Good morning. My name is Harry, and I'll be your conference operator today. At this time, I would like to welcome everyone to Squarespace's first quarter 2022 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'd like to withdraw your question, please press star followed by two. Thank you. Robert Sanders, you may now begin your conference. Good morning. Thank you for joining us. My name is Robert Sanders, Head of Investor Relations. With me today are Anthony Casalena, Squarespace Founder and CEO, and Marcela Martin, CFO. They will share some opening remarks and then open the call to your questions. Earlier today, we issued a press release and posted a shareholder letter to the investor relations section of our website with additional information related to our Q1 results. 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, which can be found in the investor relations section of our website. These measures should not be considered in isolation from or a substitute for our GAAP results. 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. 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 Form 10-Q filings with the Securities and Exchange Commission. Any forward-looking statements that we make on this call are based on assumptions of this day, May twelfth, two thousand twenty-two. We undertake no obligations to update these statements as a result of new information or future events, except where required by law. I'll now turn the call over to Anthony. Good morning. Thank you, everyone, for joining us today. We are quite pleased with our first quarter results, which exceeded our guidance in multiple ways. We currently support 4.2 million unique subscriptions across our product categories, representing significant traction amongst the audience of entrepreneurs and creators we provide tools for. Late last year, we introduced our Everything to Sell Anything campaign, which is a fantastic way to understand where Squarespace is headed and the value we provide to our customers. Our marketing campaign centered around this concept have delivered record impressions in the first quarter. Thank you to our marketing creative teams for elevating the Squarespace brand and powering our growth. I hope you had the opportunity to read our shareholder letter we issued this morning and take in, through the enhancements our product team has been delivering, which will help us realize our long-term goals for the business. Related to our Commerce offering, we added new features to help sellers grow their customer base and are encouraged by the momentum building on top, our unique solution for hospitality and time-slotted businesses. We believe our efforts to expand our international revenue are supported by the global rollout of our Everything to Sell Anything marketing campaign and enablement of website language translation within our platform. One highlight coming up this summer I'd like to tease are some fundamental enhancements to our core content management system, or CMS, which will enhance Squarespace's core usability and expressibility to a wide range of users. We'll be talking about that over the next few weeks. As always, we'll continue to operate Squarespace by balancing our strong cash flow with sustainable growth, both of which Marcela will cover in more detail. Given how we are situated, we're delighted to announce that our board has approved a $200 million share repurchase program, which underscores the confidence we have in our business and our opportunities for future growth. Lastly, I'd like to thank Marcela for her leadership at Squarespace. She's been a great partner to me, helping execute on our public listing and aligning our tactical goals with our long-term priorities. I'm pleased she'll be with us through July, and we wish her the best in her next endeavor. Now I'll pass it to Marcela to share some financial highlights. Good morning, everyone, and thank you, Anthony. We are delighted to share results with you this morning that exceeded our guidance for the first quarter of 2022. Our strong customer retention, the adoption of higher value subscriptions, and new customer additions fueled our top line results. Unlevered free cash flow outperformance demonstrate our commitment to deliver value to our shareholders as we continue to empower our loyal customer base of 4.2 million unique subscriptions. We exceeded the high end of our revenue guidance by approximately $2.8 million. A portion of this outperformance was a result of non-recurring drivers, including the accelerated delivery of new features at Tock and higher than anticipated GMV. Increased transactional revenue signals a growing contribution from Commerce, which further validates our investments We expect these transactional revenues to increase even further when we deliver our white label payment solutions later in 2023. Some notes on the quarterly financials that we have presented in our shareholder letter. We anticipate marketing and sales expenses will decrease significantly compared to Q1 in the second half of the year. Q1 represents a high level of spend as we lean into seasonality and kick off the year with an extension to our macro Everything to Sell Anything campaign at the Super Bowl. Research and development expenses increased in Q1 as we annualize a headcount that was incorporated last year. non-GAAP G&A expenses are increasing about $6 million year-over-year, mostly related to D&O insurance, additional public company expenses, the consolidation of Tock, and the annualization of added headcount in 2021. Now turning to guidance for the second quarter of 2022. We expect revenue to be in the range of $208 million-$213 million, representing 6%-9% growth year-over-year. As