Squarespace, Inc. (NYSE:SQSP) Q4 2022 Earnings Call Transcript

Siti Panagrihi: Okay, great. And then, one follow-up that I’m getting questioned, today, your unique subscription does only grew 4,000 and you talked about the weakness and unfold, so I think it’ll be helpful to unpack, what was your gross increase and maybe help us like what the churn was and how much of that unfold maybe it’ll be helpful, and how should we think about this unique subscription growth in 2023?

Anthony Casalena: So, as you noted, not all unique subscriptions in that number are created equal. We’ve got talk subscriptions in there that have tens of thousands of dollars in LTV, you’ve got unfold subscriptions in there, which are more like a domain name to us, like a $100 a year type subscription. So, as I mentioned the previous, one of the previous answers, there’s some things we can do to change the unfold term, but not, it’s not going to be like in a macro way, correctible in some giant sense. And we’re really focusing on buyer sides a bit more there. But look, I mean overall the churn properties of the business are stable to, they remain really, really positive. Again, the pricing increase, it’s first time we’ve ever affected something like this. And we were in a very pleasantly surprised with what we saw from a churn standpoint.

Nathan Gooden: Yes, I would just layer on there. We are seeing strong retention of our stable customer base. Though we don’t disclose beyond the breakdown of the 4.2, I can’t tell you that the core business did see acceleration in Q3 and Q4, which that does flow through to our ’23 guidance. Our churn levels are lower than our 2020 levels, so we feel very good about where the core business is relative to our subscriber base.

Siti Panagrihi: Great. Thank you.

Operator: Thank you. Our next question comes from Chris Zhang of Credit Suisse. Chris, your line is now open. Please go ahead.

Chris Zhang: Thanks for taking my question. So, you’ve highlighted higher bookings and less churn than anticipated from the legacy price increase. We understand that you’ve tried to keep the increases less than 20% to not give customers a shock, but at the same time, there seem to be lack of customers that are still paying well below the list price. So, my question is, are you planning on continuing to reach their prices each and every year, they renew until you bring their prices to the list price, or are you planning on a pause at some point? And if you could also give us a rough sense of the portion of the logistic subscriptions, that’d be very helpful. And I’ll have a quicker follow-up.

Anthony Casalena: Yes, it’s actually a fantastic question. So, our current price increases were targeted at USD customers only, so we didn’t look the international, anything internationally. And as you mentioned correct, there’s a number of customers, hundreds of thousands of customers that are still under list price and some substantially. So, I mean, when you don’t raise prices for a decade, we’ve gotten, we had plan levels a long time together, $8 a month. And so, yes, we’ve raised these a little bit. It’s given us some confidence to understand the dynamics of what happens when we do that. And yes, I think there’s no, I don’t know the exact frequency at which it’s going to be reasonable to do those raises, but yes, there’s hundreds of thousands still below list price in U.S. dollars. So, we want to raise, we want to get everyone a list over time, but I don’t want unduly hits them to the 50% price increase or something crazy like that, which wouldn’t make any sense.

Nathan Gooden: Yes, Chris, we will take a longer-term holistic approach to the pricing as we think about it as a growth side of our business. In addition to the core business, we also have never rates pricing on talk or on scheduling. So, we will look at all different areas of the business as we think about pricing strategy.