their journey. Entering our
third decade, we are in a strong position to capitalize across our
core verticals of enabling small business, commerce and
international expansion."
"Squarespace delivered a record fourth quarter that exceeded our
expectations across the board," said Nathan
Gooden, CFO of Squarespace. "We are combining increased
scale and profitability with consistent execution and a relentless
focus on innovation for entrepreneurs to set a strong foundation
for sustainable growth and value creation. We view share
repurchases as an integral part of our capital allocation strategy
and the $500 million authorization
announced today underscores the strong financial momentum in our
business."
Fourth Quarter 2023 Financial Highlights
- Total revenue grew 18% year over year to $270.7 million in the fourth quarter, compared
with $228.8 million in the fourth
quarter of 2022, and 16% in constant currency.
- Presence revenue grew 20% year over year to $188.4 million and 18% in constant currency.
- Commerce revenue grew 14% year over year to $82.3 million and 13% in constant currency.
- Net income totaled $5.3
million, compared with a net loss of $234.0 million in the fourth quarter 2022. The
2022 result included a $225.2 million
non-cash goodwill impairment charge. Excluding the impairment
charge, net loss for the fourth quarter of 2022 was $8.8 million.
- Earnings per share totaled $0.04
based on 136,153,002 basic and 139,387,350 dilutive weighted
average shares in the fourth quarter, compared with a loss per
share of $1.72 based on 136,340,283
basic and dilutive weighted average shares in the fourth quarter of
2022.
- Cash flow from operating activities increased 56% to
$61.1 million for the three months
ended December 31, 2023, compared
with $39.1 million for the three
months ended December 31, 2022.
- Total bookings grew 23% year over year to $286.1 million in the fourth quarter, compared to
$232.1 million in the fourth quarter
of 2022.
- Unlevered free cash flow increased 57% to $65.0 million representing 24% of total revenue
for the three months ended December 31,
2023, compared with $41.5
million for the three months ended December 31, 2022.
- Adjusted EBITDA increased to $64.7
million in the fourth quarter, compared with $63.1 million in the fourth quarter of 2022.
Full Year 2023 Financial Highlights
- Total revenue grew 17% year over year to $1,012.3 million in 2023, compared with
$867.0 million in 2022, and 16% in
constant currency.
- Presence revenue grew 18% year over year to $704.3 million and 17% in constant currency.
- Commerce revenue grew 14% year over year to $308.0 million and 14% in constant currency.
- Net loss was $7.1 million,
compared with a net loss of $252.2
million in 2022. The 2022 result included a $225.2 million non-cash goodwill impairment
charge. Excluding the impairment charge, net loss for the full year
2022 was $27.1 million.
- Loss per share of $0.05
based on 135,531,363 basic and dilutive weighted average shares in
2023, compared with a loss per share of $1.82 based on 138,409,491 basic and dilutive
weighted average shares in 2022.
- Cash flow from operating activities increased 41% to
$231.1 million in 2023, compared with
$164.2 million in 2022.
- Total bookings grew 19% year over year to $1,075.1 million in 2023, compared to
$906.1 million in 2022.
- Unlevered free cash flow increased 46% to $241.0 million representing 24% of total revenue
in 2023, compared with $165.6 million
in 2022.
- Adjusted EBITDA increased to $235.4
million in 2023, compared with $147.5
million in 2022.
- Cash and cash equivalents at year-end 2023 of $257.7 million; total debt was $568.8 million, of which $49.0 million is current, debt net of cash and
investments totaled $311.1
million.
- Total unique subscriptions increased 10% year over year to over
4.6 million in 2023, compared to 4.2 million in 2022.
- Average revenue per unique subscription ("ARPUS") increased 9%
year over year to $228.02 in 2023,
compared to $209.16 in 2022.
- Annual run rate revenue ("ARRR") grew 19% year over year to
$1,105.7 million in 2023, compared to
$931.7 million in 2022.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included in this press release. An
explanation of these measures is also included below under the
heading "Non-GAAP Financial Measures."