noted on our fourth quarter call, we believe the second quarter will mark the trough in our year-over-year revenue growth comparisons, and we anticipate accelerating year-over-year revenue growth for the balance of 2022. For Q2, we project our unlevered free cash flow to be in the range of $33 million-$37 million, which implies an unlevered free cash flow margin of 16.6% at the midpoint of the range. Unlevered free cash flow margin is reducing in Q2 mainly due to the timing of payments. We are increasing our guidance for the full year 2022 for both revenue and unlevered free cash flow. With regards to revenue, we now expect that to be in the range of $867 million-$879 million, representing 11%-12% year-over-year growth. On our Q4 call, we outlined our expectations for non-GAAP operating expenses for 2022. Today, we are executing well against our plans, and we have some updates to these expenses as we look to the rest of the year or for the remainder of 2022. We anticipate our non-GAAP gross margin to remain at or close to the first quarter level for the remainder of 2022. However, if our transactional revenue represents a higher percentage of our total revenue, our gross margin will decline slightly. For marketing and sales expenses in 2022, we anticipate a ratio between 32%-35% of the total revenue versus the previous guidance of 30%-35%. For research and development, we expect the expense to revenue ratio to decrease to 20%-25% versus the previous guidance of 25%-30% of revenue. This is due to further efficiencies and changes in the ways of working that have caused savings in this expense line. For G&A, we still expect that will represent approximately 11% of revenue. We expect unlevered free cash flow will be between $156 million-$169 million, representing an 18.6% margin at the midpoint. Our guidance assumes significant free cash flow leverage in the second half of 2022 as we benefit from reduced marketing and sales expenses, having preloaded much of our annual spend in the first half of the year. As we referenced during our Q4 earnings call, 2022 is a year of difficult comparisons due to the COVID-related demand environment in 2021 and 2020. However, we are very excited and confident about our ability to capitalize on the large market opportunity. As a reminder, during the last two years, we have had a tailwind related to the pandemic and have grown our top line 27% on a compound annual growth basis. Those tailwinds made us even stronger as our customer base has expanded significantly and we continue to retain and serve our customers with tools that help them stay in business through the pandemic. We reiterate our expectations for 2023 and 2024 with regards to revenue growth into the mid- to high teens%, crossing the $1 billion mark in revenues in 2023. In summary, the fundamentals of our business remain strong and we continue to execute. We have a long operating history of profitable growth, a consistently strong growth margin, and with a large and growing customer base. We believe the introduction of new products, combined with the optimization of existing offerings, will accelerate our growth in the back half of this year as we look into the future. We now look forward to your questions. Operator, you can open the line. Thank you very much. Our first question for today comes from Matt Pfau from William Blair. Matt, your line is now open if you would like to proceed with your question. Hey, great. Thanks for taking my question, guys. I just wanted to ask, in terms of, how the quarter progressed. I think on the fourth quarter call you called out a bit of softness in January. Did you see any change, as you went through February, March and April? Hi. Thank you for your call. We have delivered according to what we had originally expected in the quarter and what we had guided. We saw a little bit of better news coming into, you know, into March. You know, so far we are pleased with the growth that we have had in new subscriptions and overall how, you know, how the funnel has worked. Yeah, it's great. And then just Um. Sorry. Just on top of that, you know, Squarespace is now comprised of multiple different revenue streams, each of which are kind of reacting differently to different phases of the pandemic and different macro world events. While we were really pleased with the quarter, stuff like, you know, things like the revenues coming in the Tock business are starting to see tailwinds as we really return to something a lot more normal in the geographies where Tock is concentrated right now. You're seeing a positive effect there. Got it. On that, just wanted to follow up on the reservation fee you introduced for Tock. Just maybe some more details on what you're seeing with that. Positive reception. What we're doing there is, in exchange for the booking fee covering chargebacks up to a certain amount for the businesses that are on the other end of that. So far so good. Yes. We are actually very pleased with the results that we have seen in Tock this quarter. You may remember that we talked in the last quarter about the investments that we were doing, and the Tock team has been able to deliver these enhancements ahead of what we had originally expected. You know, we are very happy with the investments that we are doing there because they are paying off. Okay. Great, guys. Appreciate it. Thanks. Sure. Thank you. Thank you. Our next question is from Trevor Young of Barclays. Trevor, your line is now open. Please proceed. Great, thanks. First on the 1Q guide, excuse me, 9% growth at the high end. I think that would imply steady to accelerating year-on-year growth on an organic and ex FX basis. I think FX headwinds worsen here. One, is that how