Unidentified Analyst: Hey, guys, this is Phil on for Siti. Can you help us better understand what drove the $5 million contribution from the pricing increase this quarter? And how should we think about the pricing uplift included in your FY ’24 guidance? Thanks.
Nathan Gooden: Yes. The $5 million that flew through that came through in Q1 is the increase of the legacy customers that we did in Q3 of ’22. So you’re still seeing the annual impact of those that received it in Q2 and Q3 of ’23 that’s flowing through in Q1 here. We haven’t included a very immaterial impact for price increases for those legacy customers in Q3 of this year going forward, where you’ll see just like you saw previously, the material impact from a price increase in the latter half of the year is in the following. So we would expect a more material impact for ’25 than we would in ’24 for price increases for our legacy customers.
Unidentified Analyst: Got it.
Anthony Casalena: I will just add one thing. In quarter we did, we were able to successfully move up slightly the list price in the business and plans and above. And so, I think that’s rolled out to 100% now. And it just gives us opportunity later in the year as we kind of contemplate what to do with legacy prices, now that more people are “legacy”. And yes, again, we’ve guided to roughly every two years, roughly 5% to 10%, is what to expect there.
Operator: Thank you. The next question comes from the line of Ygal Arounian with Citi Group. Your line is now open.
Ygal Arounian: Hey, good morning, guys. I want to dive into the subscriptions a little bit more, understanding that we’re seeing some strength coming from the domains out of the funnel. But the website, Subscriber Growth was up 12%. And if we look back to that, what that number was pre-Google Domains, they were kind of — if I’m just looking back over the beginning of ’22, let’s say, on average, it was mid-single digits and we’re up 12%, 13% here. Is all that incremental being driven from the domain part of the funnel? But are you still — are you seeing incremental strength from people coming directly to build a website? How should we think about the split of the list here from the pre-Google run rate?
Anthony Casalena: So the answer is no, it’s not a result of just domains attaching websites. I mean, that’s a factor. But the trial first website starts at an all-time high, too. So that’s not the domain’s funnel. You’re dealing with a lot of things here. The halo effect around Google is very, very big. And it’s not so easy to just draw a straight line between, you know, oh, they were referral, then they did a domain, then they did a website. You got to imagine that as people move over from Google, seven million new people will be Squarespace customers, whether or not they decide to transact and buy a website in month one, month five, month 12, month 24. It’s just a totally different macro landscape, in addition to the product being better than ever, in addition to international strength remaining strong.
And, it’s just — there’s a lot of factors at play here that are leading to really strengthen the core. But I wouldn’t just point to like, oh, the domain’s business is driving because it’s not the case.
Nathan Gooden: Yes. Let me layer on that, Ygal. You know, we reported in ’23 record trials every quarter and Q1 again this year was a record trial highest in the history of the company. So that momentum of our core business started before the Google transaction. So it’s just continuing to flow through and we’re maintaining those strong rates.
Ygal Arounian: Okay. Great. That’s helpful. We’re getting a lot of questions from investors on that already. So I think that clarification is important. And then second on just on the pricing and packaging optimization, I know we’re talking about kind of integrating the payments fee into higher stats here. Is there more you’re doing there as well? We’ll hear more about that on Investor Day, I’m guessing. And how should we think about the timeline for when the stuff’s going to start to roll out? Thanks.
Anthony Casalena: There’s a lot we’re contemplating there. I think that is the biggest one, just the transaction fee showing up. I think it’s also important to note that alongside that transaction fee showing up, we’ll be enabling the actual commerce functionality in almost all of the plans just differentiated by a fee. That’s a giant change. The adjustment of the fee in the business plan, which I don’t think is particularly market right now, it’s another giant change, frankly, the removal of it. So there’s that, I think there’s feature interplay with those plans would be more minor in terms of timeframe. Yes, later this year, definitely something in year, I mean, for us testing it or putting it out, I don’t think impact this year necessarily.
But yes, I mean, it’s all under development right now. The other thing we have under development from a — it’s not really a pricing perspective, but from a packaging perspective, right now, although we’re really, really encouraged by that new domains funnel, our product is immature. When you check out with a domain, it doesn’t ask you if you want to buy the website right there at the same time. We have a lot of no brainer things to do in the checkout flow that could have pretty dramatic results if some of these catch on. So we’re working on things like that too. Again, that’s more bundling than it is pricing. But yes, that’s kind of what we’re looking at.
Ygal Arounian: Great, really helpful. Thank you.
Operator: Thank you. The next question comes from the line of Naved Khan with B. Riley. Your line is now open.
Naved Khan: Yes, thanks. Are you planning to launch more markets this year? I think I heard Nathan say I think he mentioned adding support for more languages. These new markets are just kind of more strength support and marketability and just talk about that a little bit. And then maybe just on the mix of monthly subscribers versus annuals, any color there in terms of if the mix has changed anything a bit?
Anthony Casalena: Yes, so I mentioned with the closing of Google Domains, not anticipating this global customer base moving over. We’re now in — I’m going to misquote it in the letter, it’s like 27 currencies and like 25 currencies and countless languages that are needed in the interface to support those customers. In terms of new markets for the primary products, we have under development the language and support needed to enter a couple select Asian markets hopefully by the end of this year. So that will be the new change there. And I’ll let Nathan.
