
Squarespace Announces Second Quarter 2024 Financial Results
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) |
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|
|||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue |
$ |
|
$ |
|
$ |
|
$ |
Cost of revenue (1) |
82,939 |
|
43,167 |
|
163,713 |
|
86,117 |
Gross profit |
213,830 |
|
204,362 |
|
414,204 |
|
398,440 |
Operating expenses: |
|
|
|
|
|
|
|
Research and product development (1) |
69,805 |
|
61,412 |
|
136,651 |
|
119,982 |
Marketing and sales (1) |
88,282 |
|
75,373 |
|
205,815 |
|
177,045 |
General and administrative (1) |
38,873 |
|
30,909 |
|
69,696 |
|
63,249 |
Total operating expenses |
196,960 |
|
167,694 |
|
412,162 |
|
360,276 |
Operating income |
16,870 |
|
36,668 |
|
2,042 |
|
38,164 |
Interest expense |
(10,157) |
|
(8,635) |
|
(20,538) |
|
(16,729) |
Other income, net |
4,454 |
|
2,038 |
|
9,031 |
|
1,198 |
Income/(loss) before (provision for)/benefit from income taxes |
11,167 |
|
30,071 |
|
(9,465) |
|
22,633 |
(Provision for)/benefit from income taxes |
(5,034) |
|
(26,411) |
|
15,742 |
|
(18,471) |
Net income |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Net income per share, basic |
$ |
|
$ |
|
$ |
|
$ |
Net income per share, diluted |
$ |
|
$ |
|
$ |
|
$ |
Weighted-average shares used in computing net income per share, |
137,760,693 |
|
135,302,409 |
|
137,348,777 |
|
135,111,072 |
Weighted-average shares used in computing net income per share, |
142,143,018 |
|
138,771,613 |
|
141,419,521 |
|
138,013,454 |
|
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(1) Includes stock-based compensation as follows: |
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|
|||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Cost of revenue |
$ |
|
$ |
|
$ |
|
$ |
Research and product development |
19,025 |
|
15,650 |
|
34,675 |
|
26,337 |
Marketing and sales |
3,590 |
|
3,045 |
|
6,801 |
|
4,916 |
General and administrative |
8,157 |
|
9,235 |
|
15,694 |
|
17,751 |
Total stock-based compensation |
$ |
|
$ |
|
$ |
|
$ |
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) |
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|
June 30, 2024 |
|
December 31, 2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
|
$ |
Restricted cash |
- |
|
36,583 |
Investment in marketable securities |
52,041 |
|
- |
Accounts receivable |
41,384 |
|
24,894 |
Due from vendors |
- |
|
6,089 |
Prepaid expenses and other current assets |
83,016 |
|
48,947 |
Total current assets |
446,804 |
|
374,215 |
Property and equipment, net |
49,609 |
|
58,211 |
Operating lease right-of-use assets |
61,016 |
|
77,764 |
Goodwill |
196,522 |
|
210,438 |
Intangible assets, net |
140,839 |
|
190,103 |
Other assets |
11,560 |
|
11,028 |
Assets of business held for sale |
94,529 |
|
- |
Total assets |
$ |
|
$ |
Liabilities and Stockholders' Deficit |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
|
$ |
Accrued liabilities |
98,933 |
|
99,435 |
Deferred revenue |
397,923 |
|
333,191 |
Funds payable to customers |
- |
|
42,672 |
Debt, current portion |
57,140 |
|
48,977 |
Operating lease liabilities, current portion |
11,281 |
|
12,640 |
Total current liabilities |
587,210 |
|
549,778 |
Deferred income taxes, non-current portion |
1,164 |
|
1,039 |
Debt, non-current portion |
487,846 |
|
519,816 |
Operating lease liabilities, non-current portion |
71,843 |
|
97,714 |
Other liabilities |
18,940 |
|
13,764 |
Liabilities of business held for sale |
76,745 |
|
- |
Total liabilities |
1,243,748 |
|
1,182,111 |
Commitments and contingencies |
|
|
|
Stockholders' deficit: |
|
|
|
Class |
9 |
|
9 |
Class |
5 |
|
5 |
Class |
- |
|
- |
Additional paid in capital |
936,277 |
|
924,634 |
Accumulated other comprehensive loss |
(1,280) |
|
(843) |
Accumulated deficit |
(1,177,880) |
|
(1,184,157) |
Total stockholders' deficit |
(242,869) |
|
(260,352) |