2023 Business Highlights
Product Innovation
Squarespace provides superior design and ease of use technology
for entrepreneurs everywhere. Our passion for innovation drove all
areas of our business. In 2023, the Company:
- Relaunched Squarespace Domains with a more complete domain
management experience for domain-first customers following our
acquisition of Google Domains Assets.
- Launched Squarespace Payments, which fully integrates with our
customers' online stores to accept fast and secure payments and
provides a seamless purchase experience for their customers all in
one place.
- Unveiled Squarespace Blueprint, our guided website design
system that provides professionally-curated layouts and styling
options.
- Advanced Acuity Scheduling's platform technologies and
introduced new branding to help streamline the client booking
experience with a centralized dashboard, mobile app tools, and
payment features.
- Invested in Squarespace AI to make it easier than ever for
users to generate custom content. Generative AI integrations help
populate websites, email campaigns, and commerce store
descriptions, enabling customers to efficiently publish and
specialize content for their brand identity.
- Released our annual compilation of new products and features,
Squarespace Refresh, where we showcased new tools spanning
commerce, client invoicing, courses, email marketing, enterprise
customer collaboration, and more.
- Enhanced Tock's User System with a new iOS app and new
reservation features, and integrated Reserve with Google to help
Tock customers increase their visibility and drive diners to their
businesses.
- Established a partnership with SoundCloud to bring
SoundCloud Next Pro artists the opportunity to create a beautiful
website with unique, music-themed domains.
Marketing & Brand
Our marketing investments, design-centric ethos, and
go-to-market channels bolster our brand recognition and keep
Squarespace top of mind for new audiences. This year,
Squarespace:
- Continued to globalize our product suite by increasing our
currency options by 5x.
- Introduced the second edition of Squarespace Collection
(formerly Squarespace Icons) with Magnum Photos, where we partnered
with six world renowned photographers to create signature website
designs inspired by each photographer's creativity and built on our
website editor, Fluid Engineā¢.
- Teamed up with Adam Driver for
our 9th Big Game campaign, "The Singularity," where we
honored Squarespace's founding history as a pioneer in website
building.
- Hosted our second Circle Day where we engaged thousands of
members of our Circle partner program from around the world.
Members shared advice and strategies on how to leverage strengths,
skills, and connections to expand every web designer's professional
toolkit.
- Received multiple Fast Company awards, including Fast Company's
Most Innovative Companies and Innovation by Design, won two Webby
Awards and our Big Game commercial won top honors from ADC, AICP,
Cannes Lions, Ciclope, D&AD and the One Show.
Corporate
Squarespace is focused on creating and delivering value to
entrepreneurs, partners, and investors. In 2023, the Company:
- Acquired Google's Domains business, representing millions of
domains, and established an exclusive reseller agreement for any
customer purchasing a domain along with their Google Workspace
subscription from Google directly.
- Won multiple awards recognizing the excellence of our
organization including Comparably's Best Places to Work in
New York.
- Celebrated our 20th anniversary; across two decades
the Squarespace platform has been used by millions to build
beautiful brands and businesses online.
- Returned approximately $26.0 million to shareholders under
our share repurchase program as of December 31, 2023, which
represents approximately 1.3 million shares.
Share Repurchase Program
Squarespace's board of directors authorized a general share
repurchase program of the Company's Class A common stock of up to
$500 million with no fixed
expiration. These Class A common stock repurchases may occur in the
open market, through privately negotiated transactions, through
block purchases, other purchase techniques including the
establishment of one or more plans under Rule 10b5-1 of the
Securities Exchange Act of 1934 or by any combination of such
methods. The timing and actual amount of shares repurchased will
depend on a variety of different factors and may be modified,
suspended or terminated at any time at the discretion of the board
of directors.
Outlook & Guidance
For the first quarter of fiscal year 2024, Squarespace currently
expects:
- Revenue of $274 million to
$277 million, or year-over-year
growth of 16% to 17%.
- Non-GAAP unlevered free cash flow of $83
million to $86 million. This
is the result of:
- Cash flow from operating activities of $77 million to $81
million, minus
- Capital expenditures, expected to be approximately $2 million to $3
million; plus
- Cash paid for interest expense net of associated tax benefit,
expected to be approximately $8
million.