you're thinking about it? Two, it looks like a little bit of a wider range for the quarter than in prior quarters, about a $5 million spread there. Is that indicative of a bit greater uncertainty from here? Thank you, Trevor, for the question. On your first question, yes. The answer is yes. For the second question, look, I mean, what we had anticipated, what we have seen so far versus what we had anticipated is macro impact and some headwinds coming from FX that has not played you know, in our favor. We are putting a little bit more conservatism in the second half of the year, just because the macro environment is a little bit unstable. Execution-wise, we have been executing according to what you know, what we had expected, so we are you know, quite happy with that. Unfortunately, you know, FX has moved negatively in the first quarter and that put us. We wanna take a prudent position on it in that regard. Great. That's really helpful. Just last one. On the $200 million share repurchase authorization, should we expect some accelerated repurchases near term in light of where the stock is trading? If you maybe touch on your appetite for M&A right now, given the public and private market valuations appear to be coming in a bit. Yeah. We're excited about where the business is situated and are, you know, long-term believers in it, and that's the driver behind the share repurchase. You know, we're probably not gonna get into the exact strategy of that repurchase, but, you know, it's there, and we intend to use it. Regarding impact on M&A, you know, I think there's three ways you can look at cash, right? We can do a dividend, which, you know, is not, I don't think, well situated to Squarespace right now. As you mentioned, there's M&A potential, which is definitely still on the table. We don't feel constrained from an M&A perspective with the authorization of the $200 million repurchase. Most of our M&A targets, you know, have been kind of sub-$100 million, sub-$70 million sort of, Tock, obviously being the exception. You know, we continue to pursue a number of smaller ideas and tuck-ins and, you know, this doesn't constrain us from that in any way. We thought it was. We were excited to be able to issue it. Yeah. The business profile of Squarespace is really great with regards to, you know, delivery of cash. You can see that on our, you know, confidence through the share buyback program and also on the fact that we have increased guidance for the full year. Great. Thank you both. Mm-hmm. Thanks, Trevor. Thank you very much. Our next question is from Ron Josey of Citi. Ron, your line will be open now if you'd like to proceed. Great. Thanks for taking the question. Anthony, Marcela, I wanted to follow up on the subscriber growth and the visibility from what we just talked about. I think coming out of 4Q, we talked about more modest growth. 1Q results were certainly better in terms of sub additions. Marcela, I think you just said that macro was better but still unstable. Can you help us understand a little bit more about the visibility in subscriber growth, given 1Q was better, maybe better marketing and the Super Bowl campaign? As we think about 2Q and beyond, would it be fair to think about subscriber growth maybe following the revenue growth trajectory that you outlined? Marcela, I have a quick follow-up. Thank you. I would think that, you know, related to subscriber growth relates to revenue growth. And, the key strategy behind what we've been doing is to give people more ways to sell and to be more involved in our customers' transactions and how they grow their business. From a macro perspective, a long-term perspective, I think that you should see the revenue growth outpace the subscriber growth as we get more into GMV, things like Member Areas, different ways to sell, different subscriptions. I would think those would diverge a bit. Right. Yeah. Yes, definitely. You know, with regards to Q2, we had anticipated that the trough was going to be for Q2. The conservatism that we are adding in the second half of the year is not related to subscriptions and additions. I mean, as I said, we have performed a little bit better. It's just that we see some headwinds with regards to, you know, euro, the impact of the euro. Approximately 29% of our revenues are denominated in euro. The underlying growth of the international business is still strong. This quarter has been 16% year-over-year. You know, we are quite happy with the progress that we have been making in countries, you know, like Australia, the U.K., Canada We have also delivered local marketing campaigns this quarter in Germany and France. We are firm believers that, you know, international is a huge opportunity for us. As the revenue size is, you know, quite significant, we are just mindful of the headwinds because of the headwinds on FX effects that we have seen in the first quarter. Got it. That’s very helpful. Then my last question is just on pricing. Any thoughts or any update on there, given what we just talked about, maybe the unstable macro. We talked about bundling new pricing later this year coming out. Thank you, guys. Yeah. Yeah, absolutely. In the first quarter, we completed a series of price tests on new users, and we have another couple sort of running right now. Some of those were successful, and you see that reflected in the pricing on our front site. That gives us also more leverage when it comes to what you were referring to in the latter half of your question, which is the legacy pricing updates, which we still expect to happen in the second half of this year. Frankly, it gives us more confidence that they'll be successful because we can now, you know, point at, frankly, in our