Good afternoon, everyone. My name is Trevor Young. I'm one of the internet analysts here at Barclays. I'm pleased to be hosting Squarespace. So Nathan Gooden, CFO, great to host you again. You've joined us for a couple of years now. Yeah, thank you for having me, Trevor. So starting off, just diving right in, most recent results, Q3 results, strong across the board, revenue growth, 16% ex FX. Q4 guide implies similar strength, 14%-16% growth territory. You're now poised across $1 billion in revenue in 2023. It's been a significant milestone that you guys have been targeting for quite a while right now. Can you talk about what you're seeing in the core website subscription business that's driving such strong results? Because frankly, you know, a few quarters ago, we were talking about choppy demand trends, and now pretty quickly, things seem to have been firming up and the results are clearly showing it. Yeah. Again, thank you for having me, Trevor. Excited to be here in San Francisco, and had great investor engagement today, so it's great to be here. I mean, as you said, we guided to over $1 billion revenue this year with our recent guide, and so very excited about that milestone for the company. In Q3, we saw 18% year-over-year revenue growth rate, and 44% of that growth rate is driven by our core business, and we continue to see strong retention of our existing subs and acquisition of new. For several quarters in a row here, we've seen that as the top driver of both revenue and growth, and you know, I really think that speaks to the product. Yeah. The product is in the best place it's ever been. I would say 2023 is like a year of innovation for Squarespace. We've launched so many things, whether it be Blueprints or invoicing, classes and courses. Yeah. Acuity and Tock have both seen product innovation, so I think all of that combined is really helping drive the business overall. Secondly, and we've talked a lot about this in our quarterly earnings calls about our marketing attribution model, and I think that's really having a strong impact for us to direct the spend to the right channels for attracting the right higher value customers that are wanting to sell on the platform. And then, you know, lastly, I'd have to say macro is definitely having an effect here. Mm-hmm. I think the fact that for the third quarter in a row, we have been reporting record trials for the business- Yeah ... higher than any pandemic quarter, speaks to, I think, a macro effect to the business. From, you know, an ARPU standpoint, we saw a 10% year-over-year growth rate- Yeah ... at $226, and, you know, this is, again, a combination of, people choosing higher value plans. Yeah. The pricing for our legacy customers that we rolled out over a year ago, as that rolls through, that has a very positive impact. And, you know, just the people mixing to commerce plans is helping us overall. So it seems like variety of levers really driving the growth, like coming from, you know, the net ad side, a little bit of lift from pricing, but it's not just pricing, it's going into higher tier plans, more, more services, all that type of stuff. Yeah, which is really exciting because there, you know, there has been a lot of question around pricing of... Yeah ... you know, we increased for the first time in the history of the company- Yeah ... for our legacy customers, and, were we gonna be a pricing growth story? And I think that we've shown over the last several quarters is that slip to the, to the second driver of growth, that we're really seeing the acceleration in the core business, which excites me for, what we're looking forward for in 2024. I wanna key in on something you just said a second ago. It sounds like macro is a tailwind for you, which seems contrary to what we're seeing, certainly across, like, our e-com coverage. Meanwhile, GMV growth seems to be accelerating nicely here, which is kinda maybe bucking some of that e-com trend. What's driving that recovery? Is it something specific to Tock or, you know, specific service verticals that are demonstrating certain strength? And how do you see that shaping up as we head into 4Q? You know, I think that it's interesting for us because we have a diversified set of streams for commerce- Mm-hmm ... whether that's the ability to, you know, sell physical goods on our platform or time or services. Yeah. Because of that diversified stream, we get the benefit of each of those as they grow. We delivered $1.5 billion in GMV on our platform in Q3, which was 6% year-over-year growth rate. And this is an acceleration from what we saw in Q1 and Q2, so feel good about where that trend is going. Acuity specifically, as you asked, Acuity reverted back to double-digit growth. And, you know, I think this is attributable to a lot of the product innovation that we've seen on that side. And we did a rebrand for Acuity that really helps drive the customer through that funnel more effectively. Yeah ... and then the ability to transact on our platform. Tock has had a great year overall, both on the SaaS side and the GMV side, which is helping that growth. So excited about where we're seeing overall on the GMV side of our business. Makes sense. So obviously, a lot of different levers for, for growth currently, but even going forward, a lot of opportunities, in particular, payments is a big area of focus, as well as international. I guess starting first with payments, it's now live for limited customers in