Welcome to Squarespace's second quarter 2023 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 1 on your telephone keypad. If you change your mind and would like to withdraw your question, please press star followed by 2 on your telephone keypad. Thank you. I would now like to hand the call over to your host at Squarespace, Claire Perry. Claire, please go ahead whenever you're ready. Good morning, and thank you for joining Squarespace's second quarter 2023 earnings conference call. This is Claire Perry, Head of Investor Relations. I'm joined by Anthony Casalena, Squarespace's Founder and CEO, and Nathan Gooden, CFO. After their prepared remarks, we will open the call to your questions. Earlier today, we posted a press release and shareholder letter to the investor relations section of our website. On today's call, we'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 and shareholder letter. These measures should not be considered in isolation from, nor a substitute for, our GAAP reporting. 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, our strategies, and our ability to integrate new technology into our core platform. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are further defined in our most recent filings with the Securities and Exchange Commission. Any forward-looking statements that we will make on this call are based on assumptions as of this day, August eighth, 2023. We undertake no obligation to update these statements as a result of new information or future events, except where required by law. Please also note that all comparisons are on a year-over-year basis, unless specifically noted otherwise. I will now turn the call over to Anthony. Hello, everyone. I'm pleased to announce another solid quarter of strong financial performance for Squarespace. Revenue grew more than 16%, we achieved a 22% unlevered free cash flow margin, putting us within striking distance of the Rule of 40. The positive trends that we saw in Q1 continued this quarter, highlighting the strength of our core business and customer enthusiasm for our products and services. For the second consecutive quarter, website trials in our core products set an all-time high. We attribute this to a variety of factors, including the new Squarespace Blueprint onboarding flows, changes to our advertising mix based on updated internal marketing attribution models, strong international performance, and favorable macro elements. We have a number of exciting product launches set to go live through the end of this year to enable more functionality for service-based sellers in classes and courses and for payments. Stay tuned for our Squarespace Refresh product event coming in early October for more product updates and a roundup of everything we've accomplished this year. In June, we announced our intent to acquire Google Domains assets, which includes up to approximately 10 million domains. Domains are a critical part of web infrastructure and essential to an entrepreneur's online presence. We're using this unprecedented opportunity to also invest in and relaunch Squarespace Domains, which we are operating as an independent domain registrar. Squarespace is already a leading and trusted domain registrar, relied on by millions of domains customers. At this point, we've been perfecting our domains offering now for nearly a decade. As a Google Domains customer myself, I'm personally committed to making sure this transition is seamless for all of us. Some might wonder why I was a Google Domains customer when we had a domain offering at Squarespace. The answer is that the domain offering from Squarespace was historically very website-centric, and I had many domains accumulated over the years that were simply parked or used for email. The Squarespace Domains product that we are investing in will cater to these types of customers, as well as the ones that have domains centered around a website. Whether you use Squarespace products or not, we want to be the easiest and most straightforward way for you to manage your domains. We'll be building on Google's infrastructure as a foundation for our Squarespace domain service, and customers can expect the same level of reliability as we move along with the migration to Squarespace. We're thrilled to be working with Google on the management of these domains and looking forward to deepening our relationship. We are already one of the largest resellers of Google Workspace in the world and have been reselling it for close to a decade. As part of this deal, for a minimum of up to three years, we will also be acting as the exclusive domain provider when customers purchase domains through Google Workspace. This quarter, we introduced Squarespace Blueprint in five new languages. With the introduction of Squarespace Blueprint earlier this year, we integrated a modular design experience to customer onboarding. With Blueprint, users can now begin their journey without having to navigate the template store during onboarding, making each website at the end of the blueprint setup process unique. We think this, along with our curated template store, represent the best setup experiences we've ever offered on our platform, and these continue to contribute to our expanding market share as more and more customers choose Squarespace. During the quarter, we continued integrating generative AI technology into our CMS in areas where customers are presented with text they need to generate or edit. This new integration, alongside our leading CMS and dominance in design, helps our customers get set up faster than ever before. Expect further developments coming soon that will integrate Copilot-like experiences into our support interface, which already includes AI-powered recommendations trained on our knowledge base. We're currently in the process of rolling out a new homepage and brand identity for Acuity Scheduling. Acuity Scheduling is an important part of our product portfolio, and can be used as an extension of our website product via deep integrations, or completely standalone if you're a larger