view, quite modest price increases that are actually gonna keep a lot of customers still below the list price that you would enter at as a new customer. The bundling stuff is a longer-term project in full effect. Still a really big believer there that we have a lot of products that we have made and are in market that are just, you know, just due to our release timeline over the years. You know, it's just behind another subscription, another subscription, another subscription. Whereas, you know, if we took these things that are already there and built, put them in the bundles, made them a little bit more accessible from a getting started perspective, so that when you're signing up for Squarespace, you're signing up for basically like imagine like a business starter kit. You know, I'm somebody who wants to sell courses. I go and sign up for that and via a single subscription, get access to more of a full suite of Squarespace products, which enables us to then grow with you as you use more and more of that suite. Big believer in that, a lot of complexity there. Much more difficult for us than just, you know, a pricing update or a price test to new customers. Still excited about both of those, but you don't see the impact of either of them in Q1 or Q2 thus far, but they will appear in the second half of the year. Yes. Look, I mean, the success that we have had with the Scheduling tools and Member Areas has been quite good. These are very strong products and, I mean, you know, sometimes the net new unique subscriptions are not truly reflecting the actual growth because we count unique as actually unique. These products have been growing really nicely as well as marketing campaigns. You know, the main growth on GMV, for example, has been driven by the growth in Scheduling again. I believe we are very well positioned to continue to, you know, lead in, you know, providing services for customers and, you know, for customers that manage, you know, time-slotted businesses. Yeah. What Marcela is highlighting there is I think a really important point as well, which is that, you know, depending on which competitor you pick, that GMV breakdown is very, very different. We've said kind of over and over again on these calls and kind of as part of the marketing campaign that, yes, physical product sales are very, very important to Squarespace. We've got a big investment in that product. That will continue, but there's so many other ways to transact. You know, the appointments product, what Tock is doing for time-slotted businesses and hospitality, the transactions are happening around the appointments that are flowing through our platform that we see a big opportunity in getting onto our platform. Invoicing, basically it's all this GMV related to services that we're gonna be able to tap into and that we're targeting that is a little different than if we were, you know, just pure play, physical product commerce. Thank you, guys, and wishing you the best, Marcela. Thank you. Mm-hmm. Thank you. Our next question is from the line of Ygal Arounian from Wedbush. Yigal, your line is now open if you'd like to proceed now. Thanks, guys. I just follow up on some of the last comments. Is there any way to maybe go like one layer deeper and? You know, think about the growth in services and scheduling versus what you're seeing in products. Like, are you still seeing growth in kind of, you know, the more traditional product and commerce sales? You know, obviously, that's been an area that's been under a lot of pressure. Is there any way to kind of help understand the puts and takes between those two sides a little bit better? You know, while we don't break it out, I can make some macro comments. You know, what you're leading into is, you know, what you saw in, you know, various other earnings releases recently, which is that, you know, there was sort of a return to some in-person commerce and a softening in e-commerce, but even though it's still incredibly strong and is obviously gonna be a huge thing over the next decade. There's that. Part of what makes Squarespace really strong and well-positioned is as, you know, insofar as you're like, "Oh, so some of the e-commerce stuff is returning to in-person," well, our businesses like Tock and time-slotted businesses, I mean, and Appointments, and the more we can get the transaction related to that appointment flowing through Squarespace, and which in many cases it doesn't right now, you know, that stuff will be countercyclical to that other trend. We've just tried to set ourselves up by serving the needs of a broader array of businesses and ones that operate with, you know, services. I think that positioning will continue to play out very well over the next couple of years, even as these things sort of ebb and flow. Because at the end of the day, I still believe that if you take any one of these topic areas, e-commerce, invoicing, appointments, you know, scheduling, event, you know, any area where we operate, I just see them all being bigger and more online, you know, and transactions flowing more through online sources over the next, you know, couple of years. I'm really happy with how we're situated there. Thanks. Yeah. Certainly, the well-roundedness is proving to be beneficial these days. Mm-hmm. Maybe we could just talk a little bit more about the new features and functionality in the platform, something you called out a lot in the letter. Then I don't know if you'd be willing to add any more color around the CMS enhancements. You know, just broadly speaking, what are the areas and within these new features and functionality that maybe have you guys the most excited in terms of how it could contribute to the overall product? Thanks. Sure. You