We invested significantly in our domains business as we welcome customers over from Google Domains and established ourselves further in this space. We also launched dozens of new products and features in 2023 to make it easier than ever for entrepreneurs to launch their businesses and stand out online by leveraging the most distinctive design capabilities anywhere in our industry. The main drivers of our business moving forward into 2024 are: first, enabling small business, which is inclusive of the essential services an entrepreneur needs to get started, namely a domain, website, and email. Second, Commerce, where we offer powerful tools to enable customers to engage and transact via their online presence; and finally, third, International, where we're making great progress in expanding our brand and presence in both existing key markets and new ones.

With respect to enabling small businesses, two key highlights this year were the build out of our domains business and the launch of Squarespace Blueprint. Squarespace Domains is now the fourth largest registrar in the world. Renewals from migrating Google customers are going better than expected and we're now poised to grow adoption of our broader offerings as we capitalize on a wider customer funnel and larger customer base. Major updates to our platform's interface are launching as soon as next week and when our customers want to build a website, many are onboarding using Squarespace Blueprint, also available in select international markets. Blueprint's guided interactive design experience enhances our users' ability to rapidly create a distinct personalized website.

And it acts as a natural place for us to inject an array of generative AI features that help guide customers through setup. We'll be releasing these improvements throughout the year under the banner of design intelligence, which you'll find at home on our front site. Turning to commerce, we're now offering a comprehensive set of tools that enable our customer's to transact and engage with their customers through selling digital content, physical goods and services. Acuity scheduling has proven to be an important driver of GMV growth and underscores our increasing focus on services sellers, but we believe we will offer meaningful product differentiation. Tock closed out the year with a record Q4, its best revenue quarter ever, and we saw an uplift in seasonal GMV.

We believe that the product enhancements, new integrations, and an improved iOS app further separate, Tock as the leading hospitality solution for restaurants and diners alike. Our largest scores based payments in Q4 serves as a cornerstone of our commerce capabilities. Enabling merchants to collect money directly through our native solution will be central to enhancing the power of our platform by growing GMV and driving customer growth and retention. With payments now 100% rolled out in the US, we're turning our attention to key international markets. Payments is getting great early feedback from customers, and we look forward to building payments discount for our current customers into our broader plan offering as we move throughout the year, marking the first time we will have the ability to do that.

Finally, we are excited to the efforts we have put into expanding our international offering are showing up in our performance. Our largest international markets continue to grow, and we've seen double digit subscription growth across all key markets. In 2023, we added 18 new currencies, enabling more customers to pay in the ways most convenient for them. As we enter our third decade, Squarespace is in a better position than ever to empower more entrepreneurs online. We're looking forward to even more strong product releases in 2024, as we continue to refine the go to market for much of what we were able to release in 2023. Today, we're also announcing that we'll be holding an Investor Day at our offices in New York City on May 15th, where Nathan and I and key Squarespace leaders will dive deeper into our market positioning, growth drivers, and opportunities for the future.

Thank you all for your support and now I'll turn it over to Nathan.

Nathan Gooden: Thank you, Anthony, and good morning, everyone. 2023 was a tremendous year. The Squarespace ecosystem of products and solid execution fueled our strong financial results. We exceeded our top line and unlevered free cash flow guidance, which culminated in full year revenue growth of 17% and a 24% unlevered free cash flow margin, over 400 basis points of improvement. We are driving meaningful top line growth, improving our profitability and delivering strong incremental cash flow, a powerful formula for long term value creation. We continue to balance our strong cash flow with sustainable top line growth. Today, we announced a $500 million share repurchase program. This authorization underscores the strong financial momentum of our business.

Our robust balance sheet and cash flow generation provide us with the flexibility to repurchase shares, while continuing to execute against our long term strategy. We view share repurchase programs as an integral part of our capital allocation strategy, a key topic which I will discuss more at our upcoming investor day in May. Turning now to strong financial results driving our business, Q4 bookings of $286 million grew 23% as reported and 22% in constant currency. Our acquired domain assets, consisting of single domain subscriptions originally sold by Google as part of our acquisition of Google Domains, drove about half of the growth during the quarter, followed by contributions from websites, both in presence and commerce. Related to our acquired domain assets, renewal rates from this customer base have surpassed our expectations.