enterprise or have your website hosted elsewhere. We will continue to invest in this standalone channel as we grow Acuity over the next few years, and we'll be expanding the Acuity team significantly in line with the opportunity we see in the market. Finally, I'm also excited to note that we processed our first payment through Squarespace Payments on production infrastructure as part of our alpha test program. We are on track to deliver Squarespace Payments to new customers in Q4 of this year, and I'm looking forward to sharing more when we finally launch. We have an incredible set of releases lined up for the second half of 2023, and I remain incredibly encouraged by our strong financial performance, which brings us very close to the Rule of 40 this year. Beyond our performance, I'm delighted to serve our millions of customers across so many different endeavors as we continue to power entrepreneurship everywhere. With that, I'll turn it over to Nathan to review the financials. Thank you, Anthony. Good morning, everyone, and thank you for joining us today. Squarespace's second quarter 2023 demonstrated the power of our core business. Our products are well-suited to provide today's entrepreneurs with the best-in-class tools to build a beautiful brand and launch a business online. Our results surpassed the high end of our top line and unlevered free cash flow guidance as customer demand surpassed our expectations. Throughout the quarter, we leveraged our brand momentum across the globe to deepen our connections with entrepreneurs and drive strong revenue growth. In Q2, revenue was $248 million, growing 16% both as reported and in constant currency. The positive results of our pricing increases and strength in new Unique Subscriptions, both in the U.S. and international, give us confidence for sustained top-line growth in 2023. Bookings kept pace with our top line, growing 16% as reported and in constant currency to $256 million, driven by healthy demand from new customers and stable retention as we completed our third consecutive quarter of pricing increases rolling out to legacy customers. Q2 2023 revenue growth of 16% represented an increase of approximately $34.8 million over the same period last year. The primary driver of growth was the strength in Unique Subscriptions, both the retention of existing and contributions from new, which contributed $20.1 million or 58% of the growth of this quarter. This expansion includes additional revenue resulting from attached subscriptions and Tock, another meaningful opportunity to drive growth. Increasing the attach rate of our products with our existing base of over 4.3 million Unique Subscriptions provides us the opportunity to equip customers with more tools to power their businesses, all from one streamlined platform. The impact of pricing increases from our legacy customers was also an important driver during the quarter, which represented approximately $10.4 million across both presence and commerce website subscriptions, and with about 30% of the growth of this quarter. The legacy price increases have an outsized impact on our presence business and represented growth of 17%, both as reported and in constant currency. As of quarter end, approximately 90% of eligible customers have received a price increase, a process which we began in Q3 2022. Consistent with all previous quarters, customer retention outpaced our expectations against this period of price optimization, which has also resulted in a robust total cash retention rate in Q2 2023, that is nearly 1,000 basis points higher than the same period last year. Squarespace is firing on all cylinders as we grow with customers, culminating in a highly cash-generative business model with strong margins and predictability over future revenue. Customers continue to adopt higher value plans when choosing between our subscription offerings at an increased rate compared to last year. This is the third consecutive quarter where we have observed this trend, and the mix shift is impacting our ARPU, which grew above 219 at a growth rate of 7%. On a net basis, we continue to see gains in our unique subscriptions despite continued churn from lower-value Unfold subscriptions. We are beginning to see Unfold customers gradually stabilize from elevated rates, which plagued much of the past 12 months. We are encouraged to see continued traction with Bio Sites as customers choose a Bio Site as a hub to share social media links in a beautiful layout to match their individual style and branding. Commerce revenue grew to $75 million, or 14% as reported and in constant currency in the second quarter, which represents approximately 30% of total revenue. Subscription revenue related to commerce websites, Acuity Scheduling, and Tock were the main drivers of growth in the quarter. We saw a reversal of GMV trends with positive growth during the quarter as GMV reached over $1.5 billion. Softness in Acuity Scheduling abated, and we are encouraged by early customer trends we are seeing there following a revamp of new customer engagement with an optimized onboarding wizard. International revenue represented approximately $70 million or 28% of total revenue in Q2 2023, and grew 17%, 15% in constant currency as foreign exchange rates acted as a tailwind relative to currency prices in Q2 2022. We are energized to see strong revenue growth coming from our international markets as we have been prioritizing ex-U.S. geographies to drive new customer adoption.... As a percentage of total revenue, the mix of international and U.S. revenue has trended flat over the past three quarters, largely due to the impact of our legacy price increases, which have overwhelmingly impacted USD customers. Understanding the impact of FX is also important for appreciating the underlying dynamics, which have prevented the mix from increasing. As we look ahead to the rest of the year and lap depressed FX rates, we expect to see a larger impact to revenue mix shift year-over-year. I would also note our international business is primarily driven from