know, there's a lot of things. Where to begin? You know, a lot of what happens during the quarter, we frankly don't highlight on these calls 'cause we just do a lot of blocking and tackling and a lot of releases all the time that are, you know, important features for our customers that people might not see immediately. Let's see. For international, new languages launching, SEPA being kind of fully rolled out, user site translation available. People asked about the insurance coverage and the booking fee on Tock. That was a great win for us. In the Unfold product, we continue to innovate with Bio Sites, and we're approaching a large number of those created. You know, as you're, you know, as I was alluding to in the transcript, we have some functionality that hits at the core functionality of the content management system that we've really been working on for some time related to the core page building experience. It's really important because that functionality is, like, it hits every customer in every trial going through the website product. It's the most difficult thing to get right, and it's the most important thing to get right because when you get it right, you increase, again, usability, all people using the product, and expressibility. I think that what you'll see as we kind of introduce one of our new page building engines here is that we have a strategy in the core platform of not fragmenting that editing experience. We want fewer kinds of editing experiences with the right level of usability for beginners, but also the expressibility for professional users and Circle members, so they feel comfortable making more advanced sites on the platform. Some of that functionality is in beta right now. I, you know, hesitate to go on and on about it in the call just because I'd rather show it with visuals because I think that just kind of suits it better. That kind of stuff is just really important to us staying and being a world-class performer in our space. I'm really looking forward to that. Again, it's stuff that's been in development at Squarespace for a long time. Great. Yeah. I mean, I will add because I don't wanna disclose too much about it. On the beta, you know, we have our Circle members, which is our beloved community of developers that give us feedback, and the reception of this product has been great so far, what we have seen in their reviews. We have received great feedback. We are quite excited about these changes that are coming, and we hope that we can announce them very soon. Yep. Great. Thanks. Looking forward to hearing more and seeing more. Thanks, Ygal Arounian. Our next question is from the line of Gabriela Borges of Goldman Sachs. Gabriela, your line is now open. Please proceed. Hi. Good morning. Thanks for taking my question. Anthony and Marcela, I'm hoping you can share your observations on the folks that joined Squarespace in 2020 and 2021 during the worst of COVID. Any observations around those cohorts relative to your older cohorts, either in terms of churn or their willingness to grow and expand with the Squarespace platform? Just curious what you're seeing relative to history in those cohorts specifically. Thanks, Gabriela, for the question. I'm going to kick it off, and Anthony, if you want to add later. Let me talk first about the 2021 cash retention, because what we have seen, you know, for subscription cash retention is that it was stronger in 2021, versus what it was in 2020. Even at a constant FX basis, the retention was actually better. I mean, of course, as you can imagine, 2020 and 2021 are really big cohorts, so we are paying attention to how, you know, how they behave. What we have also looked at is the 2020 cohort and how that has performed on, you know, in a two-year cash retention basis, actually a little bit less than that because it hasn't been, you know, fully two years for all of the cohorts, but how those have performed compared to 2019. You know, they have performed slightly better even than 2019. So we are quite pleased with the way that so far these cohorts have been behaving, which, as I said, represents a large number of customers. I think that this retention is a testament of the stickiness of our platform and the loyal customer base that we have. With regards to churn, we have not seen changes in churn overall. I think one more, you know, piece of information perhaps is that we have seen, you know, this year, more people coming directly to Commerce, versus what we saw at first in 2020, where there was, you know, people moving more from personal to Commerce. We have seen a larger adoption of Commerce versus what we saw in the past with regards to, you know, upgrades. Anthony, I don't know if you want to That's very helpful. No, I mean, to summarize what Marcela is saying, you know, it's, they're not weird cohorts. You know? Okay. Yeah. Understood. They will churn less better, right? Right. Yeah. Right. Understood. Marcela, I know it's early days, but any guidance on how we can think about the payments revenue stream in 2023 and how to model that? Look, I mean, we are at the latest stages of choosing our partner. We have been going on due diligence for a while, and the reason is because we really have amazing partners, you know, and potential partners. The companies that we are talking to are really good companies, so we have to make a tough decision there. However, we have been developing payments, you know, from, like, I believe we started last year, sometime in October, and the teams have been showing us a lot of progress so far. We are confirming that we will launch payments in 2023. Most likely, it's going to be in the second half of the year. The piece that we have yet to