Total liabilities and stockholders' deficit |
$ |
|
$ |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
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|
|||
|
Six Months Ended June 30, |
||
|
2024 |
|
2023 |
OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
|
$ |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
36,885 |
|
14,477 |
Stock-based compensation |
60,965 |
|
51,605 |
Deferred income taxes |
125 |
|
124 |
Non-cash lease income |
(1,757) |
|
(989) |
Other |
625 |
|
310 |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable and due from vendors |
(15,697) |
|
2,364 |
Prepaid expenses and other current assets |
(35,545) |
|
(1,480) |
Accounts payable and accrued liabilities |
29,784 |
|
9,822 |
Deferred revenue |
69,012 |
|
38,030 |
Funds payable to customers |
(4,943) |
|
(2,131) |
Other operating assets and liabilities |
117 |
|
408 |
Net cash provided by operating activities |
145,848 |
|
116,702 |
INVESTING ACTIVITIES: |
|
|
|
Proceeds from the sale and maturities of marketable securities |
1,000 |
|
39,664 |
Purchases of marketable securities |
(52,856) |
|
(7,824) |
Purchase of property and equipment |
(6,074) |
|
(7,167) |
Net cash (used in)/provided by investing activities |
(57,930) |
|
24,673 |
FINANCING ACTIVITIES: |
|
|
|
Principal payments on debt |
(24,488) |
|
(20,379) |
Payments for repurchase and retirement of Class A common stock |
(16,311) |
|
(25,321) |
Taxes paid related to net share settlement of equity awards |
(37,640) |
|
(20,318) |
Proceeds from exercise of stock options |
2,585 |
|
134 |
Net cash used in financing activities |
(75,854) |
|
(65,884) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(513) |
|
165 |
Increase in cash, cash equivalents and restricted cash, including cash classified as assets of business held for |
11,551 |
|
75,656 |
Less: Increase in cash, cash equivalents and restricted cash classified as assets of business held for sale |
(35,473) |
|
- |
Net (decrease)/increase in cash, cash equivalents and restricted cash |
(23,922) |
|
75,656 |
Cash, cash equivalents and restricted cash at the beginning of the period |
294,285 |
|
232,620 |
Cash, cash equivalents and restricted cash at the end of the period |
$ |
|
$ |
|
|
|
|
Reconciliation of cash, cash equivalents, and restricted cash: |
|
|
|
Cash and cash equivalents |
$ |
|
$ |
Restricted cash |
- |
|
34,272 |
Cash, cash equivalents, and restricted cash at the end of the period |
$ |
|
$ |
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW |
|
|
|
Cash paid during the year for interest |
$ |
|
$ |
Cash paid during the year for income taxes, net of refunds |
$ |
|
$ |
Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
|
$ |
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCE ACTIVITIES |
|
|
|
Purchases of property and equipment included in accounts payable and accrued liabilities |
$ |
|
$ |
Capitalized stock-based compensation |
$ |
|
$ |
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (in thousands) (unaudited) |
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The following tables reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure: |
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net income |
$ |
|
$ |
|
$ |
|
$ |
Interest expense |
10,157 |
|
8,635 |
|
20,538 |
|
16,729 |
Provision for/(benefit from) income taxes |
5,034 |
|
26,411 |
|
(15,742) |
|
18,471 |
Depreciation and amortization |
18,213 |
|
7,236 |
|
36,885 |
|
14,477 |
Stock-based compensation expense |
32,798 |
|
29,479 |
|
60,965 |
|
51,605 |
Other income, net |
(4,454) |
|
(2,038) |
|
(9,031) |
|
(1,198) |
Proposed merger costs |
4,198 |
|
- |
|
4,198 |
|
- |
Adjusted EBITDA |
$ |
|
$ |
|
$ |
|
$ |
|
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|
|||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Cash flows from operating activities |
$ |
|
$ |
|
$ |
|
$ |