websites. Higher growth products such as Tock, Acuity, and other attached products are still nascent in international markets. Turning now to our margin profile. Our non-GAAP gross margin was 84% in Q2, where we saw nearly 100 basis points of sequential improvement and remained steady compared to the same period last year. Our non-GAAP marketing and sales expense was $69.3 million in the quarter, or 28% of revenue. This degree of expense was down sequentially from Q1 2023, in line with seasonal trends, and shows over 100 basis points of leverage versus the same period last year. We expect marketing and sales expenses to increase during the remaining 2 quarters of the year, but still show improvement relative to 2022 levels. non-GAAP R&D expense was $44.6 million during the quarter and represented 18% of revenue, as hiring continued to ramp during the quarter, but at a slower rate than anticipated. Finally, non-GAAP G&A expenses were $21.1 million, 8.5% of revenue. We have improved our margin here by approximately 370 basis points compared to the same period last year as we see opportunities to sustain operating efficiencies. Overall, we are tracking ahead of plan, and I am proud of the efficiencies that many of the teams are driving across the organization. In the second quarter, our adjusted EBITDA increased to $73.4 million at 30% of total revenue, growing 68%. Our adjusted EBITDA margin improved by over 900 basis points when compared to the same period last year. The culmination of top-line improvements and the discipline on our investments is driving this improvement. We are excited to see this leverage as our business model produces growth, tremendous cash generation, and profitability. Seasonally speaking, Q2 adjusted EBITDA tends to be stronger relative to other periods due to timing of our marketing and sales expenses. Our balance sheet remains healthy, with cash and cash equivalents of $274 million and approximately $18 million of available borrowing. Total debt was approximately $494 million at the end of the quarter, of which approximately $41 million is current. We amended the terms of our 2020 credit agreement in June to establish an additional term loan commitment of $100 million. The additional commitment is intended to fund a portion of financing related to our announced acquisition of the Google Domains assets. Upon the closing date of the acquisition, which is still subject to regulatory approval and customary closing conditions, the loan will fund. Once again, we delivered strong cash flow in the quarter. Our cash flow from operating activities grew 44% to $52.5 million for the trailing 3 months, compared to $36.4 million for the trailing 3 months ended June 30, 2022, primarily due to continued strength in bookings and overall investment efficiencies. For the same period, our unlevered free cash flow reached $54.8 million, growing 51% year-over-year and representing over 500 basis points of improvement at 22.1% of total revenue. Our share repurchase program continues to be active. While there were no repurchases in Q2, as of quarter end, we still had approximately $54 million available for repurchase under our current authorization. Since initiating the program in May 2022, we have returned approximately $146 million to shareholders. Turning to our guidance for Q3 and full year 2023. In the third quarter of 2023, we are targeting total revenue in the range of $250 million-$253 million. The midpoint of the range represents 16% growth. We expect unlevered free cash flow during the third quarter to be in the range of $47 million-$51 million, which implies an unlevered free cash flow margin of 19.4% at the midpoint of the range. The strength that we continue to see in our core business gives us confidence to raise our full year guidance today. In 2023, we expect total revenue to be in the range of $987 million-$995 million, representing growth of 14% at the midpoint of the range, up from our previous guidance of $969 million-$981 million. Unlevered free cash flow is expected to reach between $217 million and $225 million, and implies a margin of 22.3% at the midpoint of the range. This is up from our previous guidance of $192 million-$207 million. We continue our trajectory towards sustained, profitable growth and expect some improvements to our 2023 non-GAAP gross margin relative to the non-GAAP gross margin we delivered in 2022. We are seeing efficiencies across areas of our business without sacrificing essential investments for continued innovation in our product offerings. In June, we announced our intention to acquire Google Domains assets, including approximately 10 million domains currently managed by Google. We expect the acquisition to close in Q3 2023 and to begin to see a positive impact on both revenue and unlevered free cash flow following the close. The amount depends on the timing of Google Domains customers' contracts and the number of domains which migrate to Squarespace. We have not included any impact to our financial results in our Q3 and full year 2023 guidance. We expect to provide additional modeling points and impact to key performance indicators on a future date following the close of the acquisition. We had an exceptional quarter, surpassing our expectations and achieving remarkable results across our business. We are investing in areas to fuel our future growth and deliver increasing value for our customers. The strength of our recurring revenue and customer retention enable us to innovate, invest, and capitalize upon future growth opportunities. Finally, I want to thank our employees for their dedication and passion for helping our customers succeed and building a platform to enable entrepreneurs everywhere. With that, operator, please open the line for the Q&A portion of the call. Thank you. We'll now enter our Q&A session. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind and would like to revoke your question, please press star followed by two. When preparing to ask your question, please ensure that your device is unmuted locally. Our first question comes from Ygal Arounian from Citigroup. Ygal, your line is now open. Please go ahead. Hey, good morning, guys. I, I wanna focus on, on the, that last point, Nathan made just on, on future growth drivers. Anthony, you talked about Squarespace Refresh and key product improvements. In the letter, you talked about new technologies coming through. You're, you know, accelerated real nicely here into the mid-teens, but you also quantified the impact from the price increases so far in the quarter. I guess to kinda translate all the guidance into 4Q, it implies a little bit of a step down, I guess, as we're lapping some of those pricing increases. As we kind of work our way through this and into 2024 and the new products coming out, I'm just hoping we can kind of like, you know, paint the picture of that transition and whatever you're willing to share, you know, ahead of Squarespace Refresh from products and roadmap and, you know, how you're thinking about, some of the things to come. Hey, yeah, sure. Thanks for the question. You know, this refresh. I'm glad you're pointing the refresh. This refresh is gonna be a big one for us, because we have so much coming out over the next, frankly, 45 days and into, into Q4. Just a couple of highlights there. One, we've got product, a number of large product releases with respect to products for classes, selling classes and courses on the platform, and also, tools for our service-based sellers who, you know, run businesses based on invoicing, et cetera, both of which provide a combination of both, you know, an opportunity for SaaS increases as we sell the certain plans related to those products, as well as moving a lot of GMV onto the platform that wasn't previously being processed through us. In addition, huge amount of investment in Squarespace Domains, which is, you know, taking a... It's something we have an increased interest in making really, really work as we, you know, hopefully look to close the, the, the acquisition of the Google Domains assets. A lot will be updated there. A lot of visuals will show up during Refresh. We accepted our first payment on the Squarespace Payments platforms and our production infrastructure. Now that's in alpha, so it's not yet in front of a, a wide variety of people, but nevertheless, a positive milestone there. We anticipate having customers onboarded, not in alpha or beta, in production in Q4. You know, we are launching a refresh of the Acuity brand, which you'll see happen over the next 30 days, there'll be more on that in, in, in Refresh. That's just five areas. All of those are pretty substantial in terms of just the amount of effort we've put on things and the scale we think we can get out of, out of those updates. On top of that, anything we're launching in terms of releases related to generative AI being integrated or Copilot-like experiences, we think will just accelerate, hopefully accelerate across all those product initiatives. Probably one of the best Refreshes we're gonna, we're gonna- we're gonna have up to this point, a lot of product changes, a lot of product updates coming out. Really looking forward to that. Thanks. That's helpful. Just a quick follow-up on that. Nathan mentioned some customers choosing higher price point packages on average and kind of moving up there. In the past, you talked about, kind of repackaging the products as like a next lever of an opportunity to, to move ARPU up. Is that, is that already happening? Is the strategy, evolving? Just update us on thoughts around that. Thanks, guys. Sure. Yeah, we're always, you know, running a, some kind of price test, you know, every other month, basically. I think that as we look towards the future, I think looking at usage-based pricing and using it, looking at just ways to make the product-- ways to get more of the product in more people's hands earlier, while still retaining the ability to kind of, you know, keep more upside if, you know, you become a power user or a heavy user of the product. You'll see this in our classes and courses release, you know, on the low end, you know, if you're just getting started with the product, you're paying, you know, less of a SaaS fee, and we're having more of a GMV take rate. If you become really successful on the platform, our idea is you paying more of a SaaS fee, and we're taking much less of a GMV take rate. I think, you know, a lot of customers in, in, in businesses like this don't wanna feel like they're being penalized for their success. So there isn't one just big mega change that's gonna happen, but, you know, us rolling some of these subscription plans into our core, introducing new ones in, in niche environments like classes and courses and kinda taking it from there. Thank you. Thank you. Our next question comes from Matt Fowle from William Blair. Matt, your line is now open. Please proceed with your question. Great. Thanks for taking my questions and great results. Wanted to ask on the record trial, trial volume that you're seeing, perhaps you can just give us a little bit more detail on what's driving this specifically, and then the follow-up there is within those record trials, how has conversion been trending relative to historical levels? Thanks. Hey there. I, I'm actually really glad you're asking about this because it's kind of one of the a point that we were really just kind of pleased to see. A couple of things are contributing to the trial volume being up. Again, that trial volume is a, it is an all-time high for Q2, including any pandemic quarter. We saw a reversal for the first time in seasonal trends from Q1 to Q2 in the core product. Normally, Q1 is the stronger, you know, volume month, and then Q2, it decelerates a bit, and then goes back up in Q3 a little, and then down again in Q4. We saw a reversal of that trend. Why? First off, we've been talking about changes to our internal attribution model since about this time last year, where we started to introduce what we were calling Attribution 2.0. Then, you know, as we moved forward through Q4 and Q1, we were