For the full fiscal year 2024, Squarespace currently
expects:
- Revenue of $1,170 million to
$1,190 million, or year-over-year
growth of 16% to 18%, which includes contributions in the range of
$85 million to $88 million related to our acquisition of Google
Domains Assets.
- Non-GAAP unlevered free cash flow of $290 million to $310
million. This is the result of:
- Cash flow from operating activities of $266 million to $288
million, minus
- Capital expenditures, expected in the range of $4 million to $6
million; plus
- Cash paid for interest expense net of associated tax benefit,
expected to be approximately $28
million.
Webcast Conference Call & Shareholder Letter
Information
Squarespace will host a conference call on February 28,
2024 at 8:30 a.m. ET to discuss its
financial results. A live webcast of the event will be available in
the Events & Presentations section of the Squarespace Investor
Relations website. An archived replay of the webcast will be
available following the conclusion of the call. Additionally, we
invite you to read our shareholder letter available on our Investor
Relations website.
Squarespace to Host Investor Day
Squarespace will host an Investor Day on May 15, 2024 in New
York City. A live webcast of the event will be available in
the Events & Presentations section of the Squarespace Investor
Relations website. Interested investors and analysts are encouraged
to email investors@squarespace.com for an invitation.
Non-GAAP Financial Measures
Revenue growth in constant currency is being provided to
increase transparency and align our disclosures with companies in
our industry that receive material revenues from international
sources. Revenue constant currency has been adjusted to exclude the
effect of year-over-year changes in foreign currency exchange rate
fluctuations. We believe providing this information better enables
investors to understand our operating performance irrespective of
currency fluctuations.
We calculate constant currency information by translating
current period results from entities with foreign functional
currencies using the comparable foreign currency exchange rates
from the prior fiscal year. To calculate the effect of foreign
currency translation, we apply the same weighted monthly average
exchange rate as the comparative period. Our definition of constant
currency may differ from other companies reporting similarly named
measures, and these constant currency performance measures should
be viewed in addition to, and not as a substitute for, our
operating performance measures calculated in accordance with
GAAP.
Adjusted EBITDA is a supplemental performance measure that our
management uses to assess our operating performance. We calculate
adjusted EBITDA as net income/(loss) excluding interest expense,
other income/(loss), net (provision for)/benefit from income taxes,
depreciation and amortization, stock-based compensation expense and
other items that we do not consider indicative of our ongoing
operating performance.
Unlevered free cash flow is a supplemental liquidity measure
that Squarespace's management uses to evaluate its core operating
business and its ability to meet its current and future financing
and investing needs. Unlevered free cash flow is defined as cash
flow from operating activities, including one-time expenses related
to Squarespace's direct listing, less cash paid for capital
expenditures increased by cash paid for interest expense net of the
associated tax benefit.
Adjusted EBITDA, unlevered free cash flow and revenue constant
currency are not prepared in accordance with generally accepted
accounting principles in the United
States of America ("GAAP") and have important limitations as
an analytical tool. Non-GAAP financial measures are supplemental,
should only be used in conjunction with results presented in
accordance with GAAP and should not be considered in isolation or
as a substitute for such GAAP results.
Further information on these non-GAAP items and reconciliation
to their closest GAAP measure is provided below under,
"Reconciliation of Non-GAAP Financial Measures."
Definitions of Key Operating Metrics
On September 7, 2023, we closed an
asset purchase agreement between us and Google LLC ("Google") to
acquire, among other things, Google's domain assets (the "Google
Domains Asset Acquisition "). Unique subscriptions and average
revenue per unique subscription do not account for single domain
subscriptions originally sold by Google as a part of the Google
Domains Asset Acquisition (the "Acquired Domain Assets").
Annual run rate revenue ("ARRR"). We calculate ARRR as the
monthly revenue from subscription fees and revenue generated in
conjunction with associated fees (fees taken or assessed in
conjunction with commerce transactions) in the last month of the
period multiplied by 12. We believe that ARRR is a key indicator of
our future revenue potential. However, ARRR should be viewed
independently of revenue, and does not represent our GAAP revenue
on an annualized basis, as it is an operating metric that can be
impacted by subscription start and end dates and renewal rates.