figure it out is what's going to be our, you know, commercial policy. Because as you see, you know, in the market, there is a wide range of payments and processing fees, and, you know, that different processors charge. I can't, you know, talk too much about how that's going to plan. We've been working on the plan behind the scenes, but those decisions are still yet to be made because we have a year to go, and, you know, we have to continue to look at market conditions and so on. Okay. We'll stay tuned. Thank you. Thank you. Our next question is from the line of Josh Beck of KeyBanc. Josh, your line is now open. Please proceed. Thank you for taking the question. I had a little bit of a question, just maybe high level about presence and commerce revenue and try to put some, you know, guardrails. Obviously, there's been a large gap on commerce revenue outgrowing presence revenue between 20% and 40%. Obviously, we're going into a period where we'll be, you know, lapping Tock, and, you know, there's obviously some changes there. I imagine they'll converge to some degree, but just any guidance you can give us just on how to build out these two businesses for the remainder of the year. I think you can maybe take some of piecing together some of what we've answered in some of the other questions and sort of think about, all right, you know, Squarespace is obviously very interested in attracting customers that are transacting, and we wanna be a part of that transaction. Then there's different macro trends that are gonna influence people's attraction to those various business models and the performance of those various business models within the platform. I don't know if I have any, like, very specific guidance on how to Yeah. Look, I mean, what I can tell you is, you know, we provided a goal in Investor Day last year, and we are, you know, from our perspective, we are on track to deliver on that goal. Mm-hmm. If there are like, you know, significant changes that are going to move in between Presence and Commerce in 2022, I mean, I don't expect that it's going to be quite, you know, quite dramatic. Look, I mean, we are very, very happy and excited with the growth that we have in Presence as much as the one that we have in Commerce. Because, you know, anybody, once we have that customer into our platform, you know, we can move that customer that decides to transact into a different, you know, a different plan. Okay. That's helpful. Maybe just following up on the prior question about the branded Squarespace payments offering. Push a little bit more on the go-to-market. You know, I appreciate that it's early and you're still working on the commercial arrangements. You know, once you do get that offering live, are you thinking about it as most likely that new customers coming to the platform will be the most likely candidates to adopt? Do you think you can go back to the existing base that may have a different arrangement in place and get them to adopt it? Just, you know, I realize it's early, so, you know, it's probably fairly preliminary, but just curious on the go-to-market there. Sure. You know, a no-brainer for us to make it the default for all new customers coming to the platform. I think we're gonna aggressively incentivize existing customers to switch over to the payment stack. I think, you know, for the most part, the feedback we've heard from people is that they kind of prefer to have everything in one place. They don't want different vendors. They trust Squarespace. You know, they want one relationship. Insofar as they kind of want that from a product experience, and we can make it beneficial for them to switch over from a commercial side of things, yeah, I mean, I think it would be our goal to have 100% of all of our customers eventually using our payments stack. Excellent. Anthony Casalena. Thank you, Josh. Thanks. Thank you. Our next question is from the line of Brad Erickson of RBC. Brad, your line is now open. Please proceed. Hi. Thanks. Just a couple of follow-ups on the subscription business. I think, you know, given the macro factors going on, there's just a lot of worry right now about the health of the overall SMB out there. What do you think you guys are seeing from your core, call it SMB pipeline, and what have you sort of qualitatively built into your guidance in terms of SMB headwinds essentially getting worse, staying the same, or maybe even improving from recent levels? That's one. Secondarily, just on subscription, how do you think you guys are doing market share-wise lately in that part of the business? Thanks. Sure. One thing to keep in mind regarding Squarespace and kind of, you know, SMB formation is that there is going to be some correlation there, but there are a lot of people who are using Squarespace that are not really gonna get picked up in that number because they're either part of, like, a creator economy and their formation of their business is gonna lag, like, incorporation and all that. Just kind of getting started either with, like, Unfold Bio Sites or, you know, a regular Squarespace website, but they're testing Member Areas and things like that. We service a large number of business models on Squarespace, and again, like, not all of them are gonna get picked up in these SMB formation numbers, and I'll think. And then, what was the second thing you mentioned? The second part of the question with regards to guidance. Oh, guidance. Yeah. guidance. Yeah. I want to reiterate that the reason of the additional conservatism versus the guidance that we provided during the previous call is related to FX headwinds that we saw in Q1. We, you know, remain with the same plan that we had with regards to subscriptions. Yes, subscription