retraining that model and launching Attribution 2.1, et cetera, et cetera. What that does, it's allowing us to deploy our, our, our, our cash more intelligently, and so we're just seeing more effectiveness, you know, in terms of the, the core funnel. More optimized landings, more trials coming from those landings, and conversion remaining strong, while all those factors are up. That's, that's really positive. Two, we talk about Squarespace Blueprint, which is our way of onboarding people to the product and letting them, quote-unquote, "bypass the template store" and getting a more bespoke, you know, starting point for when they wanna create their site. We've rolled that out in 5 additional languages now, so that's kind of up and running, and contributing to more people finding the product easier to use. Product is easier to use, things like Fluid Engine, we're redesigning the internal nav. It's a combination of the product being the best it's ever been, the onboarding being the best it's ever been, and just increased intelligence in our ability to deploy dollars and get people onto the platform. Worth mentioning that certain international markets are outperforming the US very nicely. Again, it's not just one magic thing we're doing, it's, you know, years and years of effort and results and tweaking and tuning. It's a very encouraging number for us because, again, that is right now the core product representing the majority of revenues. Very helpful. Appreciate you taking my questions. Thank you. Our next question comes from Siti Panigrahi from Mizuho. Siti, your line is now open. Please go ahead. Great, thank you. Congrats on a good quarter. Also good to see the Squarespace Payments now in alpha. My question is, could you give talk about more about like your Squarespace Payments offering? I know that you said it'll launch in Q4. Are you going to, like, migrate all your customers, maybe, like, currently using Stripe to that? What's your target when you launch it in Q4? The target in Q4 is going to be new customers, not existing customers. We wanna make sure we're able to ramp them up and get volume onto the platform without, you know, taking somebody who's been, you know, a very successful seller and just moving them over on, on day one. Certainly, we're, we're also releasing it in. It'll be released in beta to our Squarespace Circle community before a more general release, and hopefully we'll be able to work through, you know, some of the early days in that platform with, with that community and with people we're really, really close to. That's the main plan. Then, you know, as we move into next year and we get a lot of we, we get confidence in the confidence in the platform, yeah, we will provide incentives, and we will be working with existing customers who have higher volume and move over. Yeah, and it's gonna be an incentive-based process. Great. A follow-up on Acuity business. I know, well, Q1 was weak, but you talked about some of the improvement you're doing. How should we think about it, when you think, Acuity business could bounce back, and what are the things you are doing to help it? Well, we're super excited to do the to announce the brand relaunch. It looks fantastic, and I think it just shows this commitment to a dual-pronged approach. You know, the Acuity acquisition was very successful for us in terms of there is a significant funnel coming from people attaching Acuity in the core product, which was the thesis. Then there's a number of people that, frankly, are big customers and don't need to use a DIY website builder, but they have a robust business that relies on appointments. I'm really excited to be attacking both of those at the same time, and the brand refresh that's more targeted towards the standalone business is hopefully gonna be a driver there. I think one of the things that we saw in Q1 is there were a lot of. The COVID testing sort of businesses that were on the, on the, you know, big drivers of Acuity GMV, those are more, have, have come to pass at, at this point. So I, I think we'll be able to, you know, predict Acuity in a more normalized way moving forward with the absence of those sort of anomaly-type sellers. Again, highest, you know, more headcount growth in Acuity than, than in, in other parts of the business right now as we invest in that both standalone and attached story together, which is, you know, something that wasn't front and center, let's call it 2 years ago. Great. Congrats again for another good quarter. Thank you. Thank you. Our next question comes from Trevor Young, from Barclays. Trevor, your line is now open. Please proceed. Great. Thanks. Anthony, you mentioned ramping investments in Acuity, heavy investments in domains, plus all the initiatives with payments and the whole new Squarespace Refresh. Realize you're not guiding to 2024 yet, how should we think about margins as we look beyond this year? Is a lot of that investment already reflected in the current cost base, or should we expect OpEx to grow a bit faster from here? Second question, the letter mentioned strength in English-speaking international markets. What are you seeing in non-English-speaking markets, in particular in Europe? Some peers have flagged strength there, others seem to be showing some weakness. Just trying to understand what's going on in continental Europe. For sure. So in terms of thinking about margins moving forward, you know, a lot of that is baked in. You know, it's our intent to continue to tick up that free cash flow margin into next year and beyond. I don't see any significant reason why it needs to erode. The way we intend to invest in these growth businesses, well, I mean, some are, a lot of what you mentioned, we already have the investment there, right? We already have the investment in Acuity, and Domains, and in payments. So what we can do after making that initial investment is just make sure we're disciplined about how we ramp more headcount onto those products vis-a-vis how much revenue they're bringing in. So I, I think we have a good handle on