ARRR is not intended to be a replacement or forecast of
revenue.
Unique subscriptions represent the number of unique sites,
standalone scheduling subscriptions, Unfold (social) and
hospitality subscriptions, as of the end of a period. A unique site
represents a single subscription and/or group of related
subscriptions, including a website subscription and/or a domain
subscription, and other subscriptions related to a single website
or domain. Every unique site contains at least one domain
subscription or one website subscription. For instance, an active
website subscription, a custom domain subscription and a Google
Workspace subscription that represent services for a single website
would count as one unique site, as all of these subscriptions work
together and are in service of a single entity's online presence.
Unique subscriptions do not account for one-time purchases in
Unfold or for hospitality services nor do they account for our
Acquired Domain Assets. The total number of unique subscriptions is
a key indicator of the scale of our business and is a critical
factor in our ability to increase our revenue base.
Average revenue per unique subscription ("ARPUS"). We calculate
ARPUS as the total revenue during the preceding 12-month period
divided by the average of the number of total unique subscriptions
at the beginning and end of the period. ARPUS does not account for
Acquired Domain Assets or the revenue from Acquired Domain Assets.
We believe ARPUS is a useful metric in evaluating our ability to
sell higher-value plans and add-on subscriptions.
Total bookings represents cash receipts for all subscriptions
purchased, as well as payments due under the terms of contractual
agreements for obligations to be fulfilled.
Gross merchandise value ("GMV") represents the value of physical
goods, content and time sold, including hospitality services, net
of refunds, on our platform over a given period of time.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact are
forward-looking statements. These statements include, but are not
limited to, statements regarding Squarespace's future operating
results and financial position, including for its first fiscal
quarter ending March 31, 2024 and its
fiscal year ending December 31, 2024.
The words "believe," "may," "will," "estimate," "potential,"
"continue," "anticipate," "intend," "expect," "could," "would,"
"project," "plan," "target," and similar expressions are intended
to identify forward-looking statements. Forward-looking statements
are based on management's expectations, assumptions, and
projections based on information available at the time the
statements were made. These forward-looking statements are subject
to a number of risks, uncertainties, and assumptions, including
risks and uncertainties related to: Squarespace's ability to
attract and retain customers and expand their use of its platform;
Squarespace's ability to anticipate market needs and develop new
solutions to meet those needs; Squarespace's ability to improve and
enhance the functionality, performance, reliability, design,
security and scalability of its existing solutions; Squarespace's
ability to compete successfully in its industry against current and
future competitors; Squarespace's ability to manage growth and
maintain demand for its solutions; Squarespace's ability to protect
and promote its brand; Squarespace's ability to generate new
customers through its marketing and selling activities;
Squarespace's ability to successfully identify, manage and
integrate any existing and potential acquisitions or achieve the
expected benefits of such acquisitions; Squarespace's ability to
hire, integrate and retain highly skilled personnel; Squarespace's
ability to adapt to and comply with existing and emerging
regulatory developments, technological changes and cybersecurity
needs; Squarespace's compliance with privacy and data protection
laws and regulations as well as contractual privacy and data
protection obligations; Squarespace's ability to establish and
maintain intellectual property rights; Squarespace's ability to
manage expansion into international markets; and the expected
timing, amount, and effect of Squarespace's share repurchases. It
is not possible for Squarespace's management to predict all risks,
nor can it assess the impact of all factors on its business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements Squarespace may make. In light of these
risks, uncertainties, and assumptions, Squarespace's actual results
could differ materially and adversely from those anticipated or
implied in the forward-looking statements. Further information on
risks that could cause actual results to differ materially from
forecasted results are included in Squarespace's filings with the
Securities and Exchange Commission. Except as required by law,
Squarespace assumes no obligation to update these forward-looking
statements, or to update the reasons if actual results differ
materially from those anticipated in the forward-looking
statements.