and new customers. Yeah. Again, for the full year, we baked in all of Right. Sorry. Yes, exactly. It hasn't changed compared to the previous guidance that we have provided earlier. Yeah. Got it. Maybe just a quick comment on how you've been doing market share-wise. Oh, yeah. All right. Very interesting. A number of ways to kinda track that from, just, I mean, there's CMS reports out there that talk about how many URLs are powered by which platforms and all that. I think we've been doing. I think we're doing good. I keep thinking more about what is happening behind those URLs and the value versus necessarily like. Are there 5 million sites or 6 million sites or 7 million sites, right? I mean, you could be powering the top 20,000 most valuable sites in the world, each of which process 1 billion in GMV, and that would be very, very valuable versus, like, the next million presence websites that may not be transacting. I think about what kind of customer we attract. I think about, you know, getting people in at an entry level that have a high appreciation for quality and an aptitude to grow into those bigger kind of customers over time. That's kind of how my mindset has been with regards to that. I think that, and I referenced it earlier verbally on the script and also as an answer to one of the questions. I'm really confident that with what we're releasing in the CMS and the unification of all the commerce packages together into one sort of bundle over time, that you know. Call me biased, but I really think this is the best product on the market. I think that it's gonna be, you know, just the usability and expressibility of what we do, how we push the market forward from a visual and, you know, creative standpoint remains really important. I have more confidence than ever in the main tool. At our core, we're a product company, and we invest in that and have always invested in that. That's why I'm excited about the roadmap and what's coming out. Got it. Thanks. Thank you. Our next question is from the line of Naved Khan of Truist Securities. Naved, your line will be open if you'd like to proceed. Yeah, thanks. Couple of questions. Anthony, you mentioned earlier that you did some price tests, and then- Mm-hmm Some of them were kind of the ones you tagged and you continue to kinda do more work there. Just can you give us some color on what kind of tests these are? Are these kind of just for the new customers, meaning new customers when they sign up may not be getting as big of a discount as they might have in the past, or is it generally an increase in the subscription pricing as well for the existing ones? Sure. So the tests I'm referring to are for new customers only. Any adjustments that we're making to any existing subscriptions is gonna happen in the later half of the CS number that's hit. The kinds of tests we do, just to give you some color on it, you know, remerchandising, changing plan counts, changing the difference between annual and monthly, changing the intro price, changing the difference between the prices between plans, changing that on an international basis versus a US dollar basis. Looking through the multiple currencies and testing the elasticity there. We have other ideas around, you know, priority type support offerings that we're gonna be seeing if people have an attraction to. Yeah, I hope that gives some color on kinda what we've been doing. We sort of do those all the time, right? To try and figure out what the optimal point is in the market for us. Got it. It also sounds like the existing customers will start to pay a little bit more in the back half. Is that a fair statement, and how big of a hike that might be? What was the last thing you said? How big of an increase they might see, the existing? Correct. In the second half, we'll be targeting existing customers. I think what we've proven, or I hope we can infer, is that because new people coming in were good with an even higher price, that we'll be able to say, "Hey, look, we're not gonna necessarily increase everyone to those prices," but we can kind of inch things up a little bit, and say, "Look, you've still got some in many cases, some version of a grandfathered price." But you know, I think there was. You would prove out some level of a willingness to pay on the top end. Great. Excellent. Thank you. Thank you. Our next question is from the line of Aaron Kessler of Raymond James. Aaron, your line is now open. Please proceed. Yes. Thank you. A lot of the questions have been asked, but can you just maybe talk a little bit about some of this performance of the verticals? I think you talked a little about e-commerce. Can you talk about restaurant performance as well, especially as the economy continues to reopen and any other verticals you would highlight? Thank you. Yeah. Actually, you're touching on one that I would highlight, which is that the performance within Tock has seen tailwinds as of late, as you know, we've returned to a bit of a more normal environment within the hospitality space. We're really encouraged by what we're seeing there. Yeah, I'd say there's definitely strength there. I think, you know, in terms of headwinds, you know, people have pointed out on this call just what's happening in physical e-commerce. I think, you know, Squarespace has that offset by services-based commerce and appointments and other revenue streams. That's a bit of a feel for kind of what we're seeing. Great. Thank you. Mm-hmm. Thank you. I'm afraid we have no more time for any further questions today, so I would like to thank everyone for joining the Squarespace first quarter 2022 earnings call. This concludes the phone conference, and you may now disconnect your lines.