all that. Again, just see free cash flow margins continuing to tick up into next year. Nathan? Yeah, I'll just add on there. Trevor, I think that, you know, we as a company have demonstrated strong fundamental financials, and that certainly is not gonna change. As we look at growing investments in some of these key areas, we would pull back in others, other areas, that are either more mature or not getting the ROI that we want, to maintain the operating margins that we have and continue to see that improve. I think your second question was around sort of international markets, both English speaking and non-English speaking. We see strength in, in, in both. I don't think we have split out kind of exactly where, where that's coming, but, like, again, a 10-year investment in the core platform in terms of its ability to be internationalized. When, when we do things like roll out Squarespace Blueprint in five additional languages, you know, we do see that impacting growth rates in those markets. It's, it's not, it's never just one thing with international. It's all the things at once, payment methods, languages, blueprints, product innovation. Yeah, I think we're seeing, we're seeing positive results worldwide. Yeah, we're continuing to see double-digit growth in all of our key international markets, Trevor. Great. Thank you both. Thank you. Our next question comes from Vikram Kesavabotla from Baird. Vikram, your line is now open. Please go ahead. Yeah, thank you for taking the questions. My first one is on the free cash flow margin guidance for this year. It, it looks like the guidance reflects some contraction in the second half relative to the first half. I'm just wondering if you can give us some more color on the drivers of the sequential performance there. Separately, I also wanted to ask about pricing. It sounds like you've been pleased with the retention rates you're seeing from the recent price increase. So I'm curious if you can talk about how this experience is impacting your broader philosophy around pricing, and specifically, do you think you can raise prices more frequently going forward, and what your plans are for fiscal 2024 at this point? Thanks. Yeah, thanks, Vikram. I'll take the, the first on the free cash flow. I think we, you know, overall, we're very excited to raise the high end of the guidance by $18 million for the year to reach 22.3% margin. What this reflects, if you look at the whole year, is really seasonality, because we do see an uptick in Q3, Q4, specifically around marketing and advertising cash outlay. I would not cash, you know, as I said in my opening remarks, Q2 is generally a lighter quarter, so just following that seasonal trend, and we flowed that through for the full year. Excited where we are landing for the full year. Yeah, and I'll, I'll comment regarding pricing and pricing leverage. You know, we have been so conservative for so long about any kind of price increases. We still don't even have, you know, all of our customers across all of our plans at our even current list price. We haven't made a plan yet on exactly when we wanted to begin to, begin that second wave of, again, just increasing them to list price, not even raising beyond that. I think it's pretty clear that we will continue to have pricing leverage just based on the strength of the product. Where I'm focusing more, instead of just saying, you know, how high can we make all the pricing plans, which I don't think is the right way to remain competitive, is what, what niches... do we serve where a higher price plan would be more, would be viewed very favorably? We talked about classes and courses earlier. Is there an add-on subscription? If, if you get, you know, eventually, basically all of our functionality somewhere in the core, and then we're charging a bit more for people who are really at scale, at volume, we can translate that into higher SaaS fees. You know, what can we, what can we do there? You know, if you're an incredibly successful business on Squarespace and you don't wanna pay, you know, percentage of GMV, back as any kind of tax on top of the, the, the main processing fees, you know, it does a $200-$300 SaaS fee sound like a really cheap product to run a multimillion-dollar business? I think, you know, we think it does. You see similar dynamics in the Tock business where the SaaS fees can be much higher, and there's more of an emphasis on making sure the GMV take rates lower. Okay, thank you. Thank you. Our next question comes from Deepak Mathivanan from Wolfe Research. Deepak, your line is now open. Please go ahead. Great. Hi, guys. Thanks for taking the question. Anthony, can you elaborate on the new AI technologies you're building in order to launching Copilot type experiences? You know, is that all built on top of sort of OpenAI, you know, APIs, or are you also thinking about other LLMs? Kind of more broadly, I guess, you know, how do you think about the extensibility versus sort of go-to-market speed for some of these technologies over the next 12-18 months? Then maybe one for Nathan. Can you unpack the subscriber additions between growth ads, conversion, and churn? Seems like overall macro is getting a little bit better, what is the path for net ads to kinda get back to a, you know, a pre-COVID or sort of like the historical levels? Thank you so much. Yeah, I, I can comment on the, on the, on the AI question. Right now, a lot of what we're building is based on models and API, APIs that are widely available, which is frankly why in the industry you see everyone sort of magically coming up with the same demos at the same time. You know, it's good in a way because it means that our investment actually in, you know, doing the harder ML stuff is, you know, equal to or lower than it was five years ago, with, you know, much more, quote-unquote, "magical results," if you will. We've already integrated generative AI stuff in the platform, you know, in the, in the basic areas where you would expect it, you know, a blank text field. How do we help you edit that? You know, how