About Squarespace
Squarespace (NYSE: SQSP) is a design-driven platform helping
entrepreneurs build brands and businesses online. We empower
millions in more than 200 countries and territories with all the
tools they need to create an online presence, build an audience,
monetize, and scale their business. Our suite of products range
from websites, domains, ecommerce, and marketing tools, as well as
tools for scheduling with Acuity, creating and managing social
media presence with Bio Sites and
Unfold, and hospitality business management via Tock. For more
information, visit www.squarespace.com.
Contacts
Investors
investors@squarespace.com
Media
press@squarespace.com
CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except share
and per share data) (unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue
|
$
270,718
|
|
$
228,812
|
|
$
1,012,336
|
|
$
866,972
|
Cost of
revenue(1)
|
69,650
|
|
40,106
|
|
207,520
|
|
152,655
|
Gross profit
|
201,068
|
|
188,706
|
|
804,816
|
|
714,317
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and product
development(1)
|
61,715
|
|
56,828
|
|
242,188
|
|
227,297
|
Marketing and
sales(1)
|
91,513
|
|
66,154
|
|
349,574
|
|
322,051
|
General and
administrative(1)
|
29,922
|
|
37,942
|
|
129,326
|
|
151,620
|
Impairment
charge
|
ā
|
|
225,163
|
|
ā
|
|
225,163
|
Total operating
expenses
|
183,150
|
|
386,087
|
|
721,088
|
|
926,131
|
Operating
income/(loss)
|
17,918
|
|
(197,381)
|
|
83,728
|
|
(211,814)
|
Interest
expense
|
(10,718)
|
|
(7,230)
|
|
(36,768)
|
|
(18,207)
|
Other (loss)/income,
net
|
(4,163)
|
|
(9,567)
|
|
3,362
|
|
5,030
|
Income/(loss) before
benefit from/(provision for) income
taxes
|
3,037
|
|
(214,178)
|
|
50,322
|
|
(224,991)
|
Benefit from/(provision
for) income taxes
|
2,219
|
|
(19,784)
|
|
(57,403)
|
|
(27,230)
|
Net
income/(loss)
|
$
5,256
|
|
$
(233,962)
|
|
$
(7,081)
|
|
$
(252,221)
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share, basic and dilutive
|
$
0.04
|
|
$
(1.72)
|
|
$
(0.05)
|
|
$
(1.82)
|
Weighted-average shares
used in computing net income/
(loss) per share, basic
|
136,153,002
|
|
136,340,283
|
|
135,531,363
|
|
138,409,491
|
Weighted-average shares
used in computing net income/
(loss) per share, dilutive
|
139,387,350
|
|
136,340,283
|
|
135,531,363
|
|
138,409,491
|
|
(1) Includes
stock-based compensation as follows:
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cost of
revenue
|
$
1,451
|
|
$
944
|
|
$
5,536
|
|
$
3,414
|
Research and product
development
|
13,868
|
|
11,099
|
|
54,806
|
|
42,237
|
Marketing and
sales
|
2,921
|
|
2,450
|
|
10,856
|
|
8,696
|
General and
administrative
|
9,587
|
|
12,989
|
|
36,551
|
|
48,186
|
Total stock-based
compensation
|
$
27,827
|
|
$
27,482
|
|
$
107,749
|
|
$
102,533
|
CONSOLIDATED BALANCE
SHEETS (in thousands, except share and per share
data) (unaudited)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
257,702
|
|
$
197,037
|
Restricted
cash
|
36,583
|
|
35,583
|
Investment in
marketable securities
|
ā
|
|
31,757
|
Accounts
receivable
|
24,894
|
|
10,748
|
Due from
vendors
|
6,089
|
|
4,442
|
Prepaid expenses and
other current assets
|
48,947
|
|
48,326
|
Total current
assets
|
374,215
|
|
327,893
|
Property and equipment,
net
|
58,211
|
|
51,633
|
Operating lease
right-of-use assets
|
77,764
|
|
86,824
|
Goodwill
|
210,438
|
|
210,438