As a reminder, we acquired Google domains in September 2023. This was an asset purchase with no deferred revenue. There are two primary components of the acquisition, which include the acquired domain assets and a partnership. Squarespace is the exclusive domains provider for any customer purchasing a domain along with their workspace subscription from Google directly for a minimum of three years. Additionally, we see benefits from Google referral pages, which direct traffic to Squarespace domains. Unique subscriptions and ARPUs do not include our acquired domain assets. Full year 2023 bookings were $1.1 billion, growing 19% and 18% in constant currency. The primary driver of growth during the year was the strong retention and growth of unique subscriptions.

Legacy price increases across several of our website plans were another driver of our full year bookings growth, in addition to contributions from our acquired domain assets. We are delighted by the momentum we achieved through 2023 with bookings growth accelerating quarter after quarter and driving $169 million of incremental growth in the year. Revenue of $271 million exceeded the high end of our guidance of $261 to $264 million in the fourth quarter, which represents 18% growth and 16% in constant currency. In addition to positive contributions from foreign exchange, we saw stronger new subscription acquisitions from websites. We continue to see a positive halo effect following our acquisition of Google domains, where we see robust referral traffic to Squarespace, increases in premium plan mix, and new unique subscriptions.

As of year-end, our customer base represented over 4.6 million unique subscriptions, up 10% and representing a net increase of 427,000 unique subscriptions over the 12-month period. Q4 2023 revenue highlights included presence revenue of $188 million, growing 20% and 18% in constant currency, and $82 million of commerce revenue, growing 14% and 13% in constant currency. Presence revenue grew from the acquisition and retention of unique subscriptions and also benefited from legacy customer price increases. Our acquired domain assets also contributed to presence revenue growth during the quarter. Revenue recognition of our acquired domain assets, where generally domain subscriptions are annual and paid up front, is recognized rateably over the course of 12 months.

Therefore, we see greater contributions from this important customer base in our presence revenue in 2024. Squarespace has built a strengthening, diverse commerce portfolio to support our customers' e-commerce needs, including physical goods and service sellers, as well as hospitality customers. Commerce website subscriptions, acuity scheduling, and talk were primary drivers of commerce revenue growth in Q4. We saw positive contributions to GMV-related revenue sharing across commerce capabilities. In Q4, GMV was approximately $1.7 billion, growing 6%. We saw strength in acuity scheduling this quarter, and Tack had a great finish to the year with strong seasonal uplift in reservations, leading to record-high GMV and solid subscription revenue contributions from customers.

As Anthony highlighted, our full year 2023 revenue reached approximately $1.01 billion, up 17% and 16% in constant currency. We exited the year with annual run rate revenue of $1.1 billion, up 19% or $174 million. All year, we saw strength from websites, the largest driver of our growth, both from retention of existing and acquisition of new subscriptions. For the full year 2023, unique subscriptions contributed $87 million, representing 60% of our top-line growth. Price increases across our subscription offerings contributed $39 million, representing approximately 27% of our top-line growth, with renewal rates supporting strong cash retention. Price increases had an outsized impact on our presence revenue during the year. In 2023, the growth of unique subscriptions and legacy price increases drove record cash retention to 88%, 400 basis points of improvement versus 2022.

As of year-end, ARPU's accelerated 9% to $228, primarily the result of the increase in revenue associated with our unique subscriptions and price increases across several of our subscription plans. International revenue was $286 million, growing 17% and 14% in constant currency and representing 28% to our total revenue during the full year period. Strong growth in websites across the target markets contributed to our revenue growth. In 2023, we increased our currency options five times, which, alongside growing our support languages, bolsters our ability to support our international customers. As Anthony mentioned, international is a key growth driver for our business as we look to bring our ecosystem to new markets. We are focusing resources on markets where we see clear synergies with our differentiated design and where our product market fit is well supported.

We are investing in product features, targeted marketing campaigns, and building ties with pro users through Circle, our partner program to deliver growth. Through our powerful business model, we drove profitability as a result of solid execution and operating improvement, offsetting the temporary gross profit margin impact from our acquired domain assets. We intend to improve profitability while we continue to invest to support long-term growth and shareholder return. Turning to our margin profile, our non-GAAP gross profit margin was 81% in full year 2023, a decline of 286 basis points. Cost of revenue increased in the year, primarily due to domain registration fees associated with our acquired domain assets. As legacy Google Domain customers renew their domain subscriptions, we pay registry fees up front, but recognize associated revenue rateably over the course of 12 months, as I mentioned earlier.