do we improve that in the future so that you're editing text in that field and, you, you know, it, it's better? You, you could, you could look at image generation and, and things like that, Copilot-like experiences, which, you know, I'm, I'm very keen to do, but also in some ways very confused as to how we see it being presented from some of our competitors. I'll mention two ways I'm, I'm a little confused by it. One is, you know, right now, if you are a Squarespace customer and you want to write into live chat, you will be given results that an AI bot is returning based on our training on our knowledge base, and if those results don't work, you're routed to a world-class customer support team that we've invested in for two decades that will help you get to the result that you need. It's gonna be great to also integrate Copilot-like experiences into that same UI, because I think these things really build on each other, right? Self-service, the machine can do it for you. Okay, that's failing. I, I need, I need more help with it. That's kind of where we're integrating it versus saying, "Oh, actually, it's this completely separate thing, you know, that's just I'm gonna type, like, make my text bolder, and it gets bolder," which is not really where we're seeing a lot of people like, need, need the most help. So excited about continuing to integrate it, excited about the fact that the cost for us to integrate it is lower than ever. And, yeah, we think it'll continue to make onboarding into the platform easier. That being said, Squarespace Blueprint is a visual onboarding system, and we found that that was what people... That set of steps and that, that process was something closer to what people actually wanted when onboarding to the platform. We've yet to encounter customers that wanna type, you know, a couple paragraphs and have it make a website, and then type more paragraphs and have it change the website. Like, there's still a lot of value to visual systems for design, even though all of these technologies are incredibly exciting and will keep reducing cost and set up speed. We think there's, like, as, as mentioned before, we think it's a tailwind. You're, you're, you're seeing it on the platform, we're, we're gonna keep, we're gonna keep integrating it. Yeah, I'll turn it over to Nathan for the second part. Deepak, on your unique subs question, we don't give the breakdown of the different components of it, but what I will say is this: is, you know, we saw in Q1, and then we saw again in Q2, strong acceleration of our core business and strong retention, and stable churn, which caused us to increase our overall guidance for the year. We're very pleased with what we're seeing in the core business of the acceleration that we're seeing there. It is still, you know, somewhat tainted by the Unfold churn that we're seeing, but that is reducing. We do think as we, as we look forward, you know, the core business acceleration causes us to increase guidance, and we feel confident of where that, that is going. Got it. Thank you so much. Thank you. Our next question comes from Brad Erickson from RBC Capital Markets. Brad, your line is now open. Please go ahead. Yeah, thanks. First for Nathan, I guess, you know, given the price increases you've had going now for a few quarters, the, the margin flow through there has been really high, obviously. Are these kind of the right contribution profit levels to think about longer term? I know you mentioned the sales and marketing in the second half. Maybe looking sort of beyond that, talk about how you manage the growth versus the flow through bigger picture going forward and how that works at moments, say, when you're not raising price. That's the first one. Then second, for Anthony, just adding on to that last comment, around generative AI, just as you roll these tools out, maybe just would be curious for you to speak to your views, kind of the industry's ability to monetize those tools, versus just being kind of competitive table stakes here, where everyone builds that into their cost base. Thanks. Yeah, Brad, thanks for the question. Speaking on the operating margin, you know, as I, as I said earlier, I think that we have shown strong discipline here as from both an operating efficiency standpoint and still drive the top line. I think we will continue that practice. Anthony and I are very focused on making sure that we're making the right investments, that, that is going to continue to drive the top line, but continue to see improvement on our, both our operating margin and our cash flow. We feel very confident in the raise that we did for guidance of where we think the company is running. From a growth perspective, you know, kind of layering on what Anthony said earlier, we will lapse the, the pricing increase that we did at the end of Q3 last year in Q4 this year. I think that, as Anthony said, like, we're only getting started on the, the pricing. This is the first time that we've ever increased price on our legacy customers, and we only increased by 10%-15% by cohort, so there's still sufficient room between that and list, and we would certainly tie that to the value we're delivering to customers, as Anthony said earlier. As we continue to de-deliver more value and new product innovation, looking at using price as a growth driver. Regarding the use of LLMs and AI technology, again, you know, it's an interesting benefit that we all kind of have access to these trained models and, and especially for, for text generation, sort of at the same time, at a low cost. If you think about it, this is why you have, I don't know, countless startups and countless companies with, frankly, the same demo, coming out that, you know, if you're a reasonably sophisticated company, you can integrate this in your product really rapidly. We all have. I think the thing that people are seeing now, or at least we're seeing maybe a little bit with the LLMs, is, you know, about one-third of the population already had access to ChatGPT. It wasn't really like rocket science for them