Squarespace, Inc. (NYSE:SQSP) Q4 2023 Earnings Call Transcript

Naved Khan: Thank you.

Operator: Thank you. The next question comes from the line of Alexei Gogolev with JP Morgan. Your line is now open.

Alexei Gogolev: Hello, everyone. I was wondering if you could possibly comment what was the contribution of payments business on that basis in the fourth quarter? And what do you expect the contribution for the payments business on that basis to be in 2024?

Nathan Gooden: Yeah, both for 2023 and 2024, it is immaterial to the results and to the guide. We are focused on, exposing it to first the US new customers, which we have successfully done. And then we will go out international markets in ’24 and then open up to existing. So you won’t see a material impact until beyond.

Alexei Gogolev: Okay. Thank you for that. And then Anthony, I had another very high-level question around the comment of your capital allocation. Obviously, that $500 million buyback transfer in process. I was wondering if, first of all, you have any thoughts on the potential cadence where whether it will be front loaded or evenly split over a certain period of time. And then what is your thinking around the potential impact on pre-float, which is relatively lower versus some of the peers in making transfers and structures base?

Anthony Casalena: Sure. So we had the $200 million authorized from a year and a half, two years ago, which was expiring. So this is our refreshing and expanding that program. I see this more as opportunistic. If we see things floating into certain levels, much like you saw with our other program, which I think was kind of extremely successful over the past two years, we’re able to show our support for the stock and buy into it. There’s no specific cadence set. There’s nothing around that, that’s been contemplated. And I should also emphasize that, this will probably be an ongoing portion of how Squarespace operates in terms of returns capital. And it shouldn’t be viewed as being instead of something else. It’s not instead of us buying something.

It’s not instead of us growing headcount. As you’ve seen over the years, we’ve been really, really disciplined about moving free cash flow up. And this is just one of the many things we can do with that. Also, I think Nathan quoted our net debt leverage ratio earlier. It’s very, very low. So we’re not stopped from doing anything because of this. And it’s just a component of how we’re going to operate in addition to expanding margins.

Nathan Gooden: Yeah, I would layer on that, Alexei. We would view the share repurchase program as an integral part of our overall capital allocation strategy. And the investor day in May, we will talk more about our overall philosophy around capital allocation.

Alexei Gogolev: Thank you both.

Operator: Thank you. This will conclude today’s conference call. Thank you all for joining. And you may now disconnect your lines.