|
Intangible assets,
net
|
190,103
|
|
42,808
|
Other assets
|
11,028
|
|
10,921
|
Total
assets
|
$
921,759
|
|
$
730,517
|
Liabilities,
Redeemable Convertible Preferred Stock and Stockholders'
Deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
12,863
|
|
$
12,987
|
Accrued
liabilities
|
99,435
|
|
64,360
|
Deferred
revenue
|
333,191
|
|
269,689
|
Funds payable to
customers
|
42,672
|
|
38,845
|
Debt, current
portion
|
48,977
|
|
40,758
|
Operating lease
liabilities, current portion
|
12,640
|
|
11,514
|
Total current
liabilities
|
549,778
|
|
438,153
|
Deferred income taxes,
non-current portion
|
1,039
|
|
788
|
Debt, non-current
portion
|
519,816
|
|
473,167
|
Operating lease
liabilities, non-current portion
|
97,714
|
|
110,169
|
Other
liabilities
|
13,764
|
|
11,231
|
Total
liabilities
|
1,182,111
|
|
1,033,508
|
Commitments and
contingencies
|
|
|
|
Redeemable convertible
preferred stock, par value of $0.0001; zero shares authorized as of
December 31,
2023 and 2022, respectively; zero shares issued and outstanding as
of December 31, 2023 and 2022,
respectively
|
ā
|
|
ā
|
Preferred stock, par
value of $0.0001; 100,000,000 shares authorized as of
December 31, 2023 and 2022,
respectively; zero shares issued and outstanding as of
December 31, 2023 and 2022, respectively
|
ā
|
|
ā
|
Stockholders'
deficit:
|
|
|
|
Class A common
stock, par value of $0.0001; 1,000,000,000 shares authorized as of
December 31, 2023
and 2022, respectively; 88,545,012 and 87,754,534 shares issued and
outstanding as of December 31, 2023
and 2022, respectively
|
9
|
|
8
|
Class B common stock,
par value of $0.0001; 100,000,000 shares authorized as of December
31, 2023 and
2022, respectively; 47,844,755 shares issued and outstanding as of
December 31, 2023 and 2022,
respectively
|
5
|
|
5
|
Class C common
stock (authorized March 15, 2021), par value of $0.0001; zero
shares authorized as of
December 31, 2023 and 2022, respectively; zero shares issued
and outstanding as of December 31, 2023
and 2022, respectively
|
ā
|
|
ā
|
Class C common stock
(authorized May 10, 2021), par value of $0.0001; 1,000,000,000
shares authorized
as of December 31, 2023 and 2022, respectively; zero
shares issued and outstanding as of December 31,
2023 and 2022, respectively
|
ā
|
|
ā
|
Additional paid in
capital
|
924,634
|
|
875,737
|
Accumulated other
comprehensive loss
|
(843)
|
|
(1,665)
|
Accumulated
deficit
|
(1,184,157)
|
|
(1,177,076)
|
Total stockholders'
deficit
|
(260,352)
|
|
(302,991)
|
Total liabilities,
redeemable convertible preferred stock and stockholders'
deficit
|
$
921,759
|
|
$
730,517
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (in
thousands) (unaudited)
|
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
OPERATING
ACTIVITIES:
|
|
|
|
Net loss
|
$
(7,081)
|
|
$
(252,221)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
43,927
|
|
31,617
|
Stock-based
compensation
|
107,749
|
|
102,533
|
Impairment
charge
|
ā
|
|
225,163
|
Deferred income
taxes
|
251
|
|
788
|
Non-cash lease
(income)/expense
|
(2,286)
|
|
2,227
|
Other
|
831
|
|
832
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts receivable
and due from vendors
|
(15,678)
|
|
(5,461)
|
Prepaid expenses and
other current assets
|
(458)
|
|
3,699
|
Accounts payable and
accrued liabilities
|
33,519
|
|
(2,215)
|
Deferred
revenue
|