to write text in that box and dump it into Squarespace. Same with Midjourney, same with, same with all these other ways they would generate these assets. We're able to provide it as a convenience when they're in the product, and certainly, there'll be even more of a convenience where Copilot can take actions in the product that would have historically had to jump to a human advisor. That'll just speed that up. In terms of its impact to our core business, again, it's speeding things up, it's a tailwind, and we continue to focus on where people are. You know, the experiences that people are asking us for. Again, Blueprint is a very visual experience, and, you know, we've seen conversion rate improvements there, strength of that in the international markets. Yeah, we'll, we'll, we'll keep integrating, but that's, that's sort of where, where the product innovation is. It's the stuff unique to what we do and what we do for our customers. Got it. Thanks. Thank you. Our next question comes from Ken Wong from Oppenheimer. Ken, please go ahead whenever you're ready. Hi, this is Nancy on for Ken. Thanks for taking our question. My first question is on gross margins and how they'll trend as payments layer in, do you expect further increases to the customer operations and web hosting costs? Secondly, could you clarify around the terms of the 3-year partnership with Google, and if there's any opportunity to extend that partnership after the 3-year mark, and if it's conditional on the performance of the partnership or anything like that? Thank you. Sure. Regarding the gross margins and the payments business, yeah, you will see the gross margin change, but it will all be a net impact in a positive way to the cash flows of the business. This is not something that's going to erode margins to the extent of cash flows. We're going to be generating a better take rate off of payments, all costs factored in after this is out, versus before it was out, otherwise we would have just never done it. We, we're going to be disciplined about the spend as we move into, move into this product. Regarding the partnership with Google, yes, there's an opportunity to, to extend it. We've sort of, you know, we're in a process right now where we're waiting for the deal to close, and, yeah, the, the, the terms of what is in there is sort of in our, is in the releases related to that announcement. Thank you. Our next question comes from Franco Granda, from D.A. Davidson & Co. Franco, please go ahead whenever you're ready. Oh, Franco, we're not getting any audio through. Hey. Okay, we'll move on to our next question. Oh, Franco, are you there? We'll move on to our next question from Andrew Boone from J.P. Morgan Securities. Andrew, your line is now open. Please go ahead. Great. Thanks for taking my questions. I wanted to ask about the new attribution model that you've rolled through on, on the marketing side. What does that help to unlock, and, and how should we think about that contributing to just greater overall efficiency? Then on the pricing side, going to international, I thought you guys had kind of waited to the back half of the year to, to talk about pricing for non-USD subscriptions. Can you guys just provide an update there? Thanks so much. Sure. Just to contextualize the attribution model. You know, Squarespace operated a cash flow break even for the greater part of 15 years, and has been profitable for almost 5 years now. That's really based on the fact that we have always done a lot of work internally to, to try and determine, to the best of our ability, the efficacy of our, of our spends. We have guidelines set around those spends that are always changing as the macro landscape changes and as our product changes, that hopefully mean that we're spending efficiency- efficiently. What was great about these recent updates is that we did a major overhaul to our internal model that had been, you know, kind of in process, in, you know, in, in production for years and years and years. When we backed up to the model, we were able to find that, oh, actually, we were underspending in certain areas, overspending in certain areas, and let's make those changes and try that. We do that, and it works. Then when it works, we can feed it back into the model and retrain it and do that on a more, more continuous basis, versus before, we were just training it less frequently, and so it was less adaptive to the environment around us. So that's what's allowing us to, to, to spend more with confidence. Frankly, I'm glad other people are highlighting on the call that to have the Q2 trials in the quarter higher than Q1 and also higher than any pandemic quarter is, is quite a thing. Now, there may be some macro contributing to that too, but we're certainly changing our activities as well. There's that. You know, as we move to international, we're seeing, we're seeing strengths there as some of the product improvements take hold, the foothold takes hold. I think your question was around pricing with regard to international. I don't-- When, when did we start increasing the q- the international... In March. In March. Oh, for you guys. March of this year, we started moving some of the international subscriptions up to list, so all that's not fully baked in. We've got a number of pricing projects started in international markets, even right now, which are looking at, you know, currencies where we need to frankly decrease pricing to be competitive. Again, the result of any of these tests will be a net positive, or we won't roll them forward. Yeah, we're in process there with international price testing. Thank you. Thank you. At this time, I'll now hand back to Anthony for any closing remarks. Everyone, thank you so much for joining on the call. Thrilled with this quarter, thrilled with what's coming up for Squarespace Refresh. Thank you for the thoughtful questions. Looking forward to hearing from some of you. Thanks. This concludes today's conference call. Thank you all for joining. You may now disconnect your lines. Have a great rest of your day.