Cash paid for capital expenditures |
(2,689) |
|
(4,092) |
|
(6,074) |
|
(7,167) |
Free cash flow |
$ |
|
$ |
|
$ |
|
$ |
Cash paid for interest, net of the associated tax |
7,480 |
|
6,310 |
|
14,968 |
|
12,326 |
Unlevered free cash flow |
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
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|
|
|
|
||||
|
|
|
|
|
June 30, 2024 |
|
December 31, 2023 |
Total debt outstanding |
|
|
|
|
$ |
|
$ |
Less: total cash and cash equivalents and marketable securities |
|
|
|
|
322,404 |
|
257,702 |
Total net debt |
|
|
|
|
$ |
|
$ |
|
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|
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue, as reported |
$ |
|
$ |
|
$ |
|
$ |
Revenue year-over-year growth rate, as reported |
19.9 |
|
16.4 |
|
19.3 |
|
15.2 |
Effect of foreign currency translation ($)(1) |
$ |
|
$ |
|
$ |
|
$ |
Effect of foreign currency translation (%)(1) |
(0.3) |
|
0.3 |
|
- |
|
(0.5) |
Revenue constant currency growth rate |
20.2 |
|
16.1 |
|
19.3 |
|
15.7 |
|
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|
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Commerce revenue, as reported |
$ |
|
$ |
|
$ |
|
$ |
Revenue year-over-year growth rate, as reported |
7.9 |
|
14.0 |
|
9.2 |
|
13.9 |
Effect of foreign currency translation ($)(1) |
$ |
|
$ |
|
$ |
|
$ |
Effect of foreign currency translation (%)(1) |
(0.1) |
|
0.2 |
|
- |
|
(0.3) |
Commerce revenue constant currency growth rate |
8.0 |
|
13.8 |
|
9.2 |
|
14.2 |
|
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|
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Presence revenue, as reported |
$ |
|
$ |
|
$ |
|
$ |
Revenue year-over-year growth rate, as reported |
25.2 |
|
17.4 |
|
23.7 |
|
15.8 |
Effect of foreign currency translation ($)(1) |
$ |
|
$ |
|
$ |
|
$ |
Effect of foreign currency translation (%)(1) |
(0.3) |
|
0.4 |
|
(0.1) |
|
(0.6) |
Presence revenue constant currency growth rate |
25.5 |
|
17.0 |
|
23.8 |
|
16.4 |
|
(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) |
|||
|
|||
|
Six Months Ended June 30, |
||
|
2024 |
|
2023 |
Shares outstanding: |
|
|
|
Class A common stock |
90,630,649 |
|
87,723,667 |
Class B common stock |
47,844,755 |
|
47,844,755 |
Class C common stock |
0 |
|
0 |
Total shares outstanding |
138,475,404 |
|
135,568,422 |
KEY PERFORMANCE INDICATORS AND NON-GAAP FINANCIAL MEASURES (unaudited) |
|||||||
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|||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Unique subscriptions (in thousands) (1) |
5,195 |
|
4,305 |
|
5,195 |
|
4,305 |
Total bookings (in thousands) |
$ |
|
$ |
|
$ |
|
$ |
ARRR (in thousands) (2) |
$ |
|
$ |
|
$ |
|
$ |
ARPUS (1) |
$ |
|
$ |
|
$ |
|
$ |
Adjusted EBITDA (in thousands) |
$ |
|
$ |
|
$ |
|
$ |
Unlevered free cash flow (in thousands) |
$ |
|
$ |
|
$ |
|
$ |
GPV (in thousands) (3) |
$ |
|
$ |
|
$ |
|
$ |
______________ |
|
(1) |
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. |
(2) |
Annual run rate revenue ("ARRR") for the three and six months ended June 30, 2023 has been recast to conform to the current period definition. Previously, ARRR was calculated using monthly revenue from subscription fees and revenue generated in conjunction with associated fees in the last month of the period multiplied by 12. We have since revised our calculation to use quarterly revenue from subscription fees and revenue generated in conjunction with associated fees in the last quarter of the period multiplied by 4 to normalize results for the run rate each quarter. |
(3) |
"Gross payment volume" or "GPV" was previously presented as "Gross merchandise value" or "GMV" in prior period disclosures. There were no revisions to the calculation of GPV as a result of this nomenclature change. |
SOURCE Squarespace, Inc.

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