Our customer operations costs increased on an incremental dollar basis, but as a percentage of revenue remained in line with 2022, showing that we are able to sustain an efficient model for our business as we scale. We see AI as a continued driver of efficiency in our customer operations. We have been using AI models to bolster parts of our platform and enhance our customer support for the better part of a decade. We will continue to leverage technology to drive efficiency in our business. Moving to operational expenses, we improved non-GAAP operating efficiency in areas throughout the year, lowering expenses as a percentage of revenue. In 2023, non-GAAP R&D expense was $183 million, or 18% of revenue, an improvement of nearly 280 basis points, primarily due to efficient spending in cash-based payroll with increased capitalization year over year.

During the same period, non-GAAP marketing and sales expenses were approximately $313 million, or 31% of revenue, an improvement of nearly 400 basis points. Our marketing attribution model has been efficiently directing the mix of spend to the optimal marketing channels, helping us drive better ROI. During the year, we prioritized direct response channels and decreased investment in brand advertising. These changes supported increases to our growing subscription base. Finally, non-GAAP G&A expenses were $90 million, or 9% of revenue. We improved non-GAAP G&A expenses both on a dollar basis and as a percentage of revenue, more than 250 basis points, primarily due to taxes. In 2023, we focused on execution and efficiency, which can be seen across each of the operating expense areas.

Full year 2023 adjusted EBITDA increased 60% to approximately $235 million, or 23% of total revenue, nearly 600 basis points of improvement compared to the previous year, driven by our operational discipline. This performance more than offset impacts related to the acquired domain assets and increases in employee expenses. Turning now to the balance sheet and cash flow statement, we finished Q4 with cash and cash equivalents of approximately $258 million and approximately $18 million of available borrowing. Total debt was approximately $569 million, of which $49 million is current. I remain comfortable with our leverage ratios today, with net debt to our trailing 12-month adjusted EBITDA at 1.2 times as of year-end. We delivered strong cash flow in 2023, surpassing the high end of our guidance.

Our cash flow from operating activities grew 41% to $231 million. We generated strong unleveraged cash flow of $241 million for the trailing 12 months, or 24% of total revenue, a growth rate of 46%, surpassing the high end of our guidance. The outperformance was primarily due to strong bookings, driven by renewals and acquisition of our website business. Our consistent levels of positive unleveraged fee cash flow afford us opportunities to innovate and develop new products, where we see opportunity to provide more value to our customers and to plant seeds for long-term growth. In 2023, we returned approximately $26 million of cash to shareholders under our current share repurchase authorization. This represents purchases of approximately 1.3 million shares at an average price per share of $22.17 on the open market.

At year end, we had approximately $54 million remaining on the current authorization. The shares we purchased in 2023 had an anti-dilutive impact and offset some of our stock-based compensation grants. Turning to our guidance for Q1 and full year 2024, we are expecting another year of strong growth for Squarespace, driven by our expanded ecosystem, contributions from renewing Google domain customers, and the continued strong performance of our website business. In Q1 2024, we are targeting total revenue in the range of $274 to $277 million. This represents 16% growth at the midpoint. We expect unleveraged fee cash flow during the quarter to be in the range of $83 to $86 million, which implies an unleveraged fee cash flow margin of 31% at the midpoint of the range.

Our Q1 unleveraged fee cash flow margin reflects the seasonal strength in bookings, including the added benefit of bookings from our Google Domain Asset Acquisition. For the full year 2024, we expect total revenue to be in the range of $1.17 to $1.19 billion, representing growth of 17% at the midpoint of the range. Unleveraged fee cash flow is expected to grow through the year to the range of $290 to $310 million, and implies an unleveraged fee cash flow margin of 25% at the midpoint of the range. Related to the full year revenue guide, we expect contributions from our Google domain assets to be in the range of $85 to $88 million. I want to call out that we are not including any material contributions from either pricing of our core offerings or cross-selling of Squarespace products to our Google domain customers in our revenue guidance.

Adjusted EBITDA is expected to improve as the year progresses, ultimately showing similar leverage to our full year 2024 unleveraged fee cash flow margin as we benefit from improved marketing efficiency in the second half of 2024. Finishing where I started, I couldn't be more proud of our performance in Q4 and 2023. Our teams helped drive steady performance, enabling us to maintain a strong outlook and steadfast execution. 2023 was my first full year as CFO at Squarespace, and it is clear that we have a strong foundation for growth, supported by our growing Squarespace ecosystem and suite of products. Thank you to our employees who execute daily to deliver value to our customers. I look forward with confidence and excitement in this new year.

With that, operator, please open the line for the Q&A portion of the call.

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