61,364
|
|
39,464
|
Funds payable to
customers
|
3,827
|
|
8,707
|
Other operating assets
and liabilities
|
5,152
|
|
9,086
|
Net cash provided by
operating activities
|
231,117
|
|
164,219
|
INVESTING
ACTIVITIES:
|
|
|
|
Proceeds from the sale
and maturities of marketable securities
|
39,664
|
|
27,193
|
Purchases of marketable
securities
|
(7,824)
|
|
(27,681)
|
Cash paid for
acquisitions, net of acquired cash
|
(176,721)
|
|
ā
|
Purchase of property
and equipment
|
(16,998)
|
|
(11,543)
|
Net cash used in
operating activities
|
(161,879)
|
|
(12,031)
|
FINANCING
ACTIVITIES:
|
|
|
|
Borrowings on Term
Loan
|
99,444
|
|
ā
|
Payments of debt
issuance costs
|
(637)
|
|
ā
|
Principal payments on
debt
|
(44,867)
|
|
(13,586)
|
Payments for repurchase
and retirement of Class A common stock
|
(25,989)
|
|
(120,193)
|
Taxes paid related to
net share settlement of equity awards
|
(36,366)
|
|
(21,268)
|
Proceeds from exercise
of stock options
|
228
|
|
2,211
|
Net cash used in
financing activities
|
(8,187)
|
|
(152,836)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
614
|
|
(412)
|
Net increase/(decrease)
in cash, cash equivalents and restricted cash
|
61,665
|
|
(1,060)
|
Cash, cash equivalents
and restricted cash at the beginning of the period
|
232,620
|
|
233,680
|
Cash, cash equivalents
and restricted cash at the end of the period
|
$
294,285
|
|
$
232,620
|
|
|
|
|
Reconciliation of cash,
cash equivalents and restricted cash:
|
|
|
|
Cash and cash
equivalents
|
$
257,702
|
|
$
197,037
|
Restricted
cash
|
36,583
|
|
35,583
|
Cash, cash equivalents
and restricted cash at the end of the period
|
$
294,285
|
|
$
232,620
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|
|
|
Cash paid during the
year for interest
|
$
35,668
|
|
$
17,088
|
Cash paid during the
year for income taxes, net of refunds
|
$
41,747
|
|
$
10,664
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
|
|
|
|
Purchases of property
and equipment included in accounts payable and accrued
liabilities
|
$
129
|
|
$
1,784
|
Accrued taxes related
to net share settlement of equity awards
|
$
377
|
|
$
176
|
Non-cash leasehold
improvements
|
$
ā
|
|
$
(5,864)
|
Capitalized stock-based
compensation
|
$
3,940
|
|
$
980
|
RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES (in
thousands) (unaudited)
|
|
The following tables
reconcile each non-GAAP financial measure to its most directly
comparable GAAP financial
measure:
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income/(loss)
|
$
5,256
|
|
$
(233,962)
|
|
$
(7,081)
|
|
$
(252,221)
|
Interest
expense
|
10,718
|
|
7,230
|
|
36,768
|
|
18,207
|
(Benefit
from)/provision for income taxes
|
(2,219)
|
|
19,784
|
|
57,403
|
|
27,230
|
Depreciation and
amortization
|
18,952
|
|
7,844
|
|
43,927
|
|
31,617
|
Stock-based
compensation expense
|
27,827
|
|
27,482
|
|
107,749
|
|
102,533
|
Other loss/(income),
net
|
4,163
|
|
9,567
|
|
(3,362)
|
|
(5,030)
|
Impairment
charge
|
ā
|
|
225,163
|
|
ā
|
|
225,163
|
Adjusted
EBITDA
|
$
64,697
|
|
$
63,108
|
|
$
235,404
|
|
$
147,499
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
$
61,090
|
|
$
39,102
|
|
$
231,117
|
|
$
164,219
|
Cash paid for capital
expenditures
|
(3,857)
|
|
(2,691)
|
|
(16,998)
|
|
(11,543)
|
Free cash
flow
|
$
57,233
|
|
$
36,411
|
|
$
214,119
|
|
$
152,676
|
Cash paid for
interest, net of the associated tax