the U.S., if I'm not mistaken. Can you talk a little bit about the opportunity you see there in payments and how you expect that to ramp? And then also just, you know, hit on the international opportunity as well. Yeah. So yes, payments is finally live. We've been talking about it for nearly two years, so excited to see it live for our customers. We launched at the beginning of October to U.S. new customers. And, you know, I'd say we're taking a very methodical approach here to migrate our existing customers over, 'cause we don't wanna hamper their business. But I do think this is a really exciting opportunity for Squarespace, as it opens up new avenues for people to transact on our platform. It creates a seamless experience for customers, so customers aren't having to go off-platform. We use... You know, we are a design-centric firm, and we use that design expertise, I'll say, to create a customer flow that's much more magical for customers versus going off to a third party that they're not familiar with in transacting. From our customer and entrepreneur standpoint, I think that is a much better experience for them. Like if they have issues with transactions, they're not contacting someone they're not familiar with- Right ... they're contacting us. Right. And so, I think that's great for our existing customers. The other thing I would say is this, I think, is just opening up the spectrum for what we can do in the financial services world, whether that be lending or other things, that payments is a foundational capability that opens up for those things. So I think going forward, those will provide further opportunities. On the international front, you know, again, like, I view this as a great opportunity. 30% of our revenue comes from international today. We've made some significant investments over the last two years. We now have 22 currencies, 11 languages, and so a lot of work has been done over the last two years on this, and I think that's culminating in what we're seeing in the business. We saw double-digit growth in all of our key markets and websites in Q3, and that's, you know, a continued trend that we've seen all year. I think as we focus on the where we're going internationally, you know, when we look at the international market, we wanna make sure that, number one, it's that we're going with the right product market fit. I mean, that's very important, that we're not just taking a U.S. product and delivering it to an international customer. We wanna set them up for success. And so we look at that. We look at things like internet use. We look at, like, desktop to mobile, and macro as well, when we're going in, into international markets, and we have been intentional about investing. Yes. I think that we'll start to see in 2024 and forward, really the impact of those investments as that becomes a larger growth part of our business. And that's an opportunity, too, for areas like Tock and Acuity, which are maybe a little bit more nascent internationally. Exactly. Yes. That's a very good point, actually, because as we expand Tock specifically, we have been focused on expanding the geography, even within the U.S., expanding that market. International remains a great opportunity for us there. Okay, great. You mentioned it before, how you took pricing action last year. We're now beginning to lap that. We still view that as a potential lever of growth going forward for the company, as there's still a significant portion of customers that are still below the current rate card. Do you envision, you know, changing bundles a bit, you know, to migrate some customers up to rate card? How do you think about that pricing lever, you know, going forward? Is it gonna be tied to new product launches? How do you think about it? Yeah. So as I, as I've said before, like, this is the first time we've launched a price increase for our legacy customers. In Q3, 2022, we increased it. So you had people that had been on the platform for three years, five years- Right ... that are our price, list price that was from that time, and so they've never seen or experienced an increase, and, you know, we've continued to deliver value to the customers. As you've said, like, we do look at increasing prices associated with the value that we're delivering to them. You know, a year and a half ago, we increased by 10%-15% by cohort, so there are still significant opportunity there for customers to bring them closer to list. And so we will look at doing that over time at a more regular cadence than once every two decades. Right. So, like, probably every 18-24 months, we will look at continuing to bring them up, and again, associated with delivering value to the customers. Right. You know, that aside from list, like the last time we increased list was February of 2022. Mm-hmm. We've done a lot from the last two years- Right ... of what we've delivered. I would look at that as another driver of growth as we and again, as Anthony said, we are always testing pricing of how we can deliver more to the customer and open up opportunities for them to experience more on our platform. Yeah. So up until now, everything we've talked about has been organic driven. Obviously, the Google Domains deal, super topical, closed in September. We've been getting a lot of questions from investors on, you know, how to think through layering that in in Q4 and going forward. So, I guess, for starters, just kind of remind us the high level on the deal. How do