Squarespace(US:SQSP)2023-08-07 16:00Revenue Performance - Total revenue for Q2 2023 was $247.5 million, a 16.4% increase from $212.7 million in Q2 2022[153]. - Total revenue for the three months ended June 30, 2023, was $247.5 million, an increase of $34.8 million or 16.4% compared to $212.7 million in the same period of 2022[178]. - Total revenue for the six months ended June 30, 2023, was $484.6 million, an increase of $64.1 million or 15.2% compared to $420.5 million in 2022[194]. - Total bookings increased by $36.2 million, or 16.5%, for the three months ended June 30, 2023, and by $73.5 million, or 16.4%, for the six months ended June 30, 2023, primarily due to an increase in unique subscriptions and price hikes[239]. Subscription Metrics - Subscription revenue accounted for 92.1% of total revenue for Q2 2023, up from 91.6% in Q2 2022[152]. - The number of unique subscriptions increased by 2.9% year-over-year to 4.3 million as of June 30, 2023[154]. - Unique subscriptions increased by 0.1 million, or 2.9%, as of June 30, 2023, compared to the same period in 2022, driven by retention and acquisition of new subscriptions[237]. - Annual run rate revenue (ARRR) increased by $143.1 million, or 17.1%, as of June 30, 2023, compared to the same period in 2022, attributed to retention and acquisition of subscriptions[241]. - Average revenue per unique subscription (ARPUS) rose by $15.25, or 7.5%, as of June 30, 2023, due to a shift towards higher value plans and price increases[243]. Profitability - Net income for Q2 2023 was $3.7 million, compared to a net income of $64.5 million in Q2 2022[153]. - The company reported a net income margin of 1.4% for the three months ended June 30, 2023, down from 30.3% in the same period last year[192]. - Operating income for Q2 2023 was $36.7 million, compared to $8.9 million in Q2 2022[174]. - Adjusted EBITDA for the six months ended June 30, 2023 was $104.2 million, compared to $40.7 million for the same period in 2022, reflecting a significant increase[235]. - Adjusted EBITDA increased by $29.8 million, or 68.2%, for the three months ended June 30, 2023, compared to the same period in 2022, primarily due to increased revenue[245]. Expenses - Total operating expenses for Q2 2023 were $167.7 million, slightly up from $166.8 million in Q2 2022[174]. - Research and product development expenses were $61.4 million for Q2 2023, a 4.4% increase from $58.8 million in Q2 2022[157]. - Marketing and sales expenses decreased by $4.6 million, or 2.5%, to $177.0 million, accounting for 36.5% of total revenue[202]. - General and administrative expenses decreased by $11.9 million, or 15.9%, to $63.2 million, representing 13.1% of total revenue[203]. - Interest expense increased significantly by $5.3 million, or 160.2%, due to higher interest rates impacting total debt[189]. Cash Flow and Financing - The company had cash and cash equivalents of $274.0 million as of June 30, 2023, with an additional $17.7 million available under its Revolving Credit Facility[215]. - During the six months ended June 30, 2023, net cash provided by operating activities was $116.7 million, up from $83.7 million in the same period of 2022[217]. - Net cash used in financing activities for the six months ended June 30, 2023 was $65.9 million, up from $55.2 million in the same period in 2022[224][225]. - Net cash provided by investing activities for the six months ended June 30, 2023 was $24.7 million, compared to a net cash used of $6.8 million in the same period in 2022[222][223]. Market Presence - International customers represented approximately 30% of total bookings as of June 30, 2023[158]. - Gross Merchandise Value (GMV) processed on the platform increased by $8.2 million, or 0.5%, for the three months ended June 30, 2023, compared to the same period in 2022[248]. - GMV processed on the platform decreased by $32.3 million, or 1.0%, for the six months ended June 30, 2023, primarily due to the scheduling product[248]. Taxation - The provision for income taxes increased significantly, resulting in an effective tax rate of (87.8)% for the three months ended June 30, 2023, compared to 444.5% in 2022[191]. - The company expects to pay significantly higher cash tax payments during 2023 due to changes in tax regulations affecting research and development costs[215]. - The company expects to receive federal tax refunds totaling approximately $8.7 million during 2023, which includes $4.0 million related to a research and development tax credit[215].