benefit
|
7,788
|
|
5,105
|
|
26,894
|
|
12,874
|
Unlevered free cash
flow
|
$
65,021
|
|
$
41,516
|
|
$
241,013
|
|
$
165,550
|
|
|
|
|
|
|
December 31,
2023
|
|
December 31,
2022
|
Total debt
outstanding
|
|
|
|
|
$
568,793
|
|
$
513,925
|
Less: total cash and
cash equivalents and marketable securities
|
|
|
257,702
|
|
228,794
|
Total net
debt
|
|
|
|
|
$
311,091
|
|
$
285,131
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue, as
reported
|
$
270,718
|
|
$
228,812
|
|
$
1,012,336
|
|
$
866,972
|
Revenue year-over-year
growth rate, as reported
|
18.3 %
|
|
10.3 %
|
|
16.8 %
|
|
10.6 %
|
Effect of foreign
currency translation ($)(1)
|
$
4,664
|
|
$
(8,252)
|
|
$
7,010
|
|
$
(28,318)
|
Effect of foreign
currency translation (%)(1)
|
2.0 %
|
|
(4.0) %
|
|
0.8 %
|
|
(3.6) %
|
Revenue constant
currency growth rate
|
16.3 %
|
|
14.3 %
|
|
16.0 %
|
|
14.2 %
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Commerce revenue, as
reported
|
$
82,285
|
|
$
71,983
|
|
$
307,987
|
|
$
269,672
|
Revenue year-over-year
growth rate, as reported
|
14.3 %
|
|
12.1 %
|
|
14.2 %
|
|
17.5 %
|
Effect of foreign
currency translation ($)(1)
|
$
796
|
|
$
(1,451)
|
|
$
1,204
|
|
$
(4,960)
|
Effect of foreign
currency translation (%)(1)
|
1.1 %
|
|
(2.3) %
|
|
0.4 %
|
|
(2.2) %
|
Commerce constant
currency growth rate
|
13.2 %
|
|
14.4 %
|
|
13.8 %
|
|
19.7 %
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Presence revenue, as
reported
|
$
188,433
|
|
$
156,829
|
|
$
704,349
|
|
$
597,300
|
Revenue year-over-year
growth rate, as reported
|
20.2 %
|
|
9.5 %
|
|
17.9 %
|
|
7.7 %
|
Effect of foreign
currency translation ($)(1)
|
$
3,867
|
|
$
(6,801)
|
|
$
5,806
|
|
$
(23,358)
|
Effect of foreign
currency translation (%)(1)
|
2.5 %
|
|
(4.7) %
|
|
1.0 %
|
|
(4.2) %
|
Presence constant
currency growth rate
|
17.7 %
|
|
14.2 %
|
|
16.9 %
|
|
11.9 %
|
|
(1) To calculate the
effect of foreign currency translation, we apply the same weighted
monthly average exchange
rate as the comparative period.
|
|
Amounts may not sum due
to rounding.
|
SUMMARY OF SHARES
OUTSTANDING (unaudited)
|
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
Shares
outstanding:
|
|
|
|
Class A common
stock
|
88,545,012
|
|
87,754,534
|
Class B common
stock
|
47,844,755
|
|
47,844,755
|
Class C common
stock
|
0
|
|
0
|
Total shares
outstanding
|
136,389,767
|
|
135,599,289
|
KEY PERFORMANCE
INDICATORS AND NON-GAAP FINANCIAL
MEASURES (unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Unique subscriptions
(in thousands)
|
4,631
|
|
4,204
|
|
4,631
|
|
4,204
|
Total bookings (in
thousands)
|
$
286,123
|
|
$
232,145
|
|
$
1,075,096
|
|
$
906,056
|
ARRR (in
thousands)
|
$
1,105,743
|
|
$
931,708
|
|
$
1,105,743
|
|
$
931,708
|
ARPUS
|
$
228.02
|
|
$
209.16
|
|
$
228.02
|
|
$
209.16
|
Adjusted EBITDA (in
thousands)
|
$
64,697
|
|
$
63,108
|
|
$
235,404
|
|
$
147,499
|
Unlevered free cash
flow (in thousands)
|
$
65,021
|
|
$
41,516
|
|
$
241,013
|
|
$
165,550
|
GMV (in
thousands)
|
$
1,654,126
|
|
$
1,556,004
|
|
$
6,211,823
|
|
$
6,058,832
|
|
Unique subscriptions
and average revenue per unique subscription ("ARPUS") do not
account for single domain
subscriptions originally sold by Google as a part of the Google
Domains Asset Acquisition.
|
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SOURCE Squarespace, Inc.