the economics work? When does it start layering into your numbers? And then what's baked into the Q4 numbers, you know, from the deal? Yes, without a doubt, the very top question that we're getting from investors. Yep. And, you know, I would say a transformative transaction for our company. I'm very excited about this. We closed it on September 7th, and so that started to flow through. You know, there's three aspects to the deal: the legacy domains. There's 10 million domains in Google with millions of customers. Yeah. We will migrate that over the next 10 months. We will see those come on our platform as we migrate them. But even pre-migration, upon close, we do get the revenue from the renewal. So when they renew- Even if they haven't migrated yet? Correct. Okay. So when they renew, that revenue starts to flow through, to us. But, you know, we recognize revenue over the rather really- Yeah ... over the period, so most of them are over 12 months. So you won't see that as an impactful part of the business, whereas bookings, you know, it was the second largest bookings in Q3, 'cause we do see that flow through immediately. Right. And so that will start to flow through over the next year as we migrate or as they, as they renew, 'cause we do get the benefit when they renew. The other two parts of the deal, though, which are fairly exciting as well, is we are the exclusive domain provider for Workspace. So when someone goes to sign up for Workspace, you either have to bring a domain or they have to get a new domain. Right. When they get the new domain, we're the exclusive provider for that, and so we are seeing that flow through already and then the referral. So if you go to domain dot google, that is now referred to us to provide that, and so another great channel for us. You know, these things combined, as we've seen even in Q3, they are starting to create a halo effect for the Squarespace business overall. But to your question on guidance, we did include the effect of Google in our Q4 guide. Okay, got it. Just to be clear on how the mechanics work, so you'll recognize the bookings upfront on renewal ratably on a revenue basis over the next four quarters, typically, but you also have the underlying registry cost recognized upfront, so that's a potential, you know, gross margin headwind, but eventually, that starts to normalize through? That's correct. So the cost of registry is upfront. So that's why, you know, we did see a 200 basis point hit- Right ... in Q3 from Gross Profit Margin. And, you know, we've been in the domains business for over a decade, and so, not something new. We do believe over time, as you said, though, that it will normalize- Yeah ... to get back to the 80%+, but it is a different margin profile. So in the short term is, that, you know, millions of customers come over, it will have an impact. But the exciting part of the deal is once they're in the Squarespace ecosystem, is the opportunity to cross-sell and upsell, and become part of all of the other services and tools that Squarespace has to offer. Yeah. So you're actually starting to hit on my next question, kind of now that we've gone through the mechanics of it, what's the big vision here? Do you see those opportunities to, whether it's innovate or is it more of the cross-sell opportunity to get that customer to get email attached, Acuity, maybe if they're in the restaurant space, Tock, or ultimately, a website subscription, what's, what's the playbook here? Yeah, I think this is a, this is a very interesting one. And, you know, domains historically is, I would say, somewhat of an archaic industry, and so, like, as we enter into this in a much bigger realm, we're definitely focused on how do we innovate, here. And so I think that you'll see a lot of exciting stuff to come of how we rethink that industry and impact that industry, you know, from specifically for Squarespace, as we get them into the fold of Squarespace- Mm-hmm ... you know, that's one of the best parts of the deal, is that we're getting millions of customers that we have the opportunity to either be an Acuity customer or a Squarespace customer or email or commerce, all the other services that we offer. Right. And so long term, though, like I said, like, we do believe the... it'll be similar profile to the existing business that we have today. Okay. Any update on how the migration is progressing? Yeah. So, you know, migrating millions of domains over with millions of customers is not an easy feat. Right. We have been working closely with Google, since we closed the transaction, and I would say we feel very good about it. Like, the migration setup is going well. We have not started migrating. They'll start to migrate very soon, and we'll bring them over in batches. But, you know, migrating millions of domains is going to, we'll be very methodical about it- Yeah ... so that we're successful in it, but things from a relationship with Google is going very well, and so we feel good about that migration. No easy feat, but going as expected. Yeah. Okay. Back to what you were saying earlier on the kind of the demand environment, unique subs ticked up roughly 100K, QoQ. Again, pretty strong growth among best-in-class in the web tool space. Can you just talk about how the pricing changes that you took actions on last year impacted churn or retention, and now that you've lapped most of that, and also just help us unpack how much of that 100K came from those Google Domains customers that are, you know, not necessarily migrated over, but actually were going to the Google Domains page now to get funneled to you? Yeah. So, you know, Q3, we ended with 4.4 million unique subs. As you said, that excludes all of the legacy domains. Right ... because those are not migrated over, grew at 5% year-over-year. You know, as I said, the primary revenue or primary driver of growth for revenue has been our core business, so the retention of existing and acquisition of new. You know, the exciting part is the pricing increase, and we've talked a lot about like the, we've continued to exceed retention. We are hitting cash retention rates, record cash retention rates. Right. So feel very good about as that flows through the business, the effect of that. But again, it doesn't include the legacy domains, but it does include the referral. Right. As I've said, like, as those flow through there, they're having both a positive effect on our unique subs, but also a halo effect on the overall business. Got it. Okay. Obviously, two very different customer bases here, not insignificant, that you have millions of potential Google Domains customers, 10 million domains potentially coming over. Could you just talk us through how you expect kind of consolidated subs, ARPU, and other top-line KPIs to evolve as you go through this onboarding? Because it's not insignificant, and it could create noise in the metric. Yes, completely agree. The, you know, bringing millions of domains over, millions of customers over, is going to create noise around that unique subs number. We are going to rethink these KPIs- Okay ... for 2024 of what's most meaningful- Yeah ... to the business, to think about that differently. Because they are a very different ARPU customer than our existing ARPU customer, and so, difficult to just to fold those in. So we will rethink those for 2024. Okay, that's helpful. I think the last one on the domain side, I alluded to it before. I mean, obviously, there's the underlying registry cost, so that's gonna be a very different margin profile versus your core business at north of 80% gross margin. How should we think about, you know, gross margin trending from here, both near term as this layering in happens, but also what kind of longer-term implications? And just any color you can share on the underlying OpEx structure from that business, because even though maybe it's lower gross margin, it's probably pretty attractive- Yeah ... in OI or EBITDA. So yeah, let me start on the margin side. As I said, you know, we did see a 200 basis point hit in- Yeah ... Q3. And in the near term, because of the way revenue recognition works and the cost of the registry is all upfront, we will see a hit to gross profit margin- Right. And even into 2024. Yeah. The exciting part of the deal is once they're in the ecosystem, as we've been in the domain business for over a decade. Right ... that cross-sell, upsell opportunity. And so over time, I do expect the margin to get back to what we've been accustomed to- Okay ... at the 80%+, but in the near term, there certainly will be effect. It's a completely different margin profile. Right. And to absorb millions of customers, certainly it's gonna have an effect. But to your point, from an OpEx standpoint, this is where it, you know, it's an asset acquisition. Yeah. And so we're able to bring millions of customers over without having to build out a whole new infrastructure for that- Yeah ... 'cause we've already been in the business, so we can absorb a lot of that. Now, there is some increased cost of the cost ops to be able to service the customers. Right. But from an overall standpoint, we've already been in that business. From an Unlevered Free Cash Flow, you know, the exciting part is we were able to raise our guidance for the year. Right ... on the high end by $11 million, increased by 400 basis points year-over-year, and that's partly driven by that. And so, like, I think that it's very accretive to unlevered free cash flow, and over time, we'll see that accretiveness to the, to the overall margin profile. Not a lot of OpEx coming over with the deal? Correct. Got it. Okay. And since you alluded to it, I'll hit on the free cash flow. Q4 guide implies, we in, you know, somewhere in the low-20s margin on unlevered free cash flow, which is, you know, well within that long-term target range of twenties, as it's been put. Can you talk about how you're thinking about profitability, you know, growing and/or margin expanding from here, again, once we get through the noise of, you know, migrating Google Domains? Yeah. I'll just talk from an overall company level. You know, Anthony and I have been very focused on continuing to drive Unlevered Free Cash Flow out. Right. I think that over time, we'll continue to see this tick up over time. Yeah. and we've demonstrated that ability to be able to continue to deliver top line- Right ... and see the accretiveness on the bottom line. I think we drive a very efficient shop, and we'll be continuing to focus across the board on that. Now, I do believe, though, like, I don't wanna starve growth, and so, like- Yeah ... I am very focused on what are the seeds we need to plant in 2024 as we- Yeah ... make sure that we're on the trajectory of the five-year plan we presented to the board last year- Yeah ... of where we need to be in 2026 and 2027. And some of those investment seeds that have to happen in 2024 are will be a shift in investment in other areas. And so we, you know, I think we're very fluid at doubling down on things that are working and pulling back on things that are not, so that we see that- Yeah ... Unlevered Free Cash Flow continue to tick, tick up. So maybe more like, you know, zero-based budgeting, right? Take from one pocket to fund the other. Exactly. Not incremental from the current run rate. Yeah. I mean- Okay. Yeah, from the overall run rate, yeah. From a size standpoint, as the company grows, you'll see that- Some good leverage. ... overall size, somewhat increase, but leverage will improve. Got it. Okay. Shifting back to just product, you know, looking at the current suite of products, how do you feel overall about the portfolio here? I mean, obviously, Google Domains is a big acquisition to digest, so you're gonna be working on that for a while. But we also talked about Tock, Acuity. You have some social products like Unfold. How do you feel about the product portfolio broadly? Is there appetite for, you know, further M&A in the medium term? Just anything complementary that's, you know, not in-house that might make sense. I think from an overall product standpoint, I feel very good about where we're at. I think, looking across the product portfolio, whether that be Acuity, Tock, Unfold, our core business, commerce offering, like, we've done so many different things to increase those- Right ... offerings, over the last 18 months to two years. I feel very good about where we're at. And, you know, I do think it's interesting as you think about the customer journey with all of these different, brands, if you will- Mm-hmm ... and domains. Making the Google acquisition even enhances that more of like- Yeah ... domains being an entry point, but so is Acuity, so is Tock Right ... so is Unfold, Bio Sites, and our core business. Into the ecosystem that then has the opportunity to spread the love, if you will, of our other products and services. But from an M&A standpoint, I will be very opportunistic here. Yeah. I think that we have demonstrated like things like Acuity, which can be a great standalone business to drive top-line revenue, but be a perfect attached product to our core business. Those are the types of things that we'll be looking at. Yeah ... that can continue to expand our services and products for our offering. But, you know, I think we've demonstrated, like, founder-led companies, I think, flow very nicely into the Squarespace story. Mm-hmm. From a financial profile standpoint, I would say we want something that's going to be accretive to our current- Right ... financial profile, both top line and bottom line, or at least have a path to that- Right ... with the acquisition. We would not want to purchase something that's going to take us backwards from that standpoint. Got it. So accretive to top line and profitability over time, complementary to the existing portfolio, founder-led, those are kind of the key- Exactly ... criteria? Got it. Okay. Last one before I open it up to, to Q&A. Obviously, AI, everyone's been talking about it all year long. Hopefully, 2024 has a different theme, but, have to ask the, the obligatory, question on it. I think last quarter, Anthony called out focusing on common sense AI integrations thus far, and Squarespace Refresh showed off some of the cool AI design capabilities that you can, you know, users can take advantage of. Overall, what are your thoughts on the AI pipeline from here? Do you see it as a potential differentiator for Squarespace, or is it going to quickly become table stakes for all of the players in the space? I mean, Trevor, it wouldn't be an investor conference if you're not asking about AI. Yeah, I have to. Yes, I look forward to seeing in 2024 this softening. Yeah. You know, first I will say, I do think it's table stakes. Yeah. I think it's naive to think that it's not table stakes for our industry. Yeah. I think that if you think about Squarespace, you know, design is a differentiator for us. Yeah. And we've continued to demonstrate that. I think AI is only going to elevate that. Like, if you watch the AI video from Squarespace Refresh, I think that really gets to how we think about design and AI to deliver something magical to the customer- Mm-hmm ... of, like, really being able to take AI and create a website off of, you know, a few words. Yeah. That's where I think it becomes interesting of the next gen of a generative AI end-to-end solution for our customers. Whereas, like, not just a text box- Right ... like, ChatGPT, I think, are the basics. Right. Anyone can cut and paste that or put the API into their system- Right ... to generate that. But as you think about from a design standpoint, we can take, you know, two decades of design expertise to deliver to a someone starting a business that has no design expertise. Right. I think that's where Squarespace really begins to differentiate, incorporating AI with our design expertise. So something like maybe a differentiated theme based on, you know, your input of like, "Hey, I'm making a coffee shop. Give me a brown theme for my website," or something like that? I mean, even deeper than that, like using your identity or your brand and then incorporating design into what, how you wanna portray yourself online. Got it. Okay, super helpful. In our last few minutes, wanna open it up to the audience if we have any questions. Doesn't look like it. All right, great. Thank you